Power Lunch - AMD stocks surges on OpenAI news announcement 10/6/25

Episode Date: October 6, 2025

OpenAI and AMD announced a deal that would have OpenAI use 6 gigawatts of chips from AMD. Fifth Third announced it will be acquiring Comerica. And what does the move in the 30-year Japanese bond mean for markets? It's all here on Power Lunch. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Another massive Open AI money and power deal lifting big tech and the NASDAQ hire. Welcome to Power Lunch, everybody. I am Brian Sullivan. And what a day of news. AMD shares, you might have heard about this. Surging as Open AI comes calling. But is this kind of the same money just swimming in circles? And where exactly is all this power coming from?

We're going to dig into Sam Malman's increasingly, shall we say, sizable plans. Plus, one of the biggest banking deals in years will change the money landscape. The always fiery Mike Mayo is here. On set, talk about it. And it's not just big tech popping today. Gold and Bitcoin. Oh my, both at all-time highs as oil moves on another OPEC output change. We will hit it all. Welcome, everybody. Good to have you. Hope you having a great Monday, wherever you may be. We're going to begin with, of course, another deal rocking the AI and big technology landscape, chat GPT-PT-Prent Open AI and its boss Sam Altman, announcing what could be a, 10% stake in semiconductor maker AMD, it's also a potential deal from up to six gigawatts of

data center chip power with the first gigawatt, which is about 750,000 homes worth of electricity coming online sometime in the second half of next year. This is the latest in a series of monster mega deals that OpenAI has made with AMD, Nvidia, Oracle, and others. And it's not hyperbole to say that this right now, what's going on right now is one of the greatest tech buildout stories in human history. Let's talk about it all with McKenzie Sagalos, who is at West, at the event, the numbers, the magnitude, McKenzie. It's astronomical on every level. It absolutely is. So the six gigawatt announcement is additive to what we already knew about the 10 gigawatt buildout with Nvidia, the 7 gigawatt buildout

with Oracle and SoftBank. That is 23 gigawatts. That's the equivalent of 20. nuclear reactors required to power this? Yeah, and I want to be very clear. You know how many new nuclear power plants are currently being constructed in the United States? McKenzie? Zero. You know how many new natural gas plants

are currently under construction in the United States right now? Zero. There are some add-ons. There are some nuclear things in development. The nuclear stocks, by the way, today, we should show them they're moving in a big way. Is anybody out there questioning,

not the B-Ward, the bubble aspect of this, but potentially where's all this coming from? Would you say the power or the money? Because both of those are big questions here. Really, this event is about, not the compute, but it's about the 4 million developers who are around the world who are building on top of chatGB's bones.

What we just heard from Sam Altman is that they're opening up chatGBT, and they're making it possible for any developer to create an app inside the chatGBT ecosystem to then apply to be. become a part of an app store that they're calling the directory. But to your point, Brian, in order to power all of this, they need to have more compute. And so Greg Brockman, OpenAI president this morning, saying that there are several updates to chat CBT, and there are

also new products in-house that they aren't launching because they don't have sufficient compute. I also talked to their head of infrastructure. And to your point, he said nuclear is a part of solving for the equation, but it's not enough. So that's why they're talking to grids around the world and trying to bring legacy assets back online, spin back up old gas turbines that haven't been used in years. Yeah, and that's what they're, that's what they're talking about doing, McKenzie is reopening up some nuclear plants, reopening up some older gas turbines, adding on some wind, adding on some solar. I totally get it. But also just talk to us about the timelines here because the AMD deal has that first gigawatt done the second half of next year. So that's,

that's one year out. So we, it's potential, right? When you add all these things in one gigawatt here, one year there, we're looking out 10 plus years, maybe? Exactly. And that's the same situation with the Oracle buildout. We're seeing 2026 is when we're starting to see more of that capacity come online. Same with Nvidia. That $100 billion equity investment they're making into OpenAI is coming in $10 billion tranches,

time to each gigawatt buildout. And it's something that they've spaced out once so that they can catch up on raising money, whether it's through debt or other equity sales like this, also hoping to become a company that's eventually in the black by finding ways to monetize products that they're putting out there, which is something that they've talked about today. But separately, there's this idea that this creates a moat around OpenAI, that even if they can't deliver on some of these very ambitious build-out plans,

it's intimidating their rivals in the space. Yes, so we'll wrap it up with this. That moat, because remember, there are other areas. AI players. There's perplexity. There's Anthropic. There's Google's Gemini. There's GROC. Of course, Microsoft has partnered with Open AI, so we'll leave them out of it. But there are at least four, if not more. How much is this you think Mac designed to kind of block these others out? Because those other ones have totally separate money and power demands. I think that's a big part of this equation because when you talk about a player like Gemini,

It's got the Google ecosystem behind them. Google Workspace is a great way to reach wide swaths of potential customers. And OpenAI doesn't have the same ecosystem effect, which is why they're hosting something like a Dev Day to get more applications built on top of them. That's something that they are very good at, being at the forefront of a consumer zeitgeist, getting a lot of public appeal.

You saw it with Sor. It's number one in the Apple App Store. And that's what they're going for here, that absent having some of these larger enterprise products, they want to bring people and snare them in to the Open AI ecosystem, and that is the play. Yeah, I think to paraphrase the great poet philosopher, Tony Montana, first you get the money, then you get the power, then you get the AI data center.

Mackenzie Segalos, thank you. So if you own AMD or any other chip stock, how do you think about this deal? Well, I pose this question on X and LinkedIn today, quote, with so many massive, massive deals and partnerships in the space, there are really just three primary questions. Where's the money coming from? Where's the power coming from? And how many years or decades?

Will this take? Let's ask our next guest on the semiconductor side. Stacey Razgon is a top-ranked analyst at Bernstein and joins us now. Stacey, obviously, a tremendous day for AMD and its shareholders. Yeah, Nvidia had one of its own. Is there anybody we're missing? I mean, who's next? Yeah, you know, we got Nvidia.

we got AMD. We even got Broadcom a few weeks ago. I forgot. Yes, thank you. Yeah. I mean, those are your biggies for now. I mean, given the scale that they're talking about, hopefully it's enough for now.

Like, I don't know. But we had, you know, which again, it's, Nvidia might be up to $100 billion. You know, 10 gigawatts. Amd's talking about six-gig. income was 10 billion to start like next year. So, I mean, there's a lot of flowing at this point.

What do you mean, hopefully? it's enough for now. Well, it's, to your questions, right, where's the money coming from, where's the power coming from, how long does it take, right? I mean, it's clear that the money's there for now. Like, I mean, there's plenty of folks that are seem willing to put money into these kinds of investments right now.

The power, I think, is open for debate. There's a lot of power that is going to have to get added to drive this. And in terms of how long it takes, I mean, look, at least for the AMD one, we kind of know, like, they're targeting this, like, basically over the next five years. They gave Open AI a warrant. Actually, OpenAI is going to become an investor in AI. And the AMD's actually giving Open AI equity in return for some of this. But those warrants expire in five years. So presumably A&D's looking to drive their buildout over the next year. So at least that long. Yeah, help me understand that because they're getting warrants for 160 million shares of AMD at one penny.

basically they have to have some value associated, but they're not buying AMD stock. So why is AMD stock? No, no, they're getting. Yeah, why is it up 27% right now? Well, I mean, it's up because you can sort of run the math on the numbers. The numbers can get very large, right? If you think about the amount of revenue that potentially this could drive over time. The warrant is a little different.

It's a little different from Nvidia. Like, Nvidia gave, they're going to be. give them money and get hopefully what will be valuable open AI stock and returns. A&D is literally just giving them stock. I mean, they're going to give them, I mean, it's roughly 10% of the company. Andy's not getting any cash or anything back from that. They're giving them, you know, effective this equity if they hit specific targets around the buildout and also around the A&D share price.

But A&D is not getting anything else in return for that except the partnership itself, which I think they're hoping will be. We'll take putting up. Yeah. Is there any part of this story that you're starting to worry a little bit, maybe overdone, Stacey? I mean, look, at the end of the day, you think through, you know, broad coming to Viti and A&D, even like folks like Oracle a few weeks ago

that had like a tremendous amount of, what they call RPO, they're basically the revenue backlog taken up because of Open AI. Everything we're seeing right now really is Open AI and Sam Altman. And I just wrote this in our piece. But Oldman, you know, he has the ability, I think, to either credit. the global economy for a decade or take us over the promised land. And I don't exactly know, like, what's in the cards yet, which which way that's going to go. Like, but for now, people are clearly optimistic on this.

It's, you know, this is going places for now. Is it a pretty, pretty binary event between, you know, crashing the global economy and taking us to the promised land? Or is there some sort of happy middle ground, like a, like a median and a highway that we can hang out on while the cars go by? Yeah. I mean, look, like the numbers are very, very much. very, very large. Even if we get to numbers that are not as big as what's getting tossed around now, they're probably still pretty big numbers. Yeah, maybe there's a happy medium. Hopefully there's some kind of happy medium. But for now, look, I think we are in that period still where

people are going to be enthusiastic. And if people are worried about this like ending anytime soon, it's clearly not going to. I mean, the Nvidia stuff, the broadcuffs stuff, the AMD stuff, it doesn't even start shipping for a year. Right? And so that means we're not worried about 25. We're not worried about 26. This is going to start at the end of 26. You're probably not worried about 2027 either. Right. So we've got some runway still. And I want to be and we got to go. And Stacey Razgon will let you go. I want to make sure that our viewers understand that we are talking about years out. This is not tomorrow. It's not next year. This is many, many years potentially out the par value of the stock, by the way, is with one penny. Not the value of the deal.

I want to make sure that is corrected and understood. Stacey Razgon, thank you. Let's talk more about this deal. Joining us on. to talk about how all this AI spending might impact the rest of the tech ecosystem and the market and, I don't know, the world. Barton Crockett is senior analysts at Managing Director at Rosenblatt Securities. We can also talk about maybe what happens if some of this doesn't happen. Barton, but for now, NASDAQ's up again today, AMDs up 26%. Billions of dollars are being thrown around. Your take.

people are in. I mean, there's a ton of money that believes, and that can make a lot of things happen. So I don't know how quickly this actually gets executed, but there's a strong will and a strong momentum behind this change. And so right now you have to say there's a lot of reality here and a lot of change that's being built today that will start to really impact our day-to-day over the next few years. I don't doubt the money is there. In fact, I posted on Twitter this morning, Rex, I think the money is the easy part, right? The money from here, the money from Europe, the money from the Middle East is tens or hundreds of billions or trillions of dollars, effectively going into not one company, but a couple of companies. So how does that impact the overall market then?

Or does it matter? Well, I think we're investing in Open AI in a company that you have... Nobody had ever heard of three years ago. Nobody heard of three years ago. And now you have to believe that these guys are the next Google, you know, as rich and as wealthy and as much money as Google makes from search. Or bigger, maybe. Or bigger even. That this assumes that market and many others around it and is absolutely transformative.

And the thing about money is that. it can make things happen, particularly in this area. So it's hard to really stand against this tide, right? I mean, you have to run with it until you get some reason to think it's not going to happen. And certainly this year, next year, a lot's going to happen. Yeah, because as we talked about with McKenzie at the top, I think what Altman is doing is basically getting in front of everybody and saying, oh, we got Broadcom, up, we got Nvidia, up, we got AMD, we got power.

Of course, they've got the Microsoft partnership. We've got all this money coming in. Who are the other players? Anthropic, what? Perplexity, who? Give me your money. Yeah, it's... And I'll make it happen.

The players are really Google and meta. You know, those guys have cash flow. They have businesses. They can spend a lot of money, but they can't do what Open AI is doing, which is lose $8 billion of cash flow this year, $100 billion through 2029, which is what they're talking about. And... How much? $100 billion.

Yeah, they're about losing. Losing. Because we all love... AI and chat GPT, you can do amazing things. Draw me a picture of a cat merged with a leopard, right? And there it is. It's amazing. Right.

Where are the three places I'm going to see in Cinque, Terry, Italy? Boom, there it is. Right. Somebody has to make money on this. That's where advertising has to come in. I mean, that is an untapped spigot of money that has to flow in a big way through chat GPT, through open AI, through these LLMs to make it all make sense. and that's coming.

That's absolutely coming. You know, not maybe today, but very soon that will be here. Is this the Google moment? When Google was started, I think, is back scratch or back rub with Sergey and Larry in their garage. That was the original name was something like that. And then, you know, Yahoo was kind of indexing the web. Google came out. No one knew what they were talking about.

And now, of course, they are what they are. Yeah. Sounds like you think this is that Google moment. It is. I mean, I think Google is part of this moment, but they dominate search. It's hard to say with this much money going into Open AI that they'll dominate the coming world of AI superintelligence. There'll be a few real strong players. You know, Google will be one of them, but they won't be the dominant player.

It's going to be, we're living in one of those moments where there's going to be massive winners. There might be some massive losers. Do you think quickly to Stacey Raskon's point? Is there any risk of, you know, crashing the global economy? I'm not going to go to crash the global economy. There is a risk that these features might take longer to roll out, and the chip sales might take longer to materialize because you don't have the power supply. Is that built into the market, though, right now?

That's my worry if somebody cuts their forecast, what's going to happen? That's debatable. You know, perhaps there will be some turbulence, but, you know, this is coming. I mean, it's just really money can build these things. The feature sets will come. It's just a question of how quickly. You know, earlier, I got to correct myself. I said, draw me a picture of a cat and a leopard.

A leopard is a cat, so that would be really stupid picture. Yeah, it would work in AI. Yeah, a unicorn and a leopard would be better. Barton Crockett, really appreciate your time. Thank you very much. Thank you. All right, folks, we've got a news alert from the White House as part of his plan to boost domestic manufacturing. President Trump just announcing on his truth social platform

that all medium and heavy-duty trucks coming into the United States from other countries will be hit with a two. 25% tariff beginning November 1st. The president, of course, already targeted heavy trucks with new tariffs announcing last month that a 25% duty would begin October 1st. However, those tariffs officially have not taken place. Shares of a car, which owns Peter Burt and Kenworth. They're up about 1% on the news.

I would just kind of off the cuff. I haven't seen the news. Got to keep your eye on things like Caterpillar Cummins, obviously, you know, in Europe or Mercedes-Benz, right? Volvo, those are the trucks that are going to come into the United States, not the earlier ones, but the Mercedes and the Volvos, et cetera, the world, those are the ones that you might need to watch. The more domestic manufactured ones, the Cummins, the Caterpillars, maybe the Picars, those are the companies that might actually benefit stocks, certainly, to watch. All right, on deck.

The big banking deal that may change the money landscape across America. Star Annel, Mike Mayo, is here and next. All right, welcome back. let's step out of AI for a moment because there was actually another big deal to begin the week. Fifth Third Bank, saying it will buy Comerica Bank for nearly $11 billion. And your next guest said six weeks ago that Comerica was likely a takeover target. Mike Mayo is the head of U.S. large-cap research at Wells Fargo. Mike, good to have you on.

Your take on the deal. Are you happy with the price? I am happy with the price because it did not give all the economics. to the Comerica shareholders, I thought they'd be taken over for $90. The price is $82, which means Comerica shareholders get some of the benefits, and fifth-third shareholders get some of the benefits. But this is 10 years in the making. Brian, a decade ago, I was part of a campaign to have them restructure or sell or improve their performance.

Comerica. And here we are a decade later, and they still hadn't sold. So I asked a question on the second quarter earnings call. We added them to our takeover basket six weeks ago and better late than never because this was an underperforming bank. But this is the way bank consolidation should work. The stronger performers should be buying the weaker performers, and that's the way this is playing out. So the usual question, and I hate asking usual questions, but I'm going to do it, is this the sign of more deals or is literally Comerica just kind of its own thing? To your point, underperforming, they move from Michigan to Dallas, kind of flailing around out there.

or is now every banking investment banker getting ready to go to work? Merger Monday is back for banks. Look out for the next 12 months. We should see a lot more mergers. And this is the period of the greatest deregulation in three decades. And Brian, you know, I lived and worked through the 1990s when you had a wave of consolidation. And it starts a little bit and other people look at it. but it creates a domino effect.

So those who may have had their sights on Comerica now have to look elsewhere. So I think this leads to more deals. And Wells Fargo Equity Research, we have a bank takeover basket. And we have a series of names. Who's in the basket? Well, in the basket would be Bank of California, Bank United, First Horizon. And my colleague, mid-cap analyst Timor, Braziller, maintains that list. But that's, I got Comerica added six weeks.

weeks ago. So we have a lot of names, but the reason we have those names, because when you have a takeover like you have today, the whole basket's going to appreciate. We had a bank mutual fund manager, Anton Schutz, about a week and a half ago, on this very program, and unrelatedly, because obviously he didn't know you were coming on. You didn't know he was on or maybe did, but he has Bank of California and First Horizon as possible takeover targets. Why? What is about those two companies that make them potentially attractive? Well, as a group, first of all, you can dream the dream in this deregulatory environment. This is a more pro-bank, pro-business regulatory environment the most we've had in some time.

So I think the attitude from the regulators is mergers can be good for the industry. They should have more clarity when they're approved, and they should be approved soon. So I think the time is right for deals generally. And I think the mid-cap banks as a category are more digestible for merger. So I think you're going to have a lot of overlap when people name takeover names. Now, we at Wells Fargo with our team, we have a complicated scenario where CEO age and geography and if their efficiency is poor. It's a lot of metrics like that.

So I think a lot of different ways of approaching a problem can come up with similar solutions. Does the macro market, you know, when I look at everything that's going on and say crypto, right, with Robin Hood and Galaxy Digital today announced the trading app on, you know, platform on their app, and that stock's popping. There's so much happening in the sort of the payments and stock market space. Does that bleed over into your world, Mike, where there's kind of a competition for cash and capital or no? Absolutely. Absolutely. In fact, I asked the question today of the CEO of Comerica. I said, I asked you guys a decade ago. I asked you on the earnings call, why don't you sell? Why don't you sell? And finally, they admitted they needed more scale. They need more scale to compete, both on brand and distribution and technology.

So I think today's merger is evidence that Goliath is winning in banking. Scale is more important than ever before. And that's for distribution. That's for brand. That's technology. That's to compete with the biggest bank. So this is not a one-off deal, Brian. I could probably come back, you know, 10 more times over the next year, not every deal this size, but we have a big wave of bank mergers ahead, and this next 12-month period is one of the key moments.

Okay, First Horizon Bank, United Bank of California. Next time, Mike, I hope that you'll come back with an actual basket, like a physical basket with the logos, then we could just take them out if they could take it out and toss them. Mike Beale, thank you very much. Appreciate it. Coming up, let's party like it's 1999 with the global bond market is signaling that really hasn't flashed in decades. All right, we're going to file this under WBI wonky but important.

A leadership race in Japan is sending bond yields to their highest level in nearly 25 years. But does this tell a larger story about global markets? Andy Brenner's head of international fixed income at National Alliance, joining us now as part of our bond report. Andy, great to have you back on. Is Japan just like a political fight about the next prime minister? Or is Japan and maybe others telling us a larger story about global markets? Brian, thanks for having me on as always.

I think it's telling us a larger story. This new prime minister is a fiscal, is someone that really wants to use fiscal stimulus. And the bond market, the Japanese bond market, really didn't like that overnight. The Japanese 30 are backed up 14 basis points. That's one of the biggest moves we've seen, and it's now back, as you just said, to a yield that we haven't seen since 1999. So I don't think it's going to be good for the long end of the bond market globally. We saw that a little bit in Europe.

We're seeing it a little bit here in the U.S. So, I mean, Bloomberg had put out a story over the weekend saying, this is the time to buy duration. I don't think that's the case, and they've already been proven wrong for the first day. and I think it's going to be proven wrong again. You know, the U.S. economy, it might be a jobless economy, but it's still booming. And I just don't see any reason to want to buy duration here. So we're looking for, you know, maybe another 25 basis points higher and yield and longer rates.

That's both across tens and thirties in the U.S. So how long on the bond spectrum, the duration, as you call it, would you be looking to buy, Andy? Well, Brian, there's no question in my mind that the next two meetings, Fed meetings are going to be cuts of 25 basis points, whether we get an opening of the government or not. I think the government numbers, even when they do come out, really are particularly very good as far as their track records over the last few years. And I think we have a pretty good idea that, again, a slowing job market for sure. And we tend to think that you should be more in the shorter end. You know, take advantage.

of that. We think two's 10 should probably get out to 71. We think fives, 30s. They were out to 126. They're now down to about 103. We think that will get back out there. We think it's going to be more of a standard yield curve, much, much wider from top to bottom. If the government shutdown rolls on for weeks or longer, let's hope it doesn't. But if it does, Andy, does it start to crack the bond market? I don't think so, Brian. I mean, there's all kinds of theories on this. But, you know, I think we're getting decent ideas of how the economy's going by the numbers that have come out. If you look at the, tried to look at the unemployment number, which didn't come out on Friday, you have that Ravello survey that looked pretty much in line, a little bit higher than expected.

You had the ADP number a lot worse than expected, but then there was a comment in Barrens over the weekend that the ADP was doing some annual adjustments, and maybe that number can't be taken as quite as a grain of salt. And then if you continue to watch and listen, you can see that companies are just not hiring, not necessarily firing, but they're just not hiring. They're worried about AI and what AI is going to do to their employment and the number of people that they need, so on and so forth. So I think you keep it in the short end. I think you stay steady in the bond market. You might want to buy some corporates. You know, investment-grade corporates look like a good yield to me.

They're up about seven and a quarter, seven and a half percent so far, you're going to be. day. That's not a bad place to be. No, not at all. Andy Brenner, we're glad you're here in our place. Thanks for joining us. Have a great day. Thanks, Brian. Take care. All right. Up next, legendary hedge fund manager, Paul Tudor Jones, with some rather stark words to you this morning. The key issue he thinks could blow the top off the current bull market. Welcome or welcome back. Big Tech is making new record highs today, crypto and gold as well. But earlier on Squawk Box, market legend Paul Tudor Jones says right now, this market scenario sounds kind of similar. It feels exactly like 1999.

I don't know whether we'll actually replay it exactly, but I think all the ingredients are in place. And certainly from a trading standpoint, you have to position yourself like it's October 99. I don't see why you would do anything but that. All right, but what's also making new highs today are the smaller cap stocks, the Russell 2000, finally breaking out recently and no one knows more about that. Laurie Calvacina, ahead of U.S. Equity Strategy at RBC Capital Markets. Let's talk about that in a second, but I do want to comment on those Paul Tudor Jones words. 99, let's be clear, great song, great year.

2000 started off pretty good, didn't end well. We know what happened then. Is this now then? So it's interesting, Brian. I went back and looked at my valuation charts. Okay. I listened to his interview because some of our valuation charts, for example, SMP 500, market cap-weighted, PE, everything all in, actually looks pretty similar to kind of the peaks in the market. But then I do the same chart on the top 10 names in the S&P 500 or the NASDAQ 100.

And we're at the highs of like the last six, seven years, but we're not quite back to those, you know, kind of tech bubble highs. I think the NASDAQ number went up on my calculation to 65, and it's around 29 now. So, you know, big differences there. So I will say if you look hard enough, you can find those comparisons, but you can find other things that say we're not there. And the difference is that the earnings environment is very different today. Yes. So if somebody said, are we a bubble, I could probably make 100 cases where we are. But if they said, are we not, I could probably make 100 cases why we're not.

I was at the NASDAQ in 1999. I want to be very clear. A lot of the companies that raised billions of dollars and lured in reaffirred in, retail investors, were pretty much fake companies. I mean, they tried. They used weird metrics, revenue per eyeball, whatever. They had no real businesses. They had catchy names. They're not Nvidia. They're not Microsoft now. They're not any of those things, are they? No, and look, I think what the street is grappling with right now, and I'll be honest with you, I've been on the road the last couple weeks. I was over in the UK for a few days. I was kind of

running around the U.S. different places last week. What the two kind of weeks had in common was that there was a lot of wariness and concern about stuff. market valuations and there were jitters on the AI trade. And it was interesting when I sort of tried to pin people down on exactly what it is that's bothering them, it seems to be the kind of move, the speed, the valuation levels. And I find myself having a lot of conversations with people, not that this stuff doesn't make sense, but that it's going to take time. And maybe things have gotten a little bit overdone in the short term.

It may just simply take more time for companies to really see the big productivity impacts. Is that ultimately bullish for this trade? Is that ultimately bullish for this market if you slow things down a little bit? But the wariness is absolutely there to a T. And the other case for the bull case, so that was a clip of Paul Tudor Jones. What else he said was that the markets could have a really big rally in the short term. They could have a really monster rally in the near term before maybe then blowing off that top. And the fact that you're telling me that everybody you meet or a lot of people you meet or talk to are negative or nervous,

that's actually a bullish sign. Because I know it sounds weird to the viewer and listener, but when people all feel the same way, generally the opposite happens. Well, I think it's interesting, right? I was talking to someone earlier today about all of our sentiment indicators. And of course, with the government shutdown,

there's no CFTC data right now, which is kind of my favorite gauge of institutional investor positioning. So we're kind of flying blind on that. If you look at the American Association of individual investors, it's subdued. You're a little bit below average on the four-week average.

but it's been moving up pretty quickly. Conference board had a data point that came out last week, and while the overall consumer sentiment, consumer confidence story seems to be stalling, bullishness, expectations for the stock market to go up over the next year. They're not at the tip-top of the range, but basically the last high that they made was way above all the previous highs, and now current levels, even though they're below that, are in line with past highs. So there is some froth, I would say, in that sort of retail investor,

cohort, at least on that particular gauge. But hey, small caps have done well. I know you were on that train for a while, and they kind of teased this a few times. Now they, I hope, are they here? So look, I'm kind of throwing a little bit of cold water on all this. And so we've been telling people to be neutral. We don't want to be overweight. When I say overweight small caps, you know, to me it equates in my mind going out and telling people who make longer term investment decisions that they really need to pivot, take on bigger positions than they typically do, and get ready for a multi-year run, not just a short-term trade that could last another month or so. So we've gotten some optimism injected back into these stocks because of the Fed.

They're not cheap. And the economy, you know, current expectations are one to two percent. It's not great. And look, the honest truth is, for small caps to really get that longer-term outperformance cycle, you've either got to break the economy, have a recession and play them on the rebound. This is small-cap 101, or you need a hot economy with accelerating jobs growth, ISM manufacturing rising. We're not either of those things. We're not either of those.

We're stuck in this meh, one to two percent economy, which is fine, but not hot. And, you know, it's a hot economy either way, right? Because if you break the economy and then you rebound it, that's a hot economy on the recovery. And this kind of middle-of-the-road approach, we keep having these rate-cut trades fizzle out over and over and over again. It's like Groundhog's Day. And I feel like we've gone through the same thing. I know they're having a good day-to-day, but last I checked, they were actually lagging the NASDAQ. And if you look at Russell against NASDAQ or Russell against S&P, it looks like they peaked a little while ago.

And they kind of moved off this horrible bottom they'd been in, had this nice little moment in the sun. And now they're starting to lag again because like we did at the top of the show, we're all talking about AI again. I know. But in 1999, there would have been a punksetanifil.com and they would have had a billion dollar market cap and they had no revenue. This is not that. So I take that away. This is not 1999 in many ways. There's no more Commerce ones, Eribas, ICGEs, CMGs.

I can go on and on, but I won't. Lori Calvesina. Thank you. Thanks for having me. Thank you. All right. Let's get over now to Kate Rogers for a CNBC News update. Kate.

Hi, Brian. The White House says Hamas and Israeli negotiators are addressing technical details of a ceasefire plan for Gaza backed by President Trump. Delegations from the two sides began indirect talks on the plan in Egypt today. The White House says the Trump administration is working to advance the plan as quickly as possible to end the two-year war. Jim O'Neill, the acting director of the CDC, called on vaccine manufacturers today to break up the measles, mumps, and rebella vaccine into three separate shots. President Trump previously made a similar push. MMR vaccine maker Merck said in a statement

today there is no published scientific evidence that shows a benefit to separating the shots. And a group of labor unions, non-profits, and solar companies sued the Trump administration today over its cancellation of the $7 billion Biden-era solar-for-all program. It was aimed at expanding solar energy and low-income communities. The complaint claims the Environmental Protection Agency broke the law by rescinding awarded grants

to 60 nonprofit groups, tribes, and states. The EPA did not immediately comment. Brian, back over to you. All right, Kate, thank you very much. Kate Rogers. All right, still to come, while your trader thinks this mystery stock with earnings on deck is cleared for 10.

takeoff. That's a hint. All right, time now for a power check, three blue chip names that your guest says, always going to trade for us today. Joining us now is Lansberg Bennett, Private Wealth Chief Investment Officer, Michael Lansberg. Michael, welcome back to CNBC. Let's start with Delta. It is down here to date, but Delta is your top airline pick. Why? Yeah, Brian, again, we're not huge fans of airlines, but this is a best in breed story. They've done a good job of kind of controlling expenses.

Airlines admittedly are tough to control expenses because obviously jet fuel is a huge component. But they're very well run. They actually have less exposure to the international markets, which in a tariff kind of headline world, that's actually been a better story. Because you've had less exposure from people kind of being mad at the United States. They're still seeing a lot of travel. We expect earnings to be up, which again, you know, accelerating earnings growth is a key component here. We do like the stock here from a price standpoint. Okay, next up is PepsiCo, another name where the stock is down this year. Of course, a lot of headwinds around sodas with RFK Jr. and the health department. Maybe that's a reason to own Pepsi.

Yeah, we don't like it. And part of that is that store. Obviously, RFK and kind of going after some of the making America healthy. They have a lot of these empty carb products. It used to be a great thing as they had the snack business was a good business. It's not now. Which obviously, the GLP wants and being healthy. And again, they're going to look at earnings down year over year. And our big issues, I always look for earnings growth. At the end of the day, I'm looking for growth. And even if they beat expectations, expectations have been lowered so much, it's still not going to be any growth. So for us, there's way better places to put your capital. And again, it's a story that doesn't have any growth. Maybe at some point they'll get their footing back. But I think you're going to see change people looking for healthier options. And sodas and snack food just really aren't there. Okay, the last one. As a little company, our viewers may or may not have heard about called NVIDIA. But in the news a little bit lately, Michael, not sure if you've heard about that. It's down today, but it's up nearly 40% on the year. It's made a lot of people multi-super multi-millionaires. What are we doing with NVIDIA now?

Yeah, so full disclosure, that's our largest box position as a firm. So we bought it back in 2019. It was the first time we bought it. Today's news from AMD isn't necessarily an indictment on Nvidia. I think Nvidia is still clearly the number one in the space, but it opens up questions, who's number two? Is it AMD or is it a broadcom? With that being said, I've kind of consistently said, people need to look away from just the Mag 7. Probably all the viewers here own Nvidia. I'd probably, I'd say to hold it, but you still need to expand your ownership of the AI story to, again, just not just chips, but the power, the HVAC. You've got to continue to do that. So, again, And we wouldn't be selling Nvidia here.

We'd still be holding it. But I think clients need to look to diversify away from just a one story. If you didn't get any pop from AMD, Oracle, or Broadcom in last month, you have too much your money in one chip company. You need to look. It's tough. Made him a lot of money, though. You know, you want to hang on to that because it's just printed your money and you bought

a solid gold yacht, hopefully with it. Michael Landsberg of Landsberg Bennett, private wealth. Michael, thank you. All right. Coming up, another key development in the energy market that might ultimately impact. what you pay for your next trip to the gas stage. Stick around. There is OPEC and oil news to report yesterday OPEC's group of eight nations raised their output quotas again by 137,000 barrels a day. However, it is important to note this does not mean that actual oil output may pop higher. These are

just the written quotas these countries are agreeing to. In a note today, UBS says some of these nations are maxed out on production. Others are still trying to get compensation cuts for past over production. Yes, the OPEC math can be complicated. Here's your bottom line. OPEC and its group of eight with Saudi Arabia, Russia, the UAE, and others have now boosted their total output quotas by 2.7 million barrels per day since April. There is also a massive amount of oil in floating inventories. In other words, on ships on the water right now. now. And that, and OPEC production moves to raise output quotas, have pushed oil lower. Oil's a little higher right now, but it's still under $62 a barrel, which, remember, is really the mid to high $50

range if you adjust for inflation from just a few years ago. All right, speaking of energy, we've got a key energy interview tomorrow. You're not going to want to miss. Nick Delosso is the president's CEO of Expand Energy, basically the former Chessesson. energy, the largest natural gas producer in the United States. That interview with Nick here on set tomorrow on Power Lunch, 2 p.m. Eastern Time. All right, we're not done. And still ahead, this critical stock that was popping 75% earlier today. The name and story.

Next. All right, welcome back. Before we go, we want to highlight a company that you've probably never heard of, but is soaring today. It's a company called Critical Metal. CRML is the ticker. I'm not familiar with the company, but earlier today, a Reuters report said

that the U.S. government is in talks or maybe in talks to buy a stake in critical metals. Now, if it happens, it would be because Washington has a broader effort to secure a reliable supply of what they would consider rare or critical minerals. You know, the minerals and elements and metals, whatever, that power everything from electric vehicles to batteries to, yes, advanced defense systems. CRML, a 43% right now is up 75% earlier today. It's based in New York City.

But just to note, it's a smaller cap company, had about a dollar share per share price a couple of months ago soaring on a Reuters report. All right, I'll see you on fast money tonight. Thanks for watching. Closing bell starts right now.