Power Lunch - Big Tech Rally, Bypassing the Strait of Hormuz, Strategy CEO Interview 8/3/26

Episode Date: August 3, 2026

The major averages are moving higher as shares of major tech companies are popping on the first day of August trading, while oil prices decline after President Donald Trump called off planned strikes against Iran. Dominic Chu and Kelly Evans are joined on-set by Invesco’s Brian Levitt to break down the fundamentals behind today’s rally and what it means for investors going forward. Meanwhile, Matt Smith, Kpler’s Director of Commodity Research, also joins the anchors in-studio to discuss how global oil producers are continuing to seek alternative export routes amid the ongoing conflict between the U.S. and Iran. Later on, Strategy CEO, Phong Le, sits down for a “First on CNBC” interview to talk about his company’s latest Bitcoin sale worth more than $105 million. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Stocks are higher across the board at this hour. Welcome to Power Lunge. Alongside Dominic Chu, I'm Kelly Evans. Brian is off this week. The dowry takes 53,000 up 600 points today. The index led by Amazon at an all-time high, which surpassed a $3 trillion market cap for the first time. Only the fifth company, by the way, Dom, to ever reach that mark. All right, plus an interview that you do not want to miss. The largest corporate holder of Bitcoin, strategy, under pressure in the last year, down more than 70% in market value of the company selling. more Bitcoin just last week. Its CEO, Fong Lee,

is actually here today. That conversation's coming up, Kel. Let's start with Tech on the rebound. Take a look at the Tech Spider ETF, the XLK. It's in the green after coming off its worst month and more than a year. And despite the lingering AI anxiety, your next guest is still sticking with the group. Brian

Levitt is Chief Global Market Strategist, Adam Vesco. It's great to have you here. Welcome. To be here. Thank you. So let's take a breath. It's a fresh month. I actually haven't even see the ISM report yet today. Be that what it may. Does that mean fresh energy in the AI trade? What is the story right now for the markets? It does mean fresh energy in the AI trade. And by the way, the ISMPMI looked just fine. So, yeah, look, the market had a momentum unwind last month, but the fundamentals continue to look quite

strong. And it's always interesting to see investors get so concerned after a big run-up when there's some volatility or in a consolidation period. But if you look at the hyperscalers, you know, as an example, the highs are higher, the lows are higher. It's very common in a structural bull market. Yeah, structural bull market. Leaders, I guess, are the traditional leaders. Earning season has confirmed that, I mean, look at the earnings are strong, the guidance

is strong, the margins are strong. But today is a reminder. I mean, in memory, the stocks are selling off on the CXMT might bring out to say, there's still this concern. Our guest last hour said he thinks you should move to where the agent traffic is going to plays like networking, cybersecurity. I'm curious how you think this whole AI trade is evolving. Yeah, I think that there's going to be different periods of concern at different parts in this full AL buildout, but we're still very much in the early innings of this.

I know I'm not the first person to say this. A lot of what we're doing right now is still the automation. of work in terms of the augmentation of work or the next agentic phase where it's AI is going to be working for us all the time while we're sleeping that that's not even close to being prevalent in the economy yet and that's where we're heading so you know ultimately I think all of this investment is going to pay off ultimately I believe that there's going to continue to be a struggle to generate enough commute compute and when you've got supply challenges that's going to continue to be supportive,

even of some of the businesses that are getting hit right now. If there is a situation amidst that backdrop, where you do find, I guess, relative opportunity, given the construct, we've seen a huge pullback in semiconductor stocks almost across the board, at least from an ETF index level, certain parts of that memory chip market,

specifically, in technology overall, there are places that are disconnected. So where exactly then do you put the most emphasis on where you find the most relative value? Well, I would say if you like the hyperscalers at the beginning of the year, if you like the chip companies at the beginning of the year, they're now, they've now come off of what were pretty significant highs. And I would view that as a reset and the opportunity to get back involved at more reasonable valuations. I also think, you know, that whole software

apocalypse or whatever we call, the SaaSpocalypse, a lot of that is likely overdone. as well, you know, this idea that, you know, each of these software businesses are no longer going to have a fundamental model. I don't think that that's right. I think a lot of them do have the data and the services that will continue to be demanded by businesses and will use artificial intelligence to be more efficient. So I would look at these areas. If you believe this is a structural bull, then the rolling consolidations or the rolling drawdowns in technology create opportunities in each of them. This is just simple for you. You think, tech is still cheap and you're big believer, AI super cycle.

I mean, does that leave everything on the table then? You know, do I have to worry about memory versus the sem? Do you have to worry about what AMD is going to say this week? You know what I mean? Yeah, I mean, there'll be short-term volatility and around different reports. But no, if it's a structural story, then no, we don't have to be as concerned about it. What I would watch for, which we certainly have not seen, do we see big earnings disappointments? Do we see revisions lower?

Do you have concerns in the credit market that have spreads moving up higher? We just haven't seen any of that. So in essence, what we had was a momentum on wind during which the fundamentals continue to remain strong. If you see significant deterioration of the fundamentals, that's a different story. Can we then talk about where you are seeing any potential signs that things could go off the rails anytime soon? You mentioned all the places that we aren't seeing them, but what exactly could? be a place where we might see some signs of it existing right now. I would turn that on its head a little bit because I'm not seeing a lot of signs.

If I go through the things that I would be watching, an equal weight index hitting an all-time high, very healthy, credit spreads contained, inflation expectations down, right? The market has already priced in rate hikes from the Fed with really no incident, right? You price in rate hikes with the equal-weighted all-time highs and credit spreads tight. That's all very tight. And small caps, by the way. And small caps, exactly. It's funny you say that. Yeah.

Because there's a little bit of a freak out happening around Kevin Warsh right now. Last week, we saw the long-end rise. Certainly, there's been a lot of confusion about a strategy. But if you were to point to what you just said, equal-weight at all-time highs, small-caps at all-time highs, the stock market. I mean, you have to imagine if there was a broader concern that his... strategy was going to introduce volatility or reduce, that it would at least show some agitia there in the stock market. And long-term yields are a little bit lower today as well. So I'm not trying to say that that's your opinion about him. Maybe you have a different one. But that's hardly the

sign that there's a percolating crisis right now. Agree. Hardly the sign. And, you know, look, markets are volatile when there's some policy uncertainty. So that's true in July. But the reality is he's done a very good job of talking inflation expectations down. The administration has done a decent job of keeping oil prices, at least calm. We'll see if that continues. But ultimately, I think we're in a place where we've seen oil prices peak a while ago. I think interest rates have peaked. I would be a buyer of duration here. So you think interest rates have peaked? You don't think the 10 years go into five or the 30, you're not worried about. I don't see why the 10 year would go to five.

You know, we only got to 5% when inflation was 9.6 on a year-over-year basis. Today, you know, inflation's elevated, but a lot of that is gasoline prices. If you, again, look at the five-year break-even, it's two and a quarter, right? To me, that is price stability, and it's price stability at a time where higher gasoline prices are weighing on a couple of the consumer groups at the lower-income quintiles. Why would you want to raise interest rates? So if, amidst all of that conversation, it sounds like you're constructive and you're bullish, what exactly happens? to the S&P for the balance of the year. We're pretty much sitting on top of 7,600 right now. Is it the kind of 78 consensus? Is it north of 8,000? I think we're going to end the year with

at the start of that number. I think the markets are going to continue to move higher. He's like, it's a confident man right here. Because I think that's, again, you look at the earnings season that we've had. Biggest number of beats on EPS in five years. Guidance, biggest, best since 2021 by some measures. Margins are increasing. Yeah. I remember. at the start of the year, I was saying to investors, if you're not bullish now, I don't know what to tell you. And the reason we were saying that a global economy was expanding. There was a lot of fiscal stimulus. There was a lot of investment in AI. The Fed wanted a lower interest rates. Oil was $55 a barrel. The 10 year was 4%. If you're not bullish now, when will we be? And we disrupted

a little bit of that. And we disrupted that with the Warren, Iran, sending rates higher, sending oil prices higher, but the backdrop continues to mean be good in the earning season. I mean, you just don't see this in the middle part of a cycle. No, usually the first quarter coming out of a recession or something. Yeah, this is just stunning. And, you know, investors are trying to fight it, at least the naysayers are trying to fight it, and I wouldn't fight it. All right. Brian, thanks. Thank you. Appreciate it. Brian Levitt of Invesco. All right. Well, speaking of bonds, the U.S. 10-year yield, pulling back today, as Kelly

alluded to, after hitting its highest level since January of 2025, back on on Friday. But the story today has to be the move in currencies and specifically dollar yen. The yen is rallying off four decade lows after the U.S. and Japan both took coordinated action to support the value of the Japanese currency. Rick Santelli joins us now from Chicago with the latest on just how that currency market plays into the broader macro picture, Rick. Yeah, no, it's all related. As a matter of fact, many believe that what's going on with the yen is just the beginning and ultimately the federal have to raise rates that'll push the dollar higher and even propel of course the notion that we need to control the strength in the dollar.

That's what the administration believes. Hence, we join forces with Japan. But will it really play out that way? Time will tell. Look at a two-day chart of oil and tenure. You can see that they're moving together, but on a percentage basis, not even close. Whales down over five percent. Ten year yields are down five basis points. Now, it is true that yesterday, Friday's yield close, just a whisker under 474, was the highest yield close going all the way back, basically to Jan 25. But the real issue is it's been steadily climbing. It's a war trade. And if we look at the dollar yen at Dom mentioned, look at the interventions in what they've done, Thursday, Friday, how today down at the 156 level.

And indeed, these are levels that really we haven't seen in a long time. And what is it doing to their interest rates? Well, this is the 10-year JGB. The 10-year JGB is hovering a yield of around 2.82%. Their highest yield close was the 9th of July at 286. We're only a handful of basis points away from fresh 29-year high yields in Japan. And maybe that really is the bigger state. story. Dom, back to you. All right, Rick Santelli with Dollar Yen vis-a-vis the bond markets. Thank you

very much for that bond report. We are now just getting started. The possible $400 billion mega merger in biotech that's brewing. Strategy CEO Fong Lee is on the company's recent Bitcoin sales and talking about that. And then what's behind the software run for stocks? All that's coming up. But first, we'll get the latest on Iran and oil with Kepler's Matt Smith, WTI Cruz down almost 6%. $79. $0.70. Back here, we'll be back in just one minute here. All right, welcome back to Power Lange.

Stocks are higher. Oil prices are lower after President Trump called off a planned strike on Iran, sending U.S. benchmark West Texas Intermediate back below $80 per barrel. It's staying there right now, $79.68. Meanwhile, Iran's saying it's working with Oman on a temporary shipping corridor through the Strait of Hormuz to restart commercial traffic over there. That's, as golf producers, to reduce their reliance on that key choke point, spending billions of dollars to upgrade old

pipelines and proposing new ones as well. So how close are those alternatives to becoming an actual reality? Let's ask Matt Smith, Director of Commodity Research over at Kepler, the Commodities Intelligence firm that owns ship tracking platform marine traffic. Matt, thank you so much for being here right now. Let's start with that question, right? Just how much have we seen a disruption this time around for this latest chapter of the Iran-U.S. war. And can we expect any kind of progress to alleviate some of the pressure on shipping through that Strait of Hormuz? Answer is no. And so we're in a situation here where, you know, the Memorandum of Understanding was signed in late June. We saw traffic picking up through the Strait of Hormuz into July as well,

and then everything deteriorated again. And so just looking at the straight over the weekend, We saw tankers being hit in the Gulf of Oman again. Last week we saw maybe average 10 tankers, something like that, passing through both ways, that is. A lot of that, when you're talking about Iran and Oman doing something together, those are the ones that have the main routes right now. So there's the Iranian route, which is going up north. And so that's where a lot of the Iranian stuff is moving.

They're friendlies. And then you have the southern corridor, which is the Omani route. And so that's why these two are talking, perhaps, everyone's trying to involve them to legitimize this idea, but ultimately, the strait remains pretty much close. So I had mentioned before that there's a plan to try to get a deal in place to reopen the straight. We also see Gulf Coast states spending a lot of money to reroute things, either through pipelines to other ports north or towards the Red Sea. Is it even a viable opportunity to do something like that longer term? It's going to take a while to do that.

But if Iran has hypothetically the ability to strike any type of infrastructure in the region, is it even worth spending that kind of money to do it? Because no matter what, Strait of Hormuz open or closed in Iran, not in Iran's hands, there is always going to be a risk of oil infrastructure being attacked. Well, you have to simply because a third of the world's seaborne crude exports leave via the Strait of Hormuz there. And so they need to be redirected to be able to leave, you know, 15 million barrels per day. And so while you have the ability, UAE is going to be able to reroute basically all of its barrels from passing through the straight there by beginning of next year. They've already rerouted a good chunk of it.

You've had the situation with Saudi Arabia, which has the East-West pipeline to send those barrels to the Red Sea. Now you have got the Houthis threatening at Babel-Mendeb, which is the southern exit of the Red Sea, to then target those barrels. And so we're seeing, actually, out of Babel-Mendep, those flows slowing and slowing, grinding to a halt. So you've got the, it's like another dislocation in a series of dislocations. You have the empty VLCC's, very large crude carriers from Saudi Arabia. They are now going all the way around Africa to have to go in the Mediterranean to load. You're seeing from Yanbu in the Red Sea there, all of the crude heading north rather than heading south. And so massive dislocation in terms of time, in terms of opportunity, in terms of fuel costs.

Fundamentals continue to look terrible. And then President Trump comes out on a Sunday and says, you know, oh, we're close to a deal. oil prices drop below $80 a barrel. But if we, as this goes on, is it possible for the majority of the world's crude to come from not this choke point? I mean, if Iran still wants to send that to China, if they have their own arrangement fine, or do you think it's really important that that waterway remains free and open so that other waterways don't try to follow suit? It has to remain open just simply because of the volume involved here. And so you have Iraqi barrels.

They export maybe 3.4 million barrels a day out of Basra there. those can't get out. And so they need to build a pipeline. UAE's building the pipeline. Saudi's building the pipeline. There needs to be this crude getting to the market in a world where we're consuming. Right, but maybe it can do that via those pipelines and not via the Strait of Hormuz. No, absolutely. But that's going to take time as well. That's not in a matter of months. That's a matter of years for that to happen. Here we are. It feels like Strait of Hormuz has been closed for years, right? We're just coming into the sixth month of the conflict here now.

But there's been very little impact. All the things we were warned about, helium, Fertil, I mean, it was all of these products. Oil, the price of oil is almost half the levels it was at the peak of this crisis. So why? Sure. So you've got, the problem is in the products. And so what you've had is you've had China that has come out of the market. It has stopped buying four or five million barrels a day of crude.

And so that has helped things. You've also got the Middle East refiners there. They are not running their refineries. China's not running its refineries. The problem, when you look at crack spreads, the refining margins, where the pain is. You look at all these refiners. They're making out like bandits, whether they're in Europe, whether in the U.S. I mean, an earnings season, we're reminded these companies, earnings are increasing 100-fold. But I guess my question is, why is it that all the shortages

we were worried about, not just in oil, but in helium and fertilizer and other substances, haven't materialized? If we were waking up to headlines about this every day, the situation would have a lot of urgency around it. I haven't seen any real concern about those shortages in a while. Yeah, sure. I think, say something like fertilizers, that's going to be playing out right in the coming months here is the planting season, all that kind of stuff. There is that kind of lag delay there. And that's why when you just bring it back to the projolium side of things, you're seeing that impact on the products. You're just not seeing it on that headline crude price there. And then what can we expect? Let's put kind of rubber meets the road.

Rubber probably needs some of those products as well. Rubber meets the road. What does this mean for prices for the medium to longer term? Can we just expect to see an elevated level of prices vis-a-vis what we saw pre-war? Yeah, absolutely, because we've had five months here where the trade has essentially been closed, and there have been things that have happened to make sure that that oil price doesn't go crazy. But, you know, we've had inventories being drawn down as well. We've got those refineries dialing back. Those things can't happen forever.

You know, China's staying out of the market. It is going to come back in at some point. It may not be next month. It may not be until Q4. It may not be until the end of the year. But ultimately, they're going to come back. We're going to need to replenish inventories as well. You're going to have to have countries that haven't had the stocks in the first place to rebuild those as well

so they don't get stuck in this situation again. So that will rise all prices as we move into next year, knock on wood that we see the straight being opened back up again. And then it's a story of non-OPEC supply coming to market too, because you've got a lot of that coming from Latin America, whether it's Brazil, Venezuela's doing great. How much of that can replace the... I'm highly interested in this idea. If you wait long enough, can you get, for instance, Latin American barrels to replace some of what otherwise would come from the Middle East? Some, but it's just all incremental.

The same thing with the U.S. You're talking hundreds of thousands of barrels a day. It's not millions. All right, Matt, thank you. Really appreciate it. Thanks for coming in today. Thank you. Matt Smith of Kepler.

Speaking of oil, moments ago, President Trump took a shot at the oil majors, saying that Chevron and Exxon are making, quote, too much money. Chevron hitting session lows while Exxon is taking a dip on those comments. Earlier today, the president called on those oil companies to lower gasoline prices for consumers. If it actually happened, it would, oh, then that's the end of that story. Now, if this actually happened, it would be a massive merger. But does it actually make sense? We are talking about AstraZeneca, Bristol-Myers, one of the biggest possible pharma tie-ups ever. Anika Kim Konstantino will join us to explain next.

A pharma mega-deal may be taking shape. Astroseneca is reportedly holding talks with rival Bristol Myers. If the deal closes, it would create the fourth largest pharmaceutical company in the world. Joining us now is Anika Kim Constantino. It's good to see you again. What do we know? What are the possibilities? What would the implications be?

Thanks, Kelly. So this is a really interesting story here. And this potential deal has the market torn. These drug makers are worth more than $130 billion each. So the deal would value the joint company at roughly $400 billion. And that would make it the fourth largest pharma company after Lilly, J&J, and Abbe. The FTA is reporting that these companies had preliminary discussions, so it's unclear if those are ongoing, but we can already point to some potential upsides of a deal like this.

You know, for one, this could make Astra and Bristol-Myers a major oncology powerhouse. Cancer drugs make up nearly half of their respective revenues, and a merger could also lead to cost savings. You know, we have Jeffrey's analysts saying that drug murders tend to result in companies cutting 8 to 12 percent, of their combined operating cost. But there is a lot of skepticism around this deal. You know, one concern is that these companies have directly competing products that could attract antitrust scrutiny. That includes their blockbuster immunotherapies, Opdivo, and Infinsey.

And the other question is whether Astra even needs MNA of this size to fill in their pipeline. You know, the company last week reiterated its goal of reaching $80 billion in revenue by 2030, without major mergers, and around half of those target sales would actually come from the U.S. So that makes this deal rumor a bit of a head scratcher for some investors. You know, we've seen deals like this floated before. They don't necessarily always come to pass. Why do you think the time could be ripe if something like this were, you know, being maybe, you know, talked about, thought about floated?

That's a great question, Kelly. So, you know, when I talk to some analysts, they do point out that Eli Lilly is one factor. You know, this is now a trillion dollar company. We're not only in the age of big pharma companies. We're seeing huge pharma companies. So seeing a company of that size, it doesn't make it. seem very unlikely for two sort of smaller pharma companies at this point to merge in that way. But again, it goes back to sort of the question of, will this get, you know, approval from

antitrust regulators and whatnot? And does it really make sense strategically for a company like AstraZeneca? Do you know why Astra in particular is down 7%? Bristol Myers down fractionally, but that's a big drop for a company on a rumor like this. That's a great question. So for AstraZeneca, again, analysts really kind of question the logic of a deal like this. Astrozenica has done great with their stock price, quadrupling under their new CEO. And, you know, they're really questioned if M&A is really needed here to reach this goal of $80 billion in annual revenue by 2030. That's something that they're already confident in doing without any kind of major mergers here.

So they're questioning whether this really is something kind of worth for the company. Yeah, and if they're going to be using stock to do it, it could also be one of those, you know, if they're an acquirer, if they're using stock in some way, it could be a kind of commentary on their own shares. A final point before we let you go, Anika, on this. You mentioned the oncology side of things as being a big driver. There are possible synergies, of course, antitrust scrutiny as well. Just how much do companies like AstraZeneca and or Bristol Myers of that size need to acquire to acquire that much more in terms of pipeline for their future oncology ambitions?

Right. That's a great question, Dom. And so that's really the big thing that people are debating here, whether you do really need to merge these two companies. They're already generating, again, these cancer drugs. for the respective companies generate half of their sales already. And the biggest, in terms of costs, you know, the biggest thing that they can do is reduce sort of operational costs here, cutting the need for two cancer teams if you have just one

company there. But again, you know, these companies both have very strong pipelines and also cancer portfolios by themselves already. All right. Anika Kim Constantino on the deal chatter in BioFarmer, thank you very much. We'll see you soon. Thank you. All right. Well, Bitcoin is up fractionally today, but the bigger focus of the moment right now is why did strategy sell Bitcoin? More of it. Last week, the CEO of Strategy Fong Lee joins us next to talk all things Bitcoin and just what the prospects for cryptocurrencies

are. Keep it right here. All right. Welcome back. Checking on shares of strategy higher after the company sold more than 1,600 Bitcoins last week, raising roughly $105 million. Now, it's part of a major overhaul aimed at shoring up strategies, finances, and rebuilding some investor confidence, including buying back preferred stock. So will Strategies strategy work? Joining us now for a first on CMC interview is Strategy CEO Fong Lee. Thank you so much for joining us, Fong, for this. As I'm looking right now, the prices for Bitcoin,

just a little below 64,000, so call it roughly half of what it was at the highs just in the last 12 months alone. We're closer to the bottoms here, the 52-week range than the top. what exactly is your outlook for it and how exactly are you navigating this kind of price action given your corporate balance sheet needs? Yeah, look, I think Bitcoin is going through a bear cycle right now, and some of that is

external macroeconomic. I think there's a major funding that's happening with AI. I think there's uncertainty with interest rates. There's uncertainty with wars around the world. And there's uncertainty with governmental legislation. We, as a company, went through this in 2022. We actively manage our capital structure. We rotate into Bitcoin. We sell Bitcoin when we need to.

And we'll continue to do so. And we'll get through this bear market. And what strategy is designed to do is to outperform Bitcoin in a bull cycle, which I expect to happen next year. You mentioned those factors that were driving some of the downside action and sentiment. It wasn't that long ago that many of those factors were. were reasons to be in cryptocurrencies and specifically in Bitcoin, the fact that they were decentralized from traditional finance, the reasons because you didn't have some of the

exposure to fiat currencies and some of the geopolitical aspects, cross-border transactions, why that sentiment shift and how do you get back to a zone where Bitcoin becomes one of those positive plays on those uncertainties yet again? Yeah, I think that will still be the case. So the biggest catalyst that will start to cause Bitcoin to move forward is legislative clarity. And what I mean is we need the SEC and the Treasury and the CFTC to move forward with a set of excellent rules that they have planned to allow tokenization of real world assets to allow stable coins to be implemented. What will happen then is large banks. And we've seen them.

We'll start to move into this space. And that'll be a major catalyst for Bitcoin. And I think that will also allow Bitcoin to be the inflation hedge that we expect it to be. Fong, our graphic just showed that your average cost was $75,000 per Bitcoin and we're at 63 today. So are you a forced seller of Bitcoin? No, we're not a forced seller of Bitcoin. The average cost is not that important to us. It's really where our Bitcoin purchases accretive to our common shareholders and our Bitcoin per share, and they always have been.

We're selling Bitcoin from time to time. And, you know, we've shown that our Bitcoin sales are not really a major portion of what occurs in the market. But sometimes it makes sense to sell Bitcoin to add to our U.S. dollar reserves, sometimes it makes sense to pay dividends. And that's what we've been doing. When we spoke about this last time, the first time you had sold, you said it was to test the market. What is the rationale to shareholders for why selling Bitcoin gives them more share, more value per share? When the original idea was that buying Bitcoin, as it continues to move higher, would give them kind of leveraged, terms. Now, of course, your shares are down by half. What is the shareholder value you are

creating by selling your Bitcoin here? Well, I'll start with the big picture, right? The big picture is we have net $142,000 or $170,000 we've added this year. We've added over 35x the number of Bitcoin that we sold. So I think focusing on the sales of Bitcoin is really focusing on a very small amount. We've done in the last couple of weeks. We've done it in the last couple of weeks. to pay dividends. We've done the last few weeks to buy back stretch, which is trading below par. And that's accretive to Bitcoin per share when we do that. Michael Saylor, the chairman of your firm, has basically put on social media that, you know, while strategy has been a seller, to your point about some of the corporate machinations

around your balance sheet, but Michael Saylor on X said, when I say never sell your Bitcoin, I speak as no one, no one saver to another. I have never sold mine, not one Satoshi. strategy is a public company, not my wallet. Since 2020, it has disclosed it may buy or sell Bitcoin and managed capital. Our shared conviction of Bitcoin remains unchanged. Michael Saylor says he's never personally done it. You have to do it for corporate purposes because of what you just mentioned. How exactly then do you view that future of it, given the fact that you may not have to operate with the same kinds of parameters that Chairman Saylor does? Yeah, look, we have 842,000 Bitcoin.

that's over 4% of the world's Bitcoin that will ever be mined. We're the largest institutional holder of Bitcoin. Last quarter, we passed BlackRock. We're the JP Morgan and the crypto economy. So whether we sell 1,000 Bitcoin out of 840,000 to me is irrelevant to the conversation. The conversation is, what is our role in Bitcoin? And are we adding Bitcoin per share overall to our shareholders? and are we creating value? I think that's an unequivocal yes. Fong, you said that one of the

reasons you sold the Bitcoin was to pay your dividend. Would you have been able to pay the dividend without selling the Bitcoin? Yeah, we have over $4 billion of cash now on our balance sheet as a U.S. dollar reserve. We could use that to pay. We could use that to sell the Bitcoin, to pay the dividend also. And Fong, just how much, and I want to get this because this is a, this is not just about your firm. There is legislation tied up in Washington, D.C., right now, namely the Clarity Act. How important is the Clarity Act to not just yourselves, but the entire crypto industry for its path forward? And we're just showing some stats right now from Cali. Will the Senate vote on the Clarity Act before August recess and the majority,

72% of respondents there at Cali say no? There is rulemaking behind the Clarity Act that has been put forth by Commissioner Atkins at the SEC. by the CFTC, Treasury Secretary Besson, their rules ready to go, and they're either going to go with clarity with the legislature behind them, or are they going to go without clarity with the power of the executive branch? So I think the most important thing is decision on clarity one way or the other, and the rules will get made. All right, Fong, thanks.

Really appreciate it. Good to check in with you again. All right, thank you. Fongley, CEO of Strategy. Let's get over to McKenzie Sagal. now for the CNBC News Update. McKenzie. Kelly, here's what we're watching this hour.

ICE detentions reportedly reached a record high last month for the Trump administration. According to CBS News, more than 46,000 people are facing deportation over alleged immigration violations as the agency broadens its crackdown. The July number eclips the previous record of 43,000 detentions in June. Cuba's electrical grid has collapsed again, leaving millions across the island without power. The latest nationwide blackout comes as the country struggles with aging infrastructure, fuel shortages, and a deepening economic crisis brought on by the U.S. tightening its blockade of the island. The failure adds to a series of major outages that have disrupted homes, businesses, and basic services over the past several months.

And Canada's second largest airline, WestJet, says it reached a tentative agreement over future pay for flight attendants that will land a strike that began over the weekend. More than 4,000 cabin crew members walked off the job in order to secure pay from the time they check in until the time they leave instead of being paid only when planes are in motion. Union members still need to ratify the agreement. Kelly, sending it back to you. All right, McKenzie, thank you. Can software keep on surging? That's the question we'll get into with Wells Fargo software analysts after the break.

Check out some of the performance today across the space. Mongo snowflake up 5%. We've got more in just a moment. Stay with us. Tech stocks are largely rallying today, fueled by some gains in the software sector, which is up 7% over the past week. Michael Turin would know about that. He's a software analyst at Wells Fargo.

Michael, it's good to see you. And we've just gotten some warnings about what we could hear from software companies this earning season, because these budgets in corporate America only go so far right now. And a lot of times they feel like they have to, you know, they need to do the hardware and the cybersecurity and all the rest of it. So it may not be that the software business model is completely dead in the water. although there's some big question marks, it might just be a question of capital allocation. So all of that said, who do you think best, worst position? What are your broad expectations? Yeah, I'd say it's become increasingly evidence software has become the other side of the AI semis trade.

We've seen the mere opposite performance pattern. I'll also say there's increasing appreciation for the risks of the momentum trade and a healthier set of investor conversations around who wins and who loses surfacing in software, which we think will get more supporting evidence around the rest of this year. But just succinctly to your question, I think Microsoft stands to benefit both in the infrastructure and application side. This is the company that we think disproportionately stands to benefit from multi models and a lot of the open source open weight discussion that's happening. Wait a minute. We can't let you put Microsoft in there.

I mean, they're like they might be the best position in the entire field right now. They've got a few other levers to pull. What about some of the more controversial stocks like an Oracle, like Snowflake? Like obviously what happens with the likes of ServiceNow, you know, CRM. The next one I was going to say was Service Now, right? I think that stock's trading at multi-year lows. And Microsoft is still up just 1% year-to-date despite last week's performance. There's still not a credible competitive alternative for ServiceNow's workflow platform.

We thought Q2 was certainly better than the market was expecting and think that that company will continue to gain more investor appreciation as they're able to demonstrate turbid. of growth to your initial observation. I think that's what Q3 and Q4 will yield. I agree. It's a tighter spend environment. Every company is asking for a bit more or they can get it, often tied to generative product advancements. We like service now's position given advantages in the workflow layer, data and context matter a lot. How low to networks and cybersecurity would be another one I would push to the top of the backing order, just given the post-metho's inflection and spend. we're expecting to see there as well. You mentioned, Michael, it's Tom here.

You mentioned the Palo Alto side of things, right? How much more will that cybersecurity thematic be key to this kind of AI evolution for that next leg? Is it going to be as key as a lot of traders out there believe it to be? Really important, right? We saw the market pull back on the initial mythos announcement, and now we've seen a bit of a paranoid uptick and cybersecurity spend coupled with all of the prioritization of AI-related spend that's happening.

So we think the next couple of quarters it will be important for cybersecurity to show that there is follow-through in terms of spend and inflection of growth. Palo Alto, given the strong acquisitions on the identity space with things like CyberArk, really strong core positioning within its core network product capabilities, and just the platform advantages of consolidating spend in the cyber security space, to us, seems like it has just the concert of all the major segments of the business working in tandem. So I think Palo Alto Outso and CrowdStrike will be the first couple of companies that investors focus in on, but very important signal for carrying through some of the optimism that you're hearing.

All right. Michael Turin, Wells Fargo, Managing Director and Software Analyst, thank you very much. We appreciate the conversation, sir. Appreciate you. Have me on. Thanks very much. All right. It's been a summer to forget and get your popcorn out, by the way, and watch for some things. Record debut for the new Spider-Man movie this weekend. So just how long can it and the entire box office as hot performance continue, that momentum in Hollywood coming up next. All right, welcome back to Power Lunch. It's official. It was a record-breaking weekend at the box office for Spider-Man brand new day. The Sony and Marvel movie swing into $360 million at the

domestic box office dethroning Avengers End game for the biggest domestic opening weekend of all time. So here with us is box office SVP of content strategy, Daniel Loria. Daniel, I'm a Marvel fan, so I've consumed every bit of the content out there. What exactly was the driver for a record-breaking performance for this part of the Marvel Cinematic Universe to dethrone Endgame, which was a huge, huge event, cultural even? Absolutely. And we didn't really see this coming. I mean, we expected a big weekend. Coming into the weekend, we thought it would be the second biggest,

movie of all time on an opening weekend basis domestically. We thought $300 million was a benchmark. We were surprised coming in at 360 as of this morning. Great news. It's hard to quantify all these factors on what makes a movie a cultural event. But I will say movie going begets movie going. It's an old adage in the industry. We'd seen a rally earlier this year with movies coming in, overperforming in week

two, three, four, and five. And then the Odyssey, I think, reminded a lot of folks, hey, I have a lot of fun doing this. What else is coming out? And that's what I'm realizing this sort of the worlds that I travel in because there's so many takes still about The Odyssey and I didn't even know this movie was coming out.

And now this is the biggest box office opening of all time. By the way, AMC shares are up, but this is like a $2 stock. So yes, now we have, it's more than one. It was a franchise film, yes, that got us there. But people are showing up at the movies. Where do we go from here?

Well, I think the sky's the limit right now, or at least the sky's a limit until we figure out what happens with Paramount Skydance, Warner Brothers Discovery. I think that's the big question waiting at the other end of the tunnel. We don't know what impact that's going to have in the box office. But right now, I think we're on pace for a $10 billion year. It's going to be the first $10 billion year of the decade, the first in the post-pandemic era. I think we sustained that momentum going into 27.

I bring in Paramount Warner Brothers as a topic because we really need that film supply from the studios to remain consistent. And if they can pull off that promise of 30 movies a year in the combined studio, I think a lot of folks would be a lot calmer. It's just a big question. That's a big number. It is. I mean, if you take a look, we're showing some of the domestic box office takes from this year so far. This is domestic, all right? How big of a deal, though, is the China market? Is it healthy right now? Are the consumers that are going to go out and spend at the box office? and what exactly do we kind of gleaned from the theatrical releases here versus the global numbers that we're going to get at some point?

That's a great question. So every market has recovered from the pandemic differently. China doesn't really need any insights or help from any other market. They're good on their own. We saw them release their own $2 billion film last year with Nejah 2. Spider-Man did really well this last weekend there, $125 million, the best opening for an overseas market, for the title. So right now, I think Hollywood looks at China as a bonus, but never guarantee.

If you rely on China, I think you're in shaky ground. But if a Chinese release can come in and really contribute, I think that's very positive. What else is in the pipeline for the rest of the year? So it's going to be a little bit of a quiet period from now up until December. Luckily, we have December 18th, Dune Part 3, and Adventures Dooms Day opening on the same weekend. That's going to be a massive, massive weekend. Now, I don't know if that's going to dethrone this last weekend, which was the best weekend ever of all time in terms of revenue in the domestic market. And that's why you see that AMC stock price going up. Best revenue in AMC's history. IMAX is up 40% this year. I mean, AMC has a lot of debt problems and COVID kind of

overhang problems. But IMAX is off. Marcus, I guess, is that's doing well. Is that a newer theater chain? No, Mark's been around a number of years. They're a great family-owned theater right now public, but still operated by the family. They're around nationally, originally a Midwest chain, great performance in the stock market from them. We saw records in revenue last weekend from Regal and Cinemark. So the number one, two, and three chains in the domestic market, having their best weekend in revenue of all time, I think that trickles down to the sector as a whole. Just a few moments left in the show here, but I have to ask, you asked about the theater chains Kelly did, how important is Avengers Doomsday for Disney? I think it's crucial,

because there's been some missteps in how Disney has handled some of their blue chip IPs. You see Pixar stumble with some originals, but do well with franchises, like the last toy story. And I think right now where the Marvel universe is, is the new generation of heroes haven't really taken off. But it's the old classics, like Spider-Man, like Deadpool, and like Avengers. Those are the ones we can rely on. That means they have a lot of upside if they can figure that out. It's a nicer story to tell lately. Daniel, thanks very much, Daniel Loria.

Don, thanks to you as well. And thanks for watching Power Lunch, everybody. Closing Bell starts right now. Now. Thank you.