Power Lunch - Dow rallies 4/30/26

Episode Date: April 30, 2026

Meta falls, Alphabet rises after earnings. The latest on the Strait of Hormuz with Kpler's Matt Smith.    And BMO's Evan Seigerman joins on the state of healthcare after Eli Lilly earnings.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Markets and your money up again on this earnings paloosa, and we hit all the highlights, as well as a few low lights. Welcome to Power Lunch, everybody. Key earnings movers in just the last 24 hours, the winners, Qualcomm, Quana, Lily, Caterpillar, contributing more than 500 points to the Dow. Alphabet also out there. Two key laggards, though, meta and Microsoft. We'll look at both the fundamentals, Kelly, and the technicals. Look at those names up double digits today. And later, Kyle Bass, co-CEO of Rochfort Asset Management,

on how geopolitics is driving global markets from rising tensions between major powers. He'll break down how he's investing in America's strategic future. We'll also talk about where the biggest risks may be emerging. $710 billion. That's roughly the new projected number for AI CapEx for Meta, Microsoft, Amazon, and Alphabet.

It's a massive number. And as you can see, investors are a little divided on who they're giving that license to spend. Meta actually pacing for its worst day of the year down about 9%. Alphabet, having its best. After all the gains they've already notched, we have the story covered from all angles for you. James Demert is CIO of Main Street Research. He's a shareholder in all of these names. Craig Johnson is chief market technician at Piper Sandler. Here to kind of talk us through it, Craig, from it. I mean, look, I'm an amateur technician,

but I think when things break out, they keep going. But when they break down like meta, I mean, is that something to worry about, do you think? You know, Kelly, I think you're doing a great job with the charts. and we'll work on getting you a CMT designation in the future. But I think you've got to keep it really simple. When you start seeing charts like meta, where you're failing to break out, you're falling below your simple moving averages, probably something to avoid at this point in time. And then on the flip side, if you come back and you start looking at what you're doing with Alphabet right now, I mean, what a great breakout, all-time new highs, a simple point and figure measured objective there could take the stock to over 500.

Wow. So a lot of room left to go. But got to play that momentum. Stick in front of what's working. It's at 385 now. Correct. So you're seeing, and look, credit to Google to Alphabet for having met Chatschuk. Remember a couple years ago when Microsoft was all the rage because they were partnering with ChatGBT.

Google comes along, unveils Gemini, and powers it with its own chips. And Nvidia is down 4% today. I don't know if that's part of what is happening. Is the rise of Google is coming to some extent at their expense? I think that could be some of it. But I think more importantly, when you just look at the size of the size of it, of Nvidia across the board. You're over a $5 trillion market cap. I keep raising the question to people, can it really be a $10 trillion market cap? I mean, when you think about all the mutual funds,

bonds, money market funds out there when you look at it on the lipper data, you'd be talking about 20% of those equities just in Nvidia. I question that. It's hard to imagine. It's hard to imagine. Then if you look down cap, I can find a lot of stocks in optical companies, semiconductor companies, other things that where you could potentially find doubles or triples, I don't think you're going to get that again with Nvidia. Great company, but I'm not sure it's another double. I know we'll get some of those names in just a minute, so sit tight, but I want to go to James, get sort of the fundamental side, the earning side.

Meta, obviously, James, you've owned it for a couple of years. It's down 9% as Kelly said. Are you buying on this weakness? We're not buying on the weakness, Brian. I think investors here, it's the weakest of the four. But to be honest with you, still strong fundamentals. You know, what they really need to do is get an independent AI solution, whether that's meta-superintelligence or something else.

And that's really what they need to work on. In the meantime, they're cutting costs, which is accretive. They didn't really have the CAPEX spending that a lot of the street was looking for. And I think there's also some concern, reasonable ones around child safety litigation. That could turn into something much bigger. So we're a hold on the stock. But I do think that yesterday was an example of, you know, so many investors questioning CAP-X, is that ever going to come out the other end, the significant CAP-X, to really be accretive

to AI earnings growth? And these four companies, I think, demonstrated absolutely, they're trading at low multiples. Is the greatest, I don't want to say turnaround story because that's incorrect because nothing ever slowed down on their end, but sentiment seemed to. Is the greatest sentiment switch? How about that as a term, James, around. alphabet because Google was kind of left for dead. People said, well, AI is going to kill Google search. That's all she wrote. Suddenly, to kind of the Kelly's point, Gemini has not only

kicked some tail, but I think arguably maybe winning the AI race. Yeah, the hyperscalers, I mean, Google has the, without question, the strongest AI tech stack, without question. And the stock has every reason to be going up because it, because, because, of that. But talk about sentiment. I mean, this whole part of the market, technology stocks in general have been in the doghouse. Everybody's questioning whether the AI cycle is going to come to an end. Is there any, can they continue to spend like this? I think yesterday just showed us that, yeah, they can. And also now the multiples are cheaper than they were in 2023. So you've got low multiples, skepticism. When I see that in my career, I want to be a buyer.

And I think you can do that not just with these hyperscalers, but you can also do it with the infrastructure stocks, such as Invidia. All right. So, your's remaining firmly bullish there while Craig was a little bit more skeptical. But everyone's talking about broadening this out. So let's do that. Where do you see the doubles and triples, Craig? Well, where I see this market ultimately going when you talk about AI, tying it all together,

is when you think about history here. You think back about the Internet when it first started. We needed more and more bandwidth to really make the Internet work. You probably all remember the days where you waited for your website to load on a dial-up modem. Exactly. And now you're at a point in time where until that bandwidth really came up, you didn't get that great experience. And you didn't really get the adoption that people were hoping for. I think you're going to need a similar trend with AI.

But it's going to be now with the communication networks going forward. Look at companies like Corning, Sienna, A-A-O-I, coherent, just to name a few of these. even Nokia that Brian probably remembers from years ago is now an AI play. Corning's been red hot, okay? Correct. Corning's the stock has been super. I think it's up 300%. Right.

I'm not looking at any data, so don't at me. But Nokia, okay, Nokia, not only a river in Finland, apparently very beautiful, but Nokia's known as a former handset provider. Correct. I know you're a chartist, not a fundamental. What is Nokia now and why does the chart look good to you? Brian, when you go back and you look at the long-term monthly chart of Nokia, it's made a huge bottom.

And what has changed with it is two things. One, when you start going to do 6G wireless, they're going to be a big provider of that. And then also, they bought half of the old JDS uniface when that's split in half. And so a lot of people don't recognize that that's sort of the hidden asset there for them. That should be a big driver for Nokia going forward.

James, you mentioned as well, the ecosystem. What ecosystem names are you looking at? Yeah, we'd like, you know, certainly the technology sector, we think cheapest with the best growth rate. That's why we have 8,100 on the S&P, when I think the highest on the street. But I don't think we get there without a lot of other sectors, and we're big owners of Kat, so great to see that, that industrial play.

We think the financials are going to be coming out. Again, it's sentiment issue with the financials, but the stocks are cheap. And I think most importantly for our viewers, investors should make sure they get their passport, be a global investor. There are AI stocks like ASML, Taiwan, semi, Samsung, which, which I think are going to have a great year this year. So we're playing the U.S. market, but also we see lots of opportunity

for multiple expansion and earnings outside of the U.S. James, if I heard you correctly, I think you just said your target on the S&P is 80100. And if I am not mistaken, I believe, Kelly, I can't speak for the other shows. Have you talked to anybody that's that bullish? I don't know if I've heard an eight handle on any S&P target. Maybe one or two on the street.

And, Craig, you just raised, You just raised, but you're not at 8,100, but you did just go up to, what, 75? Correct, Brian. So we just bumped it up on Monday. We were 7150 and we bumped it up to 7500. Brian, I got to tell you, I still view 2026 as a year where it's going to be a bull market, but probably with a lowercase B, not a capital B, in two ways. I think your small mid-cap stocks are really going to be where the performance is at.

And while we're talking about meta and all these big, large-cap names, come down cap. You can find a lot of other names that have been stronger performers that aren't those. But at 7,500, Brian, there could be upside to that number. But here's my challenge. I think Wall Street's super excited about all these AI pieces. But there are some real-world problems geopolitically that still have to get dealt with that we do need to think about. And so while I could see from some of my bottom-up numbers, numbers even higher than where James is at here, I think you've got to try to put time and price together, which a lot of people don't want to do.

And you've got to kind of discount this back until we clear some of these hurdles. $7,500 for us for now. Yeah, we're only at $7,200, literally as we speak right now. I think think think Chata over at Deutsche Bank might be one of the few who has an $8,000 marker. Let's talk about one of the names that's powering the Dow in particular today, which is Caterpillar. They reported last night, record intraday high, up 10%, almost its best day since 2009. Quick take for both of you, James. What do you do with the stock now?

I think you own it. And if you don't own it, I would even buy shares here. I know that's hard to imagine when it's popped, but I would buy, let's say, a third of the shares you want to own. And if it trails off, let's say, over the next couple weeks, add more. It should be a full position, a great example of a global industrial company, still trading in a great multiple. And curious, Craig, for you, what you do here. We talked last hour about a lot of the fundamental changes might be going on in the old economy, revenge that might be powering it higher, but plain and simple, where do you think the stock could go? I think the stock continues to go higher from here. When I come back and I look at the big, longer-term breakout on the charts, it's fantastic what we're seeing. So what I'm going to

play for this one is, first and foremost, we're overweight the industrials and we have been for a while. We continue to think it is going to be a broadening market. Tech has done great. It's a neutral for us, but we see financials, industrials, and these names doing well. And coming back to the chart and Caterpillar, you could buy a third of it, buy a half of it. Just use a 50-day moving average as a trailing stop. That would be the way that would kick about. I know we got to, James quickly, Katz an energy stock now too. It was an industrial. Now it's part energy because they're using the engines to move natural gas. Yeah, you need cat even for data centers. And they're using AI ad cat to be better. So really great company, very, very modern. And another part of the

ecosystem that we hadn't talked as much about until today. Gentlemen, thank you both. James Demert, Main Street Research, Craig Johnson with Piper Sandler. Appreciate it. Speaking of tech, don't miss our exclusive interview with the CEO of Western Digital tomorrow, Irving Tan. They're reporting earnings today after the bell. Shares are up a cool 900% over the past year. Can they clear that hurdle? Few of the others have had a problem doing so. We look forward to that at 1 p.m. To hammer them. Where's the 1,000 percent, Irving? How are you lagging? 900. All right. Let's get a quick check on the bond. market, the 10-year yield, guess what? Just keeps going up. We're debating rate cuts. The bond market's

like, yeah, we're going to do what we want. We're not there now. We were at 445 earlier. We're at 438 now. Highest level in more than a month. Also seeing a pretty big move in the U.S. dollar. The dollar's actually down about 2% in April. I know that's not a big move for stocks, but for bonds and for dollar, it's actually the worst monthly decline since June of last year. The promise of peace talks to in the Iran war, leading traders to unravel bets on the dollar, but we'll see where it goes. We're at 9814. All right. Up next.

Some big-time numbers from one of the world's biggest energy companies and a live look at the real situation on the water around more moves. Right now on ConocoPhillips shares, they're down a little bit right now, even though the company did beat on earnings expectations. EPS came in higher than forecast, so what's the problem? Well, Conoco Philips also said it's now going to cut Qatar from its guidance going forward for now. Conoco Phillips, you remember, a financial partner with Qatar energy and the attacks on the biggest facility. It's outside of Doha, Qatar, impacting Conoco Phillips as well. But I want to be clear, Conoco is still up over 30% this year, even with the 1.5% drop that it sees right now. Tomorrow, by the way, huge day for oil and gas earnings because both ExxonMobil and Chevron earnings,

are out as well. All right, speaking of oil and energy, let's get a closer look at if things are truly getting better around Hormuz. Remember, you've got both the U.S. blockade of Iranian and sanctioned ships, and of course some rogue Iranian military still trying to claim power and authority over Hormuz, which, as you know, is mostly an international waterway. The good news is that you can see there are a few oil and gas tankers going through the strait. That's that blue square there at the top.

The bad news is that there are not very many, and many of the ones that are steaming through are using what I shall now call the Tehran Tollway and likely paying Iran to not get attacked. All of this as seemingly hundreds of ships. Those are all those red dots and arrows in those yellow boxes. If you're on the radio, you're out of luck. All those red dots, though, on that marine traffic map

are just sitting at anchor and waiting for things to calm down so they can go fill up with oil. Matt Smith and his team at Kipler, track all this every day. They only run marinetraffic.com. And Matt joins us now again, Matt. We tried to highlight that there's not a lot of increased activity around that straight, but there is a, dare I say, boatload of ships waiting where do we stand right now? As the same as when I spoke to you last time a few weeks ago, we're just seeing like it just dribs and drabs passing through.

So it's just like a handful of tankers there. It's a common theme, Brian, right? You've got some Iranian tankers going through. You've got some very small tankers. They are all going up in the Iranian waters there, your Tehran tollway kind of area there. And then we've also actually just seen today. We've got 500,000 barrels actually going to Pakistan.

So it's one of the friendlies, you know, that needs clean products. But really, grand scheme of things, straighter form is remains closed. And I know we always kind of talk a lot about should we call it closed or should we call it open? I mean, are there a couple of ships going through, Matt? Whose ships are they? Are they paying a toll to do so? We don't know.

All we know is that they are not going through the middle of the straight there. They're going up past Iran. The thing is, though, they could be doing that simply because we don't know whether the straight of Hormuz's mind or not. and so we're not seeing any of these tankers taking the traditional thoroughfares that have been opened there. But again, it's just very small tankers, most of them Iranian and just some friendlies, and that's basically about it. One thing I like about oil is that it's kind of just math. You're counting barrels, right?

And the marginal barrel doesn't have a lot of value, although now it does because people are using it to store. Oil, we know that we've been in a deficit. Everybody's got, I want to be clear. And Matt, give us your numbers, too. And the audience is probably confused because they hear so many numbers. because everybody does have different numbers, I think. Some people have 7 million shortage. Some people up to 15 depends on the day as well.

But we do know that China's got about 1.3 billion barrels of storage or they used to. Iran has some. We have some. And there's a coordinated release. So with all that aside, Matt, where do you come in on the oil numbers? Is there a $150 oil scenario in your math some point soon? Well, at base case, Brian, is that we're looking at the straight remaining closed for a few more weeks here yet, right? It seems from the US side of things.

The blockade is really working very well by the US there. And so what that is meaning, that is choking off those Iranian barrels in terms of the tankers getting in, the barrels getting out. And so what we're seeing is onshore storage building up there. We're seeing floating storage starting to build. You know, they're bringing old tankers back into the, the grand scheme of things and going to load. And so the situation is that we're going to be seeing the straight probably closed for a few more weeks here yet. And what that means is we're going to see your prices pushing higher.

And so $120, $125 in the next few weeks is our kind of base expectation there. Matt, $4.30 is the national average at the pump. It's up from $4.22 yesterday. It's a new four-year high. Still doesn't appear to be having that much of a macro or consumer impact. But if you're right, it sounds like could the, the pump price still be going high? It's because not just oil affected by all this. It's products as well, like gasoline. Yeah, absolutely, Kelly. And you tend to have a seasonal trend as well with prices

of the pump where they increase through April, May, June, ahead of summer driving season there. So we should expect them to be rising even if all prices stay kind of flat. And so we should expect them to push, you know, 25 cents higher, potentially more than that. With the case that we're presenting, pushing to kind of a $4.75 level, potentially. And what that means is that's when you're going to start to have demand destruction creeping in, you know, on a year-on-year basis. We're well over a dollar higher than we were this time last year. And so that is going to have a meaningful impact, particularly on President Trump's base here.

And so that's why the US is so fixated on trying to get this price of oil down because of what it is doing to the prices of the pump. And they're only going to get worse from here, it seems. Just one other thing actually, Kelly, when we're talking about prices of the pump, another thing to bear in mind is diesel. we've seen diesel now as like $5.50 a gallon there. And so that higher price is going to be reflected through into all of our groceries that are getting moved around our Amazon orders, everything. So it's not just the price of the pump. It's also the inflation on our goods,

too, that we're going to be failing here. Good point. Matt Smith, a Kipler, Matt. Really appreciate the view. It's not something we hear all the time. So thanks for coming on. Appreciate it. Folks, just a quick reminder, sign up now for my weekly new energy intelligence. Please, peace delivered straight to your inbox. It's called Power Insider. Head to cnbc.com slash power dash insider or hit that QR code. Just don't call it a newsletter. I don't like that. I don't like that.

What's wrong with the newsletter? I just don't like it. I don't know. What are you going to call it instead? Weekly energy intelligence, weekly piece. Missive? How about a missive? A scribe.

I just, newsletters overdone. I don't know. I just, just me. I want the audience to come up with the term up with. I like it, though. I want to see what you can come up with. Coming up, Eli Lilly, surging 10% after a blog. Blockbuster earnings beat. It's lifting the whole sector. We're putting the biggest movers under the microscope with BMO's Evan Seagerman after the break.

Shares of Eli Lilly are surging 10 percent today after the company beat earnings estimates on both the top and bottom lines. The CEO joins Squawk Box talk about the outlook for their GLP1 drugs, which saw a demand spike in the latest quarter. It's answering a question a lot of investors had, which is what's the depth, the breadth, the breadth of the GLP1, weight loss consumer market around the world. And here we see just really strong numbers internationally across every geography strength in the U.S. market across both forms, Zepbound and Manjaro. And the team's executing really well. Let's talk more about the full report. Evan Seagerman, a senior pharmaceutical analyst and head of health care research at BMO. Evan, it's great to have you. And, I mean, look, I think they deserve placement up there in the MAG 7 at this point.

I mean, they're an amazing stock, and I think that the stock has been under pressure year to date. There have been concerns that the market just got too saturated, that there wasn't any growth. But today's earnings kind of put that to bed. Obviously, they still have more work to do with the launch of Fondial, which is their oral small molecule. They're competing against the Wagobe pill. But I think they have a breadth of a pipeline beyond just Zepbound and Manjaro. We're going to get data for Retachritritide. Dave Ricks talks about El-A-Randlid.

Their Amlin asset, which could have 20% weight loss with no side effects. They are really firing on all cylinders, and they are back today. What number revenue growth year on year did they report? And what are their profit margins maybe gross or, you know, operating? I just want people to kind of wrap there. And we know to wrap our heads around this. So just their guidance for the year, $82 to $85 billion in top line, you know, earnings are about $35 to $37.

I mean, that's massive. I think that, you know, that really highlights the demand. And we're not done with that, right? This is just 2026. Beyond, we see growth beyond that into 27, 28 with international expansion, as Dave Ricks had also said, with OUSMajara, which is their brand name for obesity, really crushing it. So can investors feel comfortable owning this for the medium to long term? You mentioned kind of places, but no one wants to buy it at the moment. These pharmaceutical companies can be notoriously cyclical, right? You don't want to buy it at the moment that we start talking about patent cliffs or competition.

and all of that. Right, for sure. Well, you know, I have a buy rating on the stock, so I would recommend buying Lilly at these levels. Even with the move today, I see more upside. The stock is down 13% or so year to date, so there is still more room to grow. And I think that they really have a lot of like long-term strength in their pipeline, even when you think about competition. Because they've cut the price of these products so much, they are the low-cost, like, manufacturer, and I believe that they'll be able to compete with generics when those eventually happen. But they have a really great portfolio beyond just resepitide. And that doesn't even look at their inflammation business, their neuroscience business, their oncology business, which was my question on their call.

And I think that that's also very important. They have a lot of diversity in their portfolio. You've got an implied return of 40% from here on vertex and 27% on regenerants. You're very bullish on vertex and regeneron with all the coverage of GOP-1s. Well deserved, by the way. Look at the Lilly results you guys just talked about. I get it. but you fear that investors are ignoring or avoiding or whatever word you want to use, better opportunities simply because we're just obsessed with weight loss drugs. Two ways that I think about it. One, I think weight loss drugs are very important and definitely driving, you know,

interests from generalists and specialist investors. Two, when it comes to the more biotechy names like Vertex and Regeneron, you've got to get comfortable with the science. You know, Vertex has a cystic fibrosis franchise, rare disease, They also have drugs for kind of rare kidney disease. You have to really understand the nuances of those to be comfortable investing. It's a lot easier for folks to just look at obesity products. When it comes to regeneron, complicated business, we're waiting on some melanoma data,

which could be very important for the stock, expected by, you know, mid-year. Beyond that, they also have a rare immunology franchise, you know, hematology. So they have a lot of assets that specialists are much better suited to get comfortable with. Michael Yee was saying the other day that pharma stocks are. making a comeback. And we've talked, we had J&J CFO on this program. That stock's done amazing. Bristol Myers is trying to play a little bit of catch up year to date. Do you think that's true and why that pharma stocks are coming a little bit back in favor? I think pharma's been back since we started giving the MFN deals late last year, right? That took a bit of pressure off of just

drug pricing and concerns, you know, tariffs. And, you know, these are relatively cheap to some of the AI names, for example. And I think once all these companies get through their Lowe issues, like Merck solving that, Bristol solving that. These become more palatable investments. They all have really strong, most of them have really strong dividends, right? Even Pfizer, which is pretty controversial. Not everyone loves it. Great dividend. You know, some important IP settlement this week. So you have visibility into the P&L into the 2030s. All right. Well, Evan, we may be seeing more of you. Thanks for making the time. Thank you. Evan Siegerman with BMO. Appreciate it. All right. After the break, he's got a new firm name. He even has a new hedgeger.

shot. But he's coming with the same heat as he always has. And is Kyle Bass on the Middle East, China energy markets. Look at that. Mary, the firm picture. Rochefort? I know. Rochefort. And we're back with Kyle right after this. Markets, you could see there, rocket higher, the S&P 500 and NASDAQ 100 powering to more all-time highs today. Investors are clearly looking past Iran, past the war, and past higher energy costs. But should UBS out with a great piece of data showing that global oil and gas volumes are down about 13% since the war began, and now many ships are taking new routes around the bottom of Africa to the United States. It's also not back to normal in Hormuz.

You heard Matt Smith earlier talk about it. There's another chart. Traffic still stalled with some new report suggesting the U.S. is pitching a new coalition to get ships moving again. here to share his insight on the geopolitical tensions. The impact of what you should do is Kyle Bass. He is now co-CEO at Rochefort. It is a new U.S.-based national security-focused firm that invests in defense and industrial companies.

I can personally tell you, Kyle, very, very well-connected and dialed in on all things international and national security, even as a new picture. Kyle, so we're glad that you're on. Thanks very much for joining us. I have to admit, I'm optimistic about how this all ends. I want to be, because I'm never going to bet against the U.S. or the U.S. military, but I am a little surprised that the market seems to be like a honey badger just doesn't give a, you know what, are you? Yeah, I mean, look, Brian, it's important to realize that the impacts of the straits closure are going to be bespoke.

They're actually going to be, they're going to be adjudicating a long policy prescription for some countries around the world that have just tied a green noose around their neck and just choke themselves with it. When you think about the countries of Europe, the UK, even Australia and others, they've just decided that refining is a dirty business, that they just need to push it out to places like Singapore and Malaysia. and these countries have engaged in huge renewables pushes, and in the end, they've been doubling down on these renewables pushes, and what you see happening now is they are going to pay the price. The U.S. economy is not going to pay the price that the U.K. economy is going to pay, or that the French economy is going to pay, or Australia, for that matter, and the others. We are the global powerhouse in both hydrocarbons and food and AI and technology. we literally have the benefit of being the best at all of those things these days.

And the countries that have kind of pushed off those dirty businesses because they really wanted to pursue green policies, those are the countries are going to be paying $250 a barrel or more for their refined products like diesel and jet fuel and things like that, Brian. So again, this is not going to be felt evenly around the world. Kyle, it's Kelly. If I could just jump in here for a second. What I appreciate is you're not just talking about this. is a kind of geopolitical analyst, although we love them as well. But you are investing in industrial and defense companies.

What kinds of companies are you investing? Are there any public companies our audience might be familiar with or ways to think about the characteristics that you think make for an attractive investment in those areas right now? Sure. It's a great question, Kelly. I think you know our defense budget today is about a trillion dollars on about a $31 trillion economy. Call it a little more than 3% of GDP.

If you look back through history, throughout the Cold War, we were 5.5 to 6% of GDP, going all the way back to Vietnam, around 11% of GDP. And in World War II, we actually spent 47% of GDP, 1945, because we had to win. And one could argue that 3% is not enough. And you see President Trump already saying he wants to have a trillion and a half dollar budget next year, a 50% increase, which would get us to like 4.5% of GDP. And so when you think about those tailwinds, not only in the U.S., Europe's finally trying to get out of their own way and finding a defense investment because the U.S. has been providing that nuclear umbrella to Europe all along, and they haven't been towing their weight with their NATO pledges. So Europe's going to have to actually step up and start funding their own defense.

We are going to invest heavily in our own munition stockpiles, our own attritable, call it smaller, easier, let's say, less expensive weapons. And that is going to be where the U.S. economy is going to be driving defense spending for the next decade or so. And so, Kelly, what we're doing is helping those small companies, the U.S. best and brightest, grow, grow their balance sheets, and be able to take orders from the U.S. government and our allies. Yeah, two things. One comment, one question. The question is, then, who wins in the U.S.? I mean, who do you think is going to be the winner, Kyle? And then the comment would be when or question, when does Europe get involved? I don't know what they're waiting for. And Asia, too, they have more to lose. I know that we're the ones that were in the war with Israel.

I get it. But Asia has more to lose than we do. So does Europe. I don't understand what they're doing. They're doing nothing. China is anomalous because, Brian, as you know, they built 500 million barrels of SPR storage last year alone. They've got 1.2 billion barrels of storage. China's got a little bit of time here. for this to play out. Think about it. They just built an SPR in one year larger than our SPR. That's pretty, orders magnitude is pretty enormous. And one could say that they're doing that because they're preparing for global conflict of their own. If and when China moves on Taiwan, you know what's going to happen in the Straits in the Straits of Malacca and what the U.S. will engage in from economic warfare perspective.

What's that blocked that so that they don't get the oil they need? Yeah, I mean, look, Brian, you don't have to be a geopolitical genius to figure out what our move will be if China moves on Taiwan. It's going to be terrible for both economies, but it will absolutely destroy their economy if we press that financial nuclear button and also blockade some of their shipments. And so, you know, this is Sun Tzu's art of war. Unfortunately, you know, the world would be a better place if Xi Jinping would leave Taiwan alone. But since 2017, he's told us he's going to take it. what the U.S. has got to do, and it's something we're doing through the Department of War, through the initiatives that Secretary Hague Seth and President Trump and the others that the

Department of War have been engaging in, we are acting behind the scenes like it's wartime. We are absolutely spending hundreds of billions of dollars on our munition stockpiles and our advanced weaponry, and it's something that has been a long time coming. All right. Kyle, really, by the way, why a French name for the firm? Okay, so this is a great name. Joe Rochever was an unsung hero in America. Back in the World War II, after the raid on Pearl Harbor, Joe Roachford was a non-commissioned officer who became the Navy's top cryptographer. It was his job to break Admiral Yamamoto's code. And he jumped rank and went to the Admiral and said, I've broken their code. It's Midway Island, move the aircraft carriers.

It's something he could have been court-martialed for and kicked out of the Navy. So he bet his career on it. And not only did we move our aircraft carriers, we repositioned them for a counter strike and we sunk four Japanese carriers. That was the turning point of World War II in the Pacific. We thought that was a perfect name to name our firm as we go to lend money to America's best and brightest. Another great, great man and great person from Dayton, Ohio, along with my wife. How do you know that? Michelle Cruser-Cabrera, Courtney Reagan, and Joe Rochefort. And the right guys who did something with planes. That's right.

They went in the air, I think. Kyle, thank you for sharing the story. We appreciate checking in with you. Thanks so much. My pleasure. Thank you. Kyle Bass. To Leslie Picker now for the CNBC News Update.

Leslie. Hi, Kelly. The House of Representatives this afternoon finally passed legislation to reopen the Department of Homeland Security but provides no new money for immigration enforcement seen as a major win for Democrats.

The bill now goes to the president for his signature, The vote comes just as the paychecks were about to be delayed once again for DHS employees. President Trump pulled the nomination of wellness entrepreneur Casey Means to be the Surgeon General today. It's the second time the president has withdrawn a pick for the nation's top doctor. In place of means, the president said he's nominating Dr. Nicole Sapphire for the role. She is a radiologist by training and has been a contributor to Fox News for several years. And for the first time in seven years, a direct commercial fly,

between the U.S. and Venezuela landed in the capital of Caracas today. The milestone comes just after the January capture of Venezuelan leader Nicholas Maduro by U.S. forces. Guys, I'll send it back to you. All right. Leslie, thank you very much. Up next, our market navigator, homing in on a stock that's quietly rallied 80% in the last three months. Stay tuned for the name right after this. Welcome back to Power Lunch. I'm Dominic Chu with your market navigator.

Now, much of the investing world is focused on big. tech earnings this week for a good reason. But our next guest is eyeing what he says is a different buying opportunity in the sector, but in a stock that's been on a massive run this year, that's not one of those hyperscalers. So joining us now for the case is Bob Lang, founder and chief options analyst over at explosive options. Bob, there's a lot of focus, of course, on the four hypers that reported this past day. And then, of course, Apple after the closing bell today. But what stock are you watching right now for that next big moment? play? Well, it's great to see you, Don. So one name I'm really focused on here is Dell. And

if you probably remember Dell from back in the late 90s, it was probably the number one, number two stock performer in a whole decade. And they've kind of reestablished themselves as a huge AI data center and cloud provider here. Michael Dell is very bullish on the AI and the data center and the cloud. Just a couple of months ago, Don, they came out with the numbers that they said that they more than doubled their server sales and capacity to about $30 billion, which is pretty astonishing, more than doubled in the first couple of months of their fiscal year. So that's pretty amazing.

But I'm looking at Dell here because it's come off of a recent high. The stock was up about 85, 90 percent from the late February period, Dom. And it's come off a little bit right here. They have earnings coming out later in May, and I think it's a good opportunity here. Now, Bob, just really quickly, how would you play it? Buy the stock outright or you're an options analyst? Well, I'm really an options guy here, as you know, Dom. So I think buying July options over here, I've been seeing some really brisk options activity for Dell from the June 200s all the way out to the June 240s.

Now, the company will report earnings on May 28th. I think the June is a little bit too soon for that. So I'm looking at the July 210 calls, which all. also has seen a lot of action recently. It has large open interest as well, too. So I'm looking at the July 210 calls, buying them for about $20 to $21 straight. Dom, that's about 10% of the price of the stock. The stock is looking for a $35 to $36 move on earnings when it comes out on May 28th. So I think that if the stock continues to rise, it's dipped a little bit again, often 10%. I think this has got an opportunity to get up to the two 50s.

All right. Bob Lang with the trade on Dell, thank you very much. We appreciate it. Brian, I'll send things over to you. We're not done with you, Dom. I want you to come over. We want to talk to Dom about something else, because Dom, people may know this, they better. You're our golf guy. Okay. Not only big golfer. You cover golf for us. You're at golf tournaments. Do a lot with our partners at the Golf Channel. Live Golf. Okay, reports. Saudis are going to pull out. Where does Live Golf stand right now? And what happens? happens to the players, that let's be honest, took a lot of money to go to live.

Where do we stand right now? How much time do you have? Oh, about 90 seconds. It's a complicated story. All right. So what happens right now is we are getting on the record officially a statement today that confirms what we've known for the past two to three weeks, which is that the PIF, the public investment fund in Saudi Arabia, is no longer going to support LiveGolf past this season.

They are still funded for this season, but nothing beyond that, which means that live golf, yes, faces significant headwinds coming up, but it is not dead yet. What they have to do now, the current state of play, is they have to do what any other kind of startup or mid-sized company has to do when they run out of funding. They have to go find more funding, which means, in essence, they have to go out there and solicit investors, get sponsors and advertisers to kind of buy into this story. Now, I've gotten the chance over the last few weeks to speak to a number of insiders within the live organization, familiar with the financials, familiar with the operations. They talk about the 130% increase in ticket sales.

They talk about the 40% gain in sponsorships and partnerships and partnerships. They talk about the doubling in revenues between 2024 and 2025. Now, if that sounds like a roadshow pitch book or a slide deck, it's probably not so far off the truth, right? Because that's what these guys now have to sell and what Scott O'Neill as the CEO has to get investors. I just heard him making a comment where he said, we have how. a billion dollars in sponsorships lined up. I mean, all of this is contingent on all of those sponsorships, not pulling out once the tournament collapses, which maybe it will, maybe it won't, but he now has to figure out how to take that money. So he's like, we do have this wherewithal,

and we just have to figure out kind of what exactly to do. And to Brian's other point of this, his question about what the players are going to do right now, there are a slate of players, reportedly who are now trying to figure out what their options are, whether it be for the path back to the PGA tour, DP World Tour, or other ways to get back in the organization. a slew of very high profile live golfers at the higher end of that echelon, who are publicly committed to what's happening with live golf, not the least of whom is Bryson Deschambeau, arguably the most important figure in that live golf world right now, who has said on the record for the last couple of weeks that he wants to make live work if live is still around. That's his priority.

Didn't they just postpone or whack a New Orleans? In New Orleans. That's not a great sign if you cancel a tournament. No. And that. And that's, and that. That was what some would debate is the precipitating factor for the cascade of events that we've seen over the course of the past 48 hours. Did the Iran war play into this at all? I'm just trying to, if it's the Saudis and we see what's happening, I'm just wondering, did the Strait of Hormuz impact live golf? You know, it's interesting. To your point, I was with our sister network golf channel having the same conversations with the folks over at golf today. And one of the things that we brought up in the wake of the Iran war starting is that for many of these countries, not just, Saudi Arabia, priorities may shift, and certainly even more so with the fact that there's been an immense amount of damage from a human toll perspective, an economic toll perspective, an

infrastructure perspective, that there may be some reprioritization of what these guys are spending money on. When I say these guys, I mean everybody in the region right now. So the way that live and the PGA tour have to function is interesting, because I mentioned this situation that Scott O'Neillet live is in. It is not unlike the situation. It is not unlike the situation. that Brian Rolap, the CEO of the PGA Tour is in, they're just working from different bases. The Live is a startup kind of thing. The PGA Tour is your blue chip company,

who still has to, they have their own private equity ecosystem, and they have to find sponsors and advertisers to fill those ranks. So different kind of games, but it's a similar strategy. Should be a little easier now. I don't know how you have time to play golf when Brian's out. You know, I haven't, to be to your point, I haven't played golf yet really this season. Is he ever not here?

It's also been cold for six months here. It has been. It hasn't stopped me before. It's like 45 and raining for six months here. What has stopped me is kids' activities, and I don't have the number that Kelly has. Well, I don't play golf. Just saying. More power lunch after this short break. All right, Monday and Tuesday, out west, Milken Global Conference, big lineup.

Brian Cranston, Breaking Battle, join us to Governor. Florida will join us, Doug Kimmelman, who's probably the best energy investor you may never have heard of. We'll join us on Tuesday, big week next week. You're making me think it's Friday already. We've still got one more day to go before we get to that. Thanks for watching, Caroline. Closing don't starts now.