Power Lunch - Food Cost for Super Bowl Parties, 2023 Stock Draft & Cyber Security in an Election Year 2/9/24

Episode Date: February 9, 2024

CNBC’s Tyler Mathisen and Kelly Evans take you through the heart of the business day bringing you the latest developments and instant analysis on the stocks and stories driving the day’s agenda. “Power Lunch” delves into the economy, markets, politics, real estate, media, technology and more. The show sits at the intersection of power and money. “Power Lunch” gives viewers a full plate of CNBC’s award-winning business news coverage, plus a healthy dose of personality from the show’s anchors and the network’s top-notch roster of reporters and digital journalists.   Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Morgan and Power Lunch, everybody alongside Morgan Brennan. I'm Tyler Matheson. Welcome, Morgan. Good to have you here. Coming up, $7 trillion and a dream. OpenAI, Sam Altman, has some ambitious plans for the future of his company and what is needed to power that dream. Plus, getting ready for the Super Bowl, the cyber security threat surrounding the big game. The cost of your wings and nachos. We're going to talk to a former Super Bowl champ as well about what he expects to see on the field Sunday night. But first, let's get a check on markets.

because it is a bit of a mixed picture here with the Dow under pressure, but the S&P firmly trading above that 5,000 mark up about half a percent. Tech really leading the charge here. Shares of Pepsi are falling today after the company surprised Wall Street with a drop in revenue, even though it did beat on earnings and raised its dividend. But the action today is clearly in big tech as AI ambitions just get bigger and bigger and bigger. And Sam Altman says the limitations of current chips are holding back as company's growth. Our team is on every angle of this story and what may come from it.

Deerbosa, Steve Kovac, Christina Parts in Avelis. Deer, let's start with you. What do we know about Altman's ambitions and the price tag he has put on them or someone has? Tyler, we know that they are mind-boggling. This is like the moonshot of all moonshots, and I'm going to use Google's definition here. A moonshot is something that sounds undoable, but if done, could redefine humanity. That is what Sam Altman is reportedly looking at. Let's start with the number.

According to the journal, it could require up to $7 trillion. That is seven times the expected size of chip sales in 2030. It's more than the combined market caps of Apple and Microsoft. It's 7 million millions written out 12 zeros if you're counting. We'll put it up on the screen for you. Yes, you could barely fit it on one screen. Now, the project itself is aimed at reshaping the world's chip building capacity. Altman is going after one of the most complex, expensive, and geopolitically sensitive,

industries in the world. And it's a project that would create an equally complex partnership between open AI, chip makers, investors, power providers, and governments. Perhaps the most interesting part of this is the why. Open AI and Altman are on a quest to develop AGI or artificial general intelligence, which Open AI defines as systems that are broadly smarter than humans, and so has the ability to teach itself, thereby creating new, even potentially smarter AGIs, depending on who you talk to, that could ruin humanity or could supercharge it. A lot would need to be. to fall into place for any of this to happen. There are still a ton of questions that I know we're going to get into.

A few of them, though, if chips are a national security issue, do we let Abu Dhabi fund a new landscape because you're going to need sovereign wealth money for this? Can a software CEO lead the charge when others, notably mega caps, chick companies themselves struggling to catch up to Nvidia? And how do you raise $7 trillion? Guys, I was trying to figure out, what do you think the valuation would be of a $7 trillion investment? You got me, but we'll come back to you in just a bit.

Why don't you ponder that for a minute? It's now on set to discuss this is CNBC's technology correspondent Steve Kovac. I'm guessing if this is as big as these numbers suggest, that this has to have a major governmental drive behind it, one way or another. Exactly. And Deirdre alluded to that, too, the possible security issues. Let me just read. I asked Open AI about this, and a spokesperson told me, I'll just quote here, we will continue to keep the U.S. government in foreign given the importance to national priorities,

and look forward to sharing more details at a later date. So they are taking that into consideration. They are talking to authorities. At least that's what they say they're doing, but we know what the US's position here is. We've had those chip sanctions going from over to China that's been kind of hurting Nvidia a little bit and other chip companies unable to do business

maybe in China in the same way. We're because this technology is seen as so fundamental to the future, it really And so national security. It's national security. And you name it all down the line. So all that gets tied up in there. We're talking about the $7 trillion whiz-bang.

Oh, my God, number here too. Where did that number come from? Was that a number he put on the investment? I guess. That's what the journal is reporting. That's what apparently he thinks it will take to do what he wants to do here. But who has seven, this is a question I would have for Deirdre here is, who has the $7 trillion dollars besides governments?

It's not, you know, VCs. Yeah, sovereign wealth funds. Sovereign wealth funds. And there are too many sovereign wealth funds that, you know, the U.S. government would be cool with us. Or a consortium of sovereign wealth funds. But for that, you'd have to go to the Middle East. Yeah. But arguably.

Which they're doing. Singapore. But arguably, the UAE would be one of those that would potentially make sense and check a lot of boxes. And to be very, very clear, and I can say this for many of my conversations on the national security side and my interviews on the record with Gina Romando, the Commerce Secretary, 100 percent, without a doubt. semiconductors are a national security issue. They're only becoming more of a national security issue. It also speaks to a broader industrial policy here in the U.S. that is much more national security

focused. But the other piece of this, of course, is going to be the electricity and the energy needs that are associated with all these semiconductors and all this AI compute power too. And I'd imagine that would be part of the conversation you're having with, say, sovereign wealth funds or like a UAE that is energy rich. Exactly. And that comes out to oil, doesn't it? fossil fuels and you know that that's not what the Silicon Valley ethos really would want from this at the same time so this is ambitious like ambitious is not even the right word for it it is almost ludicrous uh mind-boggling that's what i keep going back to i can't think of a better word yeah and i mean dirger covers VC funding quite a bit i mean dirja when was the last time you heard a deal

around of funding even approaching one trillion i thought a lot about that this morning and it has to be SoftBanks Vision Fund. That was a $100 billion fund. There was bigger than anything we ever saw before, and this is magnitudes, magnitudes, larger. And that completely reshaped the venture capital world, the startup world, led to supercharged companies like we were. Can you imagine what this would do to some of the chip companies? Let's move to the chip side specifically of the equation and let's, and how Altman's plan could affect the existing chip heavyweights, since we know some of the reporting suggests that they would be involved in this process. Christina Parts and Evelis has that side of the story from the NASDAQ. Christina, what is your reporting unearthing on this?

I haven't got them. Dynamic. I need to do it. It's funny because you use the word could and I'm going to stick with that because like everyone's alluded to, it is quite a mind-boggling number. But if, I'll use the word if the funding does come through, this could bode well for equipment makers like lamb research, KLA, applied materials, which already could also get an additional boost because of chipsack funding. Morgan, that you just talked about, we're expecting more award. to be dispersed in the coming two months or so. So that's a positive for a lot of these names you're seeing on your screen. There's also strength possibly in the chip designer simulation and verification firms like cadence design, synopsis,

and so that's the reason why you're seeing cadence and synopsis up higher today because of those two leaders. Even ARM, which we saw an surge, sorry, I should say, just after its earnings report, this stock is up again, 2.5%, but look up, is it week to date, 65%. They make the blueprint for a lot of these chips. all this funding's coming into the United States to build, these are some of the beneficiaries. There is also a Reuters report that Open AI and NVIDIA are working on custom chips, hence the positive reaction in NVIDIA shares. Creating custom chips isn't new for NVIDIA, though. I want to point that out, and something CEO Jensen Wong did mention in his keynote back in 2002,

which I listened to, but it was largely overlooked, myself included, because we were all just more focused on NVIDIA's AI chips, right? It's all about those GPUs. But today, Reuters reporting Nvidia is actually meeting with Amazon, Meta, Google, and Open AI to discuss building their own custom chips. And they're also in talks, NVIDAs and talks to work on a wireless chip with Erickson. So I reached you out to NVIDIA. They wouldn't confirm any of these conversations. But it's still enough to create a reaction in all of these stocks. A lot of these companies like Erickson or negatively impact a company like Marvell because Marvell does make custom chips. So does Broadcom. And for those that are like, ah, all the

this conversation about chip stuff. Custom chips, think of it like performing very specific tasks. Therefore, they're a lot cheaper than GPUs, which GPUs can handle a wide range of tasks like graphics, rendering, machine learning, et cetera. And to bring it full circle to your conversation requires a lot more power. In the chip world, they use the word, or power gate, right? And this is going to be a huge topic in the years to come because of the power use that is needed for these data centers, which is why efficiency is key for budgets, for everyone. One more company we're not mentioning, Microsoft. Its destiny is uniquely tied to what Open AI is doing. A lot of the technology they are developing or Open AI is developing will eventually find its way to Microsoft products.

They're already doing that with their co-pilot assistant and so forth. The journal reporting that, you know, Satya Nadella, the CEO of Microsoft is aware that Sam Altman is going out here trying to do that. But look, what we learned last fall was this is a complicated relationship, not just because Microsoft relies so much of the technology, but because it's heavily invested in Open AI too. So if Open AI is chasing, you know, a $7 trillion fundraise at, again, as Deirdre said, who knows what the valuation of a company would be there, you know, that plays into Microsoft. And that plays in a Microsoft value. But they don't have $7 trillion. Exactly.

And so that also plays into how Microsoft values its state. in Open AI, not to mention just the technology being developed. Microsoft also working on its own chips. So there's just a lot of complicating factors. What's the argument, Deidro, I mean, excuse me, Christina or Steve, or Deidder, for that matter, that a non-incumbent chipmaker, not Nvidia, not Intel, not Broadcom, not Arm, not AMD, could be a big beneficiary of this. Well, in the case with OpenAI, he has the branding right now and the interest from, you know,

sovereign wealth funds all around the world that want to invest in AI. So there is an opportunity for investments there. But the big question is, I think the skepticism is around actually open AI building the chips. Why he has to rely on third party members, a beneficiary would be TSM, Taiwan Semi, for example. But we saw with the example of Apple. Apple has been working on these mobile chips for smartphones for quite some time. But they have to re-sign their agreement with Qualcomm because they weren't able to make a chip that was ready to put in the new iPhones. And that shows that even Apple, a tech company that's been around forever,

mega cap, you know, has been a leader in technology, still can't figure out exactly how to get those chips for the perfect chip for the phone. And it shows that a lot of these chip companies will benefit because they specialize. And that's what an AMD does. That's what Marvell does. Broadcom, Arista Networks. The list continues. All right, Christina, thanks very much.

Deirdre, you two and Steve, thanks for being with us explaining this all to us. Coming up, Super Bowl Sunday is upon us, huge money swirling around this game, maybe not $7 trillion, but plenty of zeros. Between the event itself, the gambling, the food, even cybersecurity. We'll cover all the big angles further ahead on the program. Power Lunch will be right back after this. Look at those wings. They look good. Welcome back to Power Lunch. Shares of CyberArc up 17% this week on Blockbuster earnings yesterday that beat Wall Street's estimates. Looks like shares are higher again, about 6.5% today. Webbush and Bank of America increasing their price targets following that report, both calling it a top

pick for 2024. As cyber attacks become ever more sophisticated and frequent, CyberArc Survey found nearly nine out of ten organizations were targets of ransom war attacks in the past year. Nine out of ten. A large majority actually paid the ransom. So let's bring in my next guest to discuss the trends in cybersecurity. Joining us now for more is CyberArk CEO Matt Cohen. Matt, it's great to have you on the show. We tease that we're having you come on to talk about the cybersecurity threats as we come into Super Bowl. weekend here. But when I see a stat like nine out of 10 companies in your survey having ransomware attacks and in many cases paying those fees, let's just start there because it's staggering.

Yeah, I think it speaks to the threat landscape that we see today, which is as kind of enterprises face this rising crisis of proliferation of identities that exist, the new complexity of the environments they're trying to protect. And they're doing it in a new environment, by the way, with workers working hybrid, working from home. They're doing it each and every day to try to figure out how to secure the new perimeter and the new perimeter is identity. And that means that the bad actors that are out there are innovating themselves trying to figure out how to get in. And they're doing it more effectively each and every day. And we see that in the ransomware results that you're exhibiting. Okay. Dan Ives over at Wedding.

Bush called your quarter that you just reported another, quote, Mahomes-like quarter. I mean, at a time where the geopolitical landscape has become more fraught, we see more attacks, including cyber attacks by the likes of Russia and China and Iran, to name a few. It's a big year for elections, not just here in the U.S., but historically speaking, when you look the globe over. And then, of course, we have more and more adoption and application of AI. How is the threat landscape growing and evolving. And what does it mean in terms of the innings we're in around these security risks? What does it mean for CyberArc? I think as you think about that threat landscape that you're describing, and you hit on this idea of AI-enabled attacks. And when you think about the power of

AI and what it can use to boost productivity for enterprises like us, it also is an element of innovation that the bad actors can use to actually make their attacks more efficient, to make they're more effective, to make even basic things like fishing, which has been out there for years and years, turn into a more advanced attack with deep fakes, with vishing, with voice-simulated attacks. And I think as you get into the election season itself, you see people actually more likely to click on links, more likely to believe what they read, and then become more susceptible to these bad actors that are out there trying to get into environments, trying to get into enterprises, and trying to take over. And so for CyberArc, that represents an opportunity. You know,

we started securing the most privileged assets, the IT admins accessing the data center, but now throughout the enterprise, whether it's developers, it's the larger workforce, it's the growing amount of machine identities that are out there. They all need a layer of control in order to be able to be secure. And that opens up the broader opportunity for CyberArc to actually secure the entire enterprise of the customers that we deal with. So whom does artificial intelligence help more? The bad actors who are going on offense using it or the good actors who are playing defense? I think it's a constantly changing seesaw, if you will, or scales. You know, I think they innovate and we try to innovate in response. And all of us,

not just CyberArk, but all of our cybersecurity peers out there, are trying to make sure that we innovate ahead of the bad actors that are out there. But it is a constant balancing act. And certainly in this threat environment, we need to stay vigilant and we need to stay on the attack as defensive agencies. Is a bad actor more inclined to attack a big event like the Super Bowl or more inclined not to attack a big event because they, the bad actors, would realize that the defenses would be so bristling surrounding that event

that they would wait and maybe go in March or April to attack the National Football League or its teams to get credit card information about season ticket holders, et cetera, et cetera, or whatever the hell they want in terms of identity. I mean, it's probably tough to predict exactly what people are going to do. With that being said,

These larger events, like we're talking about with the Super Bowl or we're talking about with the elections, they really allow an opening to the consumer, to the individuals that are out there. The attacks that are going on against the enterprises, including, for example, the franchises that sit within the NFL that are operating as business entities, that's an ongoing attack vector that pretty much is going to happen all the time and we need to be aware and prepared. I mean, it's been a pretty solid earning season so far for anybody who's in cybersecurity, yourself included. I even just look at Cloudflare, which is surging double digits today. I realize a little bit of a different business there. But how would you categorize the competitive landscape? And would you expect that we're going to see more M&A in this landscape, given the fact that this threat landscape is changing and the demand is growing? Sure, thanks. I mean, our quarter and our year really demonstrated.

the growth potential of this space of identity security. You know, we grew 36% in our ARR annual recurring revenue for the year. We actually were able to put up a record fourth quarter, which you see in the results that you have up on the screen. But what we see in the competitive environment is more and more attention being spent on identity security. You know, when you peel back all the major breaches that are out there, you peel back all these terrible headlines that we talk about,

all roads seem to lead to identity. And that's ultimately where the bad actors and the attacks are targeted. And so we see ourselves as well positioned to be able to respond and help our organizations respond to that type of attack method, that type of attack vector. Ultimately, that leaves us with looking at other ways to obviously build out our identity security platform, make sure that we're able to secure every part of the enterprise from IT, as I said, to developers to the entire workforce. Okay.

Matt Cohen of CyberArc. Thanks for joining us. Thank you. Shares are up another 6% today. As we head to break a quick power check. On the positive side, end phase. The CEO saying recent declines in the space have hit a bottom. Morgan Stanley and Barclay is raising their price targets.

On the negative side, though, Expedia. Diving on soft guidance, naming a new CEO. You can see Expedia shares are down 18%. Big move there. And phase up about six. We'll be right back. All right. Welcome back to power launch. Revision's to recent CPI data now show inflation wasn't as bad as we first thought. Let's see how that's playing out today in the bond market with Rick Santelli in Chicago. Rick. Yes, Tyler. You nailed it, but not as bad. That's kind of a wide statement. Many are using it. I looked at all the revisions. They go back to 2019, five years, and they were subtle revisions.

And that's not a bad thing, because many, including myself, are very nervous that changing seasonalities due to a variety of reasons, not the least, which is pre-post and post-COVID issues and how the world's changed. Well, those seasonalities might be given as data points that aren't highly accurate. So seeing that the CPI didn't stray much is a good thing. And the Valentine's Day surprise will be the revisions to PPI. Those will be next week, of course. Look at an intraday of two-year, and you could clearly see at 8.30 Eastern, we had a whole lot of volatility. Kne-jerk reaction, rates rent down. But that quickly dissipated, and that's the short end. You can go all the way to the 30-year bond, see exactly the same dynamic. But maybe the bigger story here is that despite the subtle changes that specifically, most traders saw that D's one-tenth lower and immediately started buying the market pushing yields down. But once you looked at the data, well, 20-24. has been a year for higher rates, forgetting what the Fed's going to do. I'm talking market-driven.

So let's look at a 10-year. There's a year-to-date chart. It's currently at 418. That is the current high-yield close of the year. So we're toying with the new one. Two-year yields, well, they settled. Their high-yield close is 447. So right now they're on pace for a fresh high-yield close.

And by the way, 10-year-no yields as they sit here are up 16-based. points on the week. Twos, threes, five, sevens, tens all toying with fresh 2024 high yield closes. Morgan, back to you. And we're here trading with an SPX at record levels. It's kind of amazing to think about it. Treasury funding, all these auctions. It's been a wild week for bombs and for those yields. Absolutely. All right, Rick Santelli. Thank you. Natural gas prices falling to their lowest levels in three years. Pippa Stevens here now with a look at what's driving that trade. What is driving that trade? Is it weather or is it something else? Okay, well, weather is always the most important thing when it comes to that gas. So that actually is the first factor, apart from that one

week of kind of, you know, very cold temperatures we saw across the country. It has been very warm, very seasonably warm temperatures and December was very warm, so we're still working through that. The second factor, so that's the first factor. The second, of course, is production, which is currently over 100 billion cubic feet a day, around record levels. And then the third is the fact that we still have that outage at Freeport. So one of their, LNG trains is offline, one of the three of them. And at the end of January, they said it'd be offline for about a month. And so that impacts NAC gas because it reduces our export capabilities.

And so reduces demand for NAC gas. And so right now we're at 184. And actually, 150 is the level where producers start shutting in production. So we still could drop quite a bit from here before producers start saying, I can no longer make money. I'm going to shut up my production. So it's as simple as elevated production, warm weather, which reduces demand. and price goes down. When you put it like that, yes, it sounds very simple, but it's true.

Let's kick the rest of the day off. It sounds good. But, I mean, you see this, that it always responds to weather, and it's very volatile, and that you can never predict that far out in advance, and particularly now with increasingly volatile temperatures. It's even harder to predict, and we're still working through what we thought was going to be this big surge in European demand when we thought there was going to be this energy crisis.

And so we're still seeing the lasting impacts of that. And so Goldman actually put out a note today saying that while 2024 looks bad, 2025 is looking better because, of course, this is a cyclical business. And so if the market takes the corrections this year, then next year looks better. So 11 months to go. Thank you, Pippa. Appreciate it. Let's get to Kate Rooney now.

CNBC News Update. Kate. Hi there, Charlie. The Department of Veterans Affairs announced a plan today that lowers the burden of proof to get disability benefits for certain cancers and chronic conditions. It's expanding the list of locations and timeframes for service. members who were exposed to Agent Orange and other herbicides. The list already included Vietnam and other locations in the South Pacific, but it will now include 12 states where

the toxic materials were stored or tested. Egypt, meanwhile, has sent about 40 tanks and personnel carriers to its border with Gaza in the past two weeks in an effort to boost security in that area. It comes ahead of Israel's military expansion into the southern city of Rafa, where many Palestinians have come for safety. And Saturday Night Live's Colin Jones, Colin Jones, Jost will be featured as the entertainer at the White House Correspondence Dinner in April, often called nerd prom. Jost will be the latest in a string of entertainers, including Trevor Noah, Stephen Colbert, who have highlighted and headlined that event in the past.

Big news for the NBC family, guys. Back over to you. All right. We'll take it. Kate Rooney, thank you. After the break, it's not just a new Super Bowl champ being named this weekend. We'll also have a new stock draft champion. before we announce our winner Monday,

we're going to take a look back at the competition with one of the years' contestants who unfortunately came up a little short. That's coming up next. Welcome back to Paralunch, everybody. After nine months and ten teams, we are getting ready to crown a champion in the 2023 CNBC stock draft that ends at the close of trading today.

Team Wu, which is wrestler Charlotte Flair's team, as a commanding lead because of triple-digit gains from what else, NVIDIA. She has followed up by Tori Dunlap of the financial feminist, Olympic swimmer, Erica Sullivan, and team Mountain Goats, which includes actor Ryan Reynolds. I believe they were the winner of the prior year. Draft didn't go quite as well for our next guest in Damakan Sioux, team House of Kings. It's in last place dragged down by a long shot bet on Peloton, which has lost nearly 48% since the draft began on the NFL draft day last April.

his other pick United Health up 7%. Here to discuss the draft is Super Bowl and champion and more. Indomicon Sue, Super Future Hall of Famer as well. And Domicon, welcome. Good to have you with us. Hey, listen, when you picked Peloton, and I, as people know, I am a devotee of the Peloton, I thought it was a pretty cagey choice

because to win this, you have to have a home run. And that had the possibility to be a home run. It didn't work out, but... Yeah, definitely did. I had the opportunity to kind of do a little bit of research and seeing their implanting a new CEO. That was going to write the ship. There was a couple of news pieces that came out, I think, in the last couple months, and unfortunately just didn't work out for me, so it dragged me down. And I knew United Health would give me kind of that steady gang. And I was doing my barbell approach, which is outside of my normal way of investing with all the

great mentors that I have. And one of those mentors is Warren Buffett. You, I guess, got to know him when you were at Nebraska All-American Player there. He's a Nebraska fan and benefactor. Do you talk to him? And what did he teach you about investing? Yeah, we do. You typically talk on a quarterly basis. And we just talk about a handful of things, one catching up most of the time,

but then just in general, just being patient. And I think that's one of the biggest things that I learned from him having that opportunity to be patient, be steadfast in your thought process of looking. at these different companies that you're investing in, also involved in to help them grow. So a lot of patience is one of the big key. And I know most athletes and entertainers don't have patience. I just want to see immediate success. And it's all about the long game.

Patience is maybe not a virtue that is rewarded by our stock draft contest, which has a very finite timeline. You've got to hit and hit quick. But yeah, Morgan jump in. Yeah. I do want to get to some Super Bowl questions with you. But first, I mean, you are an advocate for financial literacy. why is it so important? What is the number one mistake that you think athletes make?

Honestly, financial literacy, I think, is one of the biggest things that our youth need to be involved in and need to be exposed to, primarily because at this age of having NIL deals, especially in sports and collegiate sports and that whole landscape changing, they're in tune with all these amazing deals that they're getting involved in with, but just don't understand how they need to structure themselves to be able to pay for those taxes and that income coming in as we're getting into April and tax season and whatnot. And so those are the things that they need to start learning at a young age, whether that be in middle school or high school and something that I've been able to be very fortunate of having great partners like I have with Intuit to be able to create these interesting

opportunities to do workshops with kids in high school like we did this past year. And even more specifically coming up in the near future, we're excited about doing another partnership with them and growing that space. around this NIR work that needs to be addressed. Okay. Contessa Brewer, our colleague Contessa Brewer, last hour, was asking different athletes about Super Bowl this weekend, about their investments,

but also about the fact that we've seen this surge in popularity around the NFL and whether betting is the culprit or whether it's Taylor Swift or both. So just want to get your thoughts on that as we do go into Super Bowl weekend. Yes. Super Bowl weekend's a big weekend, and betting's always the number one piece. Taylor Swift is obviously a big part of it as well.

I'll be in attendance in the Super Bowl and in and around all the fun activity, so we're getting ready to head out me and my wife. So it's a lot of excitement. I've been in three of them. So being able to be a part of them and then around them at the same time, betting is always a big thing. Who's your pick this weekend in Domiton? My pick, I'm watching throughout the last playoffs.

a few of weeks I was in London with Sky Sports, having some fun with them doing announcement. But if Washington, Kansas City, I picked them as my winner because, one, I beat them in previous years and know how dominant that offense is. And they're on a very high role of being on all cylinders. And then their defense, surprising on their defense is shut down some amazing offenses. And Lamar Jackson, who just won MVP. And then the Buffalo Bills with Josh Allen and that amazing, very high. high power and effective offense. So I think the Kansas City Chiefs are going to take care of business against the 49ers, even though I got some friends over on that team that I hope can get a ring sometime soon.

You didn't play this year. Are you going to get back in? I had many opportunities. Actually, one of the team that's in the Super Bowl called me in week 1617 to come and play. But it just didn't fit well for me and my family. So it's all about the right opportunity. I'm in a very important. very fortunate and blessed situation where I don't have to play the game in football, but I would love to play it if it's the right fit for me and my family. Yeah, well, those quarterly meetings with Warren Buffett, I'm sure, help as well. The game is better when you're playing in D'Amakon. The game is better when you're playing,

and the Hall of Fame will be better when you're in it, which is going to happen. Thanks so much, my friend. Thank you very much, and I appreciate it. It's always a pleasure to talk to you guys, and I look forward to seeing you again soon. Likewise. Well, still ahead. A small bill for your big.

Big party. Some game day snacks will cost you less this year. Thanks to deflation. Our own Jane Wells has the details. Jane. Well, with my Rams on the sideline, I'm all about the Super Food Bowl. And up next we have good news. Even for Taylor Swift's favorite food, yes, I'm going there. And you will too when power lunch returns. Welcome back. While food prices seem to remain a perpetual problem for consumers, Those looking forward to the Super Bowl could actually see some deflation. Jane Wells has a story.

Hi, Jane. Hey, Morgan, you know, I'm all in. I'm wearing my commemorative Roman Gabriel jersey. Google him. But anyhow, whoever wins or loses on Sunday, you win and lose a little when it comes to the party. We're going to start with the proteins. Wing prices were already down a year ago, and they're down even more. By the way, Taylor Swift's favorite food is chicken tenders.

There, I have worked her into the story. Ground beef for your tacos and burgers is up, though, but the surprise value this year, shrimp? Take a look at this. Courtney Schmidt at Wells Fargo has been running the numbers, and she says ground beef prices are up 12% from a year ago. You can see what's happening with shrimp and chicken. Shrimp is down 6%. It's a value now, and wing prices down anywhere from 5 to 11%. Why? They've been dealing with some export restrictions related to the bird flu again this year. And then they've had, you know, more weight on the birds. That's caused more production. Now we have plenty of avocados.

So guac prices are about flat, but it's in the package goods where you're going to start to see inflation. It's the packaging costs more. There's higher labor costs and wages are going up. Chip prices, according to Schmidt, are up 5 to 6%. PepsiCo this morning talked about higher potato prices. Salsa prices are up 3% as we move to beverages. is beer prices are starting to flatten out. You know, not as many young people are drinking beer.

It's about a buck 75 for 16 ounces, she says. And when it comes to soda, soda in a can is up 5% from a year ago, and soda and a plastic leader is down 1%. So it all depends on whether it's the aluminum or the plastic. And as we look at how PepsiCo is performed after reporting earnings, Schmidt says soda has been, has seen the highest food inflation of any, category since COVID. Can is up 55% since 2020 and in liters is up 33%. Guys, who knew? Get out of here. Fifty-five percent since when, Jane, did you say? Coke. Soffering?

Since COVID, 2020. 55% for flavored carbonated sugar water. A lot of it, of course, is what it comes in. I have to say, I know I remember watching Roman Gabriel. He was so dreamy. He was dreaming. He was a big. He was a big. tall guy, I think from North Carolina State, if I'm remembering correctly. I can't remember. I think so. He's still alive. He's out in Palm Springs. He's in his mid-80s, you know, but they could never get past those darn Vikings. No, that's right. And then the Vikings could never get past whoever it was they were playing because they never won a Super Bowl. I know. Jane Wells, enjoy the wings. Thank you. Thank you. All right. See you soon.

Still ahead. The S&P 500 may be notching all-time highs, but more than a dozen stocks in the index are trading below their 50-day moving averages. How about that? A three-stock lunch trader will tell us if there's any opportunity in those laggards when power lunch returns. Black-owned businesses secured a little over $2 billion in venture capital in 2022. That's a lot of money, but it represents less than 1% of the more than $200 billion pool of venture capital. Many agree this means there's more opportunity to invest in founders of color. Celebrating Black Heritage, I'm Sharon Epper. Welcome back to Power Lunch. It's time for today's three-stock lunch. Today we are pulling three

stocks from a CNBC screener looking at stocks underperforming as the S&P sets records. Here with our trades, David Wagner, portfolio manager at Aptus Capital Advisors. So up first, we were talking about chips earlier in the hour. Teradyne. As of yesterday's closed, slightly below its 50-day moving average. David, your trade on Terradine. Yeah, Morgan, in the semiconductor space, it's tough to get excited about a company that does not have a narrative right now. And that's Terodyne. Yet their biggest peer, Adventist, has one of the best market narratives out there. Well, why? Well, Terodyne works closely in the mobility market. So think smartphones, think Apple. While Adventist, this peer, has more visibility in the current environment, given their focus on

the GPU test market. So think Navidia, think AMD. And that honestly is the narrative that the market has been rewarding right now. And when you look at fundamentally under the hood of Terradine, you'd see that the market was really hoping for some type of growth this year, but their guidance ultimately puts that off to the second half of this year because they've seen some weakness on the automotive side of their business. All in all, you know, tear, it's great at winning designs. They just need these designs to convert into volume. And that's taken a little while because we're basically in an eight-quarter straight drawdown, slowdown in their end markets. So I'm staying away right now, but you can remain patient.

if you own the name. Let's move on to Broadridge Financial. That stock up about 37% in the past year, trading just below its 50-day moving average. Your trade on Broadridge, David? Yeah, Tyler, I've been a holder of Broadridge probably for almost a decade right now. And I think the last few months have been a prime example as to why I've held in stock for so long. So if you go back about one year, the company was really fighting two big bear cases that were thrown at it. The first was that the wealth management buildout would be a headwind to free cash flow and diluted to margins. The second bare case would be that the proxy business has been growing above trend for a few new years now, and that was going to revert. Well, fast forward to today. And we now know that

the wealth management buildout is complete and that we've seen a lot of cross-selling actually, which has benefited incremental margins, which has ultimately driven free cash flow. Secondly, the proxy business remains very resilient growing mid-single digits for this year. Basically, the company put all these two bear cases to rest, allowing the name to trade at the higher end of its valuation. But Tyler, like, there's nothing more I like than when the bulls really just stick it to the bears. And that's exactly what Broadridge did here. So I remain long. All right. Finally, Carrier Global, which reported earnings this week. Stocks up about 24% in the last year. But like the others, we just talked about, it's trading below its 50 day moving average.

What's your trade on Carrier Global as we talk about HVax and a secular trend that involves more spending on things like infrastructure. Yeah, anecdotally throughout this entire earnings season, I've seen the market really start to reward a few turnaround stories. While carrier, it's not a story that needs to be turned around, it feels like it's a name that is at least turned the corner to a more simplistic story. If you look at just this past earnings report, investors finally received a new fiscal year guidance, and it wasn't that bad.

Of course, you know, the bears are going to continue to focus on the concerns around the European heat pump demand and the U.S. residential HVAC market, but overall, the guy was strong. I mean, core earnings are expected to grow 15% this year while proceeds from sales, you know, are going to provide carrier pathway to get to about two times leverage by year end, which will open up the idea to resume share buybacks. And this simplicity, Morgan, is what should be rewarded. So pending no material slowdown in their end markets. So I do like this name right now. All right, David, thanks very much. Have a great weekend, sir. Cheers. All right, you bet. Coming up, big banks pulling big gains from overdraft fees.

Even as regulators tell him to cool it, we'll break down the numbers when power lunch returns. Okay, we only have two minutes left in the show. We got several more stories you need to know. J.P. Morgan Chase, Wells Fargo, and Bank of America reported a combined $2.2 billion in overdraft fees last year. And while that may seem like a lot, that's roughly $700 million less than the year prior. This comes as banks face pressure from regulators to cap fees, create new ways for customers. to avoid the penalties. And of course, we're having this conversation in a week where maybe not the big banks,

but the regional banks, certainly under fire and more scrutiny. Yeah, the NYCB Bank issue has certainly put Kest and yet another Paul over them. Banks are ingenious at figuring ways to hit you with fees, whether they're overdraft fees or the latest one I fit is the paper statement fee that I'm paying for not going wild. What is it called? Paperless in my accounts, $3 a month from my bank. I'm unhappy with them. I have to talk to them about that.

Big game may not be till Sunday, but the Kansas City Chiefs have already been dominating the advertising game. Have you noticed during this year's NFL season alone? Patrick Mahomes, Travis Kelsey, and Andy Reed starred in a combined 33 different TV commercials, which cost nearly $400 million to air. So whether or not Kansas City wins or not on Sunday, and I think they will, because I think they're the hot team, Kelsey Reed and, Mahomes have been winners in the ad place.

I mean, that's, there you talk about, we just had this conversation about athletes and investing and what future looks like off the field. I bet Mahomes makes more, he makes, I think he made $500 million in his latest contract or something like that. I bet he makes more from endorsements than he does on the field. I bet.

Meantime, we're seeing the price of Super Bowl tickets hit fresh records too, which I feel like you talk about every year. $8,600 for one this weekend. All right, the U.S. Army abruptly scrapping its high-profile big-ticket program to develop a new armed scout helicopter known as the future attack reconnaissance aircraft, FARA. The service had already spent at least $2 billion, had requested another $5 billion for the next five years for that major modernization effort.

Lockheed Martin Sikorsky and Textron's Bell were competing, GE building the engine that will now stay in development indefinitely. I'm going to talk a little bit more about that. On closing bell overtime, where we also have a number of guests, including Lule Demisei from I Toro. Crypto will be a purpose there. We'll be watching. Thanks for watching Power Lunch. See you next week.