Power Lunch - Memory Stocks Continue to Grip Wall Street 5/11/26

Episode Date: May 11, 2026

The Kospi continues to surge. Jefferies' Julien Dumoulin-Smith joins to discuss the surge in energy storage stocks.    And how close is streaming getting to old TV? Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Can anything stop this rally? Welcome to Power Lunch. Stop us if you've heard this before, but stocks, they're at record highs. Energy, the best performing sector so far this year, but the tech trade roaring back to life, that index of more than 20% in just a month. When investor is buying more and those names, Kelly, are coming up. Plus, a House Republican taking aim at prediction markets. Her new resolution would bar house members and staff from trading on outcomes they may have inside access to or influence. The Senate has already moved in the same direction. Congresswoman Ashley Hinson is here today.

But let's begin with the memory mania gripping walls. Who would have ever thought we'd be saying memory mania? Western Digital, Seagate, Micron, all powering to record highs again. As investors keep piling into this red-hot trade, that's another 7% gain across the board, really. It's been an extraordinary quarter. Just look at these monster gains in the S&P. Intel leading the pack, nearly tripling since the start of it. April. Sandisk, Micron, AMD, and Seagate all close behind riding that AI wave, for those of you

listening, 187% for Intel, 145% for Sandisk. These moves are so dramatic, well, it barely sound dramatic anymore. Evercore ISI's Julian Emanuel says it feels like 1999, a sentiment echoed by billionaire Paul Tudor Jones last week, and the street is still getting more bullish. HSBC sees 7,650 on the S&P 500 by year end now, Ed Yardini going further to 83. 250. Those calls driven by stronger than expected earnings growth. We were talking about that with Ed just last week. So how much further can this record rally go? Joining us is BNY Wealth, head of investment strategy and equities, Alicia Levine, and Advisors Capital Management Portfolio Manager Joanne Feeney. Welcome to both of you. Joanne, you're backing up the

truck, going all in on the chip stocks, load them up. I mean, truly, is that right? Well, you've got to be really careful where you go in the chip world right now. So, you know, our favorite names are Broadcom, for example. We've owned it for over, I don't know, 11 years now. But we like some of the ones that have gone up a lot. Seagate, we continue to own, and video we continue to own. We're continuing to buy these for new, well, new money comes in, right? They're still on a buy list. And so, you know, we are adjusting our target weight. But yeah, we like the longevity of this growth engine of AI. But there are names we will not buy. Intel is one of those. Micron is another. And, you know, you look at Micron,

It's grown, its earnings, right? And the growth outlook is primarily because of the price increase, right? Volume's only up 16, 17%. And what goes up in terms of prices can come down fairly rapidly, right? They're adding capacity. That's going to take a little while. It's going to take some years. But investors will move ahead of that.

So you just never know when that micron stock's going to come down. I feel like, Alicia, there's two trades kind of happening at the same time. There is the momentum tech trade that you guys just talked about. And then there's the stuff that everybody seems to have forgotten about. Financials, big banks, many are down this year, health care, not done well. Can you own both? Can you invest in both sides? Because I want to buy low and sell high or maybe buy high and sell higher.

I don't know. But some things are being ignored by investors. And I wonder if that's a good move. So overall, we always recommend to be broadly diversified with some thematic tilt to the portfolios, and obviously the AI buildout, it's moved from just the chips to the real economy to the scarcity economy, so commodities and materials and building and, you know, defense tech and space, and that's where it's moved to. On the other hand, as you point out, financials have done nothing for a couple of months. Health care is more a bond. The earnings are fine.

And so it's really actually a great place to add positions if you're underway, because likely you're underweight after the move in tech. And the interesting thing about it. You mean by default, you became underway. By default, you became underweight because of that 20% move in a month. And we'll point out, tech underperform for months, starting November 1st, going into the war. And the day the bombs dropped was the day that tech started to outperform. Even as it moved lower, even as a move lower, it's still outperformed. And that was the beginning to us.

We were watching it very closely. And we thought this is where tech is really going to shine. So we like it all. But I want to talk about financials for a second. We have the most deregulatory administration in a long time. The Fed's on board and Congress is on board. And we just think it's a great time for financials and the large cap banks. They got caught up with some of the private credit issues, but we think this is actually a great time to add.

It's funny what you said about healthcare. I mean, we saw this. Jared Holtz, who we talked to a lot, but he was just lamenting Joanne. He's like, we're in this sector that's 16 points trailing the market. It feels horrible, right? And people are so frustrated with those who aren't making that fast money outside, but you just know that things are never that sure. And that's why I found interesting, the areas where, you know, for instance,

we say we wouldn't do Micrum, but we would a Seagate, I think, if that's what you said. What gives you the confidence in names like a Seaget? I don't know if Sandists out there, some of the others in that space. Yeah. So you have to look at the uses that are going into these AI data centers, right? You have to really understand where memory and storage are going to be increasingly in use. and move from training to inference, for example. It's going to involve a lot more memory,

and as we've now come to learn, a lot more CPU. So we also like AMD in our growth strategy. And the combination of the CPU, GPU, plus the software that's underneath it, I think people have overlooked synopsis, for example, right? I mean, more and more complex chips are going to require the help of their design software. But that doesn't mean that that's where we are exclusively.

I manage a number of our balance strategies, which are supposed to be relatively conservative. They're supposed to, our specialty is to deliver above market yield. We're at three, four, five percent, depending on the strategy. We've got to go to financials, right? We are in energy. We are in REITs, right, in this strategy. So we're, you know, we're offsetting some of that risk that sits in the technology space right now with more, you know, income oriented companies, plus throw in some stabilizers. How good, Alicia, have earnings been across the board? The numbers seem, I mean, companies always beat the street. If they don't, you need a new seat. You know that. But these numbers have been big. And a lot of people are out there calling for the economy to collapse or just be terrible because, you know, gases at 4.50 or 515, California, whatever it may be. Doesn't seem like that's happening. No.

In fact, earning strength is very broad, as a matter of fact. So 80% of all companies in the S&P have higher earnings estimates than a year ago in terms of moving upward in projections. 88% are raising their guidance. the guide compared to a year ago. This is real. That's the biggest number I've heard in years or decades. Years. So the number is real. And the other thing, it's not just coming from tech. It's coming from all these different sectors. It's coming from financials. It's coming from industrials. It's coming from other areas as well. So it's broadly based earnings growth, which is why the market is responding to it, because it's not just located in 10 stocks. It's much broader than that. So that's feasible. I'd say one thing that we would want to look at

is a risk is if you think about what's gone on with the hyperscalers, and they've essentially sold off in the last few weeks, particularly as we learned, they're going to spend $800 billion this year, a trillion dollars next year plus. So this keeps the AI buildout going strong. But if you're reliant on that for earnings of another 40 or 50 stocks in the S&P, that, of course, is your risk. Because if you want to project forward three years, four years, can this continue? I got to jump in because I write this weekly intelligence piece. I know you've got your newsletter as well. And this is called Power Insider. And my theme this week is the capital spending for AI. And the numbers are varied by who you look at. But let's just say this. They're gigantic. They're massive. And I'm writing it,

and I wrote last night that you rarely know you're living through history while you're in it, right? You have to look back. Is this history that we're making, the level of spending that is being done on the stuff, Joanne, you're talking about, Alicia, you're talking about, the level of spending is beyond anything, I can remember, since the intranet was effectively created in 1998, 99, 2000, whatever. No, it's, it's spectacular. I mean, $800 billion this year is 2.6% of U.S. GDP. It's one and a half times the entire economic output of Singapore. It's bigger than most mid-sized European nations' GDPs per year. But the cash flow of these companies, right, is behind this in the most, in most of the case. Now, there's some.

that are doing it through debt, and we're actually now seeing the big cash flow companies also raising debt like Amazon, right, Alphabet. But they have the cash flow to do this. And it's a way for them those companies to sort of artificially be vertically integrated in this space, right? You can argue that Alphabet is vertically integrated. They go everywhere from chips all the way up to the applications like Gemini. But the other ones aren't. And so it's a way for them to invest as they do so with the capital spending and with some of the ownership stakes they're taking. And that actually makes it a much more integrated system, which I think is actually an efficient way to go, but still leaves investors the choice of where do they want to be exposed. JIP, software, data centers. What implodes the trade

even if it's just for a correction? Is it a piece of information in earnings? Is it a, you know, a news item about additional capacity coming online for a memory factory and they sell, what are you on the lookout for? Slower growth. Yeah. I mean, these multiples aren't high. I mean, look at Nvidia, right? It's earnings growth is roughly three times it's PE when you look at. one year. Same thing for AMD. Same thing for Broadcom. So it's not that the multiples are high, but those multiples are based on the next couple of years of earnings. And if investors get a look at three, four years, five years out and say, oh, no, earnings growth is going to slow. Micron, all it would take is for everybody to recognize prices are going to fall. And then they have

negative earnings, right? And that becomes a real problem. So I think earnings growth is a thing to watch. And when we select between, say, an Intel and a micron and a broadcom and an AMD, we're looking closely at those valuations and how much hope and dreams are built into those earnings forecasts. Alicia, what do you think? And you mentioned a few of the other areas that you're watching too. But are you also bracing at this point? I mean, even what Joanne's saying is it doesn't sound like we're there yet.

But at some point a correction is going to come. So we're not, we don't think we're at the end of this. You put up 1999. We don't think you're in 1999. We think you're earlier in the 90s than that. This is an industrial revolution. the slowing of growth and investment that Joanne talked about. I think overall, if you're looking at the macro picture, of course, the biggest risk

is inflation that seeps into core inflation that the Fed can't ignore. And by the way, not only do we have, you know, we have an oil shock and higher CPI, which we're going to get, but we have a new Fed chair, we would assume, who's going to be tested by the market. And he was put into place, and everybody's thinking, oh, he's going to cut rates because that's what Trump wanted. What better way to test a new Fed chair who's supposedly there to be dovish

than with an inflation call that's not what everybody was thinking. And I think that's the biggest risk here, likely as to volatility during the year, a core inflation that the Fed can't ignore. Well, in a couple weeks, we're going to hit $40 trillion on national U.S. debt, Alicia, and nobody seems to give a you-know-what.

Is there a time at which debt levels actually matter to this market? Because they have, they, we've had guests on, Kelly, that have been threatening that debt levels are going to matter for years, and they have never seemed to matter. It'll matter in the bond market. We see it in the term premium now, but as long as we can run the deficits and you have growth and the U.S. dollar is the reserve currency, it's fine for now.

It can go on as long as you have growth in the real economy, and you have growth in the real economy. 39.22 trillion. We're close. Just change between friends, Kelly. Please, not a few weeks at this point. Yeah, it's wild. Ladies, thanks.

Really appreciate it. Alicia Levine, Joanne Feeney. Speaking of the bond market, it is time now for the bond report, and Bank of America says, don't count on rate cuts anytime soon. It's their latest note. It's called Warsh may have to wait, referring to the new incoming Fed chair. Firm expects the Fed to stay on hold through this year, pushing its forecast for the first cuts into the second half of 2027.

Bank of America says inflation is still running above. of target. The labor market is holding up. Payrolls picking up. Unemployment is stable. Obviously, just one firm's opinion. Others may disagree. The Bank of America says no rate cuts until the second half of next year. All right. We're just getting started. After the break, a plot twist in Netflix's revenue stream. Most valuable customers, no longer the ones paying for most of those premium plans. What does this mean for streaming in TV at all? Talk about it. Coming up. All right, this week, the biggest names in media, TV, technology, all taking center stage in New York City. They're all making their annual pitch to advertisers, the battle for ad dollars intensified.

It's called the up-fronts, and it's a really big deal. The streaming becomes an even bigger part of the equation. A new analysis shows the value of a subscriber may increasingly come down to how much they watch, not just how much they pay with ad. tiers gaining momentum. Highly engaged viewers could soon rival or even surpass the premium subscribers, the ones who pay for no ads in revenue potential. What does this all mean for the future of streaming and ads and TV? It's bringing the man behind that analysis. He is Kevin Krimm. He is CEO of Vito. He's also my former boss. So, but now I don't have to be super nice. It's great to be back. Kevin, it is good to see you in all serious. It's been a minute.

Great to see you both. Don't be a stranger. This was a fascinating article that was written by a woman named Barbara Booth on CBC yesterday, got a lot of attention, which is that this battle between sort of the ad tier and the non-ad premium tier, who's winning and why? Well, dual revenue streams have worked for TV for a very long time. Let's remember that. And the secret to streaming is that you've got the best of all worlds for the consumer and the

advertiser, where you've got choice, you've got targeting ability if it's an advertising, advertiser wanting to reach a certain audience. And because the ad loads, the minutes of ads per hour of content are often lower, the consumer is pretty willing to tolerate a certain amount of advertising. And what we're seeing is that as long as the ad-supported subscriber is watching about as much or a little more than the regular full paying subscriber, and you can charge a premium price for the ad time, then you've got a better revenue equation per household than you have for, you know, you have, then you have for the...

Kevin, my guess is this, which is that you don't need that thing. Just pull it out. There you go. My guess is this, is that if I'm a streaming service, I don't want premium subscribers. They may pay more every month for their subscription, but I would rather, and tell me, if I'm wrong, tell me, and you will, I know. My guess is I want to know what ads, what they're doing, what they're doing, what they're watching, which they're reacting to, is the ad, is the ad subscriber worth more even though they pay less every month, or am I completely wrong? They, they tend to be. And I think what we, we've seen

for some time now across streaming and traditional TV is that you get the best of all world, it's when you've got ads and subscription revenue coming from a household. And so what I think, you know, Hulu first showed, uh, and then Peacock has shown and Netflix came, came late to this party, but is showing it really well, is that as long as you can keep the engaged audience member watching a lot of hours of your programming each month, and you put, you know, a reasonable, maybe four or five minutes of ad time per hour of advertising, and you can charge those rates. And what you see is that streaming earns a higher rate per thousand impressions per thousand views than traditional television. Because it has that extra targeting, it has some extra

controls over how often somebody sees an ad. And what that allows, is for the data, as we measure at EDO, the data shows that the fair price, that premium is deserved, that people engage more with ads in streaming on average, about two-thirds of the time, that premium on streaming of the higher price that's being charged for the advertising is worth it because the audience is more engaged with the ads. All this is fascinating to me because I don't think I've ever engaged with an ad in my life. Maybe by accident, right? But clearly it works or people wouldn't pay for what they do.

I just wonder, you know, we look back at how people didn't like the traditional TV viewing experience because of the ads. Then along came DVR to solve that problem. Right. And then along came streaming. Right. And now they've restarted the whole thing. So I just go, well, at some point, the consumers, they don't like ads. You know, and are they, are there just going to be this constant game of like something new is going to come along people and try to get around them?

Ads are delivering information to you, even when you don't fully appreciate and realize it. And as much as you don't think you're engaging, you often are. You see that new model of car or you see that new movie or you see something else that catches your eye. And you can track that. And you start to grab that phone, which you always have at your disposal, and you search for that. And you know that that's a point of that's what we're picking up as engagement with these brands. And that is predictive of the eventual sale that they are going to get later on.

And if you pick that up and you do that across all of TV like we do, you get to see how engaging things are on Netflix versus Amazon versus Peacock versus Fox News or... And you can, and I had an off-the-record dinner last week with somebody who you would know. And we were talking about this exact topic. And I was shocked to learn that the ads that I may see at home are not the ads you may see at home and maybe not the ads, you may see it home, right? I get ads for, you know, hair restoration cream. You don't need that, Kevin.

because you can target on streaming so well, right? You know so much about the person that they don't even realize how much you know about them. That's right. So what do you know about us? Well, I think, you know, if you think about your Instagram feed and how tailored that is to exactly your interests and your feeds are going to be wildly different, right? And mine will be as well. That's what's come to streaming television. And the opportunity is to now automatically keep optimizing which ads you see and which ads you see, Kelly, based on how you're reacting to those ads.

Do you think that they'd ever get rid of the subscription ad free? You know what I'm saying? If you pay more to not see the ads, would they ever do away with those? Or they would say, look, whoever's willing to pay us that number a small amount, we'll just have the direct relationship. Yeah, I think the rates on those ad-free levels are going to be the ones that go up the fastest. and then let's not forget live sports, which are increasingly on streaming and live sports. You can't have ad-free live sports.

You can't. And it drives me, so it drives me nuts. I'll pay, I pay for the ad-free in some things. That's a great point. And I still get the ads on certain things, particularly live sports. It doesn't just go to some sort of blanked-out logo. I mean, listen, if I watch Sunday ticket to watch my Chargers lose on YouTube, sometimes it goes like a picture of like a puppy or something,

Like a Moth, there's like a B, and it says like, Zen moment will be right back. That's YouTube. But you know what I'm talking about. They're trying to fill that space. But overall, what can I do? It's a commercial timeout. There's something that's got to be there. So even if I'm paying for that, they're getting my money and I'm still seeing the ads.

That's right. Red Zone, which was one of the last bastions of ad-free programming in live sports, with the merger of ESPN's assets and the NFL's assets, they've started introducing ads into those NFL red zone moments. And it makes sense. But during, how do they do that? There are these windows of time when the games are switching over. Oh, yeah. Quick ads. Very quick. Where there's these quick moments where there is no, there's guaranteed to be no red zone moments. And those are loaded with ads, which makes sense. And then there are these picture and picture innovations and all these other ways you can do formats that allow you to get ad load in without

interrupting the action. So the bottom line is, streaming came about to kill advertising, as far as I'm concerned. Maybe some other reasons, too. And now they're going to have more ads than ever. It's the revenge of advertising. It's the revenge of advertising. Kevin, thanks very much. It's great to see you again. Kevin Krimm, CEO of EDO. Coming up, we're going global with an investor in internationals. As the Korean ETF, EWI hits another record high, it's of just about doubled this year. Is it too late to get in? We'll discuss after the break. Welcome back. Let's get to two of the hottest trades in the market right now, which are international stocks and chips. And actually, there's one way you can play both. We're showing the EWI ETF, which tracks a basket of stocks

on the Kaspi, the Korean Stock Index. It's already doubled this year. A large part of that is due to S.K. Heinex and Samsung, which have both been on massive AI-fueled runs. Michael Landsberg as chief investment officer at Landsberg Bennett Private Welp Management. You own the EWI, welcome. Congratulations, depending on when you bought it. But talk to you. me strategically about how do you trade or hold an ETF like that at a time like this? Well, the issue is really, we like the story, but two biggest stocks in memory, SKHonics and Samsung aren't available to U.S. investors. So you could buy a micron, which we own micron, but this gave us an opportunity to be able

to play that. You do get some incillary crean stuff, which is okay, but the two big players in that space are there. And we've realized that memory's a key component of what goes on. Your last guest, two guests ago talked about. It's a huge input to what's going on. And so you need memory, you need to diversify your chip holdings. This gives you a way to do it.

But don't people like you, are there's, are you supposed to come on and say, you know, it's time to trim because you're winners. And so that's what I'm really curious about, especially for people who might not be in these trades and are wondering if they should be in them now. It's tough. So what happens over time is most of our investors that we see, they only own the U.S. AI story and it's chips. They're not looking at an ecosystem.

They're not looking internationally. In fact, actually 37 percent of the data centers in the world are U.S. That means 63% are not in the U.S. So we do need to play this from just not the U.S. story. This gives you exposure. We're never going to have, and clients are never going to have more international than they have U.S. But this gives you some exposure.

I think it's the right time still, even though it's run to maybe take profits in the U.S. AI profit sector and then move over. What it has run. In fact, I mean, it's been a, the EWY is up 236%. The sprint in 12 months. That's not, yeah, exactly. That's the Usain Bolt.

of ETF when it comes to running. 236% gain in a year. Isn't that enough? Isn't it time to sell? Or is that that's not all she's got, Captain? Longer term, it's not all she's got. Yeah, I think you could look for some opportunities to get in because, again, it's a momentum trade to some extent.

But we know in the U.S. There's been some memory stocks that have done two and three times that in this period of time. I'm just saying if you're going to look at that's part of the portfolio that's got more beta, let's look at non-U.S. bait, at least to give you a diversification, versus just buying U.S. memory that's gone up already for 500 percent since January 1. You mentioned Micron. Joanne Feeney was a guest just prior to you, and she said she was looking elsewhere, not at them in particular because she thinks their increase in earnings, for instance,

has come all by price and only 17 percent by volume. And so the moment that price switches, they could actually have negative earnings growth. As a shareholder, do you have a comment on that? Is it just a question of when? Or I'm just curious what you think of that. No, I don't disagree with that. I think it is a question of when. Right now you can't get enough chips.

And I look at Micron, it trades at like a commodity price because it is a commodity, but it's a commodity you can't get enough of. So I look at it and say, yeah, it could happen a year, two years down the road. And at that point, we probably be taking a look at it. We typically rebalance. You know, Nvidia is our largest holding, but it's not 10% of our portfolio. We diversify because we look at trimming and rebalancing and keeping the risk intact. So if Micron continues to have the big run that it's had,

it's doubled in basically six or eight weeks. we'll be looking to take some money and reallocate it somewhere else. Doesn't mean I eliminate a position. I want to stick with winners a long time. We first bought Nvidia in 2019. We didn't know anything about AI. It was the GPUs and it was in video games. And it's done really, really well because we stayed with it.

We didn't set a price target and set off if it goes up, we're going to ride it until it's not going to work anymore. And Micron's the same story. We'll do some trimming. And at some point, prices will come down, but I'm hoping it's a double from there. We also talked about with our previous guests, just that the financials haven't really done much. They haven't really performed well.

You got these IPOs. All right, you got the parent companies of Dunkin' Donuts, Buffalo Wild Wings, Cerebross, which is super red-hot. Their IPO target just got raised. Again, SpaceX. I don't know if you heard about that company. If they all do well, will this finally set the financials kind of alight a little bit? I think so.

I think what's happened is anybody that's really exposed to the consumer, like on the credit side, has had props. You see, like, you know, the JP Morgan's, the world cities have underperformed, let's say, the Morgans and the Goldman's that are a little bit more trading-oriented. We own JPMorgan. We think it's best in breed, but our financial exposure has been a lot more to interact with brokers and the exchanges like CBOE, because I look at that and say, I don't have any credit problems there. I got people just buying and selling, and that's going to continue. I think the I IPO market will be healthy. My fear is a lot of this dynamic has

changed. Now we're bringing out trillion-dollar companies. We never had that before. Now everybody's going to come out, and there are $800 billion or trillion dollars. I don't know how much boom, there's going to be anymore. When you brought a stockout that's already up as much it is, one of the beauties of IPOs you bought it. It went up over three or four years. You did really well. These have already had these two runs.

Exactly. And no one's getting the money. And the SEC's trying to fix that. But, you know, if anything, they're going to say, well, public companies only have to report twice a year. And then I feel like that the cure is worse than the disease. I would agree. I don't think that's a positive for those of us in the industry.

I like more transparency, not less. I think, yeah, there's less requirements. It doesn't cost you as much to do it. all reporting, but we as investors don't know what's going on. I'd rather have that more information to make a smart decision versus... I think they should require private companies to report more and therefore lower the kind of the jump, you know, and give people more information. If all of these retail investors are going to be in private markets now, then they should get as much information on those holdings as we do on publicly trading. Or they shouldn't be in there. It's one of the two things.

You either give us enough information to make good decisions or don't let people in there just because we want to generate big fees and the private asset fees. Exactly. Exactly. Michael, we'll be it there having enraged, no, Michael Landsberg of Landsberg Bennett, private wealth management, really appreciate it. Coming up, a growing fight over prediction markets on Capitol Hill, as that fast-rising industry hits $60 billion in size. Congresswoman Ashley Hinson on her push to ban the trade in Congress is next. On April 30th, the Senate unanimously passed a rule immediately banning senators and their staff from trading on prediction markets like polymarket and Kelshe. A bipartisan move to,

to prevent potential insider trading. Now, Iowa, Congresswoman Ashley Hinson, is introducing a resolution that would do the same for the House of Representatives. For more on the details of the resolution, let's bring her in. Congresswoman Ashley Hinson, a Republican representing Iowa's second district in the House of Representatives. Congresswoman, welcome. It's great to have you here. Great to be with you.

Important stuff we're trying to get done. So just to be clear, on the Senate bill, did that only bar senators themselves or did it also bar bar their staff? So it should have been all senators and staff working in that branch of government. that's exactly what we're trying to do now in the House as well. You know, I look at these prediction markets, and you mentioned Pauley Market and Kalshi, they're really blowing up right now, but I think along with that is the concern, right, as I travel through the state, hearing from folks who are worried about insiders really cashing in on political events using information

that the public does not have. So I think there's nothing swampier than that, whether you're an actual member of Congress or someone who's working knowing that information. We should be taking immediate action to ensure that the D.C. swamp can't make money off the policies that they're influencing every day. What would you give the likelihood of passage at this point if it already passed the Senate? Are you pretty close? You think this could be a done deal very soon here? Well, I hope so. I hope our leadership puts on the floor as soon as possible. And I don't know who in their right mind would vote against something like this, right? I think the Congress and the American perception of Congress right now is at a low point. And I think we need to do everything we can

to make sure that members aren't taking advantage of the American people. They're not taking advantage of information. Congress shouldn't be a casino. Members shouldn't be trading individual stocks. I think that's another place where we need to take some action there. But I think this is a good start to make this rules change. And again, Elizabeth, I can't imagine who would vote against something like this. Do we need to go further?

Does Congress need to start creating legislation that would include the executive branch? And some of it, there's many officials, the judiciary, all across the country. state and local officials. Yeah. So I think this is a good, and I worked with Bernie Moreno in the Senate. So you talk about working across the rotunda here. The action that he took and the action we're trying to take is the quickest way to make sure that we pull this off the table for members of Congress. But what I think is important is that we look at the bigger bill, which is the Predict Act, and that would do exactly what you're talking about, which would be to make it off limits for anyone in the executive branch and the judicial branch too. But I think we need to get this done.

as soon as possible and take this off the table because I think, again, serving in Congress should be a privilege, not an investment opportunity. One step further on prediction markets, because they're so they're not well defined. They don't fall clearly in the regulatory framework. And so even beyond that, if you said, okay, well, let's take a news industry, those who could bet on something happening where they have an influence on it happening, many, many other such, because all these events, it could be, you know, somebody in a low, jurisdiction having a town hall. And that is whether someone at a school board says or doesn't say

something. Do you know what I'm saying? Do we need a broader framework about defining insider trading or applying those rules to prediction markets? Yeah. And we very well might. It's kind of the wild wild west right now. And we need to make sure we're at least taking these initial steps to try to get ahead of it. And I think that's a conversation to be had on our financial services committee. So I look forward to working with them to see what more we can do. At the end of the day, this is about accountability and making sure that the American public can trust the people who are making big decisions and influencing policy on their behalf. And I think that's, again, why this is so critical that we get it across the finish line as soon as possible. Did we ever pass the ban on

insider trading of stocks? So we had a piece of legislation that was making its way through the House Administration Committee, and I know Brian Stile has been leading on that. And I think that should absolutely be a priority as well. When I was named to the Appropriations Committee, the House. I made the decision. I don't publicly trade stocks. I changed all that to mutual funds and ETF so that Iowans know that I'm not making my decisions based upon insider information. So I think Congress needs to lead by example here. And again, that's why I've tried to lead on policy like this with the prediction markets. And again, I don't think members of Congress should be getting rich off their job and the information they learn in the process.

All right. And I shouldn't have said insider trading. It was just all trading of stocks. But then you can always kind of wink at your financial. I don't know. There's many problems. This looks like the lowest hanging fruit at this point. So, Congressman, thanks for joining us to talk about it. Thank you so much for having me on. Ashley Henson from Iowa. And just a reminder that CNBC and Calci, that's one of the major prediction markets, have a commercial relationship, including customer acquisition and a minority investment. All right. Let's get now over to McKenzie Segalos for a CNBC news update, Mac. Hey, Brian, so here's what we're tracking this hour. Amid record high beef prices, the Trump administration is getting. gearing up to import more steak and ground beef from overseas to help bring prices down.

The White House is planning to temporarily cut tariffs on beet imports as soon as today. The administration says it also plans to increase loans and access to capital for U.S. ranchers, while at the same time reducing some of the regulations that ranchers face. More than 2,500 scientists sent a letter to Congress today arguing that President Trump's decision last month To fire the National Science Foundation's Oversight Board was a, quote, alarming attack on research funding and that the move could put the U.S. at a disadvantage with China. Established in the 50s, the agency funds much of public science research in the U.S., distributing about $9 billion in research grants annually. And finally, Texas Attorney General and Senate candidate Ken Paxton today sued Netflix,

accusing the streaming giant of spying on Texans, especially kids, by collecting their data without consent, and for allegedly designing the platform to be addictive, Netflix has yet to comment. Brian, sending it back to you. All right, McKinsey, thank you very much. All right, coming up, you've got solar ETFs up 3% today and a new record high.

But your next guest says there's one part of this energy market that you really need to take a look at, and he'll name it next. All right, welcome back. Let's talk about a sector that is quietly having a massive run, some alternative energy. The Invesco Solar ETF, the tan, is the ticker hitting a new record high today. Shares of Eos, Sun Run, N phase, Oglow, all up double digits in the past week, but none is up more recently than Fluence Energy. That stock has doubled in a week.

Yes, it has doubled. Now, Fluence was heavily shorted. They posted results that caused the shorts to run for cover, sending the stock. sending the stock soaring. So what now? Let's talk about that with Julian de Moulin-Smith. He is power utilities and clean energy equity analyst at Jeffreys. If you were short, not you. If an investor was short, Fluence Julian, they got their faces, chewed off. They had to cover the stock. It's doubled in a week. Somebody got something wrong. What did Wall Street get wrong about fluence? Thanks, Brian. Look, what did people get wrong about fluence? This is really,

a story about underestimating the data center world's demand for this novel product, right? Folks associated as a traditionally renewable energy product, hey, this is going to be paired up with solar wind. Look, guess again, this has really been the quarter where we're seeing this time-to-power thesis. Data centers want to come online tomorrow, and yet there's this equipment solution called batteries that are now becoming amply available, right? And this is really where we've seen the inflection. Folks did not expect to see a double back-to-back order book with Fluent's tied to two large hyperscalers, right? This really inflected the narrative.

And frankly, this is probably the start of a wider inflection in the narrative for this space and months to come. The time to power the thesis, the need to power the grid immediately, and the ability for this to both provide solutions at the data center and, frankly, adjacent to defer the need to upgrade the grid, really provides a litany of avenues. I think we're just scratching the surface. This is one of the highest growth end markets out there. And yet admittedly, as you say, a second ago, the market had been deeply skeptical about

the ability for Fluence to perhaps beat the odds and beat, frankly, its closest competitor, Tesla in the end market here. Because, well, Tesla's a pretty formidable competitor, okay? And one of the things I'm writing about in my Power Insider weekly piece this week, Julian, is the capital spending boom that we're seeing. And there is kind of a hot debate, as you know, which is, well, Tesla's going to win. No, no, Generac's going to win. No, no, Bloom Energy is going to win.

At 700 or whatever billion number you've got, and everyone's got their own numbers, Julian. Can everybody win? Can Fluence win? Can Bloom Energy win? Can Tesla win? Can they all win? Look, I say rising tide lifts all boats here. And I think this is exactly the dynamic we're talking about here. In fact, if anything, it's the boats that were least intact. It's the corners of the market that folks release expecting it. Right? You said it a second ago. Bloom Energy has surprised the upside in part by getting hyperskiller deals where votes didn't think it was possible. Look, is Fluent Bloom? Not quite. But in many ways, folks that really doubted their ability to to scoom. this kind of an end market. And I think it's transparent. The ability for this technology that are battery cells to respond to the quick oscillations that these data center needs was transparent six months and 12 months ago. So you talk about it. Can everyone, yeah, I think in this market with that kind of spending, everyone's a winner. Now, to be even more specific, this specific technology need to respond to the grid and respond to the quick gyrations and load these data

centers producing, this has been a corollary, a secondary move. that's been months in the making. Folks just caught up with it now. But Julian, to be clear, you're saying that the rise in these stocks is directly related to the AI trade? Yeah. Yeah, let's make this a bigger connection here. The recovery and the tan has everything to do with yesterday's passage of the O triple P.

But frankly, year to date, this has been all tied to tying back the renewable industry and the battery industry to the data set of trade, right? You talk about all of the above and the ability to deploying the arms race of energy solutions here. This is about throwing everything at it. We started the year back in December with Google acquiring a major renewable developer in the space. We saw them announce a litany of related renewable announcements. And then we continued through the course of the year with a number high-profile announcements about trying to keep these data centers connected the grid without throwing off the grid, without literally taking down the grid with the amount of oscillations that they're

producing. Look, we're going to see more of this. We're going to see more grid deployment of batteries to keep things intact. It's a cheap solution. And when everything else, is inflating out there. Batteries are one of the most deflationary products out there. Yes, because I wonder, Julian, is it commoditized? The bears are going to say to me, and they have said to me, Brian, it's fine. It's commoditized. Battery technology is like the same as it was 100 years ago.

There's nothing new here. It's a race to the bottom. Your response to that. Let's go, right? So you got a 1% EBITA margin that you're starting with here. You want to talk about operating leverage? The analog here is Bloom. Why?

Because Bloom didn't have an EBITA margin to speak to at the time. You talk about a rising tide. Look, if you've got an ability with a counterport, he wants to pay to get stuff done delivered tomorrow, yeah, sure, it was commoditized yesterday. But I would sure encourage you to take a look at how this can inflect and provide even a modicum of profitability. And off of very low base and off of a negligible amount of EBITA historically,

this is where you see that reflection happen. Is it in these clean tech stock that had been left really for dead, in many respects, with fairly low profitability, with low market caps, low expectations, as you emphasize with near. really 40% short interest. And Eos is a New Jersey company. Some of the stuff they do is right here in New Jersey.

Kind of love that there's manufacturing here and in Pittsburgh, Fluence, also a lot in America. Julian DeMullen Smith, really appreciate your time. Thank you. Thank you. And speaking of renewable energy, we will be speaking with Sun Run CEO, Mary Powell, exclusively tomorrow right here on Power Lunch. The stock is at more than 15% in the past week. You don't want to miss it.

All right. By the way, speaking of that weekly intelligence piece, I can't stand the word newsletter. It's delivered straight to your inbox called Power Insider. Go to cnbc.com slash power dash insider or hit that QR code on your screen right now. Actually, this week, I'm right. I wrote it last night, writing some tonight. It's about that capital spending boom. Who's going to win?

Who may not? Power lunch right up after this break. Somewhere, James Bond may be driven to drink or maybe he is shaken and stirred. because longtime bond actor Daniel Craig is now promoting a very different kind of car. It's called the Denza Z9 GT. There it is. If you haven't heard of it here in America, it's because it's not sold here in America. Denza is from China's BYD.

It's all electric. To me, Kelly, the front end looks just like a Porsche. That's beautiful. The rear end looks like a Kia EV6. What do you think? Listen, for years, the Chinese EVs are coming. the American market is somewhat insulated. I don't know when they're actually going,

you're going to find them here more regularly, but they are taking over and they are so much more sophisticated now than they used to be. And this is a good example. It's bad news for Detroit, though. It's a lot. It absolutely is. I mean, when I say bad news, I mean, like... Existentially.

What about Tesla? Speaking of which, Tesla shares flipped into positive territory today after word from the White House that Elon Musk will join President Trump on his upcoming trip to China. See how this is all coming full circle? He won't be going alone, a heavyweight lineup of CEO. is also going, including Tim Cook, Goldman's David Solomon, said he's Jane Frazier, Larry Cole from GE Aerospace. But this, listen, Musk is moving on from Tesla.

I mean, SpaceX, AI, whatever you want to call it. What happens to both that company and the entire global auto industry is at stake with that video? Big topic, but a big topic for another day because we're out of time. Thank you for watching, Power Lunch, everybody.