Power Lunch - Nasdaq climbs to fresh record ahead of key tech earnings 10/29/24

Episode Date: October 29, 2024

The Nasdaq hit a new record high as investors readied for key corporate earnings releases, including reports from notable tech names. Alphabet, Snap, Reddit, Chipotle and AMD are all scheduled to post their quarterly results after the bell. Tech juggernauts Meta Platforms and Microsoft are slated to report Wednesday, while Apple is up on Thursday. We’ll tell you all you need to know to be ready for those results to come in. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

And welcome to Power Lunch alongside Kelly Evans. I'm Dominic Chu and joining us for the entire hour. That guy over there, Chris Grissanti, chief market strategist over at MAI Capital. Stocks are rising again today. The NASDAQ hitting a new record high above the 18,700 mark at this point. That's ahead of five of the so-called magnificent seven stocks reporting in the next three days alone. Alphabet is on deck going first after the closing bell today, Kelly. You know, our friend Chris can be a bit of a contrarian. the NASDAQ is on a seven-week win streak. The share of Americans who favor stocks in the conference board survey is at a 40-year high.

You've got to be shorting or something. Well, it is troubling that there are no clouds in the sky, Kelly. I am worried about that. But we live for this week every quarter. It's, you know, half the companies in the S&P are reporting and we're very excited. Consequential. Another report we're waiting for. Speaking of earnings is AMD today.

Company, of course, trails in Vedia, which is up 186 percent. This year, AMD is up almost only 11 percent. And people often like to talk about whether you should play the catch-up trade in any kind of pair trade situation. It's not usually a good bet. But in and of itself, you could say, okay, if AMD says a few things right, maybe investors get more excited about the shares. Maybe. But expectations are very high for AMD, and AI is really led by Nvidia and AMD, and AMD, along with lots of others, are trying to catch up. So it's a real important earnings report.

The pair's trade would have been a losing one, so to speak. For short, Nvidia and long AMD during this round. Absolutely. That's a tough one. pair trade kind of situation? No, of course. All right. And so from technology, we're going to stick there. We'll go to Bitcoin because it's getting near the 73,000 area right now today, just shy of its record highs. Trump media and technology shares are jumping today. They've tripled so far just in October alone. We're going to discuss whether this is a sign of the markets prepping for a possible hypothetical Trump victory. Chris, is this a Trump trade? A lot of folks have been referring to it,

casually as such. I think it is, Dom, but I don't know if it's right or not. None of us really do. So, you know, engage at your own risk is what I'd say. Well, not just that, but you also have to ask, even if it's pricing it in, then it's priced in when it happens. So you can't expect it either. If it's right now, then there may be less if that bears out. If that doesn't bear out, that's a whole difference for it. Right. And then a Trump victory might be the biggest sell on the news thing we've ever seen. Exactly. Or unless you want to buy bonds on it, that's the only thing. Maybe. Do you think the long-term bond yield rises in Tand, with politics or other factors?

I think the long-term bond yield is probably on the way up because the economy is so good, and we're not going to see the Fed cuts, but that's for later. All right. Well, on that note, and jumping back into the markets, the major averages may be mixed, but those bond yields are continuing their rise. The 10-year hitting its highest level since July earlier today. Here to talk more about that move. Dan Suzuki is the Deputy Chief Investment Officer at Bernstein Advisors.

Dan, do you think it's on brighter growth, fiscal problems, inflation? Why do you think bond yields have been on? on this relentless hike? Is there a D, all of the above, Kelly? Right. I think it's really all those things. First of all, you know, there's been a huge swing in the narrative in the markets from, you know, doomsday talk just a few months ago to, you know, getting a hot employment report, a hot

CPI report, and earnings coming in very strong. I think that's all telling you that the economy is doing better than expected. At a time when the Fed has just started to cut interest rates, I think that is a powerful combination of factors, and that's all, you know, driving. interest rates higher, not to mention, you know, people starting to play the policy game as the electioneers. Do we think, Dan, do we think that a steepening of the yield curve is actually something fundamentally that we are watching all over again? We've been talking about the validity of the structure of short versus long-term rates because of Fed intervention. But if things are normalizing,

if we are going to see a steepening of this yield curve, is that some kind of a sign yet again? in history of things maybe better or worse, is the fundamental case there? Yeah, I think, you know, you have to put this, you know, Fed cut into context relative to history. This is a very different environment. In fact, this is the only time, you know, the Fed has begun a cutting cycle when, you know, profits were accelerating and healthy. I mean, you've never seen it before outside of two examples, which were on the wake of bare markets. 1987 in 2002, 2003, that was the only time. And so I think the reason that the Fed is cutting rates today is not the typical one of slowing growth. It's actually one of inflation coming down.

And therefore, I actually think that the Fed easing and the subsequent sort of steeping of the yield curve is not sort of the normal negative implication that you normally take with it. Chris, question, comment? I do. Dan, it sounds to me like you believe like I do, that the Fed may not cut as much or as deeply as folks are thinking right now. And I don't think that's a bad thing, but one, do you agree with that? And two, good or bad? Yeah. No, absolutely, Chris. I mean, we actually, you know, we took advantage of that. You know, the bearish negative, the narrative that was taking hold in the markets, we took the opportunity to lower duration in the portfolios move out of the long end of the curve. And that's been absolutely right.

Really, you know, on this whole idea that people are way more pessimistic than the data adjust. So I think that is a good thing. The fact that the economy is doing better than people think that the Fed, even if the Fed is not going to cut as much, the fact that the Fed's cutting in an environment where liquidity is actually still pretty elevated, I think that is a good thing. So I would absolutely agree with you, Chris. I'll try to figure out where Dan and Chris have most joint conviction on the market, because Dan's often a proponent of smaller caps. But I wouldn't say, Chris, you have per se. No, no, no. I think you should call me Chris Suzuki now because I think we're right on the same page.

I think, Dan, does it worry you that there are no clouds in the sky where you're just talking about that? Yeah. I mean, little higher rates, I don't think that's going to be a big deal, but you don't see them going to 5% or something like that. I think you really have to keep it simple, Chris. And the reality is the number one drive of markets is corporate profits. And corporate profits are getting better. Not only are they getting better, they're broadening out. And so I think that's creating, you know, tremendous opportunity.

That's not to say that there aren't sort of rain clouds on the horizon as Kelleys. alluded to, positioning, valuation, allocations are very high. You know, household equity allocations are at all-time highs. You know, the P-E multiple on the market is basically the highest since the tech bubble. Everybody's all in on risk in the same group of stocks. So I think that's something to consider. We do have some important deadlines coming up on the political front, not just the election, but the budget deadline, the debt ceiling coming up. And we have some important tax cuts expiring. So it's not to say that it's all roses and sunshine and unicorns, but I think for the time being the fact that earnings growth is accelerating and broadening out,

that's a tremendous support here. You know where there are roses, sunshine beams, and unicorns? It's in the NASDAQ trade today because it hit a record high again. So even as we're talking about all these worries, there's one key part of the market that envelops the mega cap technology drivers that are the biggest influence on the markets higher. And of course, we sit right here. here on the eve of Magnificent Seven earnings season basically coming up. Is it going to be enough to power the next leg, Dan, higher in the markets if these magnificent five do well this week? I think it will be. I think overall, what people often forget is these big stocks, their earnings are very cyclical.

So the fact that their earnings are coming in ahead of expectations, these are huge cap expenders in our economy. So if they're coming in, their profits are strong, they're spending on growth, that's going to have ripple through effects for the entire market globally. And I think that's something you want to take advantage of, Dom. And Chris, a final word on this. Correct me if I'm wrong, that Google is one of your kind of favorite stocks. It is, right? There was a speaker in the last hour that said exactly what I think, which is, wow, really cheap. Don't know what the earnings is going to be.

Hate to recommend a stock right before they're about to report. But really think the future is bright, especially this valuation. Airbus, take time. Why did those names come up? Oh, because they're kind of out of the mainstream. Airbus, of course, is the Pepsi to Boeing's Coca-Cola, but Coca-Cola in this case is having terrible problems. So Airbus has smaller problems, and they're not safety-related, so I like that.

And Take 2, I think, is really a great way to play a single event, which is the introduction of Grand Theft Auto 6, which is going to be the biggest game introduction in the history of the world. So we're excited about it. There was a time in my life when I was a big GTA guy. You're not going to try it out this time, right? I think I have too many kids around the house to be able to put that video game to play. Dan, what about you, a GT6 fan?

No, I don't have time for games. I got a 7-year-old and an 8-year-old. See, he knows what I'm talking about. You know what I'm talking about. Yeah, but I'm not really a gamer to begin with. Thank you, Dan. Appreciate it today. Dan Suzuki.

Thank you. And thanks Chris Suzuki. There you go. All right, let's move to the bond side of things. The 10-year note yield continuing to rise right now above the 4.3% level today. now it's 4.29. It's the first time, by the way, since July that's happened. That's all ahead of inflation data on Thursday

and, of course, the big non-farm payrolls jobs report on Friday. So with that in mind, let's get out to Rick Santelli in Chicago for more on the state of play in the bond report, Rick. Well, you know, Dom, I can't tell you what all the data is going to be moving forward, but today we had some quite important data. As a matter of fact, at 8.30 Eastern, we saw that the trade balance, the deficit for September on the advanced look, was $108 billion.

That is the second highest since record keeping in the 1980s. That put rates up. Then, of course, we had really solid confidence numbers. Expectations was over 89, the highest level since deece of 21. Then there was a seven-year note auction. It was capping $183 billion in coupon supply. That seven-year was the best to breed. We had soft auctions up to that point.

It was a real winner. you see on intradate chart. Now, if you look at early July for that 10 year, I know everybody was talking three months, but when we were towards the highs of the session, we are flirting with the highest yield close since the 3rd of July, almost four months. And just because the auction's over all three

doesn't mean that this move to lower rates will continue. There's a lot of drivers here. There's always this exhale after supply. And finally, it was a big day today for another reason. If you took 10-year minus boons, we touched 200 basis points briefly today. That is the widest it's been in nearly six months. Dom, back to you. All right, Rick Santelli with the Bond Report.

Thank you very much for that. Still to come on this show, we'll get a bit more micro on earnings. The trades on Chipotle and Pfizer and Ford in a deluxe version of three-stock lunch coming up, a bento box, if you will. Plus, the crypto conundrum. continues. Every few months we see a Bitcoin rally only for the trade to get stuck in the mud, but some think the election could be a true turning point. And speaking of Battleground, Georgia, we're going to take a look at how the state's economic success could impact the results in that

state. Power lunch is going to be right back. Welcome back. Time now for a deluxe three stock lunch today. We're going to get the stories on three key names, and then we're going to trade each one of them. host Chris Grasanti of MAI Capital Management is our trader of record today. And we're going to talk a little bit more about the earnings side of things. The first up is Chipotle. Wall Street is keeping a close eye on its third quarter results due out after the closing bell this afternoon. Investors patiently await the naming of a permanent CEO now that Brian Nicol, of course, has left to be the CEO at Starbucks. And we're going to turn to Kate Rogers, who's got the story for Chavolet. Kate. Hi, Dom. Analysts you're looking for EPS of 25 cents on revenues of $2.82 billion for the third quarter.

Same store sales expected to increase by 6.3%. As mentioned, this will be the first quarter the company reports since Brian Nickel departed as CEO for Starbucks. Investors will be hearing from interim CEO, Scott Boatwright, who's been at the company for seven years overseeing the tech pipeline that has really helped to propel its success in recent years. We'll learn more about how the brand is faring with consumers. Reminder, it's been gaining in recent quarters with all income cohorts, which is a rarity in this environment, it's also been able to consistently grow traffic as other brands see it fall. Chipotle rather brought back fan favorite brisket this quarter to the menu, so commentary

around that performance will be key. The stock is up over 30% year-to-date, and while it's far outperforming other fast food competitors, it's also being outperformed by two other newly public names in both Sweet Green and Kava. They're up over 200% on the year, and a lot of comparisons have been drawn to Chipotle, which of course, has a much bigger footprint than those two locations. Back over to you. All right. Kate Rogers with the trade on at least the story on Chipotle. Chris, let's turn to you for the trade on Chipotle. This is an $83 billion company. Wow. You just think about how big that is.

Yeah, no, and they just can't be as quick as these smaller, like sweet green. But all eyes are going to be on the same store sales here. If you've got to look at one number, look at that. Anything over six and a half percent, that's going to be met with pure joy, as we say, on Wall Street. It's a high hurdle, but they've been able to deliver, even with the departure of the CEO, who was seen as real strong. The team is deep. The guys coming in has been there a long time. I'm a value, guys.

So 55 times earnings is a little rich for me. But I'd urge my growth-oriented friends to take a look at that same store sales number. Of course, the same store sales for this current quarter won't show up for a couple months now because of the Brisket promotion and everything else. But anyway, don't miss Chipotle's interim CEO, as Kate mentioned. Scott Boatwright, who's going to be live on closing bell overtime today to discuss the company's earnings report. That's in the 4 p.m. Eastern Time hour. We'll see the state of brisket and everything else on the menu. I've been going there more than ever for what it's worse. I've gone a lot more for the last year than I have ever. So I'm taking the over. Have you done the brisket?

No, I didn't even know about the brisket. Oh, the brisket is something special. Even better. Let's move along to Pfizer. The pharma giant blowing away estimates for third quarter revenue, helped in part by sales of its COVID vaccine and antiviral pill Paxlovid. Angelica Peoples is here with those details and the stock is lower, Angelica. That's right, Kelly. This looks like it was a great quarter and a great print for Pfizer, but the problem is this strength is all coming from its COVID portfolio. Like you said, it's antiviral packs lovid really beat the estimates here up by about $2 billion

passed what the street was looking for. And also its COVID vaccine came in about $400 million ahead. And so the problem for Pfizer is that they're trying to get people to look at everything else in its portfolio and move beyond COVID. But that is the story today. And if you look at its cancer portfolio, some of the drugs there, including some of the ones that it got from its acquisition of Seagen, drugs like PADZV, actually coming in a little bit short of estimates. So that's not helping their case that there is more to see beyond COVID. They did also talk, though, a little bit about its obesity pipeline. Remember, they've had a few setbacks there, but they do still have an experimental pill called Daniel.

Libran. They're expecting an update from that drug in the first quarter of next year. And they also talked about two other earlier stage pills in the pipeline. But again, this is all really early. And right now, investors are looking for what else they can grab onto. And remember, Pfizer is facing pressure from activist investor Starboard. And CEO Albert Borla today directly addressing some of that pressure from Starboard saying that they're about 15 months too late and that Pfizer's already taken numerous actions to write the ship here. Things like cost cutting. and executive changes. But again, it doesn't seem like there's a whole lot of enthusiasm for that pitch. The stock today down about 2%. And JP Morgan analysts this morning saying that it's

going to take more to really change the narrative here. Some of them, they need more progress on the pipeline and also some stronger launches in its current portfolio. So again, more to see here. And we're going to have to see how this plays out between Starboard and Pfizer going forward. Angelica, thanks. And Chris, I think Borla would have a stronger case if the stock was reacting strongly to this earnings report and kind of backing up what he has to say. But after Smith's presentation and hearing the analyst echo that, you think there's probably going to have to be more done to show that they have their arms around this thing. I do. But I think Pfizer's like the Rodney Dangerfield of pharma. They get no respect. The whack on them last year was, oh,

the COVID's falling off a cliff. Now they got great COVID sales and, oh, it's just COVID. But it's a very cheap stock with great cash flow. So I like that. What's the catalyst? I don't know, but if we knew what the catalyst is, it wouldn't be selling for nine times earnings with a 6% yield. So I'm happy to take the 6% and wait. You're not worried about that 6%. No, I'm not worried at all about that 6%. Because the cash flow is quite good. Easily covers the dividend.

And earnings are growing. They're not growing fast, but they are growing. And this COVID business, look, it's lumpy, but it's, you know, the check still clears. I mean, it's still money. So it's not a bad business. And, you know, we're one pandemic away from Pfizer stepping. into the breach again, who knows. And so there's lots of ways to win here, including new discoveries, including buybacks, including increased dividends. So this is a name I like, I would use this weakness

as an opportunity. All right. And the CEO, Albert Borla, will be on Mad Money with Jim Kramer tonight to discuss these results, his strategy, and more at 6 p.m. Eastern. All right. So the final name here is Ford, which top third quarter estimates when it reported earnings yesterday, but it also guided on the low end of its previously. announced full year earnings forecast range. Phil Leboe has the story on Ford, Phil. Yeah, rough day for Ford, Dom. When you take a look at shares down more than 8 percent, it's about the guidance. It changed in just three months. Back in July, they said, look, we expect to earn $10 to $12 billion this year. Yesterday they said, well, it's going to be about $10 billion,

which had more than a few analysts saying, wait a second, what happened to 10 to 12? Now it's 10. that's the primary reason why the stock is under pressure. There's also the issue of warranty costs. It has been an issue quarter after quarter after quarter. They believe that they're making progress here. They didn't detail it and talk about it at great length yesterday, though it's still too high. And they've said it's too high. Finally, there's higher inventory, though that is an issue that Ford believes should move down, should be a little more normalized by the time you get into early 2025. Take a look at EV market share because I get a lot of people saying, Well, is Ford trading lower because they're not doing as well in EVs?

They've actually cut their losses there. And the loss per vehicle is lower now than it was in the second quarter. Their market share, well, it was up there. I mean, their sales were up 12% in the third quarter. There you see there are a fourth year-to-date behind General Motors, Hyundai Kia, and Tesla. And speaking of General Motors, I want to show you this chart. This is Ford versus GM over the last two years. Why are we showing you this?

Historically, these guys trade pretty darn close. to each other, almost exactly in tandem. Look at the split that we've seen, especially in the last three months, but over the last year, you really see that General Motors has outperformed while Ford has struggled. Guys, back to you. Phil, it's funny you say that I was just looking at the five-year chart, and just in the last couple of months, we've seen GM now have a higher five-year return than Ford does. So there's a case, as we were talking early about, do you ever bet on the number two? This one has been a complete reversal, dog. So here's an interesting one, too, for Chris. We're going to give you the final word here. Phil, Beau, thank you very much for that.

the difference or the similarity between Pfizer and Ford, they both have 6% yields. And they're both trading at single-digit PE ratios. I don't like Ford here, however. High warranty costs are a real problem. Obviously, they hit earnings. We're seeing that today. But they also indicate manufacturing issues. And that's a real concern. Multi-quarters, I'd stay away. All right. Chris Grisanti, with our three-stock lunch. Thank you very much for that. Meanwhile, take a look at shares of Altair engineering surging by 8% on a Bloomberg report that, that Siemens is nearing a possible deal to buy the software maker. That deal could reportedly be announced as soon as tomorrow.

Altair is expected to report its quarterly results tomorrow as well. Siemens telling CNBC, it does not comment on speculation or rumors. We've reached out to Altair as well. So Kelly, we'll keep an eye on that. But the boilerplate responses come back from at least one of the parties. And the shares are up 8%. Coming up, a breakout coming for health care stocks. that group lagging its peers this year, but our next guest has high hopes.

Market Navigator is next. All right, welcome back to Power Lunch. A quick check on the markets right now. It hasn't changed a whole heck of a lot because we're still waiting for that big report out of Alphabet later on today. The S&P is up a quarter of 1%, but the NASDAQ composite really outperforming up about three quarters of 1%, a new record high for the NASDAQ composite index. Now, it is still, again, the busiest week of earning season with many health care

reporting their results. The sector, though, has not had a stellar year. It is the second worst-performing sector in the entire S&P 500, but is the healthcare space headed for a possible turnaround? Our next guest is taking the temperature, so to speak, on the sector, and he thinks the prognosis is good. So joining us now as Carter Worth, founder and CEO of Worth charting, a guy who looks at charts for a living, take us through why you think health care is poised to outperform after underperforming. Sure, Don, Chris. Before we get into, we know this is the third largest sector, of course, in the market, some 11%. And just as there is money flow for a while, tech is underperforming, and then banks are outperforming,

and then utilities come to life having lag semi-stalling. At this point, healthcare has lagged the market over the past 7,8 weeks to such an extent, it's down about 7%. The market's up about 4 or 5. That spread is fairly extreme. Let's look at four identical charts. So here is the XLV, that's the ETF, that tracks the sector with no lines, no drawings, annotations. Let's look at the second iteration. And what we know, if you see here on this next

chart, is that we are down to trend. If you measure trend by a long-term moving average, in this case, the 150-day moving average, we've sold off since that July peak, some 7%. And this is what a level of support looks like. So rebound potential is judged to be high. We might have other iterations of the same chart. But the point is, at this point, my thinking is one wants to be contrarian and some of the things that are steep and uncorrected. Look what happened to IBM, steep and uncorrected and then got whacked as the expression goes. There are things that are vulnerable because they're extended and there are things that are getting down to levels where they're overdone to the downside, whether one wants to use an oscillator-based phrase like

oversold or just consider this a fairly mature eight-week decline to support. Now, Carter, what exactly kind of, what kind of return could we be looking at if you're starting to leg into positions around this 150-day moving average. At what point do you say, hey, it's good, let's keep our position. When do you want to start looking at maybe is it a trade or is it a long-term investment? Well, in principle, right, there are only three timeframes, minor, intermediate and major. You could be on a run for 20 years. That's a major move. Minor, a couple hours, couple days. Intermediate moves and principles where alpha is really generated three to five, three to seven months if you're at the great poker table that is the market. And so I think on an

intermediate basis. This is, again, a trade for a bounce and two or close to the former high. Okay. We'll march back possibly towards record high or not record highs. Highs for the year. Carter Worth laying out the charts. Thank you very much. We appreciate it. We'll see you soon, sir. Now, Chris, you're a fundamental guy, a portfolio manager. So let's talk charts are one part of the, one factor. You mentioned Pfizer in our previous segment. Is healthcare something that you're looking at? It sure is, Dom. And I love, you know, I view what Carter does is kind of, he's a witch doctor. And I, I, I, I, I, I've known Carter for 20 years. He's a terrific witch doctor. We love it when we do our fundamental research, and then it's confirmed by something that Carter would do. So we intuitively feel that

these stocks are cheap. They're underperforming. We are acquiring more positions there. It's not just Pfizer, but it's health insurers, it's biotech companies, it's other things. So broadly, he's right. All of health care is lagging. And we know Chris is a value guy. Kelly, so something's back over to you. All right. Thank you both. Still to come, can anyone catch up to Nvidia. AMD's earnings are on deck. It held pretty lackluster product event earlier this month, and the stock is up just 12% this year compared to Nvidia's 186% gain. More when we return. Welcome back to Power Lunch. While 2024 has been an incredible year for an Nvidia, the stock has nearly tripled. Rival AMD is lagging way behind. Can the company ever catch up to

what Jensen Wong has built? Sima Modi is looking at that for us today. Hi, Sima. Kelly, it's a true David versus Goliath moment for AMD when it reports earnings tonight. The stock, as you pointed out, has underperformed with NVIDIA's dominance, proving increasingly hard to crack. Earlier this month, AMD CEO Lisa Sue revealed a cutting-edge AI processor that will compete with NVIDIA's H-100 and Blackwell. However, the street was left wanting more. Tonight, Sue now has the opportunity to share what demand has been like for the M-I-300 series, new customer orders, and whether NVIDIA's first mover advantage is stalling AMD's ability to gain more market share. Raymond James analysts say AMD is making steady progress in data center GPUs.

Their base case is for the company to raise its prior outlook from $4.5 billion to over $5 billion. And then Patrick Morehead and more insight says it's in order to really catch up with NVIDIA. AMD needs to spend more time on marketing, something CEO Jensen Wong does a lot of. Most recently in India, Denmark, with plans to be in Japan next month. And guys, even when you compare public engagements of Wong versus Sue, Wong has been much more active in recent weeks. And that has certainly coincided with Nvidia stock remaining near record highs, AMD off about 25% from its most recent high. Ty and Kelly. All right.

Sima Modi, thank you very much for that. I appreciate it. Our next guest expects AMD to boost its AI revenue outlook for the full year. But cautious that buy side sales estimates for its AI accelerators are too high for the next year. So joining us with that story is Christopher Rowland, Semiconductor analysts over at Susquehanna Financial Group, covers the industry in depth. Christopher, let's talk about whether or not

this AMD catch-up trade is something that could have legs. And what does Lisa Sue need to tell investors today to make it happen? Yeah, investors need to get comfort around double-digit MI-300 billions of sales. And if she can paint that picture, I think that catch-up trade, at least that margin will start to narrow between the two. But invidia is leaps and bounds above AMD on this AI story.

Okay, if there are leaps and bounds above them, that means there has to be a technological leap forward in order for AMD hardware, its processors, to then be competitive with the likes of Nvidia. It has to be the case, or this becomes a one-horse race. What does AMD have to do? Yeah. So believe it or not, on the actual processors themselves, the MI300 and NextGen 325 are absolutely incredible.

They're really, really solid pieces of hardware. The problem is that AMD does not have software in the same respects that Nvidia has Kuda, which is the de facto standard that people are. are doing processing AI on today. Additionally, AMD does not have a systems approach just yet. They bought ZT systems in hopes of closing that gap, but they're still far away. So on hardware, they're coming close to matching,

actually at a price discount, but missing on software and systems. Christopher, I have a question that dates me, because I can remember back when Intel was AMD's major competitor back in the 90s. And they got so far ahead that the question wasn't whether AMD had just as good technology. The question was, why would these companies that invested billions in this Intel or in this case, in Vidia's chip, why would they ever switch? Because even if it was just as good, even if it was a little cheaper. So isn't AMD really fighting an uphill battle even if they have as good technology?

Yeah, the difference here is not, let's say, 20% in a PC CPU or even 50% in a server CPU. This is almost an order of magnitude difference between the two processors, an MI300 and, let's say, latest Blackwell from Nvidia. that gap will likely close over time. It will take some time. And the key here is really software. AMD has to get a lot better with their software. Okay. Christopher Rowland covers the chip sector.

Thank you very much. We'll see you soon, sir. You are welcome. All right. And don't miss AMD CEO, Lisa Sue, in a CNBC exclusive interview. That's going to be tomorrow, 9 a.m. Eastern time,

squawk on the street. Chris Kelly, if you want to date yourself, I remember when InVideo was just about video games. Sure. And Intel almost bought Nvidia and turned them down. Wow. Can you imagine? Let's get to Pippa Stevens for the CNBC News Update. Pippa.

Hey, Kelly. A federal judge ruled against a Republican-led lawsuit that would have required stricter rules for overseas ballots in Pennsylvania. That includes votes from military members stationed abroad. Six Republican congressmen from the battleground state argued election officials should be required to verify eligibility of overseas voters before adding them to the tally. But the judge dismissed the case on several grounds saying they filed the lawsuit too close to the election.

Right now in D.C., preparations are underway for Vice President Harris to make her closing argument to the American people, exactly one week before Election Day. She will give the address at the site of former President Donald Trump's January 6th speech. And Trump's vice presidential running mate J.D. Vance will tape an interview with podcaster Joe Rogan tomorrow. It comes just days after Rogan interviewed Trump

and a couple of days after Rogan posted online that an interview with Vice President Harris is still on the table. Rogan has not made an endorsement in the 2024 election. Kelly? All right, Pippa, thank you. As we had to break the agony of defeat for two footwear stocks, crocs sinking despite topping Q3 estimates, investors spooked apparently by a weaker than expected

holiday shopping forecast and struggles for hey dude. While shares of boot barn are tumbling almost 20% as well after the surprise departure of longtime CEO Jim Conroy, announcing he'll leave the company next month to take the helm of off-price retailer raw stores. And both of these are the two picks of Catfish host Neve Schulman in our 2024 CNBC stock draft. His team certainly stepping in it today, dropping him down to sixth place. We'll be right back. Welcome back. Take a quick look at shares of Home Depot, Coca-Cola and Delta Airlines. What do they have in common?

You Atlanta viewers know, all three are based there. All three are also up between 35 and 45 percent since President Biden took office. So has business been good enough under his tenure that voters will want to stick with his vice president next week? Megan Kisela is in Georgia with more on what could tilt that key battleground state. One of the latest figures, Megan, welcome. Hey, Kelly, that's right. The path to victory in November could head straight through Battleground Atlanta. both candidates have been pretty narrowly focused here in the final stretches of their campaign,

but they've been coming at it with pretty different strategies. For Kamala Harris, the polls have been showing that black voters who make up about a third of the electorate here, and especially black men, they just haven't been supporting her at the same levels with which they were supporting President Biden when he was able to narrowly flip the state four years ago. The economy is strong here. It's been booming in Metro Atlanta, like you said, but folks here told us that they just don't feel like it's been working for them. So Harris is now out with a new economic agenda aimed squarely at winning over those black men. She's offering things like small business loans, fully forgivable up to $20,000 to help with startup costs,

training for some hard-to-find jobs, and legalizing recreational marijuana. And it's the kind of policy gesture that some black business leaders here told us they believe could make the difference. We've never had a policy geared toward black men. We've never had a policy geared toward minorities. Now we have a particular president actually talking our language. So get excited about it. We can be mad and your feelings are correct of what happened in the past. But we're here now.

Let's take advantage of the programs. Now for Donald Trump, his strategy has been all about the Atlanta suburbs. They swung big for President Biden back in 2020. And it's a huge reason why he was able to win the state by just about 11,000 votes back then. So for Trump, rather than campaign, in the redder, the more reliably Republican parts of the state outside of Atlanta, where he's already expected to win with huge margins. He's been focused here in Metro Atlanta. And Kelly, his strategy has been to win Georgia to flip this state back to red by losing the suburbs by just

a little bit less. Guys? Where, Megan, a lot of the sort of hour by hour polling and the betting shows Trump with the lead in at least a couple of the battleground states. Remind me where things stand in Georgia. And what would the Harris team say about this apparent momentum shift that has been playing out? In Georgia, Trump has been leading pretty reliably by at least a couple of points, usually within the margin of error, like with so many of these battleground states, but generally with the lead. The difference here is that Georgia is not really not likely to be a must-win state for the Harris campaign. She's more likely to win those blue wall states, Pennsylvania, Michigan, Wisconsin. But if she loses any of those, Georgia then becomes really, really important.

For Trump, on the other hand, he likely has to win in Georgia. If things, we will get the polls first for Georgia on election night. It's the first battleground state to close. So we're going to see some early indications here. And if we see Harris leading by a whole bunch, that would be an indication. Things are going well for her, not so well for Trump, who needs to do better in this battleground state. Interesting. All right.

We'll be following that with much interest. Megan Casella, thank you very much. All right. Meanwhile, check out the price of Bitcoin. Now topping the $73,000 mark is the crippling. crypto community, perhaps banking on a possible Trump victory and deregulation for the industry to come. We're going to discuss when Power Lunch returns after this quick break. Welcome back to Power Lunch. We've got a crypto rally today as Bitcoin is just short of its all-time highs.

McKenzie Sagalos is joining us now with a look at kind of what's driving the trade. Is it really something that can be characterized as a so-called Trump trade? Hey, Dom. So Bitcoin is trading at its highest point since March. It's up more than 5% in the last 24 hours with Bitcoin's trading volume topping $31 billion and more than $224 million in short positions liquidated over that same window. Now, meanwhile, stocks tied to digital asset prices like riot platforms, Coinbase and micro strategy are all rallying this morning along with the wider crypto market as Bitcoin breaks past that key 70K resistance level.

Now, spot Bitcoin ETFs have also seen a surge of inflows adding over $3.1 billion in just the last two weeks, bringing the total market cap of those funds to nearly $73 billion since they launched in January. I've been speaking with analysts, and they say that with one week to go until the general election here in the U.S. investors are increasingly bullish that no matter who wins, it will be a net benefit for the industry. And already, guys, we are seeing options, traders, increased bets, that regardless of who takes the White House, Bitcoin is poised to hit that 80K mark this year. Okay. For what it's worth, I'm sure he wouldn't mind me saying this, but I saw Bill Miller last week. He was obviously been very bullish on Bitcoin. He's sort of, I don't know if we're going to

use the word retired. You're never retired, as you know, in this game. And a lot of people have come up to him and said, look, you told us 10 years ago to buy this. Is it too late? And he said to them, Chris, I'm curious what you think, that it's like I'm buying Amazon in 2014. Yes, it was up a lot from the IPO, but its big run was still to come. I tend to agree with that. I mean, look, I'm of the age where people believed in gold in the 70s and 80s. And it is the gold for people 40 and under. and also Bill Miller. And me.

I mean, I do think it's a hedge against inflation. I do think there's limited supply. That's the whole gimmick. So don't scoff at it. So, Mac, this is, you mentioned regardless of who wins, and that was part of your story. I would like to look at what happens beyond the election, right? Regardless of who wins, I'm not making a call, and I'm not saying Bitcoin is either. But what happens to the entire ecosystem?

Is there a feeling like this is that 80,000? 90,000, 100,000. Some people are calling for Bitcoin 1 million in the course of the next five to seven years. What does the outlook look like past the election? Well, part of the reason why the industry raised $278 million, more than 18x what it raised in the 2020 election cycle, is because they're trying to put cash behind House and Senate candidates who are ultimately going to comprise the Congress that's going to pass some of these crypto bills into law for years now. We've had different bills that have come to the floor. Nothing has been passed. And I can tell you that the first two line items on the congressional agenda are trying to repeal SAB-21,

which is this niche accounting bulletin that's standing in the way of banks being able to custody cryptocurrencies like Bitcoin and then passing Fit21. Now, this is a piece of, this is a market legislation bill that essentially would lay out jurisdictional authority between existing regulators like the SEC and the CFTC. And institutions say, hey, this is what we need to feel comfortable jumping into the ecosystem. Well, and Coinbase, meanwhile, I mean, that's the other interesting play for those who work for the, the company or have owned the shares, they would love to see that. I mean, they're up, but they'd like to see it up kind of back towards the real highs. Yeah, and I think that there's, like, two big questions for Coinbase, one, the existential threat of these spot Bitcoin ETFs, because yes, they are a custody partner for these issuers, but ultimately it's taking

some of their business, you know, you would otherwise store it on in exchange. The second question for Coinbase is they are in the midst of this, you know, protracted litigation with the SEC. I spoke to Paul Garral, their chief legal officer about an hour ago about the outcome of the election, And he's optimistic either way. He did show up at a Donald Trump fundraiser in June held at David Sacks home. But at the end of the day, I think that the question is, will there be turnover at the top of the SEC, regardless of who's in the White House? And what does that mean for existing litigation against Ripple, against Coinbase, against Robin Hood?

Will there be, sorry, real quickly. Does he know if there's going to be turnover? I guess it depends. Donald Trump has promised to unseat Chair Gensler if he wins. Kamala Harris has not come out and said that. But typically we do see a change in leadership when there's a turnover in the administration. Chris, are your clients asking for crypto? Yes, they're asking about it, and any asset that goes up as much as crypto, they're curious.

Do you think that Trump or Harris will be better from a regulatory standpoint for crypto? I think that with respect to the big institutions, they would like to see Donald Trump because they know what they're going to get at the SEC. And then with respect to the crypto investor, I think that regardless of who wins, they're very optimistic that we're going to see the kinds of bills passed that are going to open up the doors to institutional money. And that's really what the ecosystem needs to scale. They need a lot of Wall Street cash onboarded into crypto. Yeah.

Mac, thank you very much, McKenzie Segalos. And remember, for more, you can catch our podcast anytime by following and listening to Power Lunch on any platform. We're back with final thoughts right after this. Welcome back. We got a news alert for you on Visa. The stock is taking a dip on a report that it plans to lay off around 1,400 employees and contractors by the end of the year. That's according to people. familiar with the matter telling the Wall Street Journal. The cuts are reportedly part of a plan

to streamline its international business, though shares off one quarter of 1%. Now, in the statement to CNBC, Visa is saying, quote, we expect to grow the number of employees at Visa this year, next year, and for the foreseeable future. However, we continuously evolve our operating model to better serve clients and accelerate innovation and growth, which can lead to the elimination of some roles. The company is expected to report quarterly results today after the market closed, We only have a couple seconds, Chris. People have loved having you on. Anything you wish you had said, wish you had gotten to, any final stock thoughts?

Well, I don't want to end on a boring note, but I don't think things are that complicated. It's a great earning season. We'll see more in the next 72 hours, of course. Rates are coming down. The economy is strong. The election will be behind us. Are you sure rates are coming down? Well, slowly, maybe.

But the election will be behind us in a couple of weeks. So that's a big deal. All right. Thanks very much. Chris Grondi. Great having you here. Thanks for being with us. Thank you.

Closing bells. right now.