Power Lunch - OpenAI’s Latest Models, Bitcoin’s Recent Rally, Tech Portfolio Check 9/22/26

Episode Date: September 22, 2026

Stocks are moving mostly higher with the Nasdaq Composite rising to a new all-time intraday high on Tuesday.Kelly Evans and Brian Sullivan are joined on-set by Citi’s Head of U.S. Equity Trading Strategy, Stuart Kaiser, for an extended conversation on the state of the markets and his outlook for global treasury yields and energy prices.CNBC’s Kate Rooney breaks in with the latest headlines on OpenAI’s new AI agent models with updated capabilities and lower costs.Michael Bucella, Neoclassic Capital Founder, also joins the program to recap Bitcoin’s recent runup following Washington’s recent vote on the crypto Clarity Act. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Well, don't look now, but the S&P 500 is now just 1% from a new record high. Welcome to Power Lunch, everybody. It came up quickly and kind of quietly, but the tech trade is back. Record highest for the NASDAQ and Apple. Meta, by the way, Kelly, on pace for its best day in. Checks notes, 13 years. Wow. And speaking of that broader appetite for risk, Bitcoin is above 86,000 again,

its highest level since Jan. After a punishing sell-off that had many questioning the crypto trade, Now with risk assets finding their footing, noted investor Tom Lee telling this program that crypto winter is over. Is it a durable breakout? We'll debate Bitcoin's next move. All right. It is another big run for stocks, but not all. And not all may be well under the hood. All right, not taking anything away from where we are near the records. But listen to this. Just a couple of S&P 500 stocks hitting new 52-week highs. There's about eight, I think, today. but 30 making new 52-week or multi-year loans.

The last time the index rose at least 1% and finished within 1% of a new record and new lows, outnumbered new highs, was all the way back in December of 1999. If you're old enough to remember, as some of us were, that was just a couple of months before the dot-com bubble burst. So is this just kind of a weird, bless you, stat and the state. the data or does it actually mean something else? We don't know, but Stuart Kaiser may know.

He is head of U.S. Equity Trading Strategy at City, and he joins us, and we're going to hope that you can stay with us for a few blocks. Do you glad to get you out here to the wildest swamps of Jersey. Happy to be here. Thank you very much. Glad you're here. So there's the stat. Markets almost at new highs, but again, only powered by a couple of stocks. You heard the historical reference. It's not a great one. Does it matter, though? Or is it just a cool stat? Yeah, I think right now it's a cool stat just because if you look at last week, you were looking

for two pieces of information. One is how our market's going to react to a rate hike? And two, how is this sort of AI slowdown impacting the AI trade? And in both those cases, I think the answer was bigger is better. And so what we've seen is Mag 7 and those large cap tech stocks kind of lead things higher post-fed. And that would sort of naturally give you higher markets without maybe as many stocks participating. If you were super optimist, you'd say this is evidence of broadening out.

But I actually think what it is is last week just kind of push people into these larger, safer, large cap growth and tech stocks. And that's probably why you're seeing that in the data. Yeah, I like Brian's question. Is this just a cool stat or does it really mean something? Because we're all, there's a lot of things where you could say it feels like the late night. And yet, you go, well, just last week we had this new muse launch, right? And there's this new energy behind. Is this the kind of fattish stuff that marks a top, at least even in the near term? or is this the kind of stuff that says we're still at Netscape days? It's like 1994.

You know what I mean? Honestly, if you talk to a lot of people in the AI investment space, they'll tell you we're still early innings. And if you're going to slow down model development, you're going to kind of stretch this out a bit, that would also kind of put you in the earlier part of the investment cycle. But fair enough. I mean, we've had a couple of year rally that's been extremely strong. You have, you know, lots of stocks up triple digits here today, much less double digits.

So I think it's fair to ask the question with the markets where we are and the Fed hiking rates, et cetera. But, you know, our view, you know, Heath Terry on our side, who's our AI guru. He thinks we're still kind of early innings, and you're getting nearly quadruple Kappex spending over the next few years. And that to us would suggest you're not at the end of this train quite yet. I was at the NASDAQ in 1999, believe.

I know. I was four years old. But anywho, those are fake companies, a lot of them. CMGI, ICG, Commerce 1. These are companies that never had earnings. They never had revenues. I'm not picking on those names, even though they're long gone. But these are real companies.

Your point about meta, well taken, Kelly. I mean, meta is one of the. the biggest companies in the world and released a product that has added $200 and some billion in market cap. Crazy. In two days. This is not, I think, then. I would agree with you.

I think the only thing that feels like then in the eyes of skeptics is a lot of these companies are now free cash flow negative again, which is something we haven't seen in about 20 years. But if you're worried about that and you say, well, you know, the credit spreads have tripled on these companies in the last 12 months, but there are 65 basis points. Right. So, you know, these are real companies with real earnings, with real free cash flow in generation potential. And also what they're telling you is we're borrowing it about six and we plan to earn 25 or 30 on those investments. And if that's the case, it's really hard not to encourage them

to keep investing. It's also a separate question. Are these individually great investments versus are we at the top of the cycle? But on perhaps to this very point, Kate Rooney joins us now with a news alert on Open AI. Kate, what's happening? Hey, Kelly. Well, a new AI model released today from Open AI. It's just coming out. It's the newest version of an existing suite of models. So it's a Chat, GPT, Seoul, and Luna, six, to be exact. The theme of the day, though, is cost. So Open AI says compared to prior generations, these are 50% cheaper,

describes it as a step up across this model family on cost efficiency, and then also says it is priced below Anthropics models as well. Price is really becoming one of the biggest battlegrounds right now. In AI, CFOs, we talk to CEOs, are trying to rein in their own budgets. And we've talked before as well about open source, cheaper models coming out of China in large part, adding to some of that pressure. A couple of hours

ago, we also heard from Anthropic, which unveiled its own new model, Opus 5.5. The headline was the same guys. It was about efficiency and cost. They said a couple hours ago, it performs at its best model level, which is fable on most work, but it cost 40 percent less to run than some of the older generations out there. These two models do also come after the industry, starting with Anthropic CEO Dario Amadeh, called for. for, quote, pacing the frontier of AI. Anthropics says as part of that, they did extensive alignment testing. They went through pre-release evaluations as well from outside organizations, plus extra safeguards for cyber and bio-weapons in particular. Both labs also talked about

something called alignment. So Open AI, for example, said they lowered the rates of misleading claims about their coding work alignment, basically making sure that the AI has the same goals as the rest of us guys. I love when we come up with new terms, things like, you know, no, it's just going and doing its own thing. But, Kate, to the point about cost here, and it's interesting to see now one announcement an hour ago, now the competitor with this announcement. So, Claude said it's now going to be 40% cheaper. And how much cheaper is Open AI going to be? Well, 50% compared to its previous model that had already had some sort of discount. So it's difficult to do these apples-to-apples comparisons. And it's not like

an iPhone where you can say, this one's $1,000 a box, and Android is $800 or whatever it is. They all are priced on, you know, per million tokens. Overall, Open AI is priced slightly cheaper than Claude. But what all of the executives are now saying is that it's all about efficiency and saying executives on the enterprise side are going to be willing to pay a little bit more because they know the job is going to get done. They're not going to have to pay for more tokens. They're going to say, all right, if I give this to Claude, I know that it's just going to do the job. And therefore, maybe in the end, my prices are lower. But as I mentioned, this is the battleground. It's not really enough anymore to just have the best, flashiest model. They are

are very strategically saying, oh, by the way, it's also cheaper. So CFOs, pay attention. All right, Kate Rooney, Kate, thank you very much. So, Stuart, I'm struggling with this story, and here's why. If I hear that United and American Airlines are in a pricing war, I'm thinking that's bad for those companies, right? Maybe good for consumers, but bad for the margins. If I hear Burger King and McDonald's or in a pricing war, bad for the companies,

good for the consumers. How do I read that? It's a good question. I think, as Kay kind of made the point, you have the cost of the token and you have the quote-unquote cost of the intelligence, right? And these models are developing so much faster that the cost of the intelligence is just much more cost effective. I do think, frankly, for the frontier models, the debate still was about revenues, almost how Amazon was 15 or 20 years ago, right? Ignore the margins, let's focus on the revenues. And I think what they're saying is, look, our models are developing so much faster, the cost of intelligence is so much lower that our revenue numbers are just going to keep growing massively.

And look, my view on this is if you don't like the KAPX spending, well, you can argue that this justifies the KAPX spending. The models are getting bigger, faster, and more efficient, much faster than anybody kind of would have imagined. So in that sense, is good for the overall AI-traded investment, though for those individual companies, I think, you know, there is going to be some downward pressure on margins. It's almost hard to dismiss that. I also wonder how much these business models are going to evolve. I just can't imagine in a few more years' time. It's going to be cost per token. It just, it reminds me a little bit of in the old days, like, dial up internet.

You know, you'd pay, I forget the pricing plans. It'd be like, you know. It'd be like $70 for. Stuart and I are laughing. Yeah, but I remember these days too. And so ultimately you trade or self. I remember when you had to pay per text message, 10 cents per text message, and your kids, me, would rack up these huge bills on that.

This feels to me like the token era of using, I don't know what comes next. But, you know, is the economics going to be great here? I don't know, but it feels like it's ultimately going to give way to something else. I don't know. I mean, I would have to agree with you. I mean, as these technologies evolve, the pricing evolves as well. I mean, as I mentioned, Amazon early on was just we want to grow revenues. We're on to grow market share.

And now you've got prime and tier pricing and ad-based, et cetera. So, you know, I would tend to agree that, you know, the evolution of the pricing is unknown at this point. So can I ask it one quick different way asking for a friend? Can something be bad in the market? Can something be bad-ish for Open AI and Anthropy? and others that are private companies. Could something be bad for them, but good for the public equity markets? Because the market writ large right now is acting like it is.

I mean, even if we went all the way back to Deepseek a couple years ago, the logic was, wow, this is bad for five or ten companies. It's good for every other public and private company, you know, globally. So, yeah, it can be positive for efficiency. It can be positive for productivity and growth, even though you might get theoretically some margin compression on a few companies. Yes, I think that's 100% the case. Yeah, and it goes back to how long those companies. There's more of an IPO question, I think, in some ways. The timing of the IPO, what do their costs look like as they're paying,

as people are paying them, you know, as that compresses. Sid tight, though, we have JP Morgan CEO, Jamie Diamond, still sounding the alarm about inflation. Here's what he told Squawk Box Asia today. So part of that inflation number may be the die's already been cast. It isn't about what the Fed does next raise. And of course, they have to react to what they see. So we'll see.

I'm hoping that inflation stays here and starts to come down. I don't bet on that. I think the chance it won't. And it may even go up a little bit. Let's ask our friend Rick Santelli. Rick, if you think Jamie Diamond is right about that, again, just to repeat what he said. He said, I'm not sure it's going to come down. It might stay here or even go up a little bit.

You know, I think that's actually pretty safe bet. And unfortunately, I think the driving forces that are pushing prices up are beyond the reach of rate heights by the Federal Reserve. Let's look at a couple categories on spending. If you look at global military spending, for example, he's right. The war in the Mideast and other factors, many countries are spending quite a bit of dough. But there's another side of that story. With drones and technology, maybe it's not going to be as expensive or inflationary.

Then, of course, there's sovereign debt and deficits. That's a category I don't see doing anything better down the road. However, we've seen markets ignore these things for years, so that could be. a split decision. To me, the most damaging aspect of what can bring and cause inflation to be sticky is the corporate AI buildout. Just think. Last year, we spent on a 300 billion on the way to $1 trillion. And yes, it's boosted GDP, but it's also making inflation sticky. And the last category is geopolitics. That could go either way. The second chapter of the war in the Mideast doesn't seem like is going as well as the first chapter. We overestimated the good one.

will potentially, but should end in a fashion that benefits the U.S. and the Straits of Hormuz, that could be a mixed decision as well. Those are the variables. And I think it's important to note that inflation is somewhat sticky, and it's hard to argue with the logic of a banker who gets to see the flows that Mr. Diamond sees. Good stuff. Rick Sandelley, thank you very much. We'll get more on it in a second. By the way, oil is down about 3% because the U.S. and Iran, apparently are using the Yule Week to talk, since I guess the theme of the show is the 90s. Can we just say that let's just play some 90s music. Welcome back to the 90s. Thank you. It's a good decade. Let's do it. It really was. No one knew where you were. It was fantastic.

So I go back to 1995, because in 1994, the Federal Reserve raised rates by two and a half percent, or as the market would say, 250 basis points, right? Guess what happened in 1995? The S&P 500 at its best year in 30 years. Going back 30 years, 37.3% return 1995. We have not seen a year like that since then. So my point slash question, I guess, is Stuart, are higher rates necessarily going to kill the market because they didn't in the mid-90s?

We don't think so, honestly. We think two to three hikes and then the Fed on hold until inflation comes in a bit is a totally fine operating environment for equity markets, as long as the cap-back spending continues, and those earnings, you know, continue to rise higher. So, you know, we think it's a little bit of a tactical headwind, but it's a buying opportunity if we pull back on higher rates. I'm trying to remember the playbook from back then. But I thought that after Green Spend, it triggered the Orange County bankruptcy and all of these sort of calamitous things at the time.

But I think then he backed off. If I'm not mistaken, there was some sense of, okay, I see what's happened. I'm backing up. It was also interesting to hear the former Treasury Secretary, Mnuchin, was on Squawk Box this morning. And he said he did not think Warsh. should hike rates anymore from here? Yeah, look, I think it's an open question. And Rick made, I think, a great point.

If we went back to the last five years, you know, COVID, Ukraine, supply chain, fiscal spend, Kappex spend, Iran war, the Fed has really no ability to impact that spending unless they're going to hike rates aggressively and really hurt demand. So in that sense, like, if you're hiking, you actually might be creating a growth risk that you didn't have before to try to fight an inflation trend that maybe you can't influence anyway. So from a risk management perspective, I think it's a worthwhile debate to have. All right. Stuart, we'll see you in a little bit. Thank you so much for joining us.

We're not letting you free just yet. All right, and we are just getting started here on Power Lunch. Bitcoin rising with stocks, holding right around 86,000. That's its highest level in eight months. So has the crypto winter, like Tom Lee said yesterday, finally thought we'll speak with a crypto investor who says the next bull run is already underway. And as we just noted, oil, it was up a little bit moments ago. now it is down. Some new headlines you have to hear around Iran, Hormuz, Trump, and more.

You'll hear all that and get a market update with the NASDAQ at a record next. All right, folks, as we just said, we got some breaking news that is happening right now that is moving oil prices and maybe the overall market. Megan Gisela with more, Megan. Brian, that's right. We just heard from President Trump speaking on the sidelines of the U.N. saying that U.S. officials had a three-hour meeting with an Iranian delegation on the sidelines of that General Assembly going on. in New York. The president called it a good meeting and a productive meeting, said it was his Middle East envoy Steve Whitkoff and Jared Kushner, meeting with the Iranians. Here's some of what he said about it. They had a very good meeting and we'll see how it turns out. But certainly it's to their advantage to make a deal. And if we can do that, it's preferable, I guess.

Now, Whitkoff also was asked how he felt about this and he said, quote, I feel very good right now, but wouldn't say any more about how that meeting went. The president also said, He expects there to be another meeting between the two sides quite soon. Now, guys, by my count, this is the first meeting in about two months for these two countries. Back since July, that was when that interim peace deal did sort of start to fall apart. We haven't seen them meet face to face since then. So we saw oil fall on this on the hopes of there being a deal. I will, though, remind you that just earlier today, in his speech to the UN General Assembly,

President Trump did say that he expects a deal not until after the midterms in November. Guys. Megan, Gissel up, Megan. Thank you very much. All right. Let's talk more now about this and bring in Denton Chinko Grana. He is chief oil analyst at Dow Jones Energy. Also a man who, by the way, was stuck at Newark Airport yesterday with all the flight problems. We are glad you got out. Stuart, we think you did anyway. Stuart Kaiser is still with us to talk about this. So Denton, let's talk about this. I know the news is just happening right now. There's no clear. We have no way to know what is going to come of this. The market is taking it in a good way, meaning a bearish way prices are coming back down. What's your take? Yeah, I mean, you've got to take the president at his word, that it was a good meeting, and prices are reacting, obviously. We have the WTI contract up right now on the screen there. That's the October contract. That expires today.

The November contract is down even more and trading below $90 a barrel down even more than October is. So obviously, these markets are taking it to be real and really selling off based on those headlines. But also, you know, oil inventories in the. United States are actually in pretty solid shape. We're kind of at the five-year average, maybe a little bit above. So inventories are comfortable here in the U.S. It's really the rest of the world that's having a struggle with oil inventories right now. Yeah. That being said, Denton, I think the question is the worst over. You know, when we see these declines in oil, you know, if it stays there, hopefully, what does that mean for diesel? What does it mean for gasoline?

You know, what are the other kind of risks or things to think about? And even right now, we're seeing a headline again about the whether the administration would do an export ban on diesel. What impact would that have? Yeah, I mean, if there was an export ban on diesel, I think it would be short-term positive for prices in the fact that prices would come down. But over the long term, that would have a much worse impact. If you look at Gulf Coast diesel inventories right now, they're really close to where they are on a five-year average basis. All the deficit is on the East Coast and on the West Coast when you look at inventories versus the past five years. So take it and now you continue to steamroll.

So you ban exports, storage, pipeline capacity. These are all finite. At some point, inventories start to build up too much. They back up into the system. Refinaries have to reduce runs because they have no place to put anything. But not only do you lose diesel production after that, you'll lose gasoline production. You'll lose jet fuel production. But a lot of refiners would probably also go into maintenance.

But again, short term, it would bring prices down. But over the longer term, I don't think it's going to be drastically helpful. Yeah, if there's a diesel export ban, prices will ultimately probably go higher, not lower. That said, Stuart Kaiser is still with us. From an equity perspective yesterday, I thought the theme was oil down, yields down, stocks up. Oils down, markets are up a little bit, but not a lot. What's the relationship between oil, bond yields, and stocks right now? I think between oil and stocks, that you really need pretty extreme moves and gas.

prices and oil to get equity markets attention. Obviously, TI above 100 bucks did that. National gasoline prices at 450 did that. But I think it's a little bit of a fool me once, you know, type situation here. We've had good headlines. The prices come down. That we get bad headlines. The prices go up. So to me, you will get a lot of equity relief if oil prices come down, but there will be natural skepticism about about how long that might be maintained for. If you look at prediction markets, you know, the Senate odds right now are 6040 in favor of the Democrats. The numbers were 55, 40. in favor the GOP less than a month ago.

So clearly the higher oil prices, higher diesel prices, the affordability narrative is really getting into politics ahead of the midterms. So in that sense, I think you might be of the view that you're going to get some more good news here, you know, pre-election. Although, like, to people's point, is it the kind of good news that has a hangover? You know, good news now problems. If they time it just right, you could get good news and then everything calms down. To quote Besson, they are the house.

They might have some sense of how this is going to go. But if not, you get this, like, little pop now. You're still facing a problem, especially with heat. Isn't heating oil the same thing as diesel? I heard it. You just add pink dye to one of them. I don't know if that's true. But that cost for households over the winters is still going to be a big impact.

100%. And the fact is consumers don't care about all the details, right? They care about what is the price I'm paying for by diesel? What's the price I'm paying? And if you're a politician, you want to get, you know, consumers set to be going in the right direction ahead of the election. So agree with that and the experts on the oil about how it, you know, supply demand, words, et cetera, but in the near term, a consumer cares about price. Well, and so Denton, let's talk about that because outside of the peace talks with Iran and the

U.S., and we hope that this really, this time, we mean it, amounts to something because we're going on month seven, by the way of the conflict slash war. Saudis quietly at four-month high on exports. Yes, part of their pipeline got blown up. They're exporting more by ship. How confident are you right now in global supply demand fundamentals? Yeah, so I think things are relatively balanced or getting more balanced, at least on the crude oil side of things. Again, really for much of the last three months, this has not been a crude oil story as much as it has been a refined product story and refined product shortages in different pockets throughout the world. But let's say everything tries to get back to normal over the next couple of days and there's a peace agreement or, as the president said, not until after the midterm. So let's say, let's go there and say, yes, there's a peace agreement, the straight reopens.

It's going to take some time for ships to reposition, for production to get back to up to the levels they once were. How much time? How long do you think, Denton? Three months? Three weeks, three years? We think you're going to think about 18 weeks. 18 weeks? So that brings us squarely into the first quarter of next year.

Wow. 18 weeks. That is a long time. Yeah, four and a half, five months. Dent didn't really appreciate. By the way, not as long as you had to wait at Newark Airport yesterday. I'm kidding. But I am glad that you made it out as much as you did. You're caught up and all that nonsense, Denton. Thank you very much. Actually, Brian, I'm home right now. But after this, I get to go back to the airport and pick up my suitcase. So I got that going for me. So you didn't get out? Nah. He just gave up or just like. Yeah, I gave up.

By the way, it was nine and a half hours between flights. Not a bad call on your part, Dent. But you're a smart guy. know that. Denton, thank you very much. Stuart Kaiser, thank you. Thank you. All right, don't forget to sign up for my weekly newsletter, Power Insight of the latest edition is just out, by the way. Number one trending story on CBC.com right now, because I think, Kelly, I say the three worst words anyone on Wall Street, or maybe the media, can say. You know what those three words are? It looks like you say, we don't know. We don't know. Nobody on this end of the camera or on Wall Street wants to say that. But J.P. Morgan said that. And I think others will admit that. We'll talk more about that.

Talk about some stocks. They do like as well. You can scan that QR code. Go to the website. Call your mom. Whatever it needs to do. Please sign up. I think there's a series potential in here. Things we don't know. That would be a long series. Although we're on TV, we could just pretend we do know. I'm just saying if it's that popular. We'll say it like, yeah, that's exactly right. I don't even know it. Bitcoin, speaking of things we don't know, is up double digits over the past week. Despite the Clarity Act's collapse in Congress, what could they do to keep the crypto rally running? I haven't

needed much help. We'll talk about that next. Is the crypto winter officially over? Even as we're heading into winter, kind of, first day of fall, that's the big question right now as Bitcoin, ether, and the rest of the complex have surged in the last several sessions in spite of the Senate blocking the Clarity Act from advancing last week. So what explains the pop? You could say a string of other bullish crypto headlines that have been coming out. Most consequentially, the SEC issuing a temporary exemption that will allow limited trading of tokenized stocks in the U.S. You can see how crypto, ether, Robin Hood, and Coinbase have moved since that decision last Thursday.

Here on set with us is Neo-classic Capitals co-founder and managing partner Michael Buchella. Muccella. Anyway, it's a running joke. It is great to have you here. And I'm not trying to conflate clarity with Bitcoin. The Bit Corners told us it mattered, even though there's not really a way. one-to-one obvious, you know, relationship there. So just talk about what you think is driving the action in crypto lately. Sure. So I've been trying to indicate that it doesn't matter nearly as much as I think the market wanted it to matter. It's something to point to. It's something to say

Congress and the broader government are coming around to understanding our industry. But I think the last two times I was on, I said we can still pursue our industry without, without government intervention. And I think it's been interesting to see Bitcoin was resilient in the face of that last week and then also kind of flipped and turned sort of market correlated this week where you had a billion dollars of inflows into the Bitcoin ETF yesterday. Yes. And so we see a resiliency and then a participation on the upside. So bad news is good news. Good news is good news. We're in a good place for my Bitcoin friends and I have many of them are all excited about the inflows a billion. But it's a nice round number. It's a nice. And like a billion dollars. Come on. We need a lot more.

But if that's what it takes to move that much, then okay, then you can really get a pop. I just, Okay, you go back a couple of years. You have President Trump's election, goes over 100, goes to all-time highs. He's at the Bitcoin Conference, all this excitement. Everything has come to pass. So do we go back to fundamentals with Bitcoin? How would you even explain those? What else could be drivers here?

So not everything has come to pass. And a lot of things came to pass that we didn't want to come to pass. Really? Yeah. I mean, so, you know, a lot of, there's been a lot of things that happen in the crypto markets that, you know, are a bit of a blemish. but there's been a handful of things that have worked really well, but we're still progressing. So a lot of the market still continues to develop offshore.

I mean, I think a lot of the inhibitions of both sides of the house to come together forces development offshore. We see enormous volumes inflect there. And then the U.S. says we want a piece of that. So then we start, you know, educating our regulators. We've only got a handful of, you know, pieces of the market that are proliferating offshore to come on shore to date. And you have every platform like Robin Hood, Coinbase, Twitter, X, anything. consumer retail platform in the U.S. wants a piece of perps. They want a piece of prediction markets. I was happy to hear my colleagues, Stu Kaiser, reference a prediction market because

it's good to hear that I'm mainstream these days, although there's obviously speculation around volumes there. But I would just say, generally speaking, we've gotten, you know, a handful of things that have been useful, waiting for a lot more. It's the biggest risk to crypto and Bitcoin right now. There's a lot of political pushback, too. Like political pushback was a lot on Bitcoin. Now it's on data centers, but they're kind of the same thing. It's the same people in Congress, by the way. Yeah, I would say the biggest risk to, so Bitcoin and everything else, I kind of separate the two. I think you have technological innovation and financial market innovation that's driving certain altcoins that are generating real value, real revenue. You have, you know, per platforms like hyperliquid that are generating enormous revenue. You have lending platforms like Morpho. So you have these. But you also have a lot of garbage out there, too.

But you also have a lot of garbage out there. And you also have, I would say, you know, network effects around assets that don't necessarily generate revenue but provide a use. So, you know, there's been a lot of talk around Zcash. And whether it's fair value, overvalued, undervalued, I'm not going to, you know, pontificate on that. But I will say there is a large and growing network of people who view privacy as a very valuable asset. And so that represents privacy in a way. I think the macro obviously indicates where general risk assets go. Crypto is still risk assets.

I think if we can allow innovation to work in crypto, the altcoins can work as well. I'm just trying to listen to kind of the philosophical explanation for these. Because Zcash, you know, if it's private enough, they're probably going to end up outlawing it or putting some guardrails around that, right? I mean, that's, you know, some of the others like Bitcoin still feels like it's just an adoption story. Are there literally more buyers than sellers on any given day? Is there any other way to explain its value and where it should trade? So I'll give an analogy. I was in Switzerland a few weeks ago, two friends sitting there saying the U.S. is $40 trillion

in debt. How do we get out of this? And I said, it's really difficult to think of a way out. And so he said, well, we just long U.S. denominated assets, you know, scarce assets, gold. I said, the Swiss trade is great. The franc is strong. Gold is strong. Bitcoin is strong.

And so if you think about this future state where, you know, fiat currencies are dying, Bitcoin seems like a resilient asset. And the other side of it is, as we develop more regulatory approvals onshore here in the U.S., it becomes a more static asset where you can borrow against it, more financeable. So Coinbase just announced fixed rate loans against Bitcoin. So the more financeable we can make it, the less people will have to sell it to monetize it. Yeah, I take your point. But you could also own U.S. stocks.

You could own U.S. real estate. Like you said, you could own other U.S. assets that might have a clearer value point in the long run. Bitcoin is still new. I mean, it may yet find a landing point. But if you're, it's kind of a bet about two things. Yes, a bet about debasement to some extent, but also a bet that it has intrinsic value and that it will hold it. There's other ways to express the debasement trade. Yeah, it's correct.

And by all means, express it however way you feel. I think Bitcoin is probably the best expression of that. And all those other assets can be tokenized and be mobilized collateral at some point in the future if we allow tokenization to continue. I think we're going down that path. So we'll see you back soon. Michael, thanks so much. Really appreciate it. Michael Buccella of Neo-classic capital. All right, we've got a power check on a pharmaceutical stock that is surging today.

This is a hint. The company could give Eli Lillia run for its money in the weight loss drug market. What is that mystery chart? We'll tell you after the break. Take a look at shares of Viking therapeutics. The stock is roaring higher today after reporting positive data for its GLP1 weight loss drug. It's up 31%. This could compete with Eli Ler.

Lilly Zepbound. But Invermet Associates, Chairman and Home Depot, co-founder Ken Langone, is still a believer in Lilly. He joins Squawk Box this morning with a bold take on those shares, with a prediction implying 70% upside in the years ahead. Best is yet to come. I think I shouldn't tout it. I think Lilly's going to be a $2,000 stock in the next three or four years. Well, our next guest is also all in on Lilly. It's one of his firm's top three holdings. Tom Hewlich is strategy asset manager, CEO, and he's here on set with us. Tom, it's great to have you. Thank you for having me. You know, what I just love is someone like Ken Langone giving such a big prediction about Lilly, but in general at a time when AI is sending

stocks up, you know, 30, 50 percent, it feels like every few weeks, you go, only a double? I mean, in some ways that was my reaction to it, even as big of a call as he's making, because that would be, what, a $2 trillion dollar company at this point? It's a big call, but the GLP sector has a lot of room to grow. And if you think about Lilly and Viking... Pun intended. Right. If anybody can reduce their weight by 40% and get healthier, there's a lot of hope out there. When you have Lily or Viking, for example, we don't cover Viking, but one of our best

stock picks this year was Lily. And it could be a multi-trillion dollar company. It could be. But at the same time, we're also talking every day on this program about GLP1, is already kind of fading into the rearview mirror for some. Look at novel struggles. So how do we know that this is going to still be a growth driver and not something that we just endlessly talk about for a few years of how are they going to replace its growth? Well, in pharma and biotech, phase one, safety of delivery, vaccines slash, let's say, a injection.

But now we're moving into the next generation of orals. The pill. Right. And so as Dave Rick said from the call yesterday on CNBC, he said that, look, we're building a $6.5 billion manufacturing facility that's going to start to develop our pill form of the GLP drug. Pills are easier to take than a shot. It's the next level. It's still being very effective. And there's still a lot of people who are obese. And then the next generation people are starting to see reduced inflammation. And what's next? Maybe it's going to help you with your heart. Lots of great things going there, and it could be one of the best stock picks that we've had. Johnson and Johnson is also in your top 10 holdings. Yes. Totally different story.

What's attractive about J&J? Well, I think the pharma industry is not talked about enough. And if you take a look at what the future looks like in pharma and biotech, there are a lot of patent cliffs that are happening. There are lots of new generation drugs that are happening, let's just say, in cancer. or heart or brain areas, GLP, these companies have to find next generation drugs to fill up their pipeline. J&J, for that matter, is going to be big in the, in, let's just say, neurological and also in cancer. But then you've got other companies like a Merck or somebody else who, a Roche or an Amgen,

who are going to be fast followers in this area. we're going to see a biotech and a pharma boom in the next decade because there's so many improvements that can be made. And look at some of these stocks. I mean, that's certainly exciting. Have you used Muse yet? I downloaded it today. And I'm impressed. We use a lot of Claude and we, Anthropic Claude, and we use Chat GPT. But I actually downloaded Muse over. Got to see what all the fuss is about. Right. And it can schedule my calendar or it could coordinate my calendars. could actually potentially schedule a trip for me. It could make payments. Would you give it access to all of that, though? I'm going to give it access to my calendars because I have a problem with calendar functioning right now. But like why not? These are AI agents. It's it's the consumer way

to play the AI generation stack in that ecosystem. And I think meta has something to improve on. You have broadcom, alphabet, Cisco, you know, Microsoft, Apple, all in your top 10, along with a few others outside of tech, but how does this, which is kind of like open claw for the consumer now, it's a real consumer app, apparently with some faster adoption than Chad GPT first had back in the day, how does it really change the investing landscape if it remains a phenomenon? Well, if you look at the ecosystem, we don't need to talk about all the tech stocks that are contributing to the invidias, et cetera. But when you go down and you look at something like meta, the next generation AI agents are becoming more personal assistance for people. I think

that there is a lot of room to grow in that area. We've graduated from the adoption from Claude, or for ChatGPT to Claude and now maybe Muse. And it's just like it's a commodity. It'll be a commodity for people and what you best use it for. Is it a utility or a commodity? Because I want to invest in the former and not the latter. Well, I think that what you have is a revenue-generating consumer feature

that will drive, earnings for META going forward. All right. There's the stock at 740 today, fractionally lower, but up 35% in a month. Tom, thanks so much. Good to see you. Thank you very much. Tom Eulik, strategy managers. All right, let's get over to McKenzie Seagallos with a CNBC news update. Brian, the Trump administration said today that last month it canceled 315,000 Obamacare health plans covering about 760,000 people.

Vice President J.D. Vance announced the move, which is part of a White House task force targeting fraud. He says it will save the government $2.2 billion. Vance says the enrollees did not meet eligibility requirements and that some may not even exist. Xbox is laying off another 268 workers just months after more than 1,600 employees were let go in July. In an internal memo shared today by the Microsoft Gaming Division, these cuts bring Xbox three quarters of the way through its restructuring, which will see 3,200 rolls eliminated by next summer. And country star Ella Langley just broke Mariah Carey's record for the most weeks spent by a single at number one on the Billboard Hot 100 chart.

Her hit Chooze in Texas has spent 23 weeks at number one. Cary's All I Want for Christmas previously held the title and could recapture it during this upcoming holiday season when it usually shoots back up to the top of the charts. Kelly, back to you. Interesting stuff. McKenzie, thanks. AMD hitting another record high a day after topping the trilogy. dollar market cap, our market navigator on using options to play for more upside. That's next. Welcome back to Power Lunch. Time now for our market navigator segment. Advanced microdevices is on a role. The company's moving higher for a six straight day. Those shares are up more than 20% in just

the last week. The company topped the $1 trillion mark for market cap for the first time ever on Monday. And our next guest thinks it won't stop there. Joining us now for the options play as chief strategist and CNBC contributor, Tony Zhang. Tony, thank you very much for joining us here with Options Play and everything else. Let's talk a little bit about AMD, though momentum to the upside and how you use options to risk manage around an upside position. Yeah, Dom, thank you so much. We had that breakout yesterday above that 550 level. The stock's been range-bounded between 450, 550 since May broke out yesterday on the news that they were lifting prices about 10% across all of their product range, AI, chips, graphics cards, chipsets, and this is all on the

back of incredible demand for their CPU and GPU server rack. So the way we want to play this, especially when we break out to a new all-time high and looking for further upside is to use options to play for that upside with limited risk. So I'm going out to the November expiration. I'm looking at buying the 600,750 call spread. earlier today, you can pay a little over $48 for that call spread, which only equates to about 7% of the stock's value. You essentially get upside exposure to this particular, to AMD all the way up to 750 through

November expiration. But if, let's say this stock does decline back into the training range, maybe it pulls back if we do see some softness with the market, you're only risking 7% of the stock's values to do so. So that's a type of structure that I really like when you get a breakout to new all-time highs and you're in uncharted territory and you still want upside exposure. You want to chase that momentum with limited risks of the downside. So this is all about wanting to be a little less bullish than outright because if you're really bullish, you would just pay outright to own the 600 call. You're trying to cheapen it by selling away the 750 upside from there.

What exactly does that mean in terms of what your view is on AMD? Yeah, so keep in mind that, you know, we have a November expiration on this. And my view is that 750 is a more than reasonable price target here by November, which is we're talking about a little under two months away. And that substantially cheapens the cost of buying this call option to the upside. So instead of risking more than 10% of the stock's value here, I'm reducing my overall risk to less than 8%. And that has a pretty significant impact on both how much capital is required to get into this

particular trade, and more importantly, the amount of the risk of the return on investment if it does, if this stock does continue to run. Basically, what I'm saying is that from the options market perspective, we see a relatively small percentage possibility of the stock being above 750 by November. So instead of paying for that upside, essentially taking the premium by selling that 750, and that increases our rate of return if we are correct on this move to the upside. All right. There's Tony Zang with you. option, play on events. My

good devices. Thank you very much for that. We appreciate it. Keep it right here. We got more power lunch coming up right after this break. We'll be right back. Before we go, a quick programming note, Qualcomm CEO, Cristiano Amman, will join us tomorrow live from their Snapdragon Summit, where they're expected to talk about the next generation flagship mobile platform. By the stock, I mean, with some of the levitation we've seen throughout the chip space lately, it's actually having a pretty nice moment.

And we're going to end with an RBI, and it's a little bit lighter, because today we're getting bearish. No, not on the market, but we're getting bearish because there's bears. It is Fat Bear Week, and that's exactly what it sounds like. Each year, the public votes for their favorite brown bear at Alaska's Catman-Kat-Mai National Park. Some of those bears may be on your screen right now, hopefully running next to us. But that's a live look at a bear hunting salmon. I literally thought Fat Bear Week was a market piece of trivia.

No, that bear right now, he is looking for a picnic basket. If you're listening on the radio, folks, we just saw pictures of fat grizzly bears. Thanks for watching. Closing bell starts out.