Power Lunch - Power Lunch 5/5/26

Episode Date: May 5, 2026

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

Welcome to Power Lunch. I'm Kelly Evans. We'll see Brian in just a moment, and we have stocks doing some remarkable things today. Record high for the NASDAQ. Even in the face of global bond yields moving higher, the 30 year above a near 5% again, higher in the UK. The question for investors is at one point, if ever, does this impact the risk reward for stocks? Ed Yardini is here sitting right by me. We'll tackle all of that and more. Plus, an exclusive interview with two key tech CEOs, John Ford, is live at Service Now's 2020. Knowledge Expo. He's sitting down with CEO Bill McDermott, and they're joined by NVIDIA CEO Jensen Wong. Wow, what an hour. Kelly, thank you very much. Also, another big lineup here from the Milken Conference in Los Angeles today. Coming up across the hour, we've got Mike Sable. He's the CEO Venture Global, David Gross, managing partner of Bain Capital and Doug Kimmelman, the founder and executive chair of Energy Capital Partners. They did one of the biggest, the most profitable energy deals in global history. You're going to want to hear what all those and Doug, everybody has to say, Kelly, all that coming up all across

this hour. All right, Brian, it's good to see you. And looking forward to those interviews, let's get straight to the markets with the NASDAQ notching its 10th record intraday high of the year. Despite everything going on with oil prices on the Middle East, global bond yields, our next guest has called the market's bottom at the end of March. And since then, the S&P has gained double digits up 14 percent. Ed Yardini is president of Yardini research. I looked, given you quite a victory lap on this one, at 14%. I mean, is that, because I remember you guys were more cautious, I guess probably on the MAG 7, more at the end of last year.

But then we basically went to a market weight on the MAG 7. And, yeah, at the end of the day on March 31st, we said the March 30th was the low and never looked back. What tells you? How do you know? Well, my gut, when I don't feel so good about looking at the screen, that's usually when the market it turns. And when I see that I'm not the only one, when I look at bull bear ratios and I see that there's only bears and no bulls, that's usually a sign of a market bottom. But I was watching earnings all along, and I said, something just doesn't make sense here. Either the analysts didn't get

the memo about the war or the war's not having an impact, that earnings are just so powerful. These are the kinds of earnings that I would expect us to be reporting coming out of our recession. You know the first couple quarters out of recession? You get 15, 20. I mean, How strong are they? Oh, they're phenomenal. I mean, we're going to have double-digit year-over-year growth rates during every quarter of this year. Of course, the geopolitical issue is in the background, but I think that's a reasonable outlook. And I think we keep going into next year.

A lot of it is tech, but it's also been energy, but then it's actually fairly broadly based. We look at the breadth of positive earnings revisions, and this keeps going. higher, and it's going higher at a faster pace. That's what really got my attention. The other thing is in the first quarter earning season that we're finishing up now, I mean, we went from analysts expecting a 12% increase, which is pretty good. Now, of a sudden, the reality is more like 18%. 18?

Yeah, well, that's with Google and meta-reporting. That made a huge difference. And now we still have Nvidia ahead of us. Let me just dwell on this for a second. You're telling me that the S&P 500 looks like it's putting up 18. percent, you're on your front of growth in the first quarter. In the first quarter. 18 percent. And then we're looking at 20 percent kind of numbers for the third and the second, third and fourth quarters. When's the last time we saw something this? Well, I think what's what is different this time,

which I know can be a jinx, you know, revenues are very strong, which is really phenomenal, given that the global economy is supposed to be weak. I mean, S&P 500 earnings are about 40 percent from overseas. So the revenue side of the picture looks great. And at the same time, I think a part of the story is the margins have just gone straight up. I mean, they're at record highs. And I think that speaks to what I call the roaring 2020 is the productivity boom that I anticipated, and I think it's underway. A lot of these companies, you mentioned meta, for instance, are the same ones who have been doing efficiencies and kind of trimming expenses while, you know, do you expect that to continue, or is this the kind of thing where after you post 18 and 20 percent

earnings growth, aren't these companies going to have to have to, hire people? Like, can you, what do you think, how do you think all this translates into the labor? Actually, I think you're, you're, you're, you're, you're, you're, you're onto something. And that is, everybody's kind of, kind of calm themselves down to believe that employment is going to remain for, that's kind of the new normal is maybe 50,000 per month. But I, I think a lot of the labor markets are starting to indicate that maybe we're starting to see how the joltz report this morning showed a big jump in, and the hirings rate. Really? Yeah. And so what I think happened is I think a lot of companies said, wait a second, let's try to figure out how this AI thing is going to affect us.

Let's just freeze our headcount. Let's understand it. And they found that in some areas, they could get rid of workers. Other areas, they had a great opportunity to augment the productivity of workers. And other areas, it's not really relevant. So I think we're going to be surprised by the strength of the labor market up ahead. One more because I just can't can't move on quite yet. You know, again, normally, what would you say a normal pace of earnings growth is for the S&P 500?

Something in the range of... Well, the historical trend is kind of like 8, 9%. Okay. And that doesn't include dividends. Include dividends in your more 10, 11%. Sure. If you reinvest. But in other words, a normal pace of earnings growth would be 7 or 8%.

Yeah. And so you're telling me that in a quarter that in other ways it was unremarkable. In fact, in the face of some pretty big headwinds like tariffs, that the S&B posted 18%. Yeah, yeah. And some of that is obviously the magnificent seven just continue to have huge margins and revenues. But I think we're seeing more and more companies kind of join in this kind of productivity party that we're having. Fascinating. Okay. I'll move off of that. Go back to put your, put on your bond vigilante hat now, okay, because it can be all sunshine. Right. Global bond yields are marching higher. The U.S. 30 years, we said in your 5%, it was above that level yesterday. In the U.K. 570, the highest level since 1998, very different economy. Nevertheless, what does it mean? What's going on here?

Well, so far, the equity markets have basically ignored what's going on in the bond markets around the world. I mean, the bond vigilantes have been pushing bond yields up in Japan and the UK, other parts of the world. And even in the United States, we're now, you know, for a while, everybody was like amazed at how the bond yield were just kind of sitting there around four and a quarter percent. Well, it's not so amazing anymore because the bond deal is, is crawling. towards four and a half percent. I've been thinking that this year normal for the bond market would be a range of four and a quarter

to four and three quarters percent. So I'm still pretty comfortable with the range. I mean, back in, I think it was 20, 23, we briefly got to five percent. And you just saw an enormous amount of buying at that yield level, and it didn't derail the economy at all. So I think the economy is resilient.

I mean, that's the word I've been using to describe the economy for a while. So far, so good. I'm just hoping, you know, those, the baby boomers or retirees who are helping with so they can buy it, okay? If it goes back to five, they can just monetize the debt. Well, there's a lot. They have $89 trillion of net worth. And as the market keeps going on, going up, they do rebalance and they are buying things like the bonds. They may also have been partly responsible for gold going up for a while. Yeah. So there you have.

it, some common sense in a very uncommon time. Can I say that with the way that's profit? Works for me. Incredible. Ed, thanks for being here. Thank you, Kelly. Ed Yardini with Yardinney research. After the break, Brian will sit down with Bain Capital Managing Partner, David Gross, in an exclusive interview that you won't want to miss. Dows up 330 points. We'll be right back. Welcome back. Let's head back to Brian Sullivan at the Milken Institute Global Conference with a big player in alternative investing. Hey, Brian. Yeah, thank you very much. Kelly, please to be joined exclusively by David Gross. He is a managing partner at Bain Capital, leading global private investment firm, $225 billion in assets. Why not $226? David, I'm kidding. Good to see you. Thanks very much. Good to be here, Brian. Thanks. Sitting down with this. Quickly, I want to ask you, because you have a big operation in Asia. You used to run Bain's Asia operation. Asia right now is kind of the main energy crisis battleground called the ships coming from.

this trade of Hormuz, what do you see in Asia and how are your people doing? And what's the word in the ground in Asia about energy and their economies? Sure. So it's, you know, it's got an impact for sure. Asia is fairly dependent on oil supplies and gas supplies that come to the Middle East. But they're dependent, but they've got backup plans because this has been something they've experienced in the past. And so if you take Japan, they have a lot of strategic reserves, they're starting to buy more, you know, oil from the U.S. And inevitably, these crises, you know, they kind of work one time as a chokehold because then you come up with other alternatives. And I think Japan will push ahead with nuclear and other renewables in response to this.

So they're weathering through. Any thought of how long they can hold out? Everyone's kind of wondering what's like the point at which we have like all of a sudden, you know, South Korea is like, well, we can't ship semiconductors because we ran out of fuel. It's said to be, you know, it's not like it's weeks. You know, there's probably nine months of even just reserves. in the case of Japan for oil with other backup plans. Again, they can ramp our purchases of oil from the United States.

It's expensive. So there'll be an inflationary impact, but I'm not sure it's going to stop off production and things like that. Okay. A little bit of optimism there, which good to kick off the interview. Obviously, a hot topic. Talk more about it in a few minutes here with the CEO Venture Global. Open AI.

The investment you guys have made in AI, some people will say, well, are these investments going to pay off? you obviously wouldn't have invested if you didn't think it would be, what's the Bain Reed on AI and all the money that's going toward it? Well, you know, there's tremendous, you know, power in the technology. And, you know, we own over 600 businesses. So we see this on the front line across industries, across geographies. But the bottleneck right now is getting it implemented with people who understand both

the foundational models, but importantly, the business process, the commercial objective you're trying to achieve. And there are just not enough talented people specialize. capability who can implement this today. And so the whole goal behind the deploy co is to really stand up a significant company to ramp up hiring build capabilities to come to companies like our portfolio companies to take the promise of AI and turn it into a business reality. Well, how does that promise play out? How does AI pay for itself? We're talking hundreds of, we'll probably hit a trillion dollars in capital spending around AI. Fair point?

Yes. Yes. How does that? How does that? We're on the tab. Even by you, that's a lot of money. How does that pay itself all? Well, you know, the potential is larger than really anything we ever seen. And a lot of people focus on the productivity benefits, the efficiency benefits. Those are real. But we're starting to see things that link directly to revenue.

We have a payments business where AI directly is going to shorten the cycle of collecting cash. And that increases cash flow. It increases financeability of a business in ways that are going to expand, you know, revenue opportunities. And so this is not just about costs, but there's a big revenue imperative here that I think is going to be a decade, two decades of growth potential for the economy. So if I'm hearing you right, if I'm not, tell me, the headline is AI is paying for AI? Ultimately, that's the idea. And you're seeing a lot of the investment up front because you have to pay for all this compute. You have to stand up physical data centers. But at the end of the day, they're going to be providing the data that's

going to, you know, power businesses. Is that net incremental add to GDP in the United States and globally to, or is it taking away from something else? Is it a zero-sum game or is it a net ad? Well, I look at it as a question of timing. Right now, we're absolutely seeing a significant contribution to GDP. The incremental growth that's coming from Cap-Ex spend and all the ecosystems around that is a very significant driver of GDP growth. That's eventually going to abate, and then we'll hopefully see the progress. activity benefit, which will lower prices, will increase access, create new goods and services. How that curve is going to, you know, the investment curve is going to feed into the upside

curve. I think there could be some dislocation, some bumps along the way for sure. But in a long-term sense, I think you'll see a significant payback. You have a program called Bain Macro and you kind of look at all this data points. I'm not going to lie. It may or may not have freeloaded off that data. Well, I just read your stuff and pretend that I'm smarter than I. Happy to have you use it. Some interesting data points on the consumer lately. I was looking at, how is the American consumer doing? I'm here. We're here in L.A. I get it. It's L.A. Don't at me, folks. Beverly Hills. Gas is $6.50, $7 a gallon. This is a unique situation. How is the American consumer doing? It's mixed. You know, it's a tail of two cities. I would say that there's an enormous wealth effect that's going on. And some of this is just a long bull market run we've seen. Better savings posture in the U.S. household after the global financial crisis and the baby boomers who own a lot of wealth are now really starting to spend that wealth. But the lower end is challenged. And even now the middle with a lot of pressures on a... It's trickling up into the

middle. Indeed. And so you're seeing increasingly that the strong consumer spend is concentrated in a relatively thin layer. And, you know, there's some exposure there because what you like to see in the economic recovery period is broad-based, diverse spending. And I'm not sure we really have that, but the top end is powering a lot of spend. Yeah, it's been shocking to see the prices around here. David Gross, managing partner Bain Capital. We really appreciate your time. Thank you.

And, you know, Kelly, again, listen, it's Beverly Hills. So I'm not going to extrapolate this into some thing. But California, in many places, well over six bucks a gallon. And I saw almost $7 a gallon for regular unleaded. Again, Beverly Hills, I get it. No, 448 nationwide to fill off a pickup truck if you do it here. What if you're in a driverless car? about that all throughout the hour.

I saw him. He was sitting in the back there, a little driverless car going through L.A. Sully, we'll see you in just a second. We appreciate it. It was a great interview. Coming up, we're going to talk LNG with VG. Venture Global CEO, Mike Sable,

joins us for an exclusive interview. Stay with us as stocks move back towards session highs. We'll be right back. Welcome back and let's get back out to the Milken Institute Global Conference with Brian Sullivan and another special guest, Brian. Yeah, Kelly, thanks. and kind of like the world, the energy market is front and center here at the Milk and Institute

Global Price now, or Global Conference. Let's talk about oil prices. Oil prices right now, as you can see, they're down about 3.5%. Still high, $10248 for WTI. But the Pentagon saying the ceasefire with Iran does remain intact, this despite some new recent attacks in and around the UAE. But not everybody is convinced that the ceasefire may hold. Yesterday, I spoke here to Amos Haxton, former advisor to President Biden.

Biden, who warned that the calm may not last. So I think we're probably likely to see another round of strikes. And I think that's going to surprise the market. Right square on who, how? The U.S. Israel against Iran. Limited, not as long. But I think it's very likely that we see another round of strikes before we see a deal. All right.

So let's bring it down Mike Sable. He is the CEO of Venture Global, one of the biggest LNG exporters in the world. Mike. Thanks very much for joining us. I know you guys have your own ships. Your customers take sort of control the ship once they leave. Would your customers feel safe right now? Would they go through the Strait of Hormuz with an LNG ship?

Hi, Brian. Great to be here. Right now there's no LNG traffic going through the Strait's Hormuz. And it'll start up pretty quickly once the conflict dies down. But there's going to be a little bit of time before that happens. The facilities, there's two facilities. One got hit. It's pretty much off-line.

Yes. And so it'll take a little bit of time weeks, maybe a few months before it can turn back on. But before you actually turn it back up, you have to be confident as a facility owner and operator that you can keep it on. Yeah. I hate the term open and closed. We had some U.S. flag cargo ships go through yesterday. There have been a lot of ships that have gone through. Some under cover of darkness.

Some are Iranian or they're going to sanctioned countries. I know I'm not asked you to dive in your marine knowledge. Mike, don't worry. But right now it sounds like it's still a pretty risky venture, right? It is. And so I think from a market standpoint, LNG market standpoint, gas market standpoint, it's, you know, we still have a few months minimum of uncertainty. So Qatar Energy offline, that's about 3% of global supply, three to five percent.

Is that fair? No, it's Qatar's 77 MTPA total. Okay. It's a little less than 20% of global. supply. But that's not fully offline, I don't think. A QP is, my understanding is it's offline. Wow. They had about 13 million tons approximately unfortunately damaged. And so when it does come back on, it'll, it'll be at a reduced level below the 77 until they can repair it. So how does that then reset, how does that impact pricing now? And how do you think it's going to reset the market

in months, quarters, and maybe years to come? There's two elements to it. Qatar, QP is the largest producer in the world when they turn back on. And so it'll take a few months for them to safely, they need to safely turn it back on for their personnel, but also the facilities safely. So once that turns back on, it'll take quite a while for the market to replace in storage what's been depleted,

because it hasn't been producing. And then equally important for supply is the large-scale construction they're doing to bring on a little bit more than 40 million tons more in coming years. And so the schedule for that construction is going to be critical to price expectations as well. So any delay in that is going to continue to put upward pressure, it sounds like, on prices. That's right. People had it in their portfolios a schedule for when not just their production, but everyone's production comes online to the extent that's delayed and they haven't commented on how much yet

it'll ripple through markets. But customers, I would imagine, are they're paying prices that they have to pay because they need the power. Yes. There's no elasticity of demand here is Mike, maybe a marginal amount. There's a little bit of pivot that's possible in the market where they can, you know, switch to coal or something. Yeah, I mean, Asia in particular has some capacity to turn up and turn down and replace

with coal. when gas prices go up a little bit. But most customers don't have that flexibility and they have to replace them the market. Speaking of construction, you guys are furiously building CP2, Congress to Pass 2. I know public comments, you're on schedule for next year, correct? I got to imagine that that is 24-7 because we look at the export volumes for LNG, for oil, for anything that the U.S. diesel fuel can export, the demand is. is it fair to say the demand is insatiable right now what's a word you would use yeah no it it uh conversations

for incremental additional supply are intense maybe intense is the word uh we are um on a path to add substantial additional supply starting next year and beyond we load around 43 cargoes a month now in the next two two and a half years that'll roughly double just to give you a sense of how much is coming online. And we are already making hundreds of millions of dollars investments in Brownfield bolt on to our existing facilities that... Adding on to current facility. Adding on to what's already in construction. End of next year, when we turn on CP2 will be the largest producer in the United States.

And in 28, 29, we'll add additional capacity on top of that. You know, I don't want to put you on the spot. You have an idea how much natural gas Russia is still selling? I know everybody, the pipeline, North Stream got blown. up, but Russian LNG was at a record. I mean, we think, well, Russia's still at war with Ukraine. We're trying to starve them a dollar. Right. But yet they're still selling record amounts of liquefied natural gas. Much of that is to Europe. Is that still the case? Yeah, there's still Russian LNG that goes to Europe. Yep. And Europe is implementing policies

to begin to turn that down over time. Can we make up that any lost volume? Can you and others make that up? Yeah, there's a lot of capacity coming along. Venture Global is going to bring on, you know, 30, 40 million tons in the next couple of years of new capacity that will supply, can supply the world. So the middle term pricing story is pretty positive in the market. Mike Sable, he is the CEO of Venture Global. Mike, really appreciate your time. Thank you very much. You know, Kelly, we often forget that, right? Russia is still at war with Ukraine and Russia selling a record amount of LNG, not natural gas through the pipeline, but LNG by ship, record amount. There's a lot going on energy in the world right now, safe to say.

I know Robin Brooks has advocated for a blockade on Russia, or at least said we should have done so in the first place, so we'll see how this one plays out, maybe turn our attention that way. Brian, thanks very much. Appreciate it. Brian Sullivan. Coming up, an interview with one investor focused on energy transition and sustainable infrastructure. That's next year on Power Lunch. Welcome back new highs for the NASDAQ today as the chips remain strong. And stop me if you've heard this one before, but Intel shares are rocketing to a new high after a report that Apple is considering using Intel to make the main processors for its devices in the U.S. Those shares are up 13% to $108. Now let's head back out to Milken in Beverly Hills where Brian joins us with another special interview, Brian.

Before I get to that, Kelly, can I, you probably know, Didn't Intel used to be an Apple? Or did they leave at some point? I can't remember. They were always, it was Winel. It was Windows and Intel, you know, back in the, and the... There's window, dude, you're getting a Dell. Yeah.

And Intel inside with the little jingle. You know, some of the other Qualcomm and some of the other processors. But perhaps, perhaps. If nothing else, it's obvious that both of these companies perceived that the Trump administration would love, you know, the iPhone to have more of it made in America. Yeah. Unbelievable story. And congrats all the Intel investors out there. Now when I see all the Bugatti's here in Los Angeles, I'll know who those people are, Intel investors. Or Energy Capital Partners, Investors, because Doug Kimmelman is the executive chair and founder of Energy Capital Partners and joins now on set. He said, it's been a long couple days. So I chunked that. I got that out. Good to be here, Brian. Thank you. It's good to be here. And I called you the greatest energy investor that is not a household. name earlier because you guys sold Calpine to Constellation, done some amazing deals with Blackstone. Where is opportunity and energy today? You've made billions of dollars for you and your investors.

What's next? Well, electricity is really top of the list. And it's not just AI. Everyone's talking about the electricity demand for AI. Don't forget just reliability is the game that we're in. We used to be 70% coal and nuclear in the United States. We're now down under 40%. So we're losing baseload capacity that has to be replaced. Billions of dollars for that. And it's not just AI in terms of where the demand is coming from, unshuring of manufacturing.

Your previous guest, you just talked about LNG, hugely electricity-intensive to refrigerate, liquefy that gas to get it in the tankers and ship it. Big electricity demand there. Cryptocurrency mining. In Texas, the load for crypto is more. more than the entire city of Houston. My son Tommy's in the crypto world. He's texted me this morning. Dad, crypto's running. Okay, more electricity. By the way, good point. We don't even talk about

crypto anymore. Five years ago, it's all we talked about was energy demand around crypto. Now we talk about energy demand around AI. But crypto, it's like raising its hand. It's like, I'm still here. Still here. And then drive around L.A. I'm sure you've mentioned it. Gasoline at $6.50. Electric vehicles back on the radar screen when you see prices. Okay, $6.50, California. We're under $4 in Texas and Oklahoma. but it still raises that. That's more electricity. Electrification mandates. Governor of New York, you can't have natural gas in a new home or building.

It's got good luck cooking your omelet on electricity, but that's where we are. I know what we're doing. It's like a million hamsters on bikes or go back to whaling. I don't know. Cheap plug for my newsletter, although I hate that term newsletter, Power Insider. You are the subject of my inside line this week. We kind of do like a text message, quick interview. And cheap plug, by the way, check it out. It'll be out tomorrow the new issue.

I'll read it. Thank you. Well, you don't have to because you're part of it. And I do know this. Because of it, you're not a super fan of nuclear. You say buyer beware with all the optimism around nuclear. You just gave the energy load story. Why aren't you super fan of nuclear? I'm a fan of nuclear. It's base load. It runs all the time. It is safe. The U.S. is the world's largest generator of nuclear power. Bull bulk. Okay. So very, very, it's green. We don't have emissions. But are we in a nuclear renovated? So all of these SMR technologies, the hypers need a lot of power. There's three things that they really want. They want it the power now. They want it in large scale, and they want it at a reasonable cost. SMRs fail on all three of those. 50 megawatts? No, they want 500 megawatts. 10 years from now, no, they want it to death. But isn't that how they scale it up?

I did a panel actually this morning here on nuclear fusion versus fusion or together. And they're talking about the scalability of the SMRs. Because a lot of these stocks, right, like the Oaklo's of the world and whatever, they've soared on optimism around SMRs. Optimism. But reality is to bring on one of these new technologies, there's one under construction, five times the cost of bringing on a natural gas fired facility. Nobody is going to sign contracts for five times the cost. So they've got to bring that down. Unfortunately, there's 95 or so of these SMR technologies competing for a limited amount of capital. I wish there were three or four. but I think it's not around the corner in terms of this nuclear.

Well, maybe it'll be three or four. It's like radio 100 years ago, right? Or the railroads or autos, you start with a couple hundred companies, and they whittle themselves down to the winners. Yeah, I think more. Will there be nuclear winners, not a nuclear winter? I didn't say that. Yeah.

Well, look, I think you're going to see that the traditional nuclear, maybe more likely that we get back to that. Expanding some of the existing, we have 94 operating reactors. Some of them could be expanded. We've got two or three, maybe that were mothballed, that could be brought back. online. So I think you may see more of that. Again, not for five years, not for 10 years, longer, longer term. But then you got the nuclear waste. There is a waste from it.

Well, we've decided, you know, we couldn't build Yucca Mountains, so we leave it all in a dry cast storage underground to dissipate over the next several hundreds of year. But when you take apart a nuclear plant, we're working on Santa Nofrey, taking that one just down the road here. You know that area. I do very well. That beach many times, trestles, what they call good break. But probably three billion just to take apart at an old existing nuclear plant. And then all the steel and all the concrete and all the pipes has to be taken. We're given, look at all your numbers on the screen about how much money you're making for clients. So leave us with this. Where are you investing right now? Where can we make some money? Well, look, there is an energy boom in the United States. I know you

talked about all of this LNG export that is that is happening. The world needs our natural gas. Power generation needs our natural gas. So a lot of infrastructure around that, but back to electricity. Renewables are not out of the question. Still probably cheaper and quicker to bring on solar, but natural gas is abundant and that's what we need. So power, power, power. Power, power for power lunch with the power insider, weekly, missive. A lot of power. Look at all the people lined up behind us. You're ready to go into the power panel. Doug Kimmelman, you're powerful. Thank you, your time. Kelly, send it back to you. Missive gets my vote. I like that one. Brian, thanks very much. Let's get over to Pippa Stevens now for the CNBC News Update.

Pippa? Hey, Kelly, Iran's foreign minister is heading to Beijing for talks just days ahead of President Trump's plan to meet with Chinese leader Xi Jinping. In the announcement, the foreign ministry noted the role Beijing could play in the conflict between Iran and the U.S. China is a key trading partner with Iran and buys approximately 90% of Iran's total oil exports. The state of California is pushing back on federal government investigating one of the Trump administration deals to end an offshore wind project there. The State Energy Commission said it

has issued an administrative subpoena seeking documents from Golden State Wind over an agreement with the Interior Department to give up the project in exchange for a payout. And the Equal Employment Opportunity Commission filed the Federal Civil Rights lawsuit today against the New York Times, accusing the paper of passing over a white man for promotion in favor of a less qualified candidate to meet diversity goals. spokeswoman for the Times says the company, quote, categorically rejects the meritless and politically motivated allegations. Kelly, back to you. All right, Pippa, thank you very much.

Next, we've got a big one for you. InVIDIA's CEO, Jensen Wong, with ServiceNow CEO Bill McDermott. They're sitting down for an exclusive interview with our John Ford. Stay tuned. That's right after this. Moments ago, Service Now and Invidia announcing a new autonomous agent called Project Arc. It can code, think, and work with enterprise applications all on its own. Let's get out to John Ford.

He is in Las Vegas that both shares are fracturally lower, John. But with more on what sounds like a very big announcement. It's all for sure. Kelly, thank you. I am here with Bill McDermott and Jensen Wong. Hey guys, we're on. We're live. Bill, thanks for having me once again here at Knowledge.

Jensen, always great to see you. Bill, on a start with just the market temperature. I'm looking at this and ServiceNow is being priced like Microsoft on earnings, like Oracle on revenue despite growing one and a half to two times faster than either one of them. Yeah. But you made some projections today that maybe are going to catch the streets attention on some of that. Tell me about what gives you the confidence to say you're going to hit 30 billion plus subrevenue by 2030.

When I came in in 2019, we were a $3.5 billion company. Now we add a service now every year. This year we're projecting to be nearly a 16 billion company. Right now we have a 28 billion RPO. So we're growing faster than any other enterprise software company at scale in the world ever happen. We yesterday said to the financial analyst, we were going to double the company again and we would do that by 2030. And the company right now is really focused on a couple of things. One, is agentic business. You know, we have to be the agentic front door. We work with great companies like NVIDIA, the great Jensen, the great NVIDIA. We announced Project Arc. You'll hear about that today. I'm sure Jensen will have some thoughts on it. But we want to manage the identities of the humans and the agents. We treat the agents just like the humans. So the rules and rails can complement this great AI revolution. The enterprise is a pretty messy thing. So we clarify, It's clarify it. We clean the mess up and we make sure that the AI is secure. And I think that is a big

breakthrough. And we told that story yesterday and people really liked it. Jensen, tell me about, I mean, this is at least the third time that I'm seeing you here at knowledge. We're talking with an application software company. You've talked about this five layer cake with energy chips, you know, platform, and applications at the top necessary to really make AI work. Why is the application layer, not just important, but long-term profitable, do you think? Why does that need to happen? And why is ServiceNow one to watch for you? This is one of the greatest transformations for the software industry ever. For the first time, service is software. Software is service. And the service industry is 100 times larger than the software industry. And so now for the very first time,

you're going to have human agents that are, of course, managed and supported by ServiceNow, augmented with AI agents that are going to be working autonomously, working with humans, and they're all going to need identity management, access control, network control, all of the things that companies do with respect to regulation and compliance and governance, all of that has to be provision, whether you're human or an agent. And in the future, of course, out at the edge, robotic systems. All of these autonomous systems, the time has now finally come. Now, of course, for our industry, for the rest of the five-layer cake,

it's completely revolutionary because AI, agentic AI, needs to be processed in real time. Unlike software of the past, that's pre-recorded, you could put it in storage, retrieve it as you need it. Today's software needs to be processed completely in real time. The amount of computation necessary from generative AI two years ago to now agentic AI, it has gone up a thousand percent because the AI now has to read a lot more, use tools, reason, generate a lot of tokens.

Not only that, the amount of use has gone up orders of magnitude because now for the first time, AI is doing work. It's doing useful work. And the return on that investment for software companies, for agented companies like ServiceNow is completely accretive. And so that time has finally arrived. So in that context, Bill, tell me about Project Arc and the work with Nvidia. How does invidia's stack actually enable that?

What's the level of capability that's going to bring that you didn't have before? Well, we're so honored to work with Jensen and Nvidia. and I don't think anybody has been more responsible for the AI revolution than Jensen and Nvidia. So everything we do, and we started this together seven years ago, has been built on Nvidia. The Nvidia factory is absolutely the bedrock of ServiceNow's platform. And Project Arc takes it up to the edge of the enterprise. At the edge of the enterprise, we have humans and we have agents and obviously robots. And all of that integration, the rules and the rails, is taking place at that level. So we warmly welcome OpenShel and the AI agents that come from OpenAI and

Anthropic and Gemini. We think it's fantastic. But we also know that the enterprise needs to control it and make sure it's secure so we can scale and bring all of that thought leadership and content to the enterprise. We are the action layer. So all of that compute power that Nvidia brings you, now it comes to the edge. We manage the humans and the agents, and all of that is happening on a rules and rails basis with service now. This whole platform, John, is agentic. There's an agentic front door.

We manage the identity of the agents and the humans for you. And we even manage the security of the IT and the OT, IOT, shadow IT, networks, devices, all on one platform. And I would like a compliment NVIDIA because they're the best company out there. And to think that Jensen runs employee works from ServiceNow, the humans and the agents, is a testament that we're very proud of. But also, if you think about the complexity of the bill and materials that goes along with Nvidia, a supercomputer, think about it.

That's a really complex thing. Configure pricing, quoting for a company like NVIDIA's scale done on Service Now is a testament to the move we made in CRM. So when Jensen calls us the operating system for the enterprise, everybody at service now is fired up to deliver service now. So Jensen, on physical AI, I think a lot of times people think about these humanoid robots that we see, we hear about folding laundry, maybe the dogs running around. But there's a manufacturing component of this and a flexibility in manufacturing that it seems like is potentially transformative on a global basis. How do you think about the nearer-term economic opportunities, 10 expansion around physical AI in that content?

Until now, until physical AI, the world's $50 trillion of industries that are associated with the physical world, the conference center we're in today, manufacturing plants, warehouse and logistics, all of the roads and cities around the world, none of that has been an exposure for IT, exposure for software. But now we have Injectic systems. Use this as an example. We now have Agentic AI in the enterprise,

and it's going to be running in this open shell that Nvidia created, and it's going to be accelerated on Nvidia's computing platform. It's going to be secure. It's going to be safe. It's going to be governed. Well, you're going to do the same thing with robotic arms. AMR is running around the warehouse. the entire manufacturing line will be operated by robots, managed by more robots, and the entire

factories are robot. All of that software are basically going to be physical AI agentic systems. They're going to run an open shell. They're going to run on top of service now. And you're going to manage them just like employees. And so you could just see it now. There's an operating system. They're humans on it. Their agenic software AI on it. Their physical AI on it. All the way from the center of the enterprise, all the way out to the edge of the enterprise, all running on one common fabric service now.

Jensen, I know you're going to run. Bill, we're going to talk more in a bit. Now I'm going to toss it back to Kelly. Thank you once again for having me here. Here to learn. Bill McDonnell, thank you, Jensen. Thank you, Bill. Congratulations.

You're the best. You're the best. No, you are the best. No, John, thank you. John's the best. Coming up. Check on one of the big beneficiaries of Bitcoin reclaiming the $80,000 markets at 81 and change today. Those details after this.

Keep an eye on shares of strategy, formerly micro strategy, which reports its earnings after the bell today with the shares of more than 50% in the past month. But they're still down 60% from their recent highs. Strategy is the largest institutional holder of Bitcoin, and its results are widely seen as a the key read on both corporate execution and broader sentiment toward the cryptocurrency, which, as we just said, is back around the $81,000 mark. And we will speak with CEO Fongley exclusively tomorrow right here on Power Lunch. And could you soon be getting your protein from beer? Stay with us to find out.

Welcome back to Power Lunch. Brian, what are your takeaways from Milken? Great lineup. All right, a couple, yeah, a couple panels, couple, you know, good guests here on Power Lunch last few days, three quick takeaways. Number one, supply shock is not over. Even if Stradhoramu's, quote, fully reopens tomorrow, it's weeks, months away. Number two, invest in boring, the stuff that, like, gets the electricity, like power lines, concrete, HVAC, things like that in the nuclear debate.

A lot of people, Kelly, wildly bullish. Other people say, too slow, too expensive. I like the takeaways. I think we should do more of that because, you know, we get all, all these things kind of pass, but you want to feel like, okay, hung on to something. HVAC is the key word. How about the shares of Anheiser-Busch are popping today after posting its first volume growth in three years? But the buzz isn't just about beer sales and volumes. It's about what could be coming next.

The CEO hinting at something new on Squawk Box this morning, a protein-enriched beer. Are you working on a protein beer at this point? I'm going to ask that. That's a good question. So wait for that. Still like 100 grams shy of what I need every day. The beer's not going to make it up, Brian. You get a lift.

And then, you know, instead of having a lot. a glass of like protein milk, have a protein beer, I guess. You get four grams. Brian, thanks very much. Thanks for watching, closing bell. Power lunch, closing bell mat.