Power Lunch - Power Lunch 6/11/26

Episode Date: June 11, 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.

All right, we got the market rally animation going because Wall Street right now, investors celebrating another presidential reversal. Welcome to Power Lunch, everybody. I am Brian Kelly. We'll be back tomorrow. She was on Squawk Box this morning. Stocks, they are surging. You can see up about one and a half to two percent. Oil prices down about three percent after President Trump called off another round of strikes against Iran. But we've heard this before. So what does this really all mean for your money? Well, two top-care strategists. are here to give their take. Plus, SpaceX, set to make history. And the hype reaching a fever pitch, but not everybody is ready to buy the mega IPO. And as the AI boom rolls on, one state getting royal about a canceled data center project. Is this one just isolated setback or foreshadowing of an AI backlash that's ramping up? The CEO of Digital Realty Trust is here on set,

talk all things AI, data centers, and his business. All right, a lot more to do, but we got to begin with the breaking news that came out moments ago. It is moving stocks. It is moving markets. Let's begin Megan Casella with more in D.C. Brian, it was just this morning that President Trump was vowing to attack Iran for the third straight night, but now he says he has called off those attacks because negotiations are moving forward. So here's what he posted on True Social just about a half hour or so ago. He says, based on the fact that discussions with the Islamic Republic of Iran have been brought to the highest level of Iranian leadership and approved.

I have, he says, canceled the scheduled strikes and bombings against Iran this evening. He says discussions and final points have been in both concept and great detail approved by all parties involved, including a number of countries across the Gulf, including the U.S., Israel, Saudi Arabia, and others. He says the naval blockade will remain in full force and effect until this transaction is finalized, time and place of the signing to be announced shortly. A couple of things on this, Brian. Crucially, this post does not include the word deal. It doesn't include the word agreement. I have calls out to the White House now on this, a number of officials there, and haven't

yet heard back yet on whether this means that there's actually an MOU or an agreement in hand with the Iranians. I will flag the New York Post now is reporting they did speak with President Trump that President Trump told them the agreement with Iran has been, quote, pretty much all wrapped up. So that looks like what we're dealing with here, but we don't have confirmation of that just yet. Now, this does, of course, come after two straight days of strikes exchanged in both directions between the U.S. and Iran. We're waiting to hear from the Iranians as well as to whether they're taking this as this truth post as confirmation as well, Brian. But your point just a moment ago was, I think, an important one, Megan, which is that if we get something, it is an MOU. It's effectively, for lack of a better phrase, a deal to make a deal. It's not a lasting long-term locked-in peace deal.

That's right. And he, crucially, in this post, doesn't say that it's, done yet. He says that it's finalized and it's moving forward. There will be assigning shortly, so there's still some gray area there. And then yes, even once we get that, that's always was going to be an interim deal. And it pushed all of the most difficult issues, the ones that caused the start of this war in the first place, down the road. So it might give them 30 days or 60 days to keep negotiating. Is that going to be enough time to really settle this nuclear issue once and for all? Or will we be back where we are now, where we were 24 hours ago? We just don't know yet. But at least It's a step. It seems like in that direction and markets are reacting.

And I do want to be clear, and we're all hoping for peace. I want to be very, very clear on that. But I think to your point, Megan, we have been here before. Have we not? There has been a lot of talk about deals, a lot of talk about deals to make deals. And then we have drones or missile attacks or ships get hit in the Strait of Hormuz. So this is, investors can be, I guess, understood if they're kind of rolling their eyes and thinking, haven't we been here before? We have been. I remember standing on the White House North Law and talking just a couple of weeks ago about a different set of strikes that the president announced that he had canceled that he said at the time he was just an hour away or so from sending more drones and missiles into Iran and then canceled those. Then we had several weeks of negotiations of a lot of statements that we were just two or three days away from a deal. Just on Monday, we heard that again. Now it is two or three days later. Maybe we're going to get it this time. But absolutely, you're right, that we have been here so many times, more than three dozen times now, according to the latest CNN tracker. And we've track this ourselves as well. More than three dozen times now the president has said we're close to a deal since the start of this conflict. This seems right now like it gets us closer than we have been in recent weeks, but we're still waiting for a little bit more of confirmation to make sure we're

actually at that point. All right, Mega, Kasella, NDC, all this news coming out in literally the last 15 minutes, Megan, thank you very much. All right. So as we noted, stocks, they are soaring. You might have heard about the SpaceX IPO that we've got tomorrow as well. A lot of hope around earnings and AI. Let's bring in our all-star panel to discuss the big move. What is next? Joe Tanias, chief investment strategist at Northern Trust Asset Management, Anastasia Amoroso, chief investment strategist at Partners Group. You only have one name. I named you twice, but we're so happy to have you that I just felt like I needed to say it twice. Don't worry, I'm not going to ask either of you to go into the nuances of Iran or peace deals. But I will ask you to go into the importance

if any, of lower oil prices or positive news on the macro market. Absolutely. Lower oil prices or just the resolution of uncertainty would be quite constructive for the market and we're seeing that play out. But I will say, Brian, that the reason why markets sort of discarded the back and forth and the ping-ponging on the Iran deal is because the U.S. oil economy, the global economy, is a lot less oil sensitive than it used to be. And the other thing that I've been encouraged by over the last number of weeks, there has been a lot of workarounds, whether it's the East West pipeline in Saudi Arabia, whether it's the efforts to build that out from UIE going to Oman.

So I do think workarounds are being found. Demand, in some cases, is being destroyed. But as a result, oil prices are not surging to probably 120, 140 that they could have been. So the point is as long as we have ingenuity to solve the bottleneck, you know, the deal is welcome, but perhaps it's not a prerequisite for the stock market to rally for the economy to go on. And Joe, you are a resident of my home state of California. So a $6 gallon gas, you're like, you're used to it. Well, it's painful. It's painful.

But I heard the MasterCard data yesterday on CNBC that in, or maybe it was this morning, I think it was on squawk this morning. Sorry, I'm getting old things happen. that spending has not really been hit and that it's not hurting earnings. And as our guest, the previous hour said, earnings numbers are spectacular for the next year and a half. Is there any indication that you're seeing any earnings might get hit and thus multiples on the stock market? I don't think so is the short answer. I believe that earnings so far are going to continue over the course of this year. We're expecting another blockbuster year in terms of earnings. Let's also not forget that so far year to date, you've actually seen multiples contract in the S&P 500, meaning the rally that we have seen has been entirely driven by earnings.

I think higher oil prices without question are a tax on consumption. It hurts the consumer. But then you have to be nuanced and think about which part of the consumer does it hurt. Again, we get into this K-shaped economy, this K-shaped everything that we're really starting to see. It hurts the lower-end consumer. It doesn't necessarily hurt the higher-end consumer as much. And as you know, that's who's really important. Yeah, and that's hard to say because you want everybody to prosper in American economy,

but at the same time also, if we get lower oil prices, we get lower gasoline prices, earnings would benefit. And earnings are what's been driving this market. So I've got to tie the two together, I guess. Without question, lower oil prices would help. But I'll tell you where it's going to make an even bigger, have a bigger impact than earnings, is on inflation, inflation expectations. And ultimately, what the Fed Reserve and other states,

central bankers around the world do in response to this inflationary. That's right. And as a result of that, I think that would actually really help sentiment. And I don't only mean consumer sentiment. I mean the private markets or the capital markets activity sentiment. Clearly, the IPO markets have not been deterred by this, neither is the MNA. But if you look at the pace of dealmaking and transactions in private equity, for example, it is slowed down a little bit on the margin. If you look at the exits from private equity activities, they have slowed down as well. So if all of a sudden we can shelf the fear that the Fed is going to have to respond to higher inflation.

with higher interest rates like the ECB did today. If we can shelf that fear, I think a lot more animal spirits can come back. Okay, you know, we got some more breaking. Sit tight. You guys aren't leaving. But we do have even more breaking news out of D.C. And I don't think it has anything to do with Iran. But these days, Megan, I'm not really sure of anything.

Brian, you never know what you're going to get when we're up here with breaking news. This time, it's President Trump announcing that he's nominating Jake Clayton, the former SEC chair, to be his next director of national intelligence. This also coming in a true social post just now, where the president says he is pleased to announce the nomination of very highly respected Jay Clayton, former chairman of the Securities and Exchange Commission, the former head of Sullivan and Cromwell, one of the most prominent and successful law firms anywhere in the world, and the current United States attorney for the Southern District of New York to be the next director of national intelligence and importantly to serve in my cabinet. Few people anywhere in the legal community are respected at the level of Jay. I encourage the United States Senate to confirm Jay as soon as possible. Now, Brian, this, of course, comes amid this controversy over the president's decision to nominate Bill Pulte, the current head of FHFA, to be his acting director of national intelligence after the current

director, Tulsi Gabbard, announced she was stepping down at the end of this month. Part of the controversy surrounding Bill Pulte is that he has no experience in national security. And Clayton, I will say, from a quick review, does not look like he has any relevant experience in his background either, that he is still a less controversial figure than Pulte himself. So we'll see now, If this will be enough for lawmakers on Capitol Hill to get behind this nomination, he will have to be confirmed to this position that probably does give Bill Pulte time to take the seat in an acting capacity in the near term. And because of that, we'll have to see if lawmakers then we'll get on board, if this will be enough for them to say that they are okay with this whole process. Brian, as you'll

remember, lawmakers have been threatening to withhold support for FISA, a popular surveillance tool before this whole DNI thing is worked out. They know the president needs their votes. Now we'll see if they're okay with Jay Clayton being nominated to be the next director of virtual intelligence. Big headlines. And I just, full disclosure, I know Jay Clayton not great, but I would consider him a friend-ish, highly respected, and has friends on both sides of the aisle. So we'll see. Megan Gisela, can't wait to see what you bring us next. Some more breaking news, baby, in the next couple of minutes. All right, let's go back down to Anastasia Amorosa and Joe Tanias about these markets. All right, tomorrow, you might have heard about the SpaceX thing?

It's coming. Okay, so I don't know what, I have no idea what's expected other than everybody expected to just kind of, pun intended, take off. Does space off space off space, it's called space off, why not? Does space X's success matter to the macro market or is it kind of its own thing? Look, I think it does to an extent, right? We're talking about $1.8 trillion IPO. And I think what's been happening over the last several weeks is investors have been prepositioning of how they're going to free up cash to participate in this IPO. And part of the freeing up of cash was to sell semiconductors,

which I think has been a proxy of all things, AI, data centers, and everything else. So, you know, to the extent that, you know, SpaceX does well and stabilizes the market, maybe you can see some of that money also return back to semiconductors, I will say, I don't want to comment specifically on SpaceX, but I do have, you know, some hesitations about the kind of the exuberance and valuations that we see. You know, the valuations that you see, they're not. based on this year's revenues or next year's revenues. They're based on 2030, 2035 revenues, and there are probably some big question marks about those because those revenues are based on total rest of market, which in the space of, in the case of SpaceX, is something like $28 trillion.

You know, so you try to put a number around that and that's hard. And then the other thing, right, I would say, from a private market investor perspective, when I look at investing in private companies in the series A to E round, and if you participate in those and you IPO and you your stock for six months, the average return would have been 70 or 80%. If you participated at the IPO, you know, offer price, which not everybody gets to do, then your average returns would have been about 40%. If you bought it the opening trade and you held it for six months, you might have been flat. Or that's at least what history shows you.

Or worse. Or worse. So I do have some caution around in some cases. Well, for someone who didn't have a comment on SpaceX, you sure had a comment on SpaceX, but we appreciate that joke. The raw IPO marketing. We've got Open AI Anthropic, got all these other companies waiting in line to go public. Are your clients asking about all these IPOs?

Are they happy to own what's out there? Well, I think everyone's asking about it simply because it's hard to ignore it. It's hard to avoid it. It's in your face. And look, I think these IPOs will be a good test of sentiment. I don't know that it necessarily says much more than that because the success of that individual company really comes down to its underlying strategy. And, of course, how durable those fundamentals are. but it does speak to just the direction that we are heading in, right? You take a look at public markets.

This is obviously something we can observe in private markets as well, but the overall concentration that you are seeing in equity markets in the S&P 500, when you look abroad it in the emerging markets, growing concentration into technology and just mega cap tech in particular. It's something that I think most investors need to be cognizant of. And when you think about all the capital raising and you think about these IPOs, how is the market going to absorb all of It's something that we're watching very closely. Can I want to comment on that just briefly. I mean, look, we're talking about 10% of float, right?

That's what's likely going to IPO in the next couple of months. And that amounts to, for all those $3 to $350 billion, that needs to be absorbed. Now, we're talking about the U.S. equity market cap of $77 trillion. So I do think that as chunky as these things are, it can be absorbed in the grand scheme of things. Yeah, totally agree with that. I think it will be absorbed. There is money for it. incrementally adds to that concentration risk that already currently exists, something that I think

more investors have to be cognizant of when they go into passive investment. All right, good stuff, good discussion. And by the way, thank you also for rolling with the double batch of breaking news. Like your name, so nice, we named it twice. Anastasia Joe, thank you very much. All right. I really appreciate that. All right, tons of news for the bond market as well that I just today.

You just heard maybe 30 minutes ago, President Trump saying he has canceled the scheduled strikes against Iran, but it's not the only news out there. the European Central Bank raising interest rates by one quarter of 1%. And you got the producer price index for May coming in a little bit harder than expected. Let's go back out and out of Rick Santelli for more on sort of how the bond market is digesting all that stuff we just talked about. Well, you know, it's kind of easy because if you look at when the high yields were in twos and tens, right around 8.30. If you look at one the low yields were pretty much right on the president's message that, It looks as though things are clearing for a solution to the mid-east Iranian conflict.

Now, as you look at that two and tenure on the same chart, look at the breadth of the move down, but also do realize, Brian, you're spot on. Whether it was jobless claims, 229,000. These are elevated levels. These are basically levels that we haven't seen since early February, so not as well-behaved. When you look at PPI, unlike yesterday's CPI, there were certain components. that were really hot. And I think that we shouldn't lose sight of the fact that if the producers, if the big

kind of wholesale side of this is absorbing some of these higher prices, how long can Kay continue to do that, which leads to the next story. That, you know, this communique from the president definitely, I think, read a lot more aggressive that the solution's at hand more than just that looked kind of like good news down the road. And I think that's the way the markets are interpreting it. And the ECB raising rates, maybe it'll be one and done. Maybe they jump the gun a bit because to look at what's going on with these prices and look at the dollar index as well, dollar going down.

All of this makes perfect sense. You're going to see overseas markets and other currencies potentially do a little bit better. I'm interested to follow the dollar yen where the dollar has been soaring and there's much news that the Bank of Japan may raise rates as well. So how do you bundle all this together? Well, I think that the markets are doing a really good job. And I'd say one more thing, Brian, when we talked in our last discussion about 30-year bonds, the distance between a 30-year yield and a 10-year yield is basically near the smallest it's been in one year. That's optimistic market talk about rates maybe having peaked already this year.

Rick, a lot of news, and you nailed it all. Rick, we appreciate that. Thank you very much. All right, folks, we are just kidding, started and on deck. The back and forth headlines on the Iran War, Michelle Caruso-Cabreira is back with us. We got Halima Croft on the phone. Oil is down about 2.5%. There is a lot of news.

Markets up. Oil down. We're back right after this. All right, welcome back. If you were just tuning in, stocks are surging, got the NASDAQ up 1.7%. Oil prices are falling down 3%. This after President Trump, within the hour, called off another round of strikes against Iran. But this also comes just hours after the president also said that the U.S. will take over Karga Island in the, quote, not too distant future.

Now, Karg Island does not pump oil itself, but it is Iran's primary oil loading hub. So did Trump's threat force the Iranians back to the negotiation table or maybe is there no deal at all? On the CBC news line is Salimicroft, RBC Capital Markets, Fullbhead of Commodity Strategy. an MCC Global Enterprise CEO and CBC contributor. Somebody who has been to Cargagan, Michelle Caruso-Cabrera, is back with us. In fact, in 2016, she visited Carks facilities for us. And as we said, maybe one of the only Western journalists ever granted access or kind of as unmatched views.

Michelle, there you are on Carg. I'll get to that in just one second. Halima Croft, I think I've seen some headlines that Iran and Israel also denying there's any kind of a deal. Is there anything clear that we know right now? I mean, what we know right now is that President Trump has called off additional strikes on Iran. What we don't know is where we are in the negotiations. President Trump has said once again that we are very close to a deal.

It just needs to be signed off. We have several news outlets running with that headline. But there has been some walking back. Note that even Axios is saying that the deal, the brink. broad brushstrokes of a deal have yet to be signed off on by the Supreme Leader. You mentioned Israel's and 12 news outlet is out saying that neither Israel nor Iran has signed off on this agreement yet. So again, we have a headline that is moving markets, but a lot remains to be seen in terms of where we are, in terms of actually getting a conclusive agreement that would lead to the reopening of the strait.

Yeah, and Halima, you and I were in D.C. earlier this week, and I know you're talking to everybody. is it possible, again, and I don't want to be a very, very, very broken record. Is it possible that there are different people in Iran pretending to speak for the nation? And that's why we're getting some of these seemingly contradictory headlines. I mean, I think that's a huge question is we don't know who is speaking to the White House, to news outlets. We don't know the physical state of the Supreme Leader. You know, who is around him? Are they signing off?

Is he signing off? So there are a lot of question marks about the state of the Iranian, you know, leadership at this moment. But again, I think we have to treat all these headlines that say the Iranians are on board with some skepticism until we get something much more substantial. Because, Michelle, the president is based President Trump is basically saying that a deal is close to being done. But you have others sort of denying it. I'm not going to believe Iran because I don't know who, to Helima's point to my point, I don't know who's speaking for that. I don't know who's making these comments to whom.

I think there is a deal? The market is reacting. The market is certainly reacting. We've heard this a few. We've heard this before. I would say the outright threat to take Karg Island is another level of escalation that perhaps brought whoever, we don't know who, to the table on the Iran side. because that is their cash register.

90% of their exports leave from there. And if the U.S. pulls of Venezuela and suddenly decides they're going to be in charge of everything that comes out of Karg Island and control the revenues, that's going to put Iran in the Iranian leadership in a very, very different place. It's an enormous amount of leverage. And there's such a large military buildup there. It's credible at this point. Everybody went into this.

Everybody's saying, doesn't want boots on the ground in Iran. And I am sure that is true. And I'm going to summarize. I think the American public may not have the stomach for boots on the ground war. But I also know, and I can report, there's a huge military buildup in that region. Refueling jets, fighter jets, men and women from Norfolk, from Fort Bragg and more. They're there now. And taking car isn't just taking it. It's maintaining it. It's defending it. It's defending it. it's running it. You would need air cover, supplies, et cetera, right? So having all of that military presence gives credibility and leverage to the president. And at some point, he has to take,

you know, he has to convince them that he will do that or else he's lost leverage. Yeah, and Helima, part of you and your team's job, and you guys do an excellent job, as always, in taking the headlines and just trying to sort out what they might, what they might mean. You wrote about it last night. How hard is it right now to kind of understand where we are? I mean, I think it's incredibly hard to understand where we are. I mean, we're debating, Brian, as you know, how many ships are actually going through this trade of Hormuz.

Like, we're trying to gauge, you know, what is the degree of economic pain that Iran is suffering right now? You know, what is it the actual situation in this trade of Hormuz? And again, because we have been here before with these headlines, I think we just have to wait and see in terms of what Iran is really willing to sign off on. Because you just had a statement from the Treasury saying that Iran's frozen funds are going to be used to pay for reconstruction in the region. I don't think the Iranians are going to sign off on the frozen funds that they want access to being used for reconstruction in other countries. So again, a lot's going to hinge on what the details of any agreement look like.

Yeah, and we're showing a live map of the Strait of Hermuz. There's no red dots. There's no ships there because almost every ship, as I understand it now, is turning off the transponder. So the numbers, they are all over, literally all over the map. Lima Croft, RBC Capital Markets, Michelle Kruster-Kabreira, MCC, Global Enterprises, both CNBC contributors. Really appreciate it. Thank you very much. All right.

Coming up, we're going to change gears. SpaceX, the IPO. It's off tomorrow. The biggest IPO ever. How does this one look, though, compared to Elon Musk's IPO, per se? Tesla. We'll talk about it. Coming up. And you're going to be keeping an eye at all on that other IPO that may be happening tomorrow? Well, I'll be watching along with the rest of you.

All right, that was Jeff Bezos. Watching along with the rest of us for the SpaceX IPO tomorrow. Of course, pretty much with every other major investor in America. And we're going to have more of that interview for you later on this hour. But let's focus back in now on SpaceX and turn from one tech billionaire to another. SpaceX founder and CEO Elon Musk. first took Tesla public 16 years ago this month, and certainly a lot has changed since the EV giant first debuted in the NASDAQ back in 2010.

Let's go now to a little bit of a deeper dive into that IPO. And what has changed in the last 16 years was Sima Modi? A lot has changed in the last 60. So much. And, you know, as we were comparing, contrasting Tesla to SpaceX, Elon Musk taking Tesla public 16 years ago, Brian, that represented two different eras in the United. Musk's career. In 2010, Tesla was sort of a scrappy startup valued at $1.7 billion that needed to go public to survive with only the roadster its two-seat electric car on the market at the

time. It experienced a one-day pop of 40%. And unlike most companies that tend to trade down thereafter, Tesla shares remained higher six months later by around 63%. What's different about SpaceX, it's been private for a much longer time and is entering the public market with a monopoly in satellite broadband, launching rockets, and a much higher valuation of $1.7 trillion. Another key differentiator is control. Musk's 82% voting power far exceeds his control at Tesla, which means he can essentially push for any decisions with SpaceX with little resistance from the board.

And while Musk is a co-founder of Tesla, he wasn't there day one. He joined as chairman after leading a Series A investment fresh off the sale of PayPal three years later, but he became CEO of the electric car company. Compare that to SpaceX, where he really started the company from day one as founder and CEO. Yeah. Also, like the look, he's changed his look. He was like sort of stubbley, he was flat. He was younger too at the time.

But yes, a lot has changed him as a leader. And again, what he's done from his learning lessons at Tesla that perhaps motivated why he went for this type of super voting rights with SpaceX. Yes, and we were all younger back in the day. Cima Modi, thank you very much. All right. Well, the SpaceX IPO is already said to be more than four times oversubscribed. Your next guest is not advising his clients.

clients to get in on the action, at least not right away. Joining us now is Jeff Crumpleman. He is the chief invested strategist and head of equities at Mariner Wealth Advisors. Are you saying at void SpaceX forever or just in the first sort of crazy hours and days of the trade? Yeah, we never say forever. So I would say, yeah, it's about timing. Avoid it in the midst of all this hype that you have out there, the limited float. when we look at our inbox, Brian, it is by far, if you look at all the frequently asked questions that we've had over the last five years, this has to be the number one most asked question. What should I do?

Should I buy it? And then second, what is this going to do the rest of the tech holdings that I have as we get these liquidity flows in? So it's, it is priced like Buzz Lightyear. It's in 100 times earnings. And I think this is more of the time in this situation. universe to think more like the character Woody than Buzz White Year and be patient and wait for the hype to come out and the pressure selling. I'm going to ask you the same question I asked the desk earlier in the show, which is, Jeff, do you think SpaceX means anything for the

broader market? If it goes well, then people buy all the stocks. You know what I mean? If it doesn't go well, then maybe it hurts the entire market. Or is it just a monolith unto itself? Well, I think history would say that if you just look at this group, IPOs that have more than $100 million in revenue and are priced above 40 times sales, they don't do well. So I don't think people will be surprised at all as insiders begin to sell. I think it will pop in the first day with all the hype. But I don't think it will be a challenge for the market, just like Facebook didn't do well for the first 15 months.

I don't think it will be a challenge for the market. We've got great earnings. We have a strong economy. We have so many things that are driving this market. The capital spending is not going away. I think this is a separate event that is a moment in time. Well, it's a big moment. It's a big event.

And then we got Open AI and Anthropic and a few more behind it. Jeff Crumpleman, Mariner Wealth Advisors, Chief Strategist, head of equities, have a great day and watch tomorrow. Jeff, thank you. Thank you. All right. Coming up, the backbone. of the entire AI story is data centers.

And we have the CEO of one of the largest data center operators in the world here on set for you. Next. The AI buildout continues to attract monster amounts of money. Oracle, for example, says it's prepping to raise nearly $40 billion to fund its ambitions, including a massive new stock sale that, by the way, is hurting Oracle's stock. Today, meantime, data center developer Crusoe, hit pause on one of its new projects in Wyoming because of what they call customer-driven site-related issues.

Whatever that means. Over years of seemingly unlimited spending are these signs of AI booms, maybe hitting a bit of a wall or not. We don't know, but your next guest does. That's Andy Power. He is a CEO of Digital Realty Trust, one of the biggest data center operators in the world. Their clients include pretty much everybody. Andy, welcome.

Thanks for having to Brian. I think the Crusoe news, a one-off, kind of spook people, any sign of a slowdown and spending. We're not saying anything like that. I can't tell you, we just had a record start to the year. Records in our enterprise category signed the largest lease in the history of the company, a 200 megawatt AI inference lease to a double-a-rated customer household name. That demands been continuing into the second quarter. our development pipeline is up 60% in 90 days at the first quarter. So we're still in this scene. This demand is tremendously robust and diverse.

Yeah, and I was reading a report from KeyBank about it. And it's basically said kind of echoed what we were talking about. And they have different sizes, 200 megawatts, 500 over a gigawatts, and that you still have power up for lease. And at least this analyst believes you will likely sign those leases in quarters and months to come. We are building right now 1.2 gigawatts. That's that's $16.5 billion that dramatically increased from the end of last year. The total portfolio is three gigawatts, but we've runaway to get this thing to nine gigawatts over time.

So we see a really large runway for our customers to grow in our platform. You know, back in the 70s, it was a song, before you were born, Andy, it was a song called, I was Country when Country wasn't cool or something like this. And I was thinking, you guys were data centers before data centers were cool. you guys have been doing this for a long, long time. But there's a lot of new participants in this space. So how do you stand out against them? How do you compete against them?

Because I'm sure there's a lot of price pressure out there. So a few things. We've been as a business for over two decades solely focused on building, owning, operating data centers in major metropolitan areas. We pride ourselves in a reputation, under promise, over-deliver, operational excellence. And you're seeing they call it the wheat being separate from the chaff here when times are getting tough and we're scaling this infrastructure so quickly. But right now, the demand is well outpacing supply in our core markets.

So even our value ed, we're just seeing rates for our capacity rise quicker and quicker and be more sold after. Yeah, 20-year overnight success, Andy, congratulations. A lot of public, I don't need to tell you this, a lot of high-level public pushback against, not you, but data centers in general. So electricity use, water use, what's your case? What's your response to that? So I hear that, and I think that some of the myths need to be dispelled on that, quite frankly. First of all, these are mission-critical applications what we're serving. Digital transformation, the cloud computing, the early days of AI, how you buy your coffee,

stream your video, healthcare research, it's critical. When everyone says, I don't want a data center, my data's in the cloud, well, that cloud is inside digital realties, four walls. You need it. You're what's running that. Exactly. We're the foundational physical infrastructure for the cloud. Two, our customers are absorbing the cost of the power. They've been on national media saying we want to pay their more than their fair share. We strengthen the grids for our communities. The water one is probably my favorite one. So digital reality, 300 plus data centers across 55 metropolitan areas. We use less water than 18-18-18 California golf courses. There's 15,000 golf courses just the United States, and that's less than half in the world. Is that, and is that misconception because people don't realize that most of these are on what they call a closed loop water system? Closed loop.

Where it's kind of like a pool, the water's just there. You know, some may splash out and you've got to put a little bit back in. But overall, you're just using the same water over and over again. It's like a pool except cover it up so it doesn't evaporate into the air. Yeah. But it's the same water. Correct. You're not just consuming the Colorado River.

Sometimes, although some of our sites, the water being, is going more towards irrigating. of the exterior of the building than the actual physical infrastructure. Wow. So a lot of this is called Facts are not getting the way of a good story, and we need to make sure our story at digital realty and the data center industry

is out there for the broader public. You heard about the SpaceX IPO? I've heard of something about it. Part of that is this concept of data centers in space because people say, well, you've got a lot of solar radiation. There's your power. It's cold, so you don't have to heat these things. And we have the technology to get the data

easily transmitted back to Earth. Other people I talk to say, nope, space is cold, it's dark, and it's really, really expensive and dangerous. Data centers in space, reality or sci-fi? Well, it's existing today, and we are supporting some of the leading satellite operators that exist today and will for the future to come. I think the thesis behind it, you've got to remember,

is the thesis that there's going to be so much demand for AI compute that we're going to outstrip the science. supply and the cost on planet Earth. Right now, if I'm sitting on three gigawatts, going to nine gigawatts, that's a pretty good place, be able to help our customers and deliver a return for shareholder. But I think the thing is all those gigawatts here on Earth are going to be destroyed because we're going to go into space. I don't, I would say that is not the case.

I don't think we're loading up the existing data centers on the rockets and sending them there. We focus on markets that are supporting digital transformation. The cloud not only does not flow into ether, it has physical markets and architectures what the applications have to live. Think about proximity to the eyeballs and GDP. So I think it'll be complementary, supplementary to what we're doing. And I think we'll be here for a long time to come. Andy Power, the CEO of Digital Realty Trust, in from Austin, Texas. And you guys actually have your own Colorado River. People don't realize that. There's actually two. Thank you very much.

Let's get over to Brandon Gomez for a CNBC News Update. Hey, Brian. Yeah, the man charged with murdering the Speaker of the Minnesota House and her husband last year, as well as wounding a state senator and his wife pleading guilty in federal court today. Vance Belter changed his plea after prosecutors said they wouldn't seek the death penalty. The judge approved the government sentencing recommendation of two consecutive life terms plus 40 years for political assassinations. And a big shake-up in Kier-Starmers' cabinet today as British defense minister John Healy quit in a dispute over military spending. Healy accused the prime minister of failing to put the resources in place needed to defend against heightened threats. It's the second high-profile

departure in recent weeks after his health minister resigned and is expecting to challenge Starmor in the next election. And a Reuters photographer captured this image from the top of the Washington monument that appears to show a tracing of 8647 into the grass on the national mall. The term has been used by opponents of the president's administration. Reuters later noted that the U.S. Park Police and National Guard responded to the scene and are investigating. Brian, send things back to you. All right, Brannie Gomez, Brandon, thank you very much. All right, the AI trade is not over, or so says your next guest, but it is time to start balancing some of this out of your portfolio.

We'll talk about your strategy in Market Navigator next. All right, welcome back. Time now for your Market Navigator segment. And the market's rather AI obsession has created, with some consider kind of a narrow rally, with just a handful of supercap stocks driving most of the S&B 500's gains. But if you're kind of tired of the tech trade and maybe looking to, balance out your portfolio, your next guest.

Here are some suggestions. Joining us all the way from St. Louis, Missouri, Matt Powers, managing partner, Powers, advisory group, Matt, good to have you on set. Thank you for having. A long way over there, but I'm not allowed to go. Sorry, we can. Good to see you. How are things over there?

Things are good. Talk to us about Abbott Labs, a massive company with AI. We just don't talk about it that much. Yeah, there is so much going on right now. We know that, you know, you've got, I think this is all pretty relevant, though, because we know how we got here. We had these multi-year moves in the market. You've got semis up 75% so far year-to-date. That's even with the weakness we just saw. But I think there's a certain level of FOMO out there. And what I mean by that is there's this illusion that risk tolerance is maybe a little bit higher than what it is. So you look at the numbers, regardless of Avid, you look at the numbers here and you just say, okay, 84% of companies beat Q1 earnings, but really only half those companies are up year to date. In a normalized market, you go back to 18 and 21 with similar quarters, that number was about 25%. So we have half those companies are down year to date. So take Abbott. Abbott's a great example. So Abbott is off 27% year to date. A lot of that's because

they lowered their guidance. Just said a new 52 week low. 52 week low. They had the exact sciences acquisition and that's part of it. But we kind of think that's that's overreached a little bit and it's heavily oversold. So you know, you've got a 17 PE on Abbott and it typically trades around. It was out of 27 last year. And you know, this is a dividend king. So they've got this great growth pipeline of things. And then you go into financials, another sector that's also beaten up. And if you're looking for these names that can counterbalance your portfolio, you take Visa. So Visa earnings up 20%, revenue up 17%, stock down 9%.

Why? Well, there's a lot there. A lot say it's because of consumer spending. You could say it's because of inflationary concerns. But Visa is not a lender. They don't make their money off credit card balances. they make it off transactions. So every time you swipe, every time you tap, anytime you buy something online, they're getting a fee. And if the price of goods are, it's a percentage, price of goods go up,

the fees are going to go up. And no, but you look at Visa, one of the main things here, 50 billion, or 50 billion in revenue, that is, sorry, 30 billion of revenue, that's a 50% profit margin on visa. So, you know, excellent company. It should, it's, it's oversold. So there are a lot of opportunities out there of companies that can counterbalance your portfolio and that can also de-risk your portfolio. Matt Powers, Powers Advisory Group talking about Abbott Labs, talking about Visa, kind of beating up names, but maybe that's the point for the Bilo and watch it go up. Matt, thank you very much. Short break, stocks up, oiled down. We're back. Right over. All right, fair to say that little has been known about Jeff Bezos's new startup called Prometheus.

That is until today. The billionaire shared the details of the venture with David favor. The idea that you might build a set of tools that could actually do engineering, an artificial engineer. An artificial general engineer is a dream that we've had, people have thought about for decades, but it's never really been possible. But now it is. And that's what we've been working on since late 2024. It's very exciting. We have a team of about 150 people. They've already done remarkable work. You know, it's hard work. We're grinding, but it's also very interesting. Now, Bezos also shared his take on fears that AI will take over the job market. You can watch that full interview at CNBC.com.

We're back right after that. We're still kind of coming off the amazing Knicks comeback win last night, but guess what else is happening in like 40 seconds? The World Cup will kick off with Mexico taking on South Africa at their opening match at the Estadio Azteca in Mexico City. What should you expect in today's game? Well, Calcias, Mexico is the clear favorites, So one of the hosts of the World Cup.

There is an 11% chance, though, on Kalshi of South Africa, could pull off that upset. 21% chance of a draw. CNBC does have a partnership with Kalshi. All right, folks, thanks for watching. Markets, stocks up. Oil is down. Closing bell is going to pick everything up now, and I will see you tonight. You didn't have enough already.

Fast money, 5 p.m.