Power Lunch - Power Lunch 8/28/26

Episode Date: August 28, 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.

Warsh speaks and yields pop. Welcome to Power Lunch, everybody. I am Brian Kelly. We'll be back on Monday. Stocks flat to a little bit down. The outlook for higher rates taking hold. Bond yields the story today, 2, 10, 30, all breaking above what some call key levels.

Talk about what that means for your money. Six months now to the day. Into the war with Iran oil remains one of the markets most important and most unpredictable signals prices, pulling back a bit from their peaks. But the geopolitical. political risk premium has not disappeared. And could we have another OPEC departure? We'll talk more about that for real estate affordability. Still the defining challenge of our time, high borrowing

costs, tight inventory and a slowing commercial market are forcing buyers, builders and investors to rewrite the playbook. Don Peebles, he helped write the playbook. And he is here to talk more about that and whatever else is on his mind. Hi, everybody. Happy Friday. Hope I have it a great start to your weekend. Let's just call it what it is. Why not? Friday, a lot of you work from home. Lucky. We have more in the Fed and macro markets at a few minutes, but as you know, we also like to call these days Opportunity Fridays here on Power Lunch and get actionable ideas all hour long. So let's just kick it off and get in with our opening market guests joining us. Permanent Portfolio Funds, Fund Manager Michael Cogino and Jackson Square Capital Managing Partner,

Andrew Graham. Gentlemen, both. Thank you very much. Andrew, I'll start with you. You're on set. Before we get into individual stuff, anything that you want to sort of say or what your big takeaways were, if any, from Kevin Warsh today. Well, yeah, it's more hawkish than I think most people were expecting. And he talked a lot about AI, which I thought was sort of interesting. Interesting, like, in a good way? No, kind of interesting in a long, kind of strange way. But, I mean, obviously he's very bullish on it.

And he expects a big AI productivity boost, which I do as well. and I think most people do. I thought that was, you know, sort of informational. But the real takeaway was, yeah, you're probably going to get a rate hike in 2026. And that's meant, I think, to anchor the long end, which seemed to be working for a while, but it's come off a little bit now. If we get a rate hike from the Fed, because the bond markets, let's be clear, bond market's already done it, the bond market's already raised rates.

If the Fed raises their rate, their overnight lending rate, does that kill the stock market rally? I don't think so. I mean, if you look at flash PMI's last week, the U.S. Flash PMIs were very strong and lined up with about 3% real GDP growth, which is twice that of what it was in Q2, right? So it's definitely strong. I think from a bond yield perspective, the long end is really a supply problem. It's not a monetary discipline problem. And you've got a lot of supply not only coming from the Treasury, but you have a lot coming from corporates that are trying to fund their AI cap. Michael, Cajino, same question to you. Do you think that higher interest rates vis-a-vis either the Fed or the bond market will hurt, damage, kill, whatever, this stock market rally? Well, the markets are already doing the Fed's job for it. So, yeah, he was hawkish today on inflation, generally speaking.

I don't think that was a surprise. I came in with a different take in a sense that I don't think it's a foregone conclusion that they're going to raise rates in September or even after that in December. I think a period of watchful waiting, what looking at the data, see how sticky inflation is, whether it's energy driven, et cetera, et cetera, and then look at market rates. So I think the data is inconclusive right now. I think obviously the higher rates go, the more risk there is to the stock market, especially for that, you know, dividend yield income equity investor, where, you know, the yield

on stocks, the SP500 is around 2% right now. you can get a one-year treasury around four, and the numbers go up from there. So for that risk-orverse investor, the equities may get pricing. But the growth factor, the growth sector, not as much. All right, well, you did mention energy, Michael, so I'm going to stay with you because I love the fact you guys, both ones more on energy side, one's more on tech and AI. Let's start with the energy side, Michael Kugino. The price of oil, not moving a lot today at 83 and change, but it's not at 65 and change.

you still liking the Exxons and the Chevrons, the ConocoPhillips of the world? We do. And I'll also add that we like tech, too. Okay. But let's stay on energy for now. We'll pivot. Absolutely. Absolutely. You know, if you look at valuation broadly in the market, 22 times earnings on the S&P 500. And when you look at these companies and the macro story out there, demand, geopolitical risk, inflation, et cetera, you know, you're looking at companies like Chevron, Exxon, Conoco on the big Maycap space, or even Oventim of a smaller cap space, that are providing really good dividend yields and trading at significantly below market multiple.

So for a long-term total return investor, this is a good place to play and not take on a lot of risk, as you would and maybe other more higher beta momentum names like tech. Yeah, okay. Let's pivot to tech now. Andrew, with you on set. You know, it's funny, when I hear Arista, I'm old. I still think of like the record label, but I'm just dating myself. But Arista networks is not them. And they're sort of in that plumbing of AI. Well, they make switch equipment.

Yeah, right. The stuff that we don't think they're not, it's not as sexy. Well, maybe not. I don't, it's going to be. Making money is sexy, maybe. Yeah, for sure. And I think that's where the opportunity is. So scale across, if people are worried about political pushback, about opening data centers in

your backyard, or if there's a, you. funding question or what have you, you can still get increased utilization through scale across architecture. So what we're going to do is connect data centers together. So data center interconnect ports right now are under a million total. They're going to go to 20 to 40 million over the course of the next four years by the end of the decade. It's happening. Okay. And it doesn't matter who builds those data centers. This stuff is going into whomever builds. Correct. And the ones that are existing that are already there are going to be connected, right? You get better utilization. You get more efficiencies, and so forth.

That's going to happen. All of that, I think the beneficiaries are going to be the switching equipment guys, and that's Cisco and Arista. And Cisco and Arista also have an opportunity when you get to scale up architecture. Right now, scale up architecture is dominated by NVLink, which is an Nvidia product and very topical. But it's an Nvidia product. In a lot of different layers, and they're all doing well.

Yeah, no, they definitely. We can talk about that if you'd like. But the scale up is eventually going to be disaggregated. it's going to happen. It's going to be all Ethernet-based. It's always the case. That's the standard. And both those guys make Jericho style, which is the Broadcom, L3-3-style switch equipment, and they have excellent products, especially Cisco, which a lot of people think is, you know, it's not your father, Cisco anymore. This is a very fast-growing, on-the-edge sort of developing. Well, I'm going to date myself again, Michael Kegino. I do remember when Cisco was briefly the

largest company in the world. Now I seemingly quaint six. $600 billion complete market cap. All right, you said you like technology. We got your energy picks. What do you like in the tech stack? Yeah, the late 90s, Brian, the four horsemen, right? And so, yeah, I remember those days as well. Yeah, you know, you mentioned Nvidia and, you know, trading in a market multiple

with expected growth rates of anywhere from 40 to 70 percent per the company. And to give you some perspective, you know, Marvell's entire quarter that they reported, was less than the beat of NVIDIA based on the market's reaction. So it gives you a sense about how profitable this company is. And obviously, there's risks, the higher things go, business risk, margin, risk, etc. But when you get a company with expected growth rates that are exceeding market multiples by that level, it's still an underpriced scenario in a growth mentality going forward. So obviously, you've got to look at that one.

Another one we like a lot long term is Palantir software. Very rich, but the growth rates are very, very large. And again, long-term investor, which is what we are, we're looking at this company, continuing to grow and grow into that better market multiple. And then, Andrew, finally with this, you know, I talk to people in the industry, and I'm not going to pretend I know all the stuff you just said about switches. But I do know what people are saying to me, and a lot of people drop the name Snowflake to me. Yeah, yeah.

And again, I'm not going to pretend that anyway. everything about what they do, but they seem to be in a lot of the things that a lot of people are doing. They're along with a larger subsector of software that is on the agentic sort of frontier on that curve. You can name Shopify, you can say Cloudflare, Twilio, and maybe Microsoft, although it was a big organization. But these guys saw hockey stick in terms, in Q2 earnings, in terms of daily average users, all of them did. Snowflake is a pay-as-you-go software provider. There's others, MDB, Lastic, which all just bounced their numbers higher this morning. There's something going on here, which, I mean, catches everybody's eyes. How about this? Do they benefit from more data?

More data, and that's what I do know. I know that the amount of data is not going down. No, it's definitely going on. I'm pretty confident in that. Yeah. Yeah, I mean, look, Gigantic flows are about 50% of web traffic right now. Cloudflare, going back to that name, added 2 million new developers in Q2. They did a total of 1.5 million in 2025. So these companies are just rapidly growing. And I'm not so sure that they even know if they can give, you know, accurate guidance because it's growing that quickly, snowflakes among them. Yeah. Michael Cagino, Andrew Graham, great conversation, real opportunities. Andrew, thank you very much, Michael. Thank you very much.

All right, we are seeing some reaction in the options market following that speech in Jackson Hole. In fact, maybe some big bets being placed where you may not think it. Oliver Rennick joining us now live from Chicago to tell us where those bets are being made. Oliver. Hey, Brian, it's been a very interesting options action today. First was a big trader who rushed into VIX nine minutes after the open this morning and spent $9.5 million on 100,000 October 21st, 28 strike call. and a bet Vicks could rip back to year-to-date highs.

But then, after Warsh gave his speech, Vicks went the other way and made a year-to-date low of 14.1. And now as stocks gave up those gains, Vicks' calls, or outpacing puts 5 to 1. That trader from the morning was up about a half a million bucks at one point. The key takeaway from the trade is that hedging is cheap. But maybe the bigger takeaway for the market is that with the S&P down,

just about a quarter of a percent right now, still well within the range that options had priced for today. That's despite September rate hike odds surging, gold and Bitcoin getting slammed and Nvidia selling off. So perhaps for stocks as they hold the messages, we can handle a rate hike, Brian. Yeah, I mean, the VIX bet, how big is that? I mean, it sounds big to me you're reporting on, so I assume it's big enough to be noted, but can you kind of put that a little more in context? Absolutely. Yeah, great question, 100,000 contracts, $9.5 million. For the context, the volume for the entire VIX trading today has been above two to two and a half times the 30-day average.

So it's already elevated the entire VIX complex trading, big enough that the traders here, as soon as I came down this morning, I said, I'm looking at a VIX trade. What did you see? Boom, they knew exactly what I was talking about. I messaged a few other VIX pros who said we saw the same thing. And that it actually kind of added up to a few other kind of signs of people betting on volatility. generally taking advantage to buy out of the money, very far out of the money. So, perceivably cheap, Vix calls, Brian. All right, good stuff, great color, great context. As always, Oliver Rennick.

Thank you. Have a great weekend. All right, after the break, OPEC, lost a major member a few months ago in the UAE packing its bags for the group. Could another big player be about to say audio to OPEC? We'll talk about that and more after the break. All right, beyond Iran and Ukraine. shift may be underway in the oil market, and it would be a big one. Venezuela, which is a founding

member of OPEC. Reportedly, according to the Wall Street Journal and others, weighing an exit from OPEC. It helped create OPEC, by the way, more than 65 years ago. This comes on reports that oil companies may also be looking to invests billions of dollars in Venezuelan oil fields. Joining us now is a longtime OPEC watcher, observer, and attendee, Mike Rothman, founder and president of Cornerstone Analytics. He's not only covered the markets more than 40 years, I believe, Mike, I think you're the most attended OPEC meeting person in the world, right, of any country in any job, right? That's correct.

Thanks for referring to me as the old man, but yes, that's true. You're not old. You started when you're four years old, Mike. You just went at a very early age. We'll start there. UAE, I understand why. They left a few months ago. What do you think of these reports about Venezuela?

The initial reaction I had when I saw the same reports you had was that it's really non-news, but you have to understand why I would say non-news. And there's a couple of principal reasons. One is in the case of Venezuela and their production and where they are versus where they were prior to Chavez becoming president, they're about a third of what they were producing. And their infrastructure is very heavily dilapidated. They have power grid issues. They have water issues.

A lot of their oil field equipment's been cannibalized. And the idea of people investing there, which became a big topic after Maduro was ousted, got a lot of people excited about the idea of really expanding production, but it's a multi-year process at best. That's the best case scenario. The estimates for what it would cost to rebuild a lot of their infrastructure, including the power grid, are north of $500 billion. There are numbers that range up to a trillion. But the political system being stabilized, the legal system being set where companies would feel comfortable investing and putting assets at risk, those are still not really settled.

And that's why it's kind of a non-issue. Plus, perhaps just as importantly, when I started going to OPEC, which was in 1986, there was a lot of spare capacity. Venezuela was a chronic cheater of quotas. And at the time, it would make sense for countries when there's a lot of spare capacity be corralled into OPEC. Prior to Epic Fury, there were three countries that had spare capacity, and the number was only about 800,000 a day. It was the Saudi Arabia, the U.E, and a little bit from Iraq. That was it.

Done as well as not really much of an equation changer at this point. And the reality is they've been out of all the quota deals since the pandemic because they've had so many problems. They can't even produce at what would have been a traditional quota. They were under, I think, Mike, they were under a million. barrels a day for for a couple years after the pandemic. Call it one, two now. The numbers, you know, they're going to vary, to your point.

I mean, some rigs go down. They have dilapidation, whatever. They were over three, three and a half million barrels a day. 20 or 30 years ago, it's the richest country in South America. How, assuming there is more investment by U.S. oil majors, you referenced the energy infrastructure as well and the electrical grid, et cetera. In 10 years time, best case, how much could Venezuela, produce? So it's a lot of ifs, right? I know. You start saying if, but if you think about the

work that they would have to do, which would be kind of split into two different categories, for the Orinoco Belt, which gets a lot of play as the biggest oil reserve in the world, they have to build upgraders, which is like building a refinery at the site. They have to build pipelines that can transit that oil almost 200 miles. And that all has to be redone. And then if you think about Lake Maracaibo, which is in the western part of the country, they have to redrill, repressurize, and refraq all those wells. So the ifs kind of matters. But even if you said, you know, fairy tales and rainbows, everything possible, maybe in 10 years, maybe you might get a million barrels a day, maybe. More. So like 2-2.

it might get to 2-2, but that's, again, that's, we're talking, you know, rainbows and flying dragon kind of territory here. But you never know, maybe we get the rainbows, the flying dragons. We shall see Mike Rothman, a very young Mike Rothman, who started OPEC at a very early age, but the most attended attendee. Maybe someday, Mike, we'll get back to the Helferstorferstra in Vienna. It took me a while to get that pronunciation. Mike Rothman, thank you very much. Appreciate it. Thank you.

All right. Coming up, Helplossovstra is the name of the street in Vienna where they're at. Anyway, is the Fed going to hike rates in September? Yes or no? We'll talk about it coming up. All right, obviously, figured it out the Fed, bonds, whatever. They are the top story right now. Let's get out of Rick Santelli, who is in Chicago.

And Rick, I think you nailed it in a way. You know, you're talking about Warsh. And he didn't give us a lot, although there is a tinge to a more hawkish tone in the market today. Your take? Yeah, you know, I don't know that is. His tone was technically more hawkish, but I think his brutal honesty regarding inflation and his ongoing line that 2% is the target and I'm going to get us there. I think that being in the venue it is, it just had more impact on the markets today. And the impact is easy.

Look at the 210 spread on a 12-hour chart. That is a big move. And the difference is we now have squished the 210 spread, close. closer together by about seven basis points, which means two-year yields are higher by seven basis points unanswered in the longer 10-year. Now, if you look at both the twos and the tens on this chart, okay, this is a value chart. The patterns are almost exact. But what really is the interesting chart, Sully, is once you put percentages to it, let's do the next chart. Well, a 10-year yield is basically just up about of 1%.

But the two-year yields up basically three times that. And that is the chart. The two-year yield moving up has also ceded the probabilities at the CME. They have now crossed over the 57% mark. And this is really the first big test of Warsh because if the market signals the same type of percentage, the Monday before the Wednesday 16th of September meeting, in my opinion, he's got a hike.

If it's 52, 53 or lower down to about 49, it's a tough call. If it's 48% and lower, I don't think he goes. But I think he cannot ignore the percentages in the market. It's responding to him, and he must have understood that probability, and the mechanism of having the market do its job, well, if he doesn't listen to that signal in the probabilities, it goes against, I think, all the hypothesis of his chairmanship that he has drawn and pushed into the public since day one.

There you go. Rick Santelli, thank you. Always laying it out straight, Rick. Appreciate that. Let's keep it going with the Federal Reserve. Your next guest says today's Ward Spitz made him rethink just how live of a meeting September might be. Krishna Guhaas, Evercore ISI Vice Chairman, joining us now.

Is it like live live, Christian? Like, kind of live. No, for sure it's live live. Now, unlike the market, I haven't yet crossed over 50%, but it looks at least close to 50-50 to me at this juncture. The really important thing, I think, was Walsh saying on the one hand, here's my test for rates. I need to be confident that underlying inflation is heading back to target clearly and at a sufficient speed. That's a pretty strenuous test.

And then pairing that with his language where he says, look, the summer inflation data was better, but has not changed his assessment meaningfully at the underlying inflation trend. Put those two things together. And it's telling me, at least, he's saying the onus of proof has shifted. I need more good news in order to not raise rates in September. Has the bond market already not only made up its mind, but made the move for the Fed? Well, look, the fact that the rates market went from pricing around 40% of a Fed hike in September before Kevin Walsh spoke to 57% or so right now after he spoke,

ought to guide us away, I think, from this naive idea that the market is giving some kind of clean, unfiltered read on the outlook as opposed to clinging to Warsh's clues, just like they've clung to the clues from every other Fed chair. But certainly I think the market is reading Walsh at his words. I think I heard him say, I haven't seen enough progress thus far to keep rates on hold. Now, of course, we've got more data to come, not just inflation, that that's the most important one. We've got some real activity data. We'll also get new information, further information on oil and other things that bear on the inflation outlook. So my view, again, is that September is not anything close to a done deal, but for sure it's live. Talk in my book, Christian, when you talk about oil, because here's the thing. You just heard me, you may have heard our conversation with Mike Rothman, who said, you know,

there's a lot of rainbows and dragons and whatever, meaning, we don't know what's going to happen. And the reality is we don't know what's going to happen with oil prices. And the reality is, I don't know what the Federal Reserve can do if oil goes back to $110 a barrel because fighting resumes around the straight of Hormuz. I mean, what can the... Well, as you say, the Fed can't do anything. And certainly if oil were to break significantly above $100, I think that would certainly be something.

that would plausibly tip a close call on September in favor of a hike. But, of course, what rationale for that be not that the Fed can manage the price of oil, at least not without trashing the economy completely, but rather that after such a long period of time with inflation running consistently above the Fed's target, we'd just run out of road to accommodate any more disappointments or any more impulses, for instance, from higher oil. And as I said, I think Kevin Washington has gone a step further than that saying it's not just that I need an absence of bad news. I need more evidence of sustained progress to hold fire.

Because then the opposite side would be oil prices go up enough that it does damage the economy on its own. And then we're back talking about a rate cut because we're not talking about inflation. We're talking about a slowing economy in part because the price of gasoline went up. I mean, I'm going to give you the flip side. So that's very fair. But I would suspect that the economy, which is looking in pretty solid shape right now, and Walsh underlined that in his discussion, economic growth would probably, you know, need to take a hit only if, a serious hit, only if oil was, you know, somewhere in that range of 120 to 150 bucks. I think you get the inflation worries first before you really realize the growth concerns.

Christian Guaha, Evercore ISI. Christian, always a pleasure getting your take. Thank you very much. So good to see you. All right, good to see you as well. All right, coming up, where's the beef profits? It's very rare. Get it, for every piece of beef in the supply chain to be making money.

We'll tell you which player is faring the best right now. Beef and beef prices. Stick around. President Trump turning his attention now to the beef industry in a new truth social post. the president praising farmers and ranchers, calling out the nasty monopoly, though, of big processors. President writing, quote, in order to break this powerful monopoly, with much of its ownership based outside the U.S., I am authorizing legal documents to be drawn in order to allow farmers and ranchers to be given the right to process their own food. This should move quickly.

This comes low U.S. cattle level surge, beef prices as well. Let's talk about meat and beef with Pippa Stevens, president, getting involved. Yeah, so, Ryan, the first thing here is that this is really mixed messaging as the administration tries to deal with the key pocketbook issue, of course, the high cost of beef. Now, today, taking aim at the Packers, but this follows the announcement last week of reduced tariffs for 90 days on some beef imports, which was seen as beneficial for the packers at the expense of the ranchers. The National Cattlemen's Beef Association pushing back on that, saying they are disappointed and flooding the market with government subsidized below market beef is not the way to rebuild the American Cattle Her. And that's really what's driving prices right now. The U.S. cattle herd is at its lowest level in more than 70 years, which is why we're seeing beef prices up 9% in the last year and a pound of ground beef now approaching $7.

It's rare for everyone in this supply chain to profit at once. And right now, ranchers are in a good position, as this chart from Steiner Consulting's Alton Callow shows. But 2018 to 2021 were all down years, with many still recovering from those losses. And so what that means is while the economics are telling ranchers, to rebuild their herds. The jury, Brian, is very much out on whether or not they will.

Well, they're going to do it, I guess, if they can do it profitably. They've got to have the feed. It's been drought conditions, a lot of Texas, et cetera. The president is right. Most of this industry is controlled overseas. But is anybody saying what could realistically be done? I mean, what do we do? So I spoke to one person who said there is no way ranchers and farmers

are going to build their own slaughterhouses, as the president suggested this morning. Jason announced another planet closure early. this month because they're competing. They're paying higher prices for their input, which of course is the cow. And then they have very high fixed costs. And so that's not a very good business right now. So the idea that a rancher who's already suffering from years of drought, high feed, high interest rates, the idea that they would then also want to slaughter their cow. That's not going to happen. Any sign of any consumer relief at all here, Pippa? I don't look like it.

So demand typically is seasonally weak looking forward now, given that we are now past this busy summer grilling season. So we could see a little bit of price softness there. We also did see in July CPI print. We saw a little bit of a come down for beef suggesting that maybe consumers are finally fed up with the high prices. But up until now, demand has been very sticky. Of course, people love protein right now. And they're saying that beef is worth the splurge. You know why they're fed up? Because a feed up. Feed. That's terrible. Pippa Stevens, thank you very much. I'm sorry to see. Let's get out of Julia Borson with a CNBC news update.

Brian, a federal judge today declined to immediately block President Trump's newest executive order limiting those eligible for birthright citizenship. The judge questioned the order's validity after the Supreme Court rejected the president's original attempt, but said she couldn't issue a temporary restraining order because of the way in which the lawsuit was filed. A new hearing will be scheduled so plaintiffs can again challenge it. The NYPD said that officers seized 580 pounds of cocaine today, the result of a month's last. long joint investigation with the DEA into a cartel-linked trafficking network. The department says it's their largest cocaine bust in a decade with an estimated street value of more than $10 million.

And President Trump today announced at the Johnson Space Center in Houston this afternoon that he'll sign an executive order to create the U.S. Space Academy, the first new service academy since the Air Force Academy in 1954. He also awarded the Congressional Space Medal of honor to the four astronauts of the Artemis 2 mission, the first crude mission around the moon in more than 50 years. Brian, back over to age. You're a creative person, Julia. What would the Space Academy's mascot be? Army is like the Black Knights, Navy midshipmen. You got Air Force Nick to the Falcons. What would be the Space Force name? I don't know. Well, I just see a rocket ship. You just imagine rocket ship. I'm not going to say anything about extraterrestrial. I think you're

right. I think you're right. Space Force rockets. No offense to the Houston rockets. That gets good. Maybe that should be a poll. Julie Borsden, thank you. All right, coming up, rates, rents, and real estate. Prices are high. But what do we do about it? Don Peebles is here next. Tim Cook's era is coming to an end,

capping one of the most remarkable runs in corporate America. Under Tim Cook's leadership, shares of Apple have returned 2,300 percent, making a lot of investors and employees very, very rich. Apple is a global cash flow powerhouse. And now investors are looking to the next CEO, John Ternis, who takes over next week, McKenzie Sagalos, joining us now from San Francisco.

I'm old enough, McKenzie, you're not, but I'm old enough to remember when there's a guy named Steve Jobs, rest of soul, and Steve Jobs passed away, and Tim Cook took over. It was a rough start. By the way, a lot of people don't realize that when Tim Cook took over, it was a rough beginning for him. But, boy, he showed the critics. What's he leaving behind?

And what can we expect from Mr. John Turnus? Yeah, he sure turned it around. and in his final days now as CEO, Tim Cook, is making a lot of the less glamorous calls so that John Ternus doesn't have to. Now, just in the last week, Apple has cut key jobs in Bay Area roles, reshuffled parts of its product and AI teams,

and pushed out a round of relatively incremental and underwhelming hardware updates. And this morning, another one. Fresh price hikes across its high-margin services business, including Apple TV and Apple One in the U.S. I went back and checked what I was paying when Apple TV launched. bills up about 200% since then. And of course, all this comes after already hiking prices by

20% on average across Macs and iPad. So you really do get the sense that Cook is emptying the notebook before he goes, layoffs, reorganizations, price increases, the less splashy hardware. And the payoff, of course, is that Ternus gets to take over on Tuesday at a time when he gets to be almost entirely forward-looking, right? His first major public event as CEO coming up in less than two weeks from now, that's the iPhone launch. Let's go out of PayPal because that stocks get absolutely hammered on reports that Advent and Stripe have abandoned their acquisition plans for PayPal. What's going on here? Yeah, down as much as almost 50%, 15% earlier today.

This deal was never going to go hostile, right? Our David Faber has been reporting that the two sides, so Advent and Stripe on the one side, PayPal and the other, had, like they've had substantive talks in the last few weeks. But PayPal's board wanted a number that was well above that $53 billion offer, about $60. $0.50 a share. The Stripe Advent Group has reportedly walked away. And what makes today's sell-up especially notable is that takeover speculation had been one of the best catalysts the stock has had in years. Shares have rallied 50% since June. So you're now seeing a lot of that deal premium come out of the stock. There may still be some game theory here. If PayPal stays down, that original offer starts to look a lot more attractive to shareholders, potentially putting

more pressure on the board to re-engage. McKenzie Segalo, South West on Apple, on PayPal, and more Mac. Thank you very much. More Power Lunch after this. All right. Welcome back to Power Lunch right now. Here's how the markets are trading and they're losing a little bit of steam on the tech side and the small cap side. The NASDAQ is down about 6 tenths of 1%. The Russell small caps down about 1%.

I will say this, that even with those declines that you're seeing there or listening to be safe, you're on the radio, we are still higher on the week. I mean, we had a big day yesterday, so we're giving back about a third. on the NASDAQ of what we gain weekly winners. Look at that. Natural gas up, ether, up, Bitcoin, up, NASDAQ and Dow. I mean, there's still time. We have about an hour and 10 minutes left in trading theoretically. If we really lose steam, then we're going to see what happens. So, here's some of the scorecards of the best performing market trades. We talked about it as natural gas. That is your number one trade, Ethereum and Bitcoin and NASDAQ, the stuff that we just

hit. There we go. So time now for an RBI on a first. Friday. Why not? Seems like a good time to do it. Time magazine, releasing its list of the 100 most influential people in artificial intelligence. Glad there are 100 people. Elon Musk, Jeff Bezos, Sam Altman, Dario Amadai, who runs Anthropic, all made the cut. Not surprising at all. I mean, that is, if you had to pick four names, those four are going to be near the top. But there is one name that's missing that I think is very curious. NVIDIA CEO Jensen Wong. He's not in the top 100 of that list of most important people in AI.

It's a bit odd considering the CEOs of Broadcom and Micron were included. Some random and interesting names making that list. You had Ben Affleck, Paris Hilton, Senator Bernie Sanders. I have no idea why that. But yet Jensen Wong, the guy that runs Nvidia, the biggest company in the world that is the central bank for AI as he was just called about a week ago, is not on the list. Maybe we'll make it next year. Power lunch back after this short break. All right.

There's actually a lot going on in technology with semiconductors right now. InVita had a monster day yesterday, not so much today. Let's bring in Christina Portson-Evelace and our friend Jay Woods of Freedom Capital Markets. We're going to break down the chips. We're going to break down the charts. We're going to do what they call on TV. Christina, vamping for the next four to have minutes. But this is going to be fantastic.

Jay Woods is out there somewhere. Invidia giving back a little bit. I'm not going to make too much of it. But we've had a day to digest in Vida. What are people talking about? I actually may, you know, point out that the sell-off today could have to do with the fact that the stock was under them going into the print. And you really saw a lot of hedge funds and smaller shops, prop shops, buying into NVIDIA just yesterday because they did not hold it.

So this sell-off today may be a reflection of that. There was also overnight a Wall Street Journal story talking about NVIDIA, possibly pausing their revenue-sharing deals that they just launched in July. I reached out to NVIDIA, and then they told me that that's not the case. It's still ongoing. Wall Street Journal sticking with their side of the story. So there's a little bit of a debate going on there because it's a program that they just launched in July.

The CFO even spoke about it on the earnings call on Wednesday, Wall Street Journal saying they're already getting rid of it. So I guess there's just a lot of overhang in regards to the financial engineering that's going on with Nvidia and the relationship with suppliers, customers, etc. That's an overhang for this name for sure. We talked about it a little bit last night on fast money, which is one in every $4. According to Laura Martin of Needham, the great analyst there, one of every four hyper-scaler dollars is going to Nvidia. and yet Jensen Wong was not on the top 100 most important people in AI. I did see that from Time, right? Time magazine was right?

Bernie Sanders was on there for some reason because I guess he's because he's anti-Data Center. I can't speak to that, but I think in general, the investing community, even the bears can't deny what the CEO has done for this company in terms of really putting it at the center of the AI infrastructure buildout. Of course, with every successful company and the immediate growth that comes every single quarter with it, you're going to have people questioning it. And since the balance sheet is changing, since they're getting more involved with these financing deals, the backstopping for Open AI to the tune of possibly $105 billion,

the financiers, the six financiers, even though it's going to be off the balance sheet, and it's going to be their responsibility to give cash to customers to get Nvidia chips. NVIDIA still said that they would backstop up to $125 billion of those deals. So there's a lot more risk in the near term, let's say, six to, you know, 18 months for NVIDIA once we start to see some of these deals actually come through. And I think that is something that will continuously weigh on the stock, no matter what, even if the company says they're going to see 70% revenue growth in fiscal 2020, something they've never done before in the past.

Well, you know what they say, Jay Woods, that behind every successful TV news, anchor. There is a more successful and beloved. Reporter. Contributor. Okay. And reporter. Contributor who is willing to jump on the phone at a moment. It's been a big week for the market. I don't want to make too much of it. But is Kevin Warsh doing this? Is the Fed sort of causing us to sell a little bit into the weekend? Or is it just a little bit of buyer exhaustion after what was a pretty good week? It was a pretty good week. And I think Worf's Easter eggs about the hiking got people a little scared going into the weekend.

what may happen next. But to follow up on the NVIDIA story, you know, we look at those charts and we got good price action yesterday. We didn't get a follow through. So when Jensen Wong, not on the top 100 list of the AI people, it was probably a list, Jensen Wong, and then the next 100, I would assume. But we didn't get follow through, and that's what the technicians want to see. We pushed to that 230 level that high, and we didn't get there. So now what we want to see is stabilization and not fill that gap. We talked about gaps on the show yesterday. And hold on. So next week, we're going to focus on what? It's Baby Brother and Broadcom. Broadcom, at its 200-day moving average, cannot follow through. And in the SaaS space, we had

Salesforce yesterday. Let's watch Snowflake. We talk about stocks that gapped and ran. Snowflake is going to give us some news as far as end these rallies continue. We're getting good news, but price action not following. And then we're going to talk about September all next week about being the problematic time seasonally. And I would have loved to have seen new highs from Nvidia. Now we're just going to have to wait and see Broadcom can do some of the heavy lifting parts next week. A little bit and heading into a very late Labor Day. We'll see what kind of thin market we have and maybe those results power things up.

And Christina, Jay Woods, thank you. Christina. So you know what I love yesterday? we talked about Purdue, and I saw all your friends of Purdue were watching, and you got a nice little note from the Purdue Boilermakers, which is very much like a Virginia Tech clone. Thank you very much, Christina Parsons-Nell. We have a great weekend.

Folks, thank you all for watching, Power Lunch.