Power Lunch - Power Lunch 9/25/26

Episode Date: September 25, 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.

Stock's trying to close out the week on a high note. Welcome to Power Lunch, everybody. I am Brian, alongside Contessa Brewer. Kelly will be back on Monday. The sell-off in bonds continues. The 10-year borrowing costs early today, 5.23 percent, highest in 19 years. But stocks, they don't seem to care. We're just one or two percent from record highs. Will the bond vigilantes really kill this rally? We'll ask Edgardette. So many market pollianas. What else? Energy remains one of this market's most powerful trades. Oil is up 60 percent this year. While the energy sector has, has surged nearly 40%. There you're seeing WTI at 9208.

And look at energy up or down, rather, 1.3%. Investors are really weighing here. Tight supplies, geopolitical risk, and the inflation implications of higher fuel costs. After such a sharp run, where's the next opportunity? Our guest has three energy stocks to put on your watch list. All right, folks, there's a lot to do today. And, it's just a pleasure to have you here.

Well, Brian, it's great to be here. Stocks hired today and for the week, capping and inventful week in what's been an eventful month, texting red hot. Take a look at these winners this week. You've got Everpure. The CEO was on with us yesterday, and it's up 22% week today. Datadog up 18%. Cadence design up 15%.

You're just seeing all of these stocks that we're listing here, Qualcomm, AMD, meta, all pacing here for double-digit gains this week. And Microsoft catching a bit today. It's up a little more than 3%. Big question here. Is the market piling too far into tech, or do the fundamentals support it? Let's ask a portfolio manager, Ellen Hayes and an FL Putnam Investment Management is here with us.

On set, she's also the chief market strategist. Boy, you're seeing a lot of optimism around what was sort of the dirty dogs just a bit ago. Well, I think that as we look forward into next year, there's no question that the hyperscalor CAP-X is slowing. And the big question for me is what is going to happen to stock valuations as that second derivative turns negative? So the numbers are huge trillion dollars in terms of hyperscalor capax and increasing next year. But if that growth rate slows either because they just aren't going to spend as much or because of permitting because of supply chain shortages, et cetera, then what's going to happen to the multiples?

It's such a big if. It's bigger than what if oil goes up or whatever, the impact here. So what steps are you taking now to position for the if that happens? We're looking much more carefully at valuation than we did six and 12 months ago. So as you look at calendar 25 and earlier this year, Contessa and Brian, you could put your money in anything related to artificial intelligence and the stock was going to go up. You could put your money into anything related to storage like memory or Seagate, et cetera, and the stock was going to go up. And now I think you need to be much more evaluation sensitive and you need to look for companies that are a little bit outside the core of those traditional AI plays. Well, I love having you here.

And by the way, good luck getting home to Boston tonight. from a storm coming. And I love the fact that you're bringing in a stock that I don't think I have heard recommended in like 20 years. And it's a river in Finland. Nokia. Nokia. Yeah. Really? What year is this? It's really interesting. I cut my teeth during the tech bubble. And a lot of the last couple years have been like deja vu all over again. And with Nokia, it's the exact same thing. Blackberry's been hot too, by the way. Your CEO is just on CNBC. There you go. There you go. So with Nokia, they are a sleepy company on the surface with wireless telecom infrastructure. But if you look underneath, so much of the growth opportunity in

AI hyperscalor cap-ax is related to the networking and particularly the optical networking. And if you look at Nokia's second quarter earnings, the optical networking was growing strong double digits. And they're looking for that to accelerate going forward. They have a really strong position. I'm sorry. I feel like there is that like Corning-esque in a way, right? You're talking about a company that has been around forever. Everybody knows their names, like the Cheers. Right. Right. Another Boston reference. But yet has evolved their business to where what we thought they were, right? We know the handsets from the phones back before you were born, contested. Thank you. Now it's a whole different company. They've always had a strong optical presence,

but it hasn't been as important as it is now when again, you're looking at scale up, scale across within the data center universe. And that really requires a lot more networking and more You're also looking at MCOR as one of your picks. Yes. But the confusing thing is, I mean, this is a specialized construction company that's capable of going in, building the data center, and then also has a role in maintaining it. If the CAPX is starting to be rolled back, why is MCOR still one of your picks? I think that you need to have a balance because we don't know if the CAPX is going to be

rolled back or if it will just slow down or maybe it will continue accelerating. And so this one is definitely more exposed to the thesis of AI. by CAPEX continuing to accelerate. And I think I don't want the whole portfolio made up of companies like that, but a couple names. I think that's fine. It's an inexpensive stock. And certainly you need the engineering and construction to build the data center. Is it FOMO the reason why these stocks have been, have had such bullish believers?

There's just a fear of missing out. We've seen, we've seen the markets. We've seen NVIDIA. We've seen AMD go skyrocket. And even if you think macro economics, geopolitics, geopolitics. geopolitical concerns, so the rising rate could stop the cheap availability of money and disrupt this incredible forward progress that I don't want to miss out in case it continues. So I think that forecasting earnings is one thing. That's difficult enough, and we do a lot of

that with our spreadsheets. But forecasting multiples is what you're talking about, right? And ultimately investing, if you go back hundreds of years and you study history, it's about human behavior. And I think what you're describing, Contessa, in terms of FOMO and investors worrying they're going to miss out, that's exactly right. At the same time, if you look at how concentrated the indexes are and where the growth is, then you can justify some of these stocks. I hope you get home on your plane tonight. If you end up on the Amtrak as you're driving, taking the train back to Boston, you're going to go through a little state with the longest name, Rhode Island and the Providence Plantations, a very small state. And in that state, there's a company called CVS. You're going to pass

wound socket. You're going to look over and see CBS's headquarters. That's another one of these stocks that you like because people look at RiteA and they say, well, that company, you know, was in big trouble. We know what's happening. We saw what happened to Walgreen. Is that the CVS's benefit? So CVS is definitely a value play. It's not an AI play. It's not an anti-AI play. Some might say it's a deep value play.

It could be a deep value play. But you get, you have a 2.7% dividend yield while you wait. And estimates have stopped going down, which they had been going down, for a few years. And you know how I am about looking at earnings estimate revisions. And so if you look at CVS, it's 10 times earnings. They're going to grow earnings, you know, high single digits, low double digits, and you get paid while you wait. So I think it's a decent chance, a decent stock to tuck away. Apple's one of your top holdings. I'm just curious how you're factoring in the run-up with meta, the glasses, the muse, and all of the hardware that meta is putting out that potentially

could compete with Apple. And how much money have you made in your meta position? We've done pretty well with meta. It's been up and down. It didn't look so hot several months ago, but now it looks a lot better. The thing about meta is that they are looking, it looks like that $130 billion this year, $200 billion next year in KAPX is beginning to be monetized. You're seeing it in their ad lift. You're seeing it in what the advertisers are saying about the effectiveness of the ads, and you're seeing it in the revenue growth. Some analysts are forecasting 20% plus revenue growth for the next four or five years for META. And so I think that as you look at that company, it's a risk, right? They don't have their own LLM in the same competitive field as the Frontier Labs. But they're

able to monetize it demonstrably. Will that work in the long run? We'll have to see. And yes, is it a threat to Apple? Yes, it is. Meta shares down three and a half percent right now. Ellen Hazen of FL Putnam Investment Management Company. It's great to have you with us. Thanks for coming in. Glad to be here. And safe travels. Thank you. You're very welcome. All right, we are just getting started here on Power Lunch. Ed Yardinney is here. He'll weigh in on the markets, bonds, yield, and when or if higher rates ever hit the stock market. But after the break, energy, bringing up the heat, up nearly 40% this year. Is this the golden age of energy investing? We put that question to Real Power Insider, David Crane, and you'll hear it next. All right, good time for a

Power Insider segment and few know more about all forms of energy than David Crane. David Crane was the former CEO of power producer NRG. He served in the Biden White House as one of the top energy officials, and now he's running generate capital, an investment firm focused on energy assets. We had the chance to sit down with David this week in a more informal setting. And I asked him if this really is the golden age of energy investing. The golden age.

Well, I just saw an article last week that said, you know, a number of companies that had a new 52 week low, and there were on the 30 companies on the 52. Seven of them were energy companies, electricity companies. So it seems like electricity companies are still trading as they historically have done with interest rates and high interest rates are bad for power companies because they carry a lot of debt. But so the market might be, you know, I'm not a market picker, but the market, it seems weird to me that when we're seeing the greatest demand-pulled opportunity that's ever existed in our site, we have seven companies in our sectors that are at 52-week lows.

That would seem like an opportunity, though, for the C&BC viewer and Power Insider, Reader and Listener, like you want to buy low unless the company's going to zero. Yeah, I mean, but that's it. And there are companies that go to zero. Oh, these companies are not going to go to zero. I promise there's no risk. And these are solid. I mean, a few of them are.

So what are the seven is our utility in the state of New Jersey, PSE and G. And so. Because they can't raise rates or they don't, you know, people go. crazy. Politicians go nuts. They're regulated. But then they also, we want to, we want resilient Cedar and Sandy. We don't want a 75-year-old power line in places like California where I grew up as a child. You don't want fires. And they got to spend a lot of money cleaning that dry brush. Otherwise, you're going to have fires because old power lines break and they can start fires. Yeah. Yeah. So I'm not, I'm not making any stock selections, but it does seem unusual that

electricity companies, because interest rates are important in our space. but this opportunity that exists is not something I've seen in my 35 years in this industry. I'll wrap it up with this with lower rates help, or do they matter that much to your industry? They matter, but they matter, but they matter, but they've gone from primary, the first three things that matter to below, you know, what you can achieve, you know, if you can serve this demand. All right, that was just a short clip from our longer interview with David Crane, where we talked about the cost of power, why he loves solar, and why nuclear power may take a lot longer than many people and the markets. By the way, think the full interview, about 20 minutes. It's live on our website. You can scan the QR coding your screen now at the CBC.com forward slash power insider, which is also the name of my newsletter.

It's not happenstance, Contessa, that the newsletter and that segment had the same name. That's not random. No, you did that on purpose. You're marketing genius. just genius. All right, let's stick with energy and get some more picks from your next guest, who is also named David. His name is David Anderson. He's senior equity analyst with Barclays, and he joins us on set. David, welcome. Thank you for having me. David Crane sort of implied that for a lot of stocks, they're trading well below where he thinks

they should be. He didn't name any names. It's not his job, but it is your job. So what has value right now? Well, what I think we're on the verge of is the next major upstream spending cycle. around the corner here. What's going on right now in the Strait of Hormuz is really changing energy markets structurally. What we think is really happening here, look, this is the biggest oil supply shock in history. And we think this is going to reverberate for many years. First, it's going to be energy security. It's going to be diversity of supply. It's going to be refilling SPRs. We think that's going to trigger the next major upstream spending cycle just around the corner. What happens if Trump puts a diesel export ban in place? What happens to some of these

companies, like what happens do you think to the price of diesel? The price of deal, it depends what we're talking about. What we've been seeing recently, they're talking about a 90-day temporary, temporary curtailment of exports. I think if it's a permanent export ban, that's going to be a real problem for the whole system. But I think what you potentially could see is some minor relief in the near term on the diesel side.

But really, in terms of upstream markets, it really shouldn't affect it too much longer term. So can you name some names? Where, at this point, with, you know, the potential for negotiations, with Iran to continue, perhaps that helps affect the shutdown in oil. Who stands to benefit? Well, it's a very tricky setup for investors right here. So you're seeing right now in the news potentially straight-of-harmuz is getting solved. I'm hopeful but skeptical.

But we did see a preview of that in June. That's correct. But you did see a previews back in June when the MOU was signed. So what did we see? We saw oil prices came down, oil prices corrected, stocks all came down after that. We're expecting something similar, but that's the playbook. That's the playbook because that's when you really want to own the group. I think the best name to own after all this said and done is Halliburton.

Halliburton, because, you know, I was just in Venezuela, and I could tell you, Halliburton will go a lot of places. They'll go anywhere there's oil. Halliburton's going to go, and they're going to help you get it out of the ground. Well, the reason you own is because it's a pure play on upstream spending. So a lot of the other companies in our space. That's my point. You don't care where it is.

Exactly. They're going to get paid, whether it's in Venezuela or the Permian Basin or wherever. Or the Middle East Rebuild or the deep water or a deep water, or a deep water. water inflection we see, but the real near-term opportunity for them is Argentina. That's what we think is going to be the big story in 27. Venezuela absolutely is being discussed. I think that's more of a 28th story, but right now I think it's Argentina to me is the most upside. And then another company like, which I've heard of, and I'm not going to lie, I don't know a lot about it, but I clearly need to because you're the second person I've heard talk about Solaris

energy infrastructure. But is this more of a fund or more of a company which is kind of odd name. Oh, no, no. This is a story. This is distributed power. So this is the largest publicly traded distributed power company. And what is distributed power? So this is how all the hyperscalers are going to be powering over the near term. Large scale turbines, we all know they're all on order. Those aren't being delivered to a 2030, 31. Then we have to hook them up to the grid. This is a whole new sector which has really been developed over the last really 12, 18 months. It's feeding right into it. This is all behind the meter. Solaris is unique. They have three long-term contracts with major hyperscale.

This is nothing to do with permitting or nimbism. This is all going ahead today. You're also like Technip FMC. Technip FMC. Okay. So clearly, I need to learn more about it because I... Don't worry. I did a little research.

Offshore? Yes. Okay. What's appealing about that? Well, what's appealing about this is we think in a world where energy security really matters, I believe offshore is going to be the big winner. It is the most secure barrel, if you think about it, of where is located, much less geopolitical risks.

It's also the lowest cost incremental barrel. A lot of people are not realized that. It was the high cost in 14 is now the low cost. A big reason why is TechDeep FMC. They provide sub-seat infrastructure. So this is really how you produce all of this. So we already see all this. We see all the backlog.

It's all coming. It's all going forward in the next couple of years. It's a remarkable company that just keeps getting better. And then finally, kind of to follow up on Contessa's macro point at the top, if we were to see, and we all hope for peace. Okay. I'm skeptical, but if we get peace and oil prices do fall, does that change your investment angle on Halliburton, on technique?

Absolutely not. It just makes me go forward. This is what we're waiting for. Investors need to see the all-clear signal. I mean, this is the reason why the general says out here, they're looking, they're trying to figure what to own. They just don't know when. But once you get this clearing.

By the way, can you blame them? No. Oil investors, and I love you all out there, by the way, they keep getting burned. Every time they buy stuff, oil goes down, stocks go down. They're getting oil energy stocks are now 4.5% of the S&P 500, the lowest, almost the lowest percentage ever. It used to be 14%. And I don't mean used to be like back in the 30s. I mean like 10 years ago.

So you can't blame energy investors for being a little skeptical. No, but I think they're starting to recognize there's been a major structural changes in energy markets. And I think they realize they need to own this group. They need to own energy overall. So look, if we go from 4% to just 6%, my gosh, most of my stocks are probably doubles here. David, thank you for joining us, appreciate that. Still ahead, it's not just the mega caps moving higher this week. AI is lifting a new group of software names.

Some up double digits. Sima Modi brings us the big winners. That's next. Welcome back. The AI trade is expanding from models to the mission critical software that makes them useful and secure and compliant. One of those stocks is up nearly 20% this week. Sima Modi has been tracking that stock. What is it, Sima?

It's Data Dog, Contessa. There's been this growing belief that as AI governance gains traction, it becomes a bigger topic of conversation in the AI ecosystem, that companies like OpenAI and Anthropic that both work with Data Dog will continue to lean on the cloud infrastructure player. What this company essentially does is it houses and organizes all sorts of data that is then used by both frontier labs. It also helps companies that are using open weight models to organize and aggregate data and make that data more actionable.

So you've seen some interesting notes in recent days about just growing conviction and not just data dog, but snowflake, those are sort of the two cloud infrastructure names within software. Speaking of software, guys, the other big story that remains, you know, so topical right now is cybersecurity, this whole idea that if AI safety becomes a bigger topic of discussion and a priority, as both leaders last night discussed, President Xi and President Trump, you're going to need third parties to help securitize data.

And that's why the cybersecurity rally has really picked up in recent weeks. Just take a look at the cybersecurity bug ETF, if not only up this week, but up about 20% in the month in the third quarter. That's following a 50% gain in the prior quarter. And of course, the standout name has been Crowdstrike. It is the larger cybersecurity company that is sort of benefiting from the growing customer adoption. and again, this demand for more cybersecurity tools.

Of course, this has raised the whole topic of valuation, Brian and Contessa with CrowdStrike now trading, I think, at around 181 times forward earnings. You compare that with software, which is at around 25. So that's something to keep in mind. And you also wonder, I mean, I'm thinking about it from a cyber insurance perspective as well, that you have way more exposure now to intrusions and AI power. situations and combine that with the fact that a lot of people think regulation around AI is coming and what that might do, Sima for the stock. For sure, Contessa, especially if companies cannot

rely on Washington to provide the guard whales, then the idea is you focus on the companies that can and have those cybersecurity tools. And what's interesting to see is the sort of broadening of the cybersecurity ecosystem. It hasn't just been crowdstrike, but Paula Alto, Fortinette, which focuses on providing security for agents, Cloudflare, which does something very similar, Sentinel One. So many other companies, too. And by the way, I had a story earlier this week about just the private companies in the cyber world. They're also now trying to monetize this opportunity. Bain Capital, the venture fund, raising a specific cyber fund that will invest just in the private world that has security startup. So this is one area that is certainly gaining more momentum.

Yeah, where they're headwinds, there's also opportunity. Seema, thank you. Right. Thanks. All right. Coming up, are you confused about the markets? The S&P 500 near a record high, heading for a winning week, even as the 10-year yield is at 5.2%. How? Ed Yardinney knows, and he's up next. All right, earlier today, it looked like it was going to be kind of a flat Friday of trading. But after an unconcerned, and that's key, report that I nor see NBC has verified that the U.S. and Iran have entered the, quote, technical stage of their talks, oil fell. Yields fell a little bit, and stocks popped Iran and yields specifically have been a big market

concern for your next guest so much so that he lowered his price target from 8,400 to 7900 this year, although still bullish and still bullish in the medium and longer term. He's nodding his head, so I'm going to stop talking. Let's bring in Ed Yardini. He's the president of Yardini research by question in the one also, because Kelly's off today was basically the same that I'll ask you, which is people thought 5% might kneecap the market. It clearly did not. The NASDAQ has up this month in the worst month of the year historically for the equity markets.

What's going on? I think what's going on is, first and foremost, the economic indicators have been remarkably strong, which means that the earnings momentum that we've seen in the first half of the year, which has been absolutely fabulous, continues into the second half of the year. So this has definitely been an earnings-led bull market. I'm not changing my outlook for earnings, which remains very positive. The tricky part is the valuation multiple. The valuation multiple is actually declined since the beginning of the year.

Stocks have actually gotten cheaper as the year has progressed because earnings have increased faster than the S&P 500. I think that we may need to continue to focus an evaluation multiple. On the short-term basis, yeah, my concern has been the Middle East situation, and maybe that is about to be resolved, but as you said, that's unconfirmed, and we've kind of been there, done it before, so we'll see if that plays out. That'll be wonderful, obviously. The bond yield at 5.2 percent, I don't think that's going to kneecap the stock market or the economy. The economy has been growing very strongly despite all sorts of stress tests and has passed

them all. What would? What would the yield have to hit before we start to see a cracking in the equities? Yeah, that's a very good question. I think everybody's kind of wondering, is there some bond yield at which this thing starts to fall apart? I mean, there's always the possibility that something cracks in the credit markets. It's usually higher interest rates that cause something to break in the financial markets that leads to a credit crunch, which then causes a recession. So I don't think we're in that business cycle mode right now.

But I would say, you know, we'd all start to get concerned if we got as high as six. But I would point out that nominal GDP is 6.6% year over year in the second quarter. I think as long as the bond yield stays below nominal GDP growth, we're okay. I think the economy will continue to grow. Ed, speaking of yields, the Wall Street Journal is James McIntosh, writing that bond traders maybe are just too focused on elevated oil prices. That is our bond report today. Do you think that people are, you agree, we're too focused on.

oil? No, I don't think it's just oil. I think it's also the concerns about the federal deficit, the amount of AI corporate bonds. I think it's, I think the big issue for me, and I think for the markets over the past few weeks, has been that the oil price rebounded back to $100 a barrel. And so we all came to the conclusion at the same time that it's going to be higher for longer oil prices. And again, this is a pretty tricky environment. Things can change pretty rapidly. If, in fact, it's going to be higher for longer oil prices, that means that inflation stays sticky, means that the Fed's got at least a couple more rate hikes to do, and it pushes the bond yield over 5 percent, as we've seen.

Those are all my concerns in mid-September. They've kind of played out, and I think I didn't really call for a correction in the market. I'm still using $8,400, but by the middle of next year, I don't mind if it happens sooner. I'm curious. I mean, we've seen all of this concentration in the S&F. P-500 in the top two stocks. Yes. Does that make the market right now more vulnerable to rate shocks?

Well, I think the reason the market is concentrated again is because people feel very comfortable, particularly in the Magnificent Seven, when things get a little bit unsettled. In the past, they haven't been all that interest rate sensitive. think they'd be more interest-rain-sensitive now because they're raising money in the corporate bond market. But they remain powerhouses, and that's where people kind of to gravitate. Look, I think the market will broaden out again. Once we get this Middle East situation resolved peacefully towards peace and low oil prices, I think the market will broaden out again. I mean, we have seen a sell-off in the Russell 2000, the small caps. That's usually a sign of concern

about the economic outlook, but I have no concerns about the economic outlook. I think the Russell 2000 will make a nice comeback here. I think there's still in an upward trend. And the market, you know, it's true. It's kind of concentrated back into tech and communication services. But it's the other companies

that are going to benefit from AI. It's like the shortest, like for like two months, software stocks, everyone's, they're all going bankrupt. And then now they're back to some new highs. At the top of the show, you say so many interesting things, Contessa, but something she said really caught my ear, both of them actually, which was we were sort of in that taxi cab moment in the markets, Ed, where the taxi cab drivers are like, are you, Contessa? But we're like, I just bought this stock because it's going to go up 20 percent. And people are just throwing darts and hitting winners. And there's been part of this market that I know I'm just getting old and crotchety, but it kind of makes me think, like, were we at that?

are we at that moment where it's like not dumb because I want people to make money, but that there's this thought that everybody's going to win. Is everybody going to win? The market's kind of acting like that. I mean, in AI, not like restaurants and stuff. Well, I think people that have been in the stock market have won quite quite a bit, not just this year, but over the past several years, we've, this bull market started back in October of 2022. and it's created a lot of wealth. As a matter of fact, household net worth is up to $180 trillion, and a significant part of that has been the stock market.

So we've had a very positive wealth effect on consumption, which explains the resilience of consumer spending. So a stock market going up, even if for people who aren't in it, is a very big positive for the overall economy. Ed Yardini, Yardini research. Great stuff, as always, Ed. Have a great weekend. Be well. Thank you. You too. Let's get to Brandon Gomez now for a CNBC news update. Brandon? Hi there, Contessa. A New Mexico jury found Facebook owner, META, misled users about how their data would be shared with third-party platforms. The trial stemmed from allegations that consulting firm Cambridge Analytica obtained data for millions of Facebook users and then used it to serve them political ads.

Meta wrote in a statement that it disagrees with the verdict and will keep defending itself against efforts to distort the record. The judge has yet to award damages. A powerful Noreaster is expected to batter the East Coast this weekend with strong winds, heavy rain and coastal flooding. The impacts are expected to be felt from North Carolina all the way to New England, with the outer banks, Cape Codd, Southern New Jersey, Boston and New York City receiving the brunt of the storm.

And the English Premier League's Manchester City was reportedly found guilty on all but one of 115 charges relating to breaches of the league's financial regulations. The team was charged over accusations it failed to provide accurate player financial information and details of payments between 2009 and 2018. Man City denies the allegations. That's your news update. Contessa, send things back to you. All right, rough.

Thanks, Brandon. Coming up, will AI take your job? Young Americans increasingly think it will. Next, a student journalist hearing those fears firsthand. Young workers increasingly are wary of the threat AI poses for their job prospects. A few survey this past summer indicated. 73% of U.S. adults younger than 30 believe AI will lead to fewer jobs. The number of people who believe that is up 12% from just two years ago.

According to the New York Fed, the unemployment rate for young college grads has jumped 1% in the past two years. And this past spring, the Seton Hall University newspaper asked students about their fears and difficulties entering the job market. John Ford is exploring these issues in his new special innovation lab, which airs tomorrow at 4 p.m. Eastern and John George, joins us to discuss as well. John? Thank you, Contessa. I've got Michaela de Lorenzo, the author of that article at the Cetonian and our own Steve Leesman, who is in the Innovation Lab special. Thank you for that, Steve. Going to be great. Michaela, I want to start with you here because you are the young worker soon to be that

we are talking about here. Tell me, I believe you started college right around the time when AI was gaining steam. It probably really burst onto the scene. end of high school for you. How much is this driving the conversation right now, as we're looking at muse and all these things that are able to do jobs, how much of a concern for younger workers? Yeah, thank you so much for having me. I think AI is really just changing the motivation that students have going into the job market. It's changing the hiring process, how people are formatting their resumes, and just overall how students are approaching life post-grad. Well, Walter Isaacson, who's famed biographer and student of technology as well as professor of innovation

as part of this special as well. Here's what he had to say about what's perhaps not going to change with this wave. Take a look. This new wave of innovation will disrupt the way we work, but I am convinced that like every other wave of innovation and technology, it will not actually reduce the number of jobs. It will not destroy jobs in the aggregate. It'll just change the nature of the way we work.

Because as you know, John, technology increases productivity by definition. And if you increase productivity, you have more wealth per capita. You have more demand. You'll have more demand for things to be done. Walter, in a way, Steve, acuing your blob thesis of the economy and how it's not zero sum, even in this AI case. How is this economy perhaps different from some other cycles that you've seen and watched, maybe even as the Internet was coming into vote?

Well, first of all, Walter's a super smart guy, but I wish I had the confidence in his conclusions that he has. I don't think that's manifestly true for every job. When you look back at the history of technological innovation, some jobs are wiped out. You know, we can look at the horse and buggy. We have a piece coming out next week about AI. women in the workforce. And there were telephone switch operators that used to go, Murray Hill, 34, 2, 1. Guess what? There was a little thing that happened that they didn't

were needed anymore. Walthor would agree with you. Hens of thousands of women lost their jobs. He didn't say the same jobs are going to be around, just that there will be more. Right. It could be more of them, but they may be different. And the problem you have for some people is that they're not trained for those next jobs. And so a group of people could lose their livelihoods now. And then the next generation will train for them and be capable of but there are also people for whom right now they're able to do a certain set of skills. AI takes the lousy ones away. They have higher value added jobs.

What happens? Their actual value goes up in the workforce. Michael, to us, this is all theory. We've got jobs, at least at the moment, at least today. So to you, this is a really pressing issue. Why went out and did this special? And I actually even talked to a guru about this. You'll see that in the special.

who's like dismissing the whole idea that we should be focusing so much on just work and jobs as part of fulfillment? How is the process you think different now for how you're thinking about value, what classes you take, how you even get to know people to network instead of expecting that LinkedIn or an email sent out is going to do the job? Yeah, well, I think first of all, like going with classes and internships and the normal steps that you would take, to get a job after college, that's just completely changed. A lot of the students that I spoke to for my article said that they were even having trouble just getting internships because of the way that AI has kind of taken over the hiring process

and reviewing resumes and applications. So it's really just changed how motivated students are going into life post-grad. And I think a lot of students are taking, you know, extra steps in college to try to set themselves up for success after, you know, they graduate. Well, now you're inside the doors at CNBC. You're not just the number. You can run around a little bit, you know, meet Brian Sullivan and see if you can get a leg. Well, you're sitting next to Steve Leasman.

So to go back, Steve, to the economic angle on this, right now, economic mobility, job changing is really, it's pretty stagnant. When you look at job openings, when you look at people leaving versus coming in, with interest rates going up the way they are. and that pinch happening. In part because of AI and all that investment. Yeah. Look, it's a very uncertain time. And I do not blame 20-somethings for being anxious about the future. I also think they should be hopeful, right?

Because there were times when the world looks like it's a very uncertain place and it ends up being a beautiful and magical place. And there are incredible opportunities. I think business might be making a mistake. to be leaving hungry, smart, ambitious, and energetic 20-somethings without jobs and outside of their companies. Because you know what? They're going to be outside their companies competing with those companies. And you may not want to see what they do outside of your company because they may be eating,

they may be eating your lunch before too long. There's a lot of hope in this special. Who I do not, who I think I'll be working for someday if I'm still hanging around. And there are executives who very much agree with you. who are hiring more young people. That's smart. McKeelah, thank you. And best of luck, Michaela, it's all going to be good.

That's what Walter said. In these stories like Michaela's and how AI is reshaping the labor market and society, you can tune in tomorrow 4 p.m. Eastern for our new one-hour special CNBC's Innovation Lab. I will set the alarm. Thank you, John. Thank you, Steve.

Thank you, Michaela. Coming up, our stocks of the week, two names that caught our eye, and maybe it should be on your radar. Well, welcome back on an update on the negotiations, or reported negotiations between the United States and Iran. Iranian state media refuting the report that talks between America and Iran have entered a technical stage. Now, when that report first came out, stocks did pop, oil prices fell, but they are not really reacting. But again, people inside of Iran, as I've said ad nauseum, and folks, I know you're sick of me saying it and sick of me posting it,

but the reality is there are multiple parties inside of Iran vying for control. Some people are saying one thing. Others are saying something else. And that's basically what happened apparently again today, because ultimately Contessa in Iran, the people that have the weapons, the money, the power, they're going to be the ones that have the negotiating authority. So we're back where we were to wait and see what's actually happening in terms of negotiations, ending the conflict, and reopening for real.

Well, putting, I can just say this, speaking with Gulf officials this week, a lot of them are in town for the United Nations. no names, but I will say that every leader in that region to a person is frustrated that the United States put anything about the Strait of Hormuz in the memorandum of understanding because they believe it gave Iran, and Iran believes this, implied power over something it has no power over. Well, let's make a turn here and look at some of the stocks of the week. The eyes on insurance right now. Look here, you've got week today, Neptune insurance down 7%. This is a flood insurer the biggest after the federal government.

All states down 8.5%. And look at Goosehead Insurance. It's down almost 17%. In clement weather, of course, doesn't help the sentiment of investors. You've got a couple massive storms, hurricanes heading for Hawaii and then the North Easter this weekend. But what's really weighing on some of these stocks is, will AI actually undercut and help people shop around, especially for car insurance?

insurance and home insurance will help them shop for better rates. And when that happens, you enter a soft market where the insurers are competing with each other. Because the bots, like we talked about, they can haggle for you. That's right. Lower my car insurance. And we've seen, and a writer for the New York Times talked about using it for dental insurance. Business Insider has someone who's using it for car insurance and saving on car insurance. In travel insurance, you have this, you know, you can go to Squaremouth and compare rates and coverage while you should. Well, listen, Northeaster is a big storm. Hawaii, thinking about but I will say this. On a positive note, did you know, first time, and I'm going to jinx it, I know it.

First time in 112 years, there's been no Atlantic Ocean hurricanes. And the season isn't over. It doesn't end until November. I know, but up until now, we've never had a year since 1914 with no Atlantic Ocean hurricanes. And you know what makes up for that? All of the tornadoes and the hail throughout the country, it's a very significant cost for insurance. I'm just trying to be positive. Okay. Well, just trying to like say something good. Our friends in Florida are, this is good news for them. More power lunch right after this break. I'm going to wrap up the show with our stocks of the week and some other commentary.

And I want to, my stock of the week is Moderna. Madonna's really been kind of a quiet rocket. Okay. Moderna today hitting a new 50-week high. It's up 29% this week. It's up 41% this month. And it's up almost 800% from its lows. It was at $24.00. a share in November of last year, not even 12 months ago, now it's at $198. A lot of hope and optimism around an experimental cancer vaccine. Put the term vaccine and cancer together. You got my attention. You've got investors attention. Moderna, MRNA, the ticker, soaring, best performer in the S&P this week. I want to take a look at gaming stocks now. You've got Draft Kings and Flutter, which have been, I mean, they're up today, but under pressure, like quarter to date down, flutters

down 20%, draft Kings is off 15%. And there have been these headlines coming through the New York Times reports that Draft Kings is using AI to target gamblers likely as to lose. Look, I talked to the company today. They said, this is just a misnomer. It's not true.

The Massachusetts Gaming Commission is reviewing it. They want to talk to Draft Kings and figure out what's going on. But here's what Draft Kings tells me. Look, do we use AI? Yes. In fact, I talked to Jason Robbins about that

for the CNBC Sport Podcast. But what they say is it's like what happens in marketing 101. If you only bet on the Packers during the football season, we're not going to serve you. Why do you got to bring that up? We're not going to. You know I got destroyed last night. Let me finish. Let me finish this thought.

We're not going to serve you a hockey promo. That doesn't make sense. Do you want your customers to use your product more? Yes. Do you want more customers to use your product? That is the business. They're in the business of keeping people engaged. I will defend the industry.

I will not defend the Packers. who I got destroyed on last night. My high school football team could have put 31 on that defense. Anyway, I'm all worked up now. I'm still with you. She's a Packer. They're my second team behind the Chargers who are even worse. Anyway, don't most gamblers lose?

I mean, that's why these companies exist. So if you're targeting, they're just targeting all gamblers. It was sort of like, you know, do you target marketing to people who may lose their bet? Yeah. Yeah. Like anything having to do with the Packers last time. At any rate, we may see more of this coming up. You know what?

It's a pleasure. Thanks for watching. Power Lunch, everybody.