Power Lunch - Semiconductor stocks keep surging 4/24/26

Episode Date: April 24, 2026

Tech powers Nasdaq, S&P 500 higher. X-Energy goes public in largest nuclear company debut ever.  And what would a Kevin Warsh Federal Reserve look like? Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Can anything stop the momentum in chip stocks? Welcome to Power Lunch alongside Steve Leasman. I'm Kelly Evans. Brian Sullivan will be back on Monday. The semiconductors are trying for a record 18th straight day of gains, powered higher today by a blowout quarter from Intel. It's lifting the sector, record highs and AMD, arm holdings, Terodyne, applied materials, micron, and more. And this list sets up for the next test for the rally

as we get quarterly results from the tech giants next. Plus, Kevin Warsh, Donald Trump's Fed chair nominee, his path to the Fed. The Justice Department will end its criminal investigation of chair Jerome Powell, potentially clearing an obstacle that has stalled Warsh's nomination. We'll game out what the Fed could look like under Warsh with the Washington Insider. And the next generation of athletic intelligence and new AI, a new AI powered app will put pro-level biomechanical analysis and personalized coaching right on your smartphone, power player four-time World's.

champion, world series champion. I can't believe this, Kelly. What? Joe, Your Honor. I'm freaking out on this. Hope you're freaking out too. He's going to be here on how this technology could change. Athlete development and talent evaluation. We have a lot to get to. Let's begin with the next big test for the markets. Next week is the busiest week for first quarter earnings with a third of the S&P set to report, including five of those MAG-7 members, Apple, Microsoft, Amazon, alphabet, and meta. Investors are looking for proof. These huge gains in tech and chips are backed by fundamentals, not just momentum. Our next guests own the biggest names in the space. So let's ask what they are going to be listening

for. Here with us on set, Joanne Feeney is partner and portfolio manager at Advisors Capital, and David Katz is CIO at Matrix Asset Advisors. It's great to see you both. Joanne, just kick things off for us. In terms of your broad positioning, how much is Mag 7? What do you think of what's going on with the chip stocks? What else are you, are you excited about or worried about as we go into next week? Yeah, Kelly, you know, there's a lot of good things happening in the tech space. And the AI buildout in data centers is continuing to be powered by the vast demand that's out there. We know that there are continued to be shortages in the chips and in the data centers. We're seeing these demand numbers coming out of the big

providers, the AI model providers and the application providers. But perhaps more importantly than that, we heard from Texas Instruments this week. And they're seeing a massive increase in demand, and not just on the data center side, but also in their industrials business, in automotive, which continues to be strong, we are seeing the power of AI, and I think we're going to continue to see it for many years to come, expand the need for capacity and smart capacity. And so we're going to see not just the growth in the NVIDias and one of our favorites, Broadcom, which we've owned for many, many years for our clients, but also, you know, AMD, Texas Instruments, and a lot of other chip suppliers.

So it's a very broad-based growth in the technology space. it's likely to power the economy as well as investors' portfolios for many years to come. And, David, we were just talking about kind of GPUs and CPUs and how CPUs are now this next wave of demand with Gil Lurie at last hour. But I think what it tells people is that there is such a shortage of components and kind of the supply chain. To quote him on this, he said, the biggest question for next week is going to, he said, he called it the biggest earnings day ever on Wednesday. He said, how quickly are they building data center capacity? Basically, what investors in the market want to hear, kind of what this hangs on is, how quickly can we bring more and more and more of these data centers online? And that's in some ways a political question, as there's some state pushback, but a question the whole supply chain has to answer.

But the short term, the companies are trying to build out as much as humanly possible. It's going to take years before we see exactly how quickly they're coming on stream. We own a lot of technology. You know, technology's had a great run. We like technology. We're less enthusiastic about it today because it's had a 20% run in the last. month. So we still like some names. The one that has lagged the group so far has been Microsoft. We think if you have a 12-month time horizon, Microsoft will get its act together. We don't have

a great sense on next week, but we think they'll do fine, and we think the stock easily has 30 percent upside, and it's tougher to say that for about a lot of technology. Well, especially if we're talking about a CPU cycle, and Gil was saying they have data centers full of CPUs. I mean, Microsoft and the CPU are closely associated, and maybe that could be what powers them. Joy, and you were looking at other software names, too. Yeah, I think that people have overlooked the software space and are very fearful of what AI might do to the software space. And I think that a lot of that fear is likely to be misplaced, but one has to pick and choose. It's clear that AI-based coding can make competition perhaps ramp up.

But what people misunderstand about software companies is that their moat was never writing code. Their moat was solving problems and solving problems that are complex that involve integration with other software solutions. So, you know, you've got to look at the companies that have the proprietary data that have well-integrated solutions that work with other applications. That's going to be very hard to replace for AI. And yet all the stocks have traded down as if they're going out of business in five years. And so there's a lot of opportunities for investors in the software space. What's your favorite one that's had the, you know, what kicked out of it? Yeah, you know, I think that certainly the big players like Microsoft are very well positioned.

It's more 200 diverse because it has the cloud. But if you look at a software-specific name, look at ProCore. ProCore makes software that does HR, it does financing, it does project development. They're in the construction space on the commercial side, and that's a space that doesn't have a lot of software support. One of the knocks on software is that what they did was, here's our form for your company, now mold your company to my form of my software. That's true. It seems to me that any competition with what AI offers is going to require higher cost. for the software companies, less standard standardization.

Is that a problem for these companies? That's a really good point. And that was one of the pushbacks I got when I was talking about this, is that, oh, software is off the shelf. But what AI allows, and what people are forgetting is that the software companies themselves are adopting AI. They're adopting AI in a way that can make their code easier to mold, in your words, to the more specific, more unique needs of every company

without them giving up all the proprietary data and all the integration with all the other software. So the fact that folks are forgetting that the software companies themselves can make use of cheaper, more efficient, quicker coding is something, again, that just overlooks the power of these software companies. Is there anywhere else, David, that you're looking

in the software space? So we're looking at the whole group right now and it's difficult to handicap the winners and the losers. So we're trying to find companies with niches that we don't think AI is going to take over, but rather they'll be a beneficiary. So the one that we've started a position in recently is into it.

which also has been maimed. We think that a lot of the stuff that a cord could do, you don't want to provide that information publicly. So a company like that, Accenture has been creamed over the last year. We think that's down to a level that if you have a 12-month time horizon, you should do pretty well. And ADP, which is a huge employment company, employment payroll services,

is being valued as if everybody is going to start to do it themselves. We just don't think it will. Again, we're starting very small with these names, but we do think you can start to look around, try to pick the companies that aren't going to be knocked out of the box where it really can be commoditized. All right. Let's go from that to some of the high flyers today in the market, the likes of Intel. It has the whole chip sector ripping with a semi-ETF on pace to extend that record win streak. So from 18, I guess, to 19 straight. I don't even have ever had 19 straight.

Intel is on pace for its best month ever, up over 80%. Christina Partsenevilus has more at the NASDA. Christina? Yeah, you're right. Semiconductor stocks are really just in the midst of a historic run. To your point, the stock's ETF right now is up 18 consecutive days, so that's never happened before. What is fueling it? You had strong results from Texas Instruments earlier this week.

We can't discount that. The stock jumped about 20%. And then just yesterday afternoon, Intel really helped drive the latest leg higher. Intel's earnings beat was a positive sign for the one sleepy CPU market that Kelly just talked about it. It really matters because as AI workload shift from training models to actually running the AI agents and executing tasks, what the industry calls inference, CPUs are just becoming a critical piece of the puzzle. And so that's why Intel wasn't the only winner today.

Rivals in the AI CPU chip space, including AMD and arm holdings, also got a boost, and not just any boost. Look at that, 14% for both of them. Invidia, also on track for a record close, still up almost 5%. And even one of the weaker names than the SOC, a SOX ETF that would be Qualcomm, it's jumping almost 11% ahead of its own earnings next Wednesday.

The bottom line, this rally is really underscoring growing optimism around the AI megatrend, even as investors way concerns about just the sheer scale of spending on AI data centers. Thanks, Christina. Let's get back to our panel. Guys, I cut my teeth as a cub reporter covering the real estate boom in Florida. And real estate was going to go to the sky, the buildings were going to go to the sky, everybody was building, and then it all came crashing down. What confidence do you have that we get this right? that there's this huge, massive investment.

Everybody makes money and that this is not some kind of craze going on. Well, there's always risk, right? And some people used to look at the dot-com and they overbuild of fiber. And they were wondering back last fall. They overbuilt everything. Right, whether that's what we were seeing. And so a lot of these stocks sold off. And what we're seeing now is a recognition that, no, we are actually having proof now come up,

that people are actually using AI. And we're seeing it so much in the companies that are providing those AI models, but also the spillover of the creation of more data centers. Look at Oracle. They had to be brought on board because the other providers didn't have enough capacity. And then we're seeing the run rates of revenues from, you know, anthropic and open AI going up, right? So we're seeing the demonstration. And we're also hearing from companies outside of the tech space, in industrials, in medical devices, in pharmaceuticals, right, adopting AI more and more for their own product development or their back office, certainly financials. So we're actually seeing proof now.

And I think that's what's giving people confidence that we really do need these data centers. We don't know for how many years this is going to go on, but we know it's likely to be a number of years. David, you want to take a shot with that? So we think that the data sender buildout is going to be used. There is unlimited demand right now. And the companies like Google and a Microsoft that are talking about not having nearly enough capacity, these are really smart, long-term players. There's going to be this big build-out. The flip side is, we are a little bit worried that some of the stock prices and the semiconductors are getting well in front of themselves.

So we own a lot of companies, but we'd not be putting new money in to these rallies. 19 days in a row, we think it's ahead of itself. We think at some point there'll be some sort of pullbacks. There will be some disappointments during this turning season. And I know, David, you often like to lean against, you know, the title. Is that a phrase, lean against the tide? Where else that I think about the defense stocks on a nine-day losing streak, or we haven't talked a lot about financials or the consumer?

No one's really that excited about consumer names. Is there anything else that you're looking at that you're a little bit more excited about? Medical products have been doing well business-wise, but the stocks have done poorly. So we think there are opportunities there. Medtronic, very good company, has an activist, yet the stock is at its yearly lows. Thermo Fisher had a very good quarter yesterday. Increased guidance, but the stock was off about 10 or 15%. Wow.

We think that's a really good company. Normally sells it 25 times earnings. It's at about 18 times earnings. We think AI ultimately will benefit them and you're buying something that's out of favor. price, very good prospects. Kelly, I love the way this thing keeps looping back on itself. We need GPUs. Oh, wait, Christina just said, oh, no, we need CPUs. Right? And then the GPUs, we need memory. Oh, we need memory. That was the old thing, right? And now Joanne's idea that maybe, you know, we need to think again about software and software using AI. It's like we go forward and, oh, it's

the new thing, and then we've got to go back and do the old thing. Maybe it pulls the old thing along, even to the point about medical devices. You know, at some point doesn't AI kind of help those businesses on the margin. I can't imagine it displaces that. It absolutely should help a thermo fissure. But when people get bearers, they say, okay, AI is going to be so good, people aren't going to test it. Doesn't make sense. Thermo fisher will be a beneficiary. Yeah, like I've used the chatbot to help fix a dishwasher, but I wouldn't, you know, avoid a knee replacement or so. Right. You know, because of the utilization of that. Somebody's going to sit here one day and say, you know what, the plumbers. We haven't thought about

the plumbers in AI. No, this is a real thing. I was having my dad was at a big conference this week, they were all saying, you know, we've been using AI to do a lot of stuff around the house. Everybody says you have to go into the trades in order to not have your job get eliminated by AI. Till. And that should guide portfolio management. So one of the strategies I manage the advisor's capital is our balance strategy. The equity side is designed to be somewhat conservative. So you don't want to just be in tech.

You want to think about where, you know, where tech is happening. But you also want to recognize there is some advantage here for certain pockets of the control. consumer. Which is quickly, what would that be, though? Oh, look at a T.J. Max. Yeah. They're good in a good economy and a bad economy. Look at a William Sonoma. Affordable luxury. Right? That's the segment of the consumer that's doing well. All right. If you say so. Thank you, Joanne Feeney of Advisors Capital Management. David Katz of Matrix Asset Advisors. The Justice Department dropping his criminal investigation. What does it mean for Warsh's Road to Fed Chair? More on that next.

Welcome back with the Department of Justice officially dropping the criminal investigation to current Fed chair, Jerome Powell. This likely clears the way for former Fed board member Kevin Warsh to be confirmed as the next Fed chairman when Powell's term expires on May 15th. So what can investors expect from a Warsh-led Federal Reserve? Joining us now to provide his insight, Mark Spindell, the chief investment officer and co-founder of Potomac River Capital and the senior advisor at FM Investments. Mark, thanks for joining us. Pleasure to be here. Thanks for having me. So before we get into this, the Warsh Fed, I want to just, since you've written this book,

the myth of Fed independence about Congress's relationship to the Fed. Is it fair to say historically it was up to Tillis to assert Congress's authority over the Fed and take it away from the executive branch? Is that how you would put that into historical context? What just happened here? You know, I think Congress played an important role. Jay Powell also called Congress to action when news of this investigation sort of broke a couple of months ago. I wouldn't say it's foregone that the executive, the president has this kind of authority.

He appoints governors of the board. Obviously, every president tries to put their imprint. War spoke clearly about sort of earlier forms of presidential pressure. But I think in this case, nothing could move forward without Tillis' acceptance. And we also know he's told us that he spoke for many of. other Republican senators. So it wasn't going to happen and, you know, trying to kind of handicap the decision that the president had to make. He could get the Fed chair he nominated Kevin Warsh, or he could continue to try to prosecute this particular case against Jay. Mark, let's talk about

the Warsh Fed and how it might be different from the Powell Fed. It seems to me when I look at the forward curve of the futures market. There is no rate cut built in from Kevin Warsh's Fed. Almost nothing. You only get to 50-50 by July of 2027. And you can see that looking at the probabilities. You can see it looking at the two-year. Is the market underestimating the extent to which Kevin Warsh could be successful in bringing down interest rates? I mean, first of all, the market didn't really know if and when Kevin Warsh would move through confirmation, but we've seen a steady kind of increase in hawkishness from the current FOMC, right? We saw that as far back as January. We've seen Chair Powell talk about some members

who were sort of moving from a sort of possibility of easing to sitting pat, and I think we'll hear that from the committee next week. In other words, the last meeting for Jay could wind up, really, with a symmetric bias. I don't think they're fully there yet, but I think there will be some some more members who feel that way. So first and foremost, the market is really reacting to kind of normal communication policy. Kevin certainly spoke about, and your previous guest touched on the innovations in AI. You were at the press conference in March, Steve, when kind of Jay pushed back on the idea that this sort of uptick in productivity and the sort of enormous innovation from AI was going to lead the way to less inflation and lower rates. I think Jay was sort of pretty clear

in saying he just doesn't believe that yet. So, you know, it remains to be seen. Warsh has to get through the confirmation process and sort of be sworn in for the June meeting. But I think when he does, he may be looking at a symmetric bias. Mark, hang on a second because I want to get to the bond market. The two-year yield, which closely tracks changes or potential changes in monetary policy, is lower as traders price in this potential for a Worse to become Fed Chair and push for interest rate cuts. Let's go to Rick Santelli in Chicago with how he's reading the bond market tea leaves.

Well, I think obviously what the DOJ did was definitely the catalyst for what's going on in two-year. Both maturities, twos, and tens are down for the day, but they're still both up for the week. I disagree with a lot of what is being said. I think that one of the big issues regarding Warsh is the balance sheet, and you said something very important, Steve. You can't even notice any difference in the easy mentality built into the market's assessment of the Fed until July of 20. July of 27. Heck, by then, Greenland might be a state. So much could happen between now and July 27. So I guess what I'm saying is the balance sheet is a tightening process to wean it down. That's something he's talked about. No matter what many believe he may have or may not have

with the president in terms of a quid pro quo, I think he's a smart guy and he understands the Fed. And a lot has changed since some of those eases. And I really think that the issue for him will be dealing with a committee and dealing with stagnant inflation readings that may be boosted by what's going on in the mid-east. And if you guys can run chart number two, the one-week chart of twos and tens, Steve, you could really see on this chart that the two years starting to break down a bit. And if you were reading every tick as the headlines came out, it was definitely with regard to opening the process for wars to get in.

There were many that were nervous that was going to get messy. As far as what he may do once he's in, I think the Fed Fund futures market's spot on. We're not sure because we don't know if the data in the world and the economic landscape will look like as we move forward through time. Rick, thanks very much. Have a great weekend. And let's go back to Mark Spindale. Mark, we didn't talk about the balance of because I just didn't get a chance to ask that question yet. I was going to get there, although roundly criticized for Rick for not having done so. All good.

let's talk about that. Do you think he's going to be able to bring down the balance sheet and by how much? And what kind of effect might that have on markets, on fixed income markets, along with the stock market? So nominee Warsh has been very clear that he wants a smaller balance sheet. Certainly up until some issues in the repo market and funding market, the Fed was definitely moving in that direction. I think it's somewhat in his control to shrink the balance sheet. They need some deregulation sort of moving forward through Treasury. and obviously the Fed's own sort of regulatory power.

But under a Warsh sort of led Fed, we are going to get less balance sheet. We're going to get less communication. Remains to be seen whether we're going to get less inflation. I would point out, you're right, he can do some of that, but all of it he needs either the Federal Reserve Board for deregulation or he needs the FOMC for lower rates. I continue to think that Warsh puts the balance sheet forward or reducing the balance sheet as a solution to a problem that doesn't exist.

When I look around the markets, I just don't see the balance sheet creating a problem. Yeah, and I think it was difficult to untangle from his testimony this week exactly which parts of the size of the balance sheet he was nervous about. Is he worried about lender of last resort, 13-3 type lending? I doubt that. Is he sort of worried about liquidity in the repo market? it. Again, we saw the Fed stop its shrinkage of the balance sheet in response to sort of needs from the financial sector. And that's why, again, it's going to be up probably to his colleague,

Mickey Bowman, and the sort of deregulatory efforts that she and others in the executive branch are trying to put in place to see how small that balance sheet could get. Mark, thank you so much for joining us. Pleasure to talk to you this afternoon. Great to see you. Thanks so much. Mark's from Potomac Advisors. Kelly. Great voice on that. Take a look at shares of X energy, that nuclear company that debuted on the NASDAQ today. We did a full report about it with PIPA yesterday. And we're looking at about a 21% increase to its, the open price was 30, let's say. And so that's an increase. Will more follow after this reception. We'll talk about that after the brain. X energy is surging on its public debut to make it the largest nuclear company ever to go

public. Let's bring in Pippa Stevens. Okay, so Pippa just walk us through this. What did it price at, it opened it 30, so we're a little below the open price for the public. Yes, so the initial targeted range was $16 to $19 per share. Then last night, they upsized that, thanks to strong demand. They ended up pricing at $23 per share. Then today at the open, they opened at $30,11, surging more than 30%. They got as high as $31,33, and now we're right around $27. So a gain of $17.5%.

So maybe a little bit above where the company would ideally like to see the price trading today because you never want to think you left money on the table. But they still raised more than a billion dollars. Guys in the back, can we see the two-day chart on this? So we see the open relative to where it is right now. I love the tick. Don't get me wrong. But if we can see the two-day chart. Raised a billion dollars. Ken Griffin, the founder of Citadel, is doing quite nicely, a hundred million personal investment on this when he's set to gain about 300 million. We could re-litigate, Pippa. I encourage everyone to go back and watch our segment yesterday. Stephen and I's thoughts about the nuclear prospects here. Or we could talk about, and maybe we should talk,

about what's going on in the straight of more moves. And maybe this is, you know, so this, the market has decided that the issue is, I don't want to, Steve, maybe I'm putting this too strongly, that the issue is effectively settled. But it is far from settled. And so what do we know at this point? It is far from settled. And it's really interesting to talk to people within the industry and then talk to more generalist people in the market. Because there is a very wide disconnect with everyone in the industry saying, this compounds daily, this is getting worse and worse.

And this is not going to be solved anytime soon. We're starting to see some projections of people saying, you know, months by the end of the year, the timeline just keeps getting pushed out. And J.P. Morgan had a really good recent analysis today that's getting a lot of pickup here. And basically their point was that the supply shortfall is now so large that the only option to balance this market is demand destruction. And so typically the four levers are first we see spare capacity. That's not an option this time around because Saudi Arabia and UAE had that spare capacity. And that is behind the blockade in the Gulf. So that wasn't an option.

Then you have inventory draws, emergency releases, and finally demand destruction. And by their math, stay with me here, we have lost 13.7 million barrels per day. We've seen inventory draws of 7.1, demand decline of 4.3. That still leaves us 2.3 million barrels per day short. And so what they say is that demand destruction will have to come from the U.S. and Europe, and that means higher prices. Okay, I got a problem here because I'm looking at the IEEA, sorry, EIA, which is the U.S. data. and I'm going back to, I don't know when, wherever I want to go back to, I see no production response to the United States.

We're still at 13.5 million barrels a day. And I got an armada of tankers coming to the United States to fill up. They're going to fill up a million barrels a day. Wow. An armada? An armada. A flotilla, an armada. It's a flotilla mater.

It's unbelievable. It's so big. There's more than 70. It's a mega flotillamata. That's right. So there's more than 70 VLCC's. That's very large. On their way.

Yes. On their way. And usually, usually at any given time, it's 27. So this is from Kepler. How many? What's the number now? More than 70 compared to 27 typically. These are thirsty, hungry VLCCs.

They carry two million barrels of oil. So that's a lot of oil. Yes. But before we start sounding the alarms here, there are limits for our exports because of infrastructure or capacity. issues. So, you know, last year we exported on average call at 4 million barrels per day of oil. Maybe we get up to 5.5, 6, but after that, we are tapped out. There's not enough infrastructure. So it's not like all of a sudden, all of our production will increase. But to your point, Steve,

we're not seeing the rate count actually go down. We're not seeing a supply response. And we probably won't see a big supply response because look at the shape of the curve. So we're reshaping global oil flows. 70 shipped. Temporarily at least. It's 15 extra days around the Cape Horn. It starts temporarily. These poor sailors got to go around and back around. I also think about the cost of the fuel to ship that because then you can't just look at the price of oil anymore. You also have to

look at the transport. You know, the money that you're not making when it's in round and not as its end user and the trading. All of these things, I mean, just the market is being physically reshaped. There's no going back to people. The point I wanted to reach to get to, Pippa, is whether or not you take whatever

it is, a million extra barrels out of the U.S. Doesn't there have to be a U.S. price response as a result of that? We're talking about 14 million barrels on all of these ships if that, I mean, yes. Well, what Pip was saying is that you can't fill them up even if they wanted to. Not every day. Not every single one. Not consistently at that level.

So the constraint limits how much they can take and how much. But there is this at least, what did you say, extra million barrels a day that can be taken out from the U.S. Doesn't there have to be a supply response? It is that in the market now. Well, so what happens is that won't necessarily translate to what we see on our screen. Because if you think about it, if there is a limit to how much we can export, then there is a limit on how much people will pay domestically. But then if you talk about the traders in Asia or other nations that want that oil, it's maybe the middleman that might see the most increase here. Because there is an ultimately, there is a ceiling on U.S. production.

But then you also have to think about the fact that all of our oil, you know, or a lot of it is exported, I should say, from the Gulf Coast. And you look at California, they're not connected to the rest of the U.S. via pipeline. They're called a fuel island. They're importing from South Korea, which is now curbing their exports. So the main point here is that these, just because the U.S. is the world's largest energy producer, these are global markets. This is a fundable commodity. And also, we are a net energy exporter, but we are a net crude importer because we are exporting a lot,

but we are also importing those distillate barrels, the distillate barrels we need. We have to go, but here's a fun fact that the Port of Houston just issued a new rule that allows the tankers to come in at night. Wow. Now, I think this was in the works beforehand, but it's going to be helpful in terms of the ability to fill some of these things out. But a small but consequential news item like that tells you.

It could matter. This is what's going on in order to meet the need. Absolutely, the flotilla is coming. Winter is coming. I wonder if they can send someone to feed all of these. Do you enjoy coming out every day and being grilled by us on this stuff? I want to go see the flotilla. That's where I want to see the flotilla.

That's a great idea. Pippa, thank you. Coming up, how do you want to position yourself as market momentum picks up and mega-cap tech earnings begin? That's after the break. Some strong moves today. The NASDAQ up one and a half percent. The S&P is higher by seven-tenths. All of this on optimism that peace talks between the U.S. and Iran will soon take place in Pakistan.

And it comes after the president announced that Israel and Lebanon agreed to extend their ceasefire by three weeks. Geopolitics aside, next week we get earnings, the busiest week, in fact. And there's a Fed decision on interest rates as well. The Fed reports on Wednesday. Yes. How should you position amidst all of that? David Bianco is CIO of DWS Americas. You know, we were saying something a moment ago, David, I actually want to pick up on here. And I was saying, imagine if we didn't have AI. And we'd be still for years talking about the pandemic unwind and all these energy crises. And instead, we get a new, exciting growth story, talk about maybe a little too exciting. And you said something so profound. And you said it's an innovation-led economy, not a consumer-led economy.

Sometimes we talk too much about 70% of GDP. But that's not what leads the economy, right? Anyway, over to you. I've been talking to you and Steve for a long time. And the S&P 500, it's not about the U.S. economy or the consumer. It's global. I've said that for a long time. But most importantly, it's technology.

It's digital. It's AI. And this investment boom, every time I think I get my CAPEX numbers or my earnings estimates high enough, an industry like semiconductors just blows it away. It's done that last week, and we're going to hear from some big tech companies next week on Wednesday, along with the Fed. So the Fed's important, too, but my mind's on tech all day long. I have a friend in the business, and he's involved in financing these data centers. He says that what was originally $100 million weekly-ask for funds is now $100 billion, is now a billion.

Right. Wow. Are we at a point where we might be capital constrained on the extent to which we can – the idea of running out of money? is anethema, not to the notion of how capital markets work. But at some point, do we get capital constraint? Not running out of money, but there are some resources. Because there is, by the way, just to interrupt, there's a story in the journal to you about the banks kind of balking a little bit.

Yes. Sorry, go ahead. Well, look, it's important to note that the big tech companies have gone from net savers to net borrow. Right. They used to just buy back shares. But now it's all their cash flows on the CAPEX. But when something gets as big as these data centers and this AI investment has gotten,

you have to go beyond just the cash flow of even enormous companies like this, borrow capital, get partners, joint ventures, lease landlords, and so forth. And what we're seeing is a capital stack or a capital structure being formed where it's not just cash flow and equity, it's debt capital, joint ventures. So we're tapping into all these. You're going to have a guy sitting next to the guy from the Salvation Army around Christmas trying to raise money. Okay, I'm leading you down the road to perdition here, because here's the thing. If people are borrowing all this money, what's the effect on interest rates?

Well, the answer to that depends over on the return on capital. Right. And on the short term, I do think, you know, as we've got all this investment going on, it should help. It is one of the reasons why the interest rates, I think market interest rates, look at 10-year yields, 10-year yields, 10-year-tax yields. We may have a higher neutral normal interest rate. So here we go.

You know where I'm going. You know where I'm going. If the return on capital is plentiful, then that will just add to the capital pool. People have suggested. People have suggested. That there should be one interest rate if you're in the AI. I said that. I said that.

That was me. I thought that was you. One interest rate for small business and everybody else is struggling. Everybody else. And another interest rate for all the guys trying to borrow money for data centers. In truth, if you're part of the AI boom, there's almost, you could pay 10%. Doesn't matter. You could probably 15.

And if you're not, you're going, why am I paying 6. 6.3% on a mortgage. Well, I agree with the idea that when you look at these tech companies doing all this CAPEX, don't think about where interest rates go. Some people say they're long duration, equities, and if long-term yields climb, they'll get hurt. No, it's not about the cost of capital.

It's about the return on capital. And we are starting to get encouraged about this becoming a good return on capital in a shorter amount of time. And that's because we check them with these companies and say there's a shortage of compute power. David, I could talk to you for a long time, but the legendary, the great, the unbelievable Joe Girardi is standing behind you.

Right over there. About. And we got to get to Joe. Happy to step out of the way, but let your semiconductor stocks run. Okay. Thanks, David, so much for coming in. Thanks, Dave Bianco of DWS Americas. We're going to tantalize the audience and go to Sima Modi here for the CBC News Update, Seema.

It is also legendary, right? Okay, here's what's on our waiter at this hour. A federal appeals court this morning blocking President Trump's executive order that suspends asylum access, the key part of the administration. immigration crackdown. The three judge panel found that immigration laws give people the right to apply for asylum at the border, and the president can't circumvent that. In a statement, the White House said it would seek further review of what it called a badly flawed decision. A U.S. Army soldier arrested and charged with making $400,000 by allegedly using classified information to bet on the removal of Venezuelan leader Nicolas Maduro released on $250,000 bond today, according to the Justice Department. say Gannon Van Dyke was involved in the planning and capture of Maduro and used that inside knowledge in the predictions platform polymarket. He faces charges including commodities and wire fraud. Two-time defending French Open champion Carlos Alcaraz announcing today he won't defend his title at Rolling Aros.

Alcaraz says he's recovering from a wrist injury he suffered at the Barcelona Open earlier this month. Steve, back to you. And that is the legendary incomparable Sima Modi. Coming up, we've got four-time World Series champion and former New York Yankees manager, Joe Girardi, in studio with us today. He's partnering with Joseph Caruso, the founder of Nariva Tech, a company that is ushering in a new era in athletic intelligence. Stay with us. Welcome back, a major new swing at the future of sports performance. Nariva Tech AI is launching Sport FX, a new app that aims to put elite biomechanics, real-time motion analysis, and personalized coaching directly on your show.

smartphone. The company says its platform can turn ordinary video into professional grade 3D motion data giving athletes, coaches, and scouts access to insights that you could only get from expensive labs and top tier programs. Joining us now, Joe Girardi, four-time World Series champion and advisor to Narivatech AI and Joseph Caruso, the founder and CEO of Narivotech. Thanks for coming in, guys. Thanks for having us. It's great. So, Joe, talk about what happens now. What the major leagues, how did they do this kind of biomechanic measurement in the past? Well, they create these labs that are expensive to build that have all these high-tech cameras and all these sensors, and they have to put the sensors on the body, right?

So you can only get it in a lab. Our technology allows you to get it anywhere. You can get it during a game. You can get it in a backfield in the Dominican Republic if you're scouting a young man. So we give you a ton of information simply from your phone. So Joseph, walk me through. that. I take my phone, I got the app, I pointed at the guy who's pitching. Anywhere, any place. And the swing, too, right?

Yes, any movement. So really what this is about is we're pioneering AI native, computer vision driven, human movement science. And we wanted to put that in the power of the palm of everyone's hand and build this ecosystem, this end-to-end ecosystem where you can actually scientifically measure and not calculate human movement, which creates all kinds of advances. I know what you want to measure, but I don't know that everybody at home knows what you want to measure.

You're looking for... Anything. Well, go back, guys. They almost had that thing, the swing. The swing and how that comes through. And I used to... When I coach Little League, I used to show the kids a picture of Derek Jeter

hitting the ball, and I promised to give them $20. if anybody could find a picture of Derek Cheater not looking down at his bat when he threw it, and nobody could ever find it. But what are some of the things that you're looking at when, and you're trying to measure with the phone? What we can measure with the phone is what is out there right now. Companies can get probably a couple of dozen useful tips and useful biomechanical tips. Right now we have over 70,000 dots that can measure anything,

including the micro movements of your hand when a baseball comes through, a quarterback throwing the ball and how his shoulder moves, a golfer, how his wrist is hinging. Any athletic movement, the granularity of what our proprietary suffer does. And the other thing that you're going to see is all the metrics that players want to see instantaneously, like bat speed, launch angle, spin rates, velocity. You're going to be able to see all those in real time on your phone. And that's how players are judged today. And they want instant gratification, I took that swing. What was my launch angle? What was my velocity off the bat? And you'll be able to get those metrics. Joe, how important, because you

were in baseball at a critical time, how important did these metrics become over time? We did not have bat speed when I was growing up. We didn't do bat speed. We didn't do launch speed. I don't even know what launch speed was until a few years ago. You guys obviously did. But how, is it make for a better game? or does it make you maybe you're spending too much time with the stats? No, I think it allows you to evaluate players and make more educated decisions. And that's what we're trying to do. We're trying to help organizations, players become more efficient and more accurate in everything they do. Whether you're seven years old or you're a 25-year-old player or a 35-year-old player,

or you're the general manager of a team or you're a scout, you name it. We're trying to make it more accurate and more efficient. And it's really important because people live by it now. You're as calm as you were on the field, but you got thrown out a couple times, right? Yes. Just a few times. What was the angriest you ever got? When Ryan Dempster threw it Alex Rodriguez four times and hitting the four times.

He threw at him, right, right. I remember that. He didn't get thrown out. And that was the largest fine I ever got. How much was that? I think it was $5,000. And I think Ryan Dempster should pay me back. You know, sometimes here we like to ask, what's your biggest money mistake as a way of, you know, all of us have to

to learn how to buy things or make investments. And I was going to joke, is that your biggest money mistake that you've ever made? Or is there another one that comes to money? Sounds like he would have done 50 grand on that time. Yeah, yeah. 2007, we were staying in Chicago, my wife and I, because our families were there. And I went to Chipotle for the first time. And I said, babe, this is a gold mine.

And the stock was like $30 a share, and I didn't buy it. Big mistake. So Joe Caruso, tell me about what you think the prospects of this, How big? I used to, oh my God, explode when I was on my way back from a Fed meeting in the D.C. shuttle coming back to New York, and they'd pull over to wait, but I had Game Changer. And I used to watch my kids pitch on Game Changer. But tell me how big this market is when you get down to how many phones could this be on. How many kids in Little League and football and Pop Warner is out there for the market?

Well, we built the platform to be multi-sport. Joe had explained to me over a year ago that let's build this beachhead and let's be really focused on baseball initially because of the technical proficiency that's required. But early on, in terms of scale, we already have over 10,000 kids athletes that are active on the platform. Wow. We're in just a short amount of time in the app store. In terms of the scalability, we're at this inflection point right now where the sky is the limit. and we could see this being on millions of phones, both domestically and also internationally. We have to go, but I think we need to underscore the importance of this, which is my kids don't care if I interview the Fed chair, the Treasury Secretary,

but the idea that I'm sitting or talking to Joe Gerardy will mean something to both of my boys today. So that's really the significance of this. And I wanted to ask Joe if you have any other stock trades or investors. I mean, you were sort of teasing about should you have bought Chipotle, but that's the only one I had and that's the only one I regret. So I let professional people do it for me. Smart. Joe Girardi, Joseph Caruso, good luck with the new app. Thanks for coming in.

Thanks very much. Thank you. Coming up, more power lunch. Speaking with our sports theme here to close out the show, the Las Vegas Raiders drafted Fernando Mendoza with the first overall pick last night. Before his big moment, our Alex Sherman caught up with the quarterback and asked about, among many other topics, his investment philosophy. If I'm trying to beat the SMP every single day,

I'm not going to be able to focus on being the best football player and quarterback I can possibly be. It would be to save a large part of it, live frugally, but then also give back to the community, give back to your teammates, get back to your family, while letting someone else handle that. You know, Steve, I'd hope he's not trying to beat the S&P every day. He's got a few other things going on, like carrying the Raiders on his back. To watch the rest of that interview, just scan that QR code or visit cnbc.com forward slash sport. And that's it. up, but thanks for being here.

Great. Closing bell starts now.