Power Lunch - Semiconductors surge in strong day for stocks 1/6/26

Episode Date: January 6, 2026

Almost the entire semiconductor complex surges during the Consumer Electronics Show. Bernstein's chips analyst Stacy Rasgon joins to give his takeaways live from the conference.   And Sanctuary Wealth's Mary Ann Bartels brings an old investing strategy that she likes again right now.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Record highs and the rotation. Welcome to Power Lunch alongside Kelly Evans. I'm Dominic Chu in for Brian Sullivan on this afternoon here. We've got new highs for the Dow, the industrial sector, the financial sector. Investors are looking beyond that technology trade and then rotating to other cyclical sectors. But can these stocks power yet another year of double-digit returns? Veteran investor Marianne Bartels will lay out her playbook and the three names she says should be on your watch list, Kelly. That's a good tease.

What else is soaring today? The semiconductors leading the S&P hire as demand for memory and AI compute infrastructure continues to accelerate. The leaders are Sandisk, Western Digital, Seagate. Look at these numbers. Sandisks is almost 23%. Dom, this is on top of last year's gains. It's shocking. I mean, this is a way to kick off a year for sure.

You're a semiconductor investor. Do people know what's happening? It's crazy. I think they do, but I think they're very, very optimistic about what's going on. Let's talk about that in just a moment. It, by the way, it goes without saying record day intra-hise for all these names. Our noted guest is Chip analyst Stacey Razgon. He'll join us live from the Consumer Electronics Show in Vegas in just a little bit.

Plus, a pretty decent move in crypto. It's not Bitcoin or Ether leading the way either. It's XRP surging. Is that Ripple, dumb? It's the coin formerly known as Ripple. Okay, thank you. It's up more than 25% this year, vaulting into the number three spot globally as the broader crypto market tries to add around $200 billion in value.

All right. We're going to start with the record market rally. The Dow hitting another intraday record high after closing at records to start the first full week of the trading year. And the S&P 500 is also on pace for a record close as well. But while technology and AI has been in focus, your next guest see some opportunities in the dogs of the Dow. That's a blast from the past. Here with more on what she's positioning for in the year ahead is Marianne Bartels, chief investment strategist over at Sanctuary Wealth. This is a resonating one with me because maybe many of our viewers and listeners know at one point I worked on Wall Street. I worked for a man named Neil Hennessy at Hennessy Funds, and he was one of the guys that was famously known for putting a mutual fund together tracking the dogs of the Dow. Why are the dogs now back in fashion in your mind? I think because the past couple of years, they didn't perform as well, right? Nothing could be what was happening in technology in AI. But I'm looking for a volatile year. So I'm looking for stability in a portfolio. And one of the ways you add stability is through dividend yields. And one of the old strategies is the dogs of the

Dow, where you take the top 10 high yielding stocks of the Dow by the end of the year. And I think that could add some ballast this year to a portfolio. There are always investors out there who, I wouldn't say struggle, because that's being dramatic. But they kind of, they have to tinker around with the idea that high dividend yields are not often just about high dividend payouts themselves outright, but because a stock price has then declined to the point where the dividend yield is much more attractive. Of course, the question becomes whether those dividend yields stay viable. So how exactly do you balance out those particular cross currents? Well, I'm going to assume the stocks that are in the Dow are going to survive. Not always true, but in this particular

case, I think the top 10 are very viable companies. The top one is actually Verizon. it's yielding 6.5%. Not my top pick. I don't think you get a lot of price appreciation, but you can get a great dividend yield. Then you have companies like Chevron, Amgen, and Mark, those are the next highest yield. And they look to actually have some price appreciation as well as having some good dividend yield. So that's why I'm talking about the dogs of the Dow. And they were the silent good returners last year. Dogs of the Dow were up 19% last year on a total return basis. So again, I think it's a decent. strategy if you look at total return for 2026. Is there expectation in your mind? And Kelly,

I know we were talking about this before. Is there expectation in your mind that these stocks could actually appreciate in value more so? I know you said Verizon maybe not as much, but some of these names could have the possibility of not just those gains, but also the dividend yield on top of them. Yeah. So you're going to get price appreciation and you're going to get dividend yield and you're going to get total return. And that's what a lot of investors forget about is that dividend yield can add a lot to a return, and as well as add some stability within the portfolio. Now, broadening out, another pocket that has yield that I think could add ballast to a portfolio, and the stocks are performing well, and I expect them to continue to do well

are the banks. The economy is growing. The yield curve is steepening. We're seeing many of these stocks break out, and I know a lot of clients will ask, well, do I want to buy something at a new high? Well, yes, you do. Sometimes want to buy things at a new high. And I think, banks add also very good value. Just to put a point on the dog's discussion, because I've heard it two different ways. There's dogs, as I understand, it stands for dividend over growth stocks, that right? So you're talking about, but then other people think dogs of the Dow are just the worst performers. And if you rotate into those, so wait, often they overlap, but not always.

So which are the dogs to you? Are we talking about dividend stocks or the underperformers? In this particular case, they're not all dogs. They're not all bad performers. Some of them have had some very good performers. But yes, in this case, it would be dividends overgrowth. Got it, as I figured per the discussion. So then on the financial piece of this where they've been off to this rip-roaring start,

a lot of really strong gains already, where do you think is the most interesting? In terms of the dogs that are down with the markets. Now, just in terms of the financial stocks specifically. The banks. The banks are the true leaders. So I'm really betting on the banks. But that makes me very confident that we have a strong economy. And it gives me great confidence that the yield curve can continue to steepen,

which means there's really. that interest rates can go up at the back end of the curve. You know, Kelly, we've been talking so much about the folks out there we've been talking to on our air that like the banks, for the most part, in my mind, anecdotally, have been focused on the money center banks, the big ones. We're talking J.P. Morgan. We're talking Bank of America's Citigroup, you know, Wells Fargo-ish. Not a lot of public. The table over the regional. Right. It's interesting because if you're that bullish on the economy, the alpha and outperformance could theoretically come from small and medium-sized banks, the ones that could stand to benefit the most. most if there is a real true economic stronghold that's building in the U.S. economy.

Well, this is where you get the concept of large cap over small cap, right? And there are a lot of good small cap banks. Unfortunately, I still think large caps are going to continue to be the leadership in this marketplace. So I'm also going to continue to bet on the large cap banks. But why? Is it sentiment driven? Is it just because people feel more comfortable with a name like J.P. Morgan Chase or B of A, and they maybe want to stay away from some of the regional and smaller banks that they don't know as much about? I think it's earnings power. I think the bigger banks are more diversified, have more diversification, obviously, within

their earnings power. And when it becomes large versus small, I think large just will continue to have stronger earnings power over small cap. Yeah. Anything else? You know, even within the Russell's, I heard a guest last hour saying, you know, look at the Russell's, the growth index where they have a lot of technology names and a lot of exposure to, you know, if you still believe that this AI trade has.

legs to it and that it's going to continue to benefit all those kinds of names. Yeah, I mean, you're going to have select small cap stocks that will do well. What really has done very well in small cap have been the industrial names. So if there was a pocket within small cap that I would focus on, there are the industrial names, and that's part of the industrial renaissance, and some of them do play into AI. So there are select pockets that you can focus on, but I think on a broader term spectrum, large caps will continue to actually beat over small. All right.

Big is beautiful. There you go. Something like that. It has been for a while. Thanks very much. Mary Ann Bartels with Sanctuary Wealth. Let's get to the Treasury markets now on that 10-year yield, which we haven't talked too much about, but it's been at 418.

So that is worth noting to your point about whether longer-term yields are backing up. We have a heavy slate of labor market data this week as well. We're going to get Joltz, ADP, tomorrow, and the jobs report on Friday. We're back to kind of a normal schedule. These are all big inputs for the Fed's rate path. the direction of yields from here. Rick Santelli has more in the bond report today. Hi, Rick. Hi, indeed. I think all of those economic data points you just mentioned have a very good possibility to jolt the treasury market, which in many ways has been in a range. The only issue is

each part of the curve is kind of in a different range. Look at a two year for two months. It keeps bouncing off the bottom support, and that area is around 344 to 345 on the. yield. Now let's go to the other end of the curve. Here's a two month of tens. Pretty much exactly the opposite. The last couple of half weeks, we're bouncing off the top of the range that 418, 419, not quite getting to 420. But do remember, we closed down and yields across the curve for 2025, except for a 30-year bond. We'll put that off to the side. But the tenure closed down and yield over 40 basis points. But not true for the boon. under the Japanese markets, their yields close dramatically higher.

Look at a two-month chart of 10-year boons. Hovering around 285, it has been in a recent range somewhat similar to U.S. treasuries, but do keep in mind, it's top of the range there. Goes all the way back to over two years since we've closed over a 290 yield. And on the Japanese side, it's just like a roller coaster. Keeps going up, up, up. I don't see anything coming down. That's a two-month chart.

it's hovering just under 2.13, as a matter of fact, open the chart up for a 26-year chart because today those Japanese tenures closed at a yield that is the highest yield since February of 1999. Kelly, back to you. But Rick, quickly, and yet the Japanese stock market is taking off. So it would be one thing if we had that stat and Japanese stocks were a little bit on edge about it

or remember all the issues we've had with the yen in the carry trade last year. Instead, we have Japanese long yields keep rising. It's pushing up buying yields globally. No one stock market, including Japan, seems to care. Well, consider this, though. Where was our stock market in 1989? Where was the Dow?

Okay. But the Japanese stock market was at $38,000 in 1989. It took all these years last year to finally surpass that level, and yes, they're going up. but the amount of percentage gains the U.S. has had during that interim period blows it away. Yeah, Rick, thank you very much. Appreciate it today. Rick Santelli. Take a look at Venezuela's stock market, which has surged more than 70% since U.S. forces captured Nicholas Maduro over the weekend.

Coming up, our next guest is asking a provocative question. Does Venezuela even have the oil it says it does? We'll get his full take after the break. Welcome back to Power Lunch. Following the capture of ousted Venezuelan leader Nicholas Maduro, President Trump is hoping that American companies can revive Venezuela's languishing oil industry. After all, Venezuela is said to have over 300 billion barrels of oil reserves,

the largest for any country in the world, if that figure can really be believed. And even if so, would U.S. oil companies be interested in ramping up production? Our next guest is written about this, and joining us now to discuss is Peter Bookvar, the chief investment officer at 1.BFG Wealth and a CNBC contributor. Welcome to you. Thanks.

So we were just speaking about this with Michelle last hour, Crusoe Cabrera, who says the president seems interested in trying to get U.S. oil companies to be a partner there and extracting. She said, look, this could be $12 to $14 is their cost of extraction down there. In other words, really cheap. There could be a lot of money to be made, but the stuff is in really bad shape. So how do you expect this to play out? Well, that $15 is after all the money that needs to be invested.

True. So it's really sort of the back end that they would benefit from that. But it's not only U.S. oil companies. BP and Shell have had their, you know, sort of stake in the ground there or wanting to. E&I, as Michelle mentioned, Repsol, the Chinese, Rosnep and Russia, Petavessa, what do they want, you know, how this is going to get divvied up is actually going to be pretty interesting. At some point, yeah, there's riches of oil there to be had, but it'll take time. And who knows if they even have 300 billion barrels of reserves there. I mean, overall, if they do, let's just hypothetically say that they do have this oil. The amount of investment it will take is already being estimated, and it's substantial. The return size and the return time frame is also being debated right now. What exactly does it look like, blueprint or gain plan-wise, if you were to have, hypothetically, the oil majors in the U.S., like in Exxon. We know Chevron's already got some operations there.

You get maybe a Conoco, you get other, maybe smaller exploration and production companies that are not the massive integrated oil giants like Exxon and Chevron are. What exactly, I mean, how long does that actually take and how much do we see or how long does it take for the economic impact to show itself in prices throughout the globe? Well, looking at a variety of estimates that we're all being shown in the last couple of days, I've heard $10 billion a year of investment. so call it maybe 50 to 100 billion that needs to be put in over the next five to 10 years, just to get back to three million barrels a day. So oil demand is growing one to one and a half million barrels a day, depending on people's estimates per year now. So all it would be is getting them back to where they were,

meeting just future oil demand that's going to be needed. And in the context of today, 105 million barrels a day that's being produced, it's actually going to be sort of a tiny little impact. So now there's questions about, apparently the $300 billion reserve figure is self-reported by the Chavez administration. But I guess to everybody's point, we're just trying to get to a few million barrels a day production, which we know is doable regardless of what the true reserves number ends up being. Right, because even if they just have 75 billion barrels, which is where it was when Chavez took over, there's still plenty of oil there.

I am amazed at the level of bearishness that's in the market right now. I understand because people see the supply, but this supply is not coming for a while. I mean, oil today, it's called $60 a barrel. Obviously, we're a little below that. 20 years ago, we were at $60 a barrel in nominal terms. The cost of getting the stuff out of the ground is much higher today than it was then. You inflation at just $60, 20 years ago. You know, it's $100 today.

But I keep hearing that we're in a kind of supply glut year. from all the oil analysts, that's what they say, is that... So, Glead is the word. Yeah. I do think there's maybe a glut of oil on the water, but if you look at the Cushing inventory numbers, you're near the lowest level since 2014. You look at positioning,

the net speculative long position in crude oil is at the lowest level in 15 years. And I think that Nye has been taken off the ball here of U.S. shale. Over the last 15 years, when U.S. production went from 5 million barrels to almost 14, U.S. shale was this technological wonder. Well, all of a sudden, U.S. shell production is really flattening out and maturing. So you're losing a major area of the world's oil production in terms of growth.

Yes, we have Brazil, Guyana. So there are major offsets here. So I'm actually very bullish on oil, and we're along oil stocks here. I remember you're talking about that as well. So you're staying long regardless, even if whatever happens this year. But we also have turned the calendar, Peter, and seen all of the metals trades flying again. You write about this all the time. What is the common denominator?

Is it central bank gold buying, de-dollarization, dollar debasement? Is it strong economy where you have copper flying and all these inputs to kind of the electrical or AI trades that are also doing now? Nickel, by the way, also moving it. Why is nickel? It's up 10% when I left my office today.

Why? So, well, we have gold, obviously, the central bank buying. I'll put that aside. Critical minerals is, you know, the watchwords here. Because when you, it adds another dynamic to the demand side. Because when you hear something is a critical mineral, people want to get more of it. Not just to, with their just-in-time inventory, put it into a product as a raw material.

They want to stock their shells for it because they're worried that may not be able to get their hands on it. So whether it's nickel, zinc has had a big move here as well. Copper, of course. The world is realizing that these are important things. The world is becoming more multipolar. Everyone now is in competition to get their hands on it, whether they need it as an input right now. or not, they need it to stock their shelves. And it's been an extraordinary run here in industrial metals. This year be raw industrials index, which actually includes things like copper, but also

things that are not traded, closed yesterday at the highest level since August 2022. Wow. We have a commodity bull market, X ag, X energy, but I do think energy and ag will at some point join the party here. In my professional career, starting on Wall Street and into media, I've noticed at least two pronounced what analysts would call super cycles for commodities. Every time the super cycle terminology gets put out there, literally within two or three months, you can start to see things turn. We haven't yet started calling these things super cycles yet. At what point do we think a super cycle for commodities, whether it be oil and gas or whether

it be metals, base precious or otherwise, are going to be in that so-called super cycle. That's a great question because as someone who's long and bullish, I don't want to hear those words yet too. I know. Because that would be a good ring the bell time. Yeah. I'm not sure it'll be a function of more price and certainly sentiment. You know, the interesting thing with gold in particular is as the Western world was selling gold since 2022, it was central banks that were buying at hand over fist. Wasn't until 2025 that institutional retail money started to chase the move. when you start seeing on the front page of The Economist and other periodicals, the super cycle words, well, then, yeah, that's probably closer to the bell ringing at top.

All right. But we're not there yet. Editors, you've been warned. Peter still wants to make some money. Don't put it on the front page. Peter, thanks very much. Peter Bookbar with one point BFG. Quick look at Lockheed Martin, which is hitting a 52-week high after those U.S. strikes in Venezuela.

They also struck a deal today with the Pentagon to triple their annual Patriot missile production. all the Aerospace and Defense Group is sitting a new record high, and it's climbed about 60% over the past year. All right, and a quick programming note, don't miss Brian Sullivan's big interview tomorrow. He's sitting down with Energy Secretary Chris Wright. He's going to weigh in on U.S. engagement in Venezuela's oil sector, a move that could reshape supply, geopolitics, and economic opportunity across the hemisphere, and perhaps beyond. That's tomorrow right here on Power Lunch. And there is a new third place player in crypto behind Bitcoin and Ether. Here's the chart. Take a guess and we'll tell you if you're right after the break. I think you

kind of know. Welcome back. The hottest crypto trade of the year is not Bitcoin. It is not ether. It is XRP. The coin formerly known as Ripple. Sorry more than 20% this year becoming the third largest cryptocurrency out there and there's big money behind this trade. McKenzie Sagalos joins us now with that XRP trade and what Mac is driving all of this interest in XRP. Well, it's actually been interesting is that during the doldrums of Q4, you actually saw a lot of people piling into those XRP ETFs, which is the exact opposite of what happens with the spot. Bitcoin and E3 ETFs where people really move in tandem with the price of the coin. But it was the fact that it is a way to have a higher percentage jump. So people were buying the dip with XRP in Q4, thinking this.

This is a less crowded trade than Bitcoin or Ether. And then that proved out to be true just in the first six trading days of January. We've also talked a lot about the blockchains and the ecosystems that are being built around many of these systems. We know kind of what they are with regard to Bitcoin. We certainly these days know what it is around Ethereum and Ether. What exactly is the big use case or driver? What's the practicality for XRP? Well, with XRP and Salana, those are the two.

very popular alt coins right now, where you're seeing a lot more interest. And with Solana, a lot of these different forms of tokenization. So we talk about tokenized dollars all the time in the context of stable coins. But now we're seeing a lot of people move into tokenizing money market funds. And Solana has become a blockchain use case for that. An XRP made its name in terms of cross-border payments. But what's been fascinating is even just this morning, Morgan Stanley, which has been especially progressive in terms of having their financial advisors, suggest that clients get into the spot Bitcoin ETFs, or the first bank to do that. They're now, just this morning, filing an S-1 to launch their own Bitcoin

and Solana ETS because there is an appetite there. So in the world where Bitcoin has become a bit mainstream, I'm not going to say the boomer, that's not my line. That's from somebody else. Is it possible that XRP and Solana are simply taking their place as kind of the next cool thing to know about? Or do they have a legitimately different and more relevant use case? Well, in the context of just looking to make an investment that has bigger gains. You're not going to get that from Bitcoin just because it's already so established.

You're not seeing the same kind of percentage moves. But what's fascinating with Solana especially, it's just that it moves faster. And so you're able to tokenize these funds, whether it's a money market fund that you're moving along or some other tokenized asset. It just is more efficient than Bitcoin as a base blockchain, which is why you're seeing more use cases there.

But that's also the reason why, right? Solana is the big thing right now because it is a faster transaction mechanism. And ether is a cheaper transaction mechanism as well. We talk about stable coins if people have coin-based wallets or coin-based accounts. If they use the base network for now, many of those stable coins are transaction-free. So the speed, is that what's driving a lot of this, this idea that cost and speed is going to be the defining factor for how people gravitate towards certain blockchains? That's exactly it.

And also with stable coins, the Genius Act was passed into law last year. So we saw a lot more stable coin issuers. But remember, it's not as though they only operate over one. blockchain. You have different blockchains where you can move USDC, for example. And so Tron is another quick blockchain. But at different costs, though, right? At different price points. So Salana is a lot more cost effective than moving money over the Ethereum blockchain at different points, which is why you're seeing people diversify away from the big two. Times are changing. Do you think that? Do you sense, you talk to these people more than any of

us, Mac, do you sense the times are changing or not? Is it just, in other words, are they looking for the next thing? Now the Bitcoin's been in a consolidation pattern? Or are the the real, like, long-term holders, the true believers sticking with it? I think absolutely we're seeing times change. You've got Vlad Tenev over at Robin Hood talking about tokenizing equities. Brian Armstrong, part of why the coin-based trade is doing so well, Goldman Sachs upgrading that to a buy, has to do with the fact that they're diversifying away from just being a cryptocurrency exchange and they're getting into totally, like,

ultimately they want to tokenize equities for now. They're just offering equities trading, getting into prediction markets, which also has deep ties into the world of crypto. And so it is this evolution of the market, certainly. Yeah. And how long before we let you go? I mean, there's a lot of stuff that we can unpack you. How long before we start seeing real portfolio management happen around many of these coins, alt or the main ones out there? They're almost like stocks at this point. There are so many of them out there. It's hard to navigate them. Is there a case to be made that there's an asset manager out there who will look to put together like a mutual fund or an ETF of a portfolio that's not just 60% Bitcoin. an ether and, you know, a handful of other coins in there. We're starting to see that with some ETS diversifying beyond just being tied to one coin in particular.

Robin Hood has Cortex. Their AI advisor to try to democratize access to that type of financial planning. And then certainly within the ranks of Morgan Stanley, they've put their army of FAs out there to advise clients, which is part of why they're getting into the business of offering these funds themselves. Mack, we appreciate it. Tour de force, Mackenzie Segalo. Up next, top chip analyst,

Casey Razgon is going to join us from CES on a day when nearly the entire semi-index is posting some hefty gains. Look at those memory names. We're back with a lot more after this. Look at Texas instruments. Welcome back. We have to talk about these massive moves in the semiconductors today. The SMH is rallying and hitting a new record high for a third straight day. It's up two and a half percent. This after darlings like NVIDIA and AMD have unveiled their latest Silicon at the Consumer Electronics Show in Vegas. AMD CEO Lisa Sue joins Squawk on the street. The morning to showcase their latest GPU. This is our newest MI455 GPU.

It is 320 billion transistors using the latest 2-nometer and 3-nometer technology. And this is the thing that everyone's talking about in terms of driving the large cloud deployments and where we're talking about, you know, building, you know, data centers everywhere. But the key about AI is you're going to see it in all kinds of form factors. Ironically, their shares are one of the few. in the red. Now that NVIDIA's turned lower, AMD's down 3 percent. Invidia fractionally negative. Let's ask our next guest about these announcements and his expectations for the space. Joining us is Stacey Razgon, senior U.S. semi-analyst at Bernstein. Stacey, I know

it's loud and crazy there. Hopefully you can hear us okay. These stock moves are unbelievable. Texas Instruments is up 8%. Is that justified? Yeah. It's up. Most of the analog names are up due to Microchip, who had another small positive pre-announcement at the show, is their second one of the quarter. And so, you know, people have been eager for quite a while to play sort of the analog bottoming and recovery thesis, and I think that's what we're seeing today in the analog names. Has there any, Stacey, has there been anything that you've seen at this show so far

that has made you take a moment of pause, take a bit of a breath, and say, you know what, I saw something new, I learned something today that I didn't think, was in my coverage universe, that's what we want to know about CES, because it is the preeminent conference of its kind in this industry. Yeah, well, it's just gotten started, right? And so I got into town yesterday in time for Jensen's keynote. They did a financial analyst Q&A as well. And I think the biggest thing incrementally coming out of the keynote, obviously, was the

details he provided on Rubin. He said it's in full production, which does suggest that they're on track should be well on track for a second half, I'll launch and ramp. And frankly, just given some of the metrics he gave it, it looks like a monster. Right. So this may be part of the reason that AMD is more incrementally weaker today, relative to Nvidia, maybe partially because of that. But I thought that was fantastic.

You know, there's been worry on and off, you know, as you tend to get with Nvidia, product delays and everything like that. It looks like everything at this point is pretty much smooth sailing. And like I said, the specs that they laid out on Rubin, which I wasn't expecting them to deliver at CES. it looks really really good i think so twofold on that cc a lot of people were thinking for 2026 maybe you rotate out of an invidia but it they are they seem to be coming out with a full you know kind of reason not to and then but you think that their ability to outline some of those

metrics is why amd might be underperforming today it may be there i think there's also incremental worries on PCs you talked about some of the memory names i mean memory prices have been skyrocketing and there's some general worries in the consumer electronics space, items that use memory, PCs and smartphones and what have you, that there could be weakness there. And I don't know that we saw a ton of new stuff like come out on the PC side that would give people more comfort on that. So I think with AMD, it's probably a combination of the two of those of those things. As it relates to Invidia, though, I mean, you're right. The stock is kind of stagnated for a few months. There's been, you know, you know, GPU versus

TPU and OpenAI versus Google and all these kind of worries. But at the same time, I mean, there's clearly an upward bias, I think, to NVIDIA numbers. The specs that they're putting out, the timing of the product comes, I think this 2026 is going to be a very good year for them. And the stock is quite inexpensive, given the growth trajectory. It's, I know where it's trading now, probably low to mid 20 times forward earnings. It's by far the cheapest of any of any of the AI names. And, I mean, it's their game to lose.

I mean, it's their space. They're the clear winner at this point. And so, yeah, I'm thinking this is this year's. probably looking pretty good for them. So this is the consumer electronic show, right? So we want oftentimes, and we know that AI is part of the consumer electronic story going forward. But one of the names that was on the move this morning and has been doing a little bit more work today has been Intel. And that's been a dog for a long time. Intel is up partly because of some of the announcement they've had recently about their new chips in personal computing and laptop applications

that are there to help power consumer AI applications and then also power kind of of that next generation of use cases for having that personal computer or laptop at home. So talk to us about how Intel fits into the consumer electronics AI story. Yeah. They were one of the few actually they gave a keynote yesterday that was actually almost entirely focused on consumer. In fact, Nvidia didn't even mention like gaming GPUs at the keynote. Intel's presentation was all about their 18A process and new PC chips that are their panther like chips that are finally, they've taken a while.

but they're finally ramping that you can you'll be able to buy products pretty soon um and i think investors the stock was actually a little weak yesterday maybe it's coming back a little bit today um investors i think are at least happy that that 18a process which has been you know it's taken a while at least it's finally showing up we'll see how the trajectory goes from here um and again you know they are they are delivering at least uh PCs they were they were the first and probably the only major companies out there that in the keynotes that really focused on the consumer. Then quickly, Stacey, just circle back to what microchip said,

because I think that's going to get lost again is the reason why this is levitating. And it builds on yesterday, whatever is going on in Korea with them, you know, talking about raising server DRAM pricing. What is it that we've learned in the last two days that's making all of these stocks take off? Yeah, so the memory names have been on, and I don't cover the memory names, so I'll talk factually instead of the stocks. It's a colleague of mine. But they've all been on fire because memory pricing has been on fire

because demand has been strong and supply's been tight. And then yesterday, as keynote, Jensen talked about a move into storage infrastructure, which I think is what's giving them the leg up today. Microchip is in memory. Microchip does analog. Again, analog's been kind of a dog as a space for quite a while, a couple of years, frankly, working off some major inventory that was put in place during COVID. It's taken them years to work it off.

People have been looking to play that bottoming theme. And again, Microchip this quarter has had a couple of relatively small but positive pre-announcements that maybe I think is giving people a little more confidence in that bottoming and recovery thing on it on analog. And so that's why the analog names are ripping. Memory is its own kind of thing. I'm actually a little surprised that the broader AI names are still weaker than I would have expected. Yeah. You know, it's funny.

You see a lot of these other peripherals running, memory, semi-cap, whatever. They are running because of strong AI demand. Where is that AI demand going to go? presumably it's going to go to the AI, you know, the invidias and the broadcomes of the world. They've been relatively weaker. It's been a little, it's kind of been an interesting dichotomy between the two groups. Absolutely. And one that, you know, some scratch their heads. Others just say, fine. I'll take the entry point. Stacey, thanks for making the time. Good to see you. Yeah. Stacey. Oh, you bet. All right. Let's get over now to Kate Rooney for a CNBC news update.

Good afternoon, Kate. Hi there, Don. Venezuela's military said today at least 24 Venezuela and security officers were killed in the U.S. operation to capture President Nicholas Maduro. The country's attorney general said the deaths would be investigated as war crimes. The announcement comes after Cuba said 32 of its military and police officers working in Venezuela were killed in that operation. Meanwhile, the leaders of France, Britain, and Ukraine say they signed a declaration of intent to deploy multinational forces in Ukraine once a ceasefire with Russia is reached. The announcement came today after a meeting of the Coalition of the Willing in Paris.

U.S. envoy Steve Whitkoff and President Trump's son-in-law, Jared Kushner, also intended that meeting. And Wiccoff says they will continue discussions this evening and into tomorrow with the Ukrainian delegation. And finally, the special election to replace GOP representative Marjorie Taylor Green has been set for March 10th. She officially resigned yesterday. The winner of the special election will finish out her current term, which ends in November, guys. back over to you. All right. Thank you very much, Kate Rooney for the news update there. So in this AI economy, if electricity is the new oil, who are the new majors? Our market navigator guest has some picks on how to play this market trend on energy and AI.

Stay with us. We'll be back after this. Welcome back. Time now for our market navigator segment as the AI boom continues and with it, the growing demand for energy, fuel, that everything else that goes along with that boom. who's going to be the one that benefits from that boom? Our next guest says to keep your eyes on Nat gas providers and producers. Joining us now with that case is Rob Thummel, Senior Portfolio Manager over at Tortus Capital. So Rob, this AI trade, yes, it needs power, and you say the future is Nat Gas specifically. Why?

Yeah, Dom, so if you think about what is the essence, what's the foundation of AI? It's data and it's energy, right? And so, and it's electricity. So we're going to have a lot of electricity needed. And what's going to be the fuel that generates that electricity? Well, we've been studying the energy sector for over 30 years. It's a really exciting time in history because we think over the next couple decades, you're going to see natural gas demand significantly increased

because natural gas is going to be the primary fuel because of its low cost to really generate the electricity that really supports this AI as the next industrial revolution and AI as an economy. That's why, like you said in the beginning, electricity is going to become the new oil. Now, if electricity is going to be the new oil and Nat gas is going to power it, what types of providers, specifically, company-wise, geographic footprint-wise, are the ones that we have to pay attention to the most?

Yes, I think you've got to look it up and down the value chain of natural gas. So what we do in our Tortoise Energy Fund, it's an active ETF, we focus on the natural gas producers, the low-cost producers like an EQT, which is a very low-cost producer of natural gas, and that's going to keep electricity costs low, and that will help boost and accelerate the development of AI. We like companies like Williams, which is a natural gas infrastructure company. It operates the largest natural gas pipeline in the country. And Williams actually even providing a solution and electricity and providing behind the meter power.

That means they're going to enter into contracts directly with these hyperscalers. And so the electricity consumers don't have to pay the bill, but the actual hyperscalers pay the bill. So those are the type of companies that we like, as well as another example, the high-dividend stocks. That's the great thing about looking at these energy stocks. You can invest in the energy sector and get the benefits of this future AI economy and this AI development, but you don't have to pay the same multiples that you pay in mega-cap tax. These energy stocks are trading up much lower multiples.

They're trading at much lower free cash flow multiples. So it's a great way investing in the energy sector of investing in this AI trend without having to pay the high prices that you have to pay and the high multiples you have to pay, by investing in the mega-captex. All right, the AI derivative trade there in that gas. Rob Thummel at Tortus Capital, thank you very much. We'll see you again soon. Thanks, Tom.

And coming up, speaking of AI, it's the Battle of the Chatbots. Will Gemini snatch ChatGPT's crown? We'll show you the latest data on the AI race. For now, ChatGBTGT is the heavyweight champ of AI. It reportedly boasts about 900 million weekly active users. But new data shows it could be losing some ground to one of its main rivals, namely Google's Gemini. Dear Jabosa joins us now with more. Dear Joe.

Hey, Kelly. So we've talked about this before. There's been a lot of speculation about whether Gemini is really making a dent in Chad GBT's lead. So take a look at this chart we had made up based on data from similar web. And the answer really is in the end, the slope here on the end. ChatGPT visits grew 50% in 2025. They peaked in October, down 11% since then. Gemini usage, meanwhile, started its upward trend in November, right around the time Gemini 3 was released.

In November and December, percentage gains for Gemini was nearly 30% versus OpenAI's traffic, which decreased about 6%. So, guys, the real question now is whether this trend can be sustained. Part of it is the law of large numbers. Chat GPT just has such a huge base. It makes its growth look milder. Gemini's more than five-fold gain last year. That comes off of a small base. the real signal in this chart is not that OpenAI is losing,

but that Google may finally be converting distribution into usage. And so if that trend holds, the next battle is retention, which, Kelly, we've talked about plenty. But so in other words, there's no dispute that Gemini is gaining ground on ChatGPT? According to this third party data, no. Gemini is gaining ground, but I mean, ChatGPT, OpenAI, still the undisputed leader. It's just so much far ahead.

Now, Deirdre, we're showing the chart right now that shows the kind of the use case that you're talking about right now. And we can see just how big it is that this chat GPT versus Gemini, but the ramp up that you're seeing on the right hand side of your screen for Gemini. If you look at it in that way, what exactly then is going to power either the convergence of those lines from the Gemini side and the Chad GBT side or a potential divergence again where the leader in chat GPT reasserts itself. What exactly does it, what needs to happen for us to get into chat GPT more?

This is the constantly shifting trillion dollar question, Dom, right? Who wins this? And then there's another really interesting chart that we've shown in the past, which is, you know, the open AI universe, which includes like an Nvidia and Microsoft and Oracle versus the Google universe of stocks. And Google's just so much more vertically integrated. It has its own custom AI chips. These are very different investment propositions for and in the markets.

So what powers it going forward? I mean, Sam Altman has spent a lot of the last few years talking about AGI, how that was so critical that the company that gets to artificial general intelligence is the one that wins this whole thing. Over the last few months, you've seen sort of a shift, a bit more nuance here. Their code red talks about just making sure that chat GPT usage is able to retain its users. That's very different. more focusing on product and enterprise. And that's where Google's strength really is. It talks about AGI as well, but its strength is in this massive distribution that it already

has billions of users across Google Docs, across Gmail, across search, which now AI is being served on. So that's really key. How are they going to distribute this? Which one is stickier? And there's also been some past similar web data that shows that people are actually spending more time on Gemini. But that's really the big question.

I mean, does open AI ultimately look like a Netscape or a Google, the irony of that, or is Google able to just sort of keep increasing that catch up? Nobody wants to go down that route if you're in technology. Dear Terbosa, thank you very much for that big look into chat GPT versus Gemini. And coming up on this show, the prediction market's another hot part of the market right now. There's a crackdown happening, how lawmakers could soon face new betting rules, or I should say prediction rules. That story is coming up next.

All right, a quick reminder here, not to miss, Brian Sullivan's very big interview tomorrow afternoon. He is sitting down with Energy Secretary Chris Wright. It's an exclusive conversation right here on Power Lunch. Be sure to tune in tomorrow afternoon in the 2 p.m. Eastern Time hour, Kelly. Looking forward to that. Meantime, a lawmakers is moving to crack down on prediction markets. New York Congressman Richie Torres is introducing legislation that would make it illegal for government officials. to use prediction markets to bet on political events using non-public or privileged information.

Now, the move comes after a timely bet on the fate of Venezuela's Nicholas Maduro. Take a look at the numbers from the bottom of your screen. A brand new account on Polly Market wagered more than $30,000 last Friday that he would be ousted this month. Just hours later, he went into custody. That bet paid out by more than $400,000. I kind of a provocative point of view on this because I want the information in the market. Like to some extent that information became public through that bed, but obviously I can understand the need to kind of rain people in. Why you shouldn't have insiders making profits off of those things.

But don't we want to know about the inside information, but maybe they don't keep the profits. Let's talk about stock trading on Congress. Thanks for watching Power Lunch.