Power Lunch - Soaring Diesel Prices, Wall of Worry, Data Center Buildout Interview 9/18/26

Episode Date: September 18, 2026

Stocks are little changed on Friday as the major averages close out a volatile week on Wall Street.Kelly Evans and Brian Sullivan speak with GasBuddy Head of Petroleum Analysis, Patrick De Haan, about the rising price of diesel fuel and when consumers can expect the recent surge to rise above the historic inflation-adjusted record.Interactive Brokers’ Steve Sosnick also joins the anchors on set to lay out his “wall of worry” for the markets and provide his latest forecast for stocks and bonds through the end of the year.Meanwhile, Forgent CEO, Gary Niederpruem, joins the show for an exclusive interview to discuss the state of the AI data center buildout and whether the recent backlash from the public over potential safety concerns is justified.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Some big technology stocks up again as the magnificent seven looks to rebound off what's been a rocky month so far. Happy Friday. Otherwise, everybody, with Kelly. I am Brian. The NASDAQ 100 on pace for a week of gains. Crypto also catching a bid. Bitcoin back above 80,000. And interactive broker Steve Sazig is here. Talk about all that and more. And Netflix is down after Wells Fargo downgrades on a softening environment. But Mark Mahaney says don't change the channel. He's reiterating a buy, recently raised his price target, and he joins us ahead. Plus, two big CEO interviews. Oscar helps Mark Bertolini.

We remember him from his Aetna days with a stock up more than 100% this year and Forgent Power Solutions, Gary Niederpruem, as the shares surged 20% this week alone. All right, so there is much to discuss on this busy Friday with big tech, AI, and more. But let's start with something different. And something that you were not likely to hear anywhere else but right here. because there is something pretty incredible happening around the Strait of Hormuz. The cost of shipping oil is soaring, not the price of oil itself, but putting oil onto ships. Listen to these incredible numbers. In 2022, the cost of charter, a large oil taker from Saudi Arabia to China cost about $16,000 per day, a pretty low rate at the time.

Well, after Russia invaded Ukraine and things got hotter and oil supplies got tighter, those costs went up. Shipbrokers tell me that the average rate for a super tanker of oil last year was about $135,000 per day. That's a big jump from three years earlier. But now, wow. In the last week or so, the day rate to charter a giant crude oil tanker from inside the Arabian Gulf to China. That route you see right there in light blue is around $1 million per day. That's in over six. thousand percent increase in the price of the ship oil in one of the most common shipping routes in the world. Now, there are a couple of reasons for this, and you could probably figure out what they are. Number one, there are fewer ships willing to make that voyage. They just don't want

to risk lives and ships going through the strait of Hormuz, who can blame them. Two, insurance costs are soaring on the ship owners that are willing to make that run. Now, this huge pop and shipping costs is also causing a pop in shipping-related investment. This, my friends, is called the breakwave tanker shipping ETF. Ticker is BWET, be wet. It is soared this year, up 4,000 percent. Now, this ETF, it rises as shipping rises, because it's not comprised of shipping stocks. It is comprised of shipping rates.

But guess what? The shipping stocks, the front lines, the TKs, the international seaways of the world, those have done extremely well as well. They're all hitting new highs this week. Now, many of those ships aren't just carrying oil. They're carrying refined products like diesel and jet fuel. And you have heard that diesel fuel prices are at a nominal record high in America, about $6.50 a gallon nationally over $8 in parts of California.

One important caveat. Well, that is a record high for an absolute price. Diesel prices were actually a little bit higher back in 2008, adjusted for inflation. they were over $7 a gallon. Nationally, of course, I was a pretty lousy time. Let's talk more about something else around diesel fuel. Some social media accounts, large numbers of followers,

are stoking fear by talking to you about gas stations running out of diesel fuel. I can report from my sources that those accounts are not true. Some of those social media accounts, by the way, may have, shall we say, nefarious reasons for saying what they do. I'll leave it at that. But let's talk to somebody who does this all for a living. Joining us now, Patrick DeHan, head of Petroleum Analysis, the gas buddy. Patrick, there was a lot there.

I threw a lot at the audience and at you. I get it. But bottom line is this. Any data that you're tracking around America, nobody does it better than you. Is anything showing you diesel fuel shortages in America right now? Well, thanks for having me, Sully. No, I mean, we triangulate data. There's a lot of folks on social media who think gas, but he's only a crowdsource website.

All of our data, including crowdsourcing, does not show us anything that would be widespread right now. Yes, there are anecdotal stations here and there, individual stations that may have temporarily run out of diesel. That is not rare. That happens on a daily occurrence for several different reasons, but we are not seeing anything widespread. We use crowdsourcing data. We have a transaction card that is seeing diesel purchases in real time. Our parent company has a fueling logistics business as well. And none of that really right now triangulates to anything wide. spread. Having said that, there are concerns, and we do continue to monitor the situation. But as you say, there is nothing that we are seeing that's widespread amongst all of that data collected together.

Patrick, where are diesel prices headed? Is the fever about to break or is it going to get worse? I think here at this moment, the way that these geopolitical tensions have been aligning, we may see the increases start to taper off. But in some areas, it's been refining issues on top of those geopolitical political tensions that have led prices to new all-time records by far. In fact, there are only two states today where you can find diesel averaging less than $2, excuse me, less than $6, and those two states are likely to join the $6 club soon, Texas and Oklahoma. And right now, there are nearly half of U.S. states that have seen diesel prices soar over 40 cents a gallon in the last seven days. So this is apocalyptic for the economy when you talk about tractors, trains,

and trucks that are all burning through hundreds of gallons of diesel every week. These numbers are certainly not good. The good news, though, is that we may see a temporary break, a slowdown in the pace of increases right now. 64, a gallon, we may stop shy of 650. But then again, a lot of uncertainty over how these geopolitical tensions, will Ukraine continue to attack Russian refineries? Right.

We still could go higher. So when, you know, and there'll be people listening who go, well, I want the price to come down. You're just talking about how it would stop rising, maybe around 650. What are the indicators that you're watching? Do we have public access to them? In other words, is it just watch WTI, watch Brent, if they level off, things will cool down? Or even if they level off, what data or how would we know if the products are still so tight, if the refineries are still so tight that the product prices could keep rising? Yeah, great question. There's a terrific spot on the CNBC website to look at commodities prices. And that is something.

and I have bookmarked as well for a quick view at product prices, R, Bob, and ultra-low sulfur diesel prices are posted there as well. So everything right now, to your point, you need to look at refined product prices because everything is disconnecting because of various sensitivities. Now, Goldman Sachs called out that maybe gasoline is going to start seeing some love because refiners are so focused on diesel that gasoline could be a rising star. Hopefully not.

My wallet doesn't like the sounds of that. But gasoline prices, as I was in your program about a week ago, we said it was going to continue going up, and it certainly has up 16 cents to 447. Now, some of this is due to refining issues in the Midwest. Some of it continues to be the price of oil. But it's really too early to tell. There's still a lot of concerns out there that I have that could continue to push upward pressure on both gasoline and diesel. How much is what's happening in Russia, factoring into American diesel fuel prices, Patrick, if at all? And in a big way, Sully, though a lot of people will correctly point out that the U.S. is not a recipient of Russian diesel or oil.

Certainly the absence of Russian oil and diesel in the market because these refinery tax is what's so problematic. That is why there's such a wide gap right now between Arbaud, between retail gasoline prices at 447 and the price of diesel at 644. It's primarily because Russia is a major contributor of heavy oils, heavy products like diesel. And right now, they're not exporting a single drop of any of that. And that's where the U.S. has stepped in. U.S. exports of refined products and oil in the last week amounted to 87 million barrels. So increasingly, refineries in the U.S. are running as hard as possible to fill the void left by the lack of Russian supplies. All right. Patrick, thanks very much.

For now, we appreciate it. Patrick Cahan. We have much more coming up for you this hour. Two big CEO interviews, including Forgence CEO and Oscar Health CEO Mark Bertolini. They'll both be joining us throughout the program. You won't want to miss that. But first, what's driving the massive spike in the crypto complex today? The answer to that next.

Welcome back. We see some pretty big moves in the crypto world today. Even with the Clarity Act not advancing this week, there's been a string of headlines the past 24 hours about the CEO. C-E-E-E-E-E-C and the C-F-T-C, she said, moving forward with their own regulatory framework for digital assets. The move looks to be on that news. Bitcoin back above 80,000, ether, up as well. Robin Hood, Coinbase, and strategy are surging today. Let's ask Interactive Broker's Chief Strategist. Steve Sosnik, did you know we were going to spring this on you? What's going on to the crypto trade? I found out like an hour before, basically. It was like, can you talk crypto? So, yes, I can.

Because it's a hard thing to talk unless there's always kind of the, explanation from the inside or then there's a macro explanation, but that's kind of from the Bitcoin or the token world. What is your view on why we're seeing this kind of rally in pop today? The crypto industry wants to be regulated is really what it comes down to, at least at least at the margin, right? We rallied a couple of weeks ago on the hopes that the Clarity Act would pass. We sold off on the disappointment that it didn't pass. And here we are today on stories that the CFTC is likely to engage in its own regulatory framework until or unless Congress gets their act together.

What do you think the fear was that is being, that is now coming out of the market? I think the problem is, you know, it's almost, it's analogous to the AI discussions. You know, you've got this industry that grew up as being this wild west and it's, you know, it's decentralized finance. You could do whatever you want. Ultimately, the big guys got in. And a lot of it is now dominated by ETFs or by, you know, there's this craving for real world legitimacy. And I'll use that in quotes because that's not necessarily the case.

But there's this craving for this real world legitimacy that you could really only get if you're regulated. Mom and Pop and the big banks and larger pension funds, they don't want a Wild West. They want an environment where there's some regulatory certainty. And that's, I think, why you're seeing this now. And yet it's always seemed to me that if they get that, if you want to, kind of be welcomed into the system, you lose a little bit of your raison d'etre. How is that French? Was that okay?

My French is tough. You know, then if other people can do what you're doing, what makes you so special? What makes you so different? Well, that's the larger issue. We still haven't really solved that. I mean, the general question of what does crypto do? You know, what can you do with crypto other than just use it as a store of value or a trading or a trading opportunity? Still remains a very wide open question.

We've not really seen it adopted in a lot of legitimate uses. And that's a bigger, broader problem. But I guess it's chicken and egg. If you want it to be adopted in bigger, broader uses, it's a lot more helpful to be a regulated environment. Going back to the macro markets, you just saw the opening piece. We talked about shipping costs and diesel costs, okay? Diesel costs up, gasoline up, food costs up, health care, up.

Everything's up in the last four or five years or the last four or five weeks or four or five months for a variety of reasons. certain reason here. You know what else is up? Tech stocks. The NASDAQ 100, not up a lot, but it's up today. I know it's not on a record. That was hit back in June. I get it. But all of these estimates are still high. Some have come down, but they're still well above where they were. Are you surprised at all by the level of strength and the stock buying appetite, even in the face of all that stuff that we just talked about? Yeah, I mean this. Oh, a twin wars too. Russia, Ukraine, and whatever you want to call Iran. stock markets climb a wall of worry. This market is like Spider-Man, just zooming right up that wall of worry.

And there's a ton of things to be concerned about. And, you know, in some ways you're seeing a retrenchment, why tech remains relatively solid. We've seen a lot of erosion. You know, how many times did we talk about the broadening trade? And the equal-weighted S&P doing very well relative to the SPX or the Russell 2000 showing signs of strength. It's back to the knitting. It's back to the old idea that, you know, the certain amount of tech stocks remain imperfect. to what goes on in the rest of the world.

And I think that's why you're seeing this. Are they truly a flight to safety? I don't know. But I think as long as the earnings continue to be there, at least demonstrable, we can debate whether the earnings expectations may have gotten ahead of the reality. We can debate whether AI is going to grow at the pace that's priced in. But I think that's the mentality is that just there is this belief that tech solves all problems right now still.

Yeah. I thought it would be fun if we did a not AI segment. Every day. This will be like my not AI question, which is look at the financials this week, down 8% for Goldman, 8% for Bank of America, 2.5% kind of broadly after the rate hikes and some idiosyncratic kind of stuff about the quarter. What does that say to you? Is that a worrisome message? Well, I mean, you're seeing, you remember, there's a couple things that go on. First of all, they did have a bad set of comments. I wasn't at the Barclays conference, but every headline I read seemed pretty negative about it. So whatever these guys were. saying the market didn't really want to hear it. That was, that's, that's the idiosyncratic. The broader question, you know, from a, from a big, you know, from a money center bank, so to speak, they've got trading and they've got, and they've got investment banking issues that no one else has. Investment banking is very strong. Trading remains strong. But when they use the word flat, okay, that was still, flat means they're still printing money, but that's not what,

the market's always disregard. Analysts don't like trading profits. I know this from having been a prop trader at a publicly traded firm. They don't. like them. They don't care about them. They're not modelable, and this is another reason. But then when you also look at the banking sector in general, a lot of it has to do with the shape of the yield curve, not necessarily the level of rate. And it flattened this week, right? Yeah. And so that's not very helpful either. Yeah. Is flap the new down then? Depends on when you talk about the yield curve, not necessarily when we're talking about trading profits, probably. But would that, so that would that equate to technology too? So if

If one of the big, if Google, and I'm making this up, folks, don't hold me. I'm not doing this. I'm using this as an example, kind of some people marginally listed. If one of the big hyperscalers were to come out and say, well, revenue is going to be flat. Oh, you're laughing. That would, because the market would go down 40%. Yeah, because that would be, that would be dramatic. I think from a date.

So flat is the new down. Well, from a day to day on the stock, on the, yes. But also from day to day, flat is down. Look, today is what we see with the ratchet effect. We went up yesterday because they liked what Warsh had to say when they thought about it. Traders react, investors consider it. The investors considered it being pretty good. But now we're seeing bonds.

So we, everything, it was in everything rally. Today, bonds are giving back their gains. Oil is not helping. Stocks are flat. So in that sense, yes, flat is kind of the replacement for down on a day-to-day, which is not particularly healthy in the long term, but it works in the short term. Do you think that 5% becomes more of a, a floor than a ceiling. And if so, can we adjust that? I think if Edgar or Denny were sitting here,

he'd say, we can adjust to that, but he did lower his price target for the end of the year. I think we can adjust to it. There's no, there's no, I wish I could tell you the number that would like flip people out. I thought it would be high fours or five. We're here and it's not, there was a European bank overnight that raised their tenure forecast to five and a half percent. I think the bigger issue is when you start to see deals not getting done at the right rates, because I think the part of the problem is it's been a global pullback in long-term rates. And so there's a lot of factors, government deficits, but a lot of it has to do a competition for capital. Money is not infinite. Money has a cost. This is the cost of money. And some of the big providers of money into the system, the big cash flow generating tech stocks that we were just referring to, they need money too.

And so there's billions and billions, if not trillions of dollars of borrowing needs that's out there, let alone a lot of private credit and private. equity deals that need refinancing fairly soon. That puts pressure on rates. And Japan, I guess they hiked, but, you know, they got the opposite reaction. Anyway, so that was part of what was driving the global bond sell off. So Steve, always a pleasure to check in with you. Thanks, Kelly. Your thoughts on all of this.

I really appreciate it. Steve Sosnik of Interactive Brokers. Oh, speaking of which, the Bank of Japan raising rates by 25 basis points earlier today brings the policy rate to its highest level since 1995. It comes after the Fed hiked here in the U.S. on Wednesday. The Bank of England actually sat this one out and left rates unchanged at their meeting, even with inflation being an issue. You can see global bond yields all rising across the board today pretty much. I mean, maybe you could call, okay, the German Boone guilt settling down

there, but Japan up our 10-year, Brian, at 5%. All right, the stock that was hot, and now it's not. This former stock market darling is under some pressure. We're going to tell you why, and whether your next guest believes it can and will get back. back on track. There's your mystery chart. Any guesses? Send them to Kelly. We're back right after this. All right, welcome back. So many big tech stocks have had these amazing runs that made you so much money over the last couple of months and years. Netflix is not one of those stocks. Netflix is on pace for its worst year since 2022. Stocks down another 5% today after a Wells Fargo downgrade. The streamers grappling with softening viewership, a tougher growing script, whatever.

else. But our next guest is still bullish, raising his price target to 110 from 100. Joining us now, Evercore ISI, head of internet research, Mark Mahaney. You know, Mark, I'm not a huge Netflix consumer, and maybe that's the point, because since Squid Game, I'm trying to think of where it sort of entered the cultural lexicon of really hot shows. Is that a way too overly simplistic way to look at Netflix, or is there more here that the market might be missing? Well, I think there's a couple of things the market may be missing, but let's talk about why it's corrected so much here to date. First is that it ended last year or prior to the Warner Brothers deal, attempted deal. It was trading at 35 to 40 times earnings. It was at the way upper end

of its trading range. So, you know, any sort of missteps the stock was going to correct. And then, you know, we went back and forth on this Warner Brothers deal. Most Netflix, investors did not like that deal. But it just raised questions about why they're doing this. It was this offensive or defensive. And then you had engagement problems this year. And you had the lack of the hit. You mentioned Squid Games.

You forgot to mention K-pop Demon Hunters. That was a huge hit last year. But the Hit Factory didn't come through this year, or at least hasn't year to date. And then you've got these concerns about AI and short form video content. Maybe that's displacing, impacting long-form video viewing. So you've got three or four reasons good. reasons for the stock to underperform. And then, you know, my friend Steve Khaal at Wells Fargo,

you know, I think he's the best media analyst on the street. He downgrades Netflix today on some very valid engagement issues. I'm going to take the other side, but I respect the tradeoff in the stock here to date. Okay, you mentioned short form video. So would it be possible? Could it be possible? Could it ever happen that Netflix tried to just copy Google's YouTube and just allow people to upload video, basically become a YouTube clone? No, I don't think they'll do that. I don't think Netflix will do that. They'll take some of the, no, it's a great question.

It represents the market, and this is why the stock has traded off. I think these short-form video content concerns on long-form video growth, I mean, I think they're very legitimate. I would just remind people that, you know, if you have the right hit, people are going to come to you. And last year, TikTok was really popular. YouTube was really popular. You know, shorts were taken off.

and then you had this mega hit in K-pop Demon Hunters, and all of a sudden you didn't have a problem with content at Netflix. It's a hit factory. We haven't had hits this year. I think there's a probability greater than 50% chance you'll have that in the next year. And then we've got to deal with other issues. I think there's a setup here for really strong subscriber growth. I know it's not disclosed anymore, at least only on an annual basis.

That doesn't mean it's not a driver of the P&L of the revenue streams. And I think the rollout of Netflix ad-supported solution, the cheaper one into 15 new international markets will help next year. And I think live events, we did this study this last week. In Japan, Netflix just had a spike in number of new subscribers coming on because they're their exclusive streamers of the World Baseball Classic, very popular in Japan. And I think they're going to find those in other parts of the world and it's going to surge their subscriber base. And then there's a huge, the mother of all, engagement live events is happening in the middle of next year, Women's World Cup. It's going to be

streamed exclusively on Netflix in North America. And I just think all of the this speaks to the ability of Netflix spending 20, 22 billion a year to get more subscribers coming in, to get more engagement, to drive more engagement. So I know we're concerned about engagement this year. My guess is 12 months from now, we won't be, and a stock will rewrite from here. You know, Mark, this one's been so fascinating for me because I remember at January of last, last year, I think, I had written a piece called Netflix is Eating the World. And the reason, of course, this is perfectly pegged to the highs. I'm like a great tell on this. They had just reported their strong super, it was the football events from Thanksgiving Day and Christmas.

The stock was doing incredibly. And then management went and started this whole thing about Warner Brothers. And I was a little confused. And I thought, why if the stock is doing so well, if they're taking over the world, would they go and do this? They clearly knew what I didn't. They knew that their core trends were slowing. And now that they're competing for sports rights against everybody else, how many people when the NFL started Brian, did I talk to it? They said, I have to start my Netflix subscription again to watch the game. But then you whack it. Yeah, exactly.

I mean, I'm sorry. You sign up for one month, watch the game and turn it off. Sports are expensive, Mark. So I do wonder about the economics longer term. Well, Kelly, you're right. I'm not sure that Warner Brothers bid was as defensive as you mentioned. But I forgot. I'm not going to comment on that.

That's in the past. I think we're restricted on that deal anyway. So forget that. But just going forward, it's like, yeah, I think, Netflix is still going to be lean back entertainment most of the time, but they actually have the ability to start increasingly bringing in short form content. There's something called Netflix clips on your mobile device. And I think they have the ability to take all of that content that they have and kind of bite-size it. Let me see the 10 minutes of gooliest scenes from

Stranger Things over the year or the steamyest scenes from Bridgeton over the years. I think they can package this. Management hasn't listened to me on these ideas, but I really liked them, and I think they have the opportunity to do that. In the meantime, they're just going to work their way in the sports. They're not going to jump all in, but if you've got $22 billion a year growing by $2 billion a year of that content budget, which is just about more than anybody, then every year maybe toggle about $500 million more into sports. And we're not talking about the NFL. Netflix is a global phenomenon. I think people underappreciate this. Don't just look at U.S. engagement trends. I mean, less than 10 percent of new subs come from the U.S.

look at what's happening to Netflix in Germany and in Portugal and in Poland. And as they get more of these local events and local good content from different markets, they are huge success in South Korea. And they can take that content and universalize it. I think that's the win on Netflix. And so when the market's this skeptical on Netflix, well, this is one I'm most bullish on Netflix. All right. Mark, really appreciate you joining us.

Thanks, Kelly. Really good to see you. Mark Mahaney of Evercore ISI. All right. So we talk a lot about the picks and the shovels. of the semiconductor companies, but what about the companies that make data centers actually work? We're going to sit down after the break with a CEO of one of those companies, a name you may not know, but the stock has been red hot, and it's next.

Cool new graphic. All right, well, let's answer the sort of riddle that we gave you before the break. The company we're talking about is Forgent Power Solutions. The stock is up nearly 23% in the past week after reporting fourth quarter results that beat Wall Street estimates on the top and bottom line. You may not know the name, but you probably should because the company creates the electrical equipment, transports power into data centers, industrial facilities, and also the electrical grid. Joining us down an exclusive interview is Forgett CEO Gary Niederproom, based right on the outskirts of Minneapolis, Minnesota,

homegrown American company. Gary, welcome to the program. All right, when I hear, I'm a simple guy, when I hear the term drive train, I think about, cars. You guys are the electrical drive train of the data center. What does that mean? In plain English to our audience, what do you do? Yeah, good afternoon, Brian. Nice to meet you. Kelly, good to see you again. Thank you guys for having me on. So I think you described it perfectly. Look at, I'm a Midwest DNA guy in my roots just like you, Brian. And that electrical power train that we talk about is once you have power coming from the substation, you need to move all of that electricity from point A to point B, all the way down in a data center through the gray space, which is where all the power

equipment is held, powering all of the thermal management, and then ultimately powering all the servers and storage and racks that are going to have invidia chips inside of it. Every step of the way is where we play in that electrical power chain. So we are truly in that physical infrastructure from moving electricity from the substation all the way through the entire data center. And look, this is such, this is like the gold rush, Gary. It's kind of. of fun to watch and be, but it's got to be nerve-wracking for you. How do you fend off competitors? How do you stay ahead? How do you make sure you have enough capital to invest without blowing up the balance? I mean, all of these things. How do you do it? Yeah, every day is a little bit like

a roller coaster. It's a little bit exhilarated, a little bit of anxiety filled, but you love that adrenaline that comes from it. So it is hard work. We tell everybody, it is hard work. Sometimes we hope we make it look easy above that waterline, but below that waterline, man, we're paddling just like a duck to make sure that we take care of all of our customers the way that they deserve to be taken care of. We don't take any order that they give us very lightly. So it is our duty. It is our obligation to make sure that we design it appropriately. Put the right project management folks on there. And then mostly ship it, make sure it is safe, make sure it is high quality, and then ultimately service it once it gets into the field. Is it fair to say,

though, you're an early or leading indicator for data centers? Because I imagine if you're going to build something, you're going to call you and say, Gary, I know you got like a $3 billion. dollar backlog. Gary, I need this, I need that. So given that, are you seeing any sign? We're asking every AI CEO of this, by the way, any sign of a slowdown? You're smiling. Let me give you the short answer and a one word answer, which is no. Now, let me expand on that just a little bit. So, you know, the data, I've been in the day of the space for about 30 years. So if you go back multiple decades into where we are today, there's probably 50 to 55 gigawatts of data center capacity installed in the U.S. today. Based on anybody you talk to, and one of the

blessings of my job is I get to talk to a whole cadre of people in this AI and cloud infrastructure space, nobody sees any parts of slowdown whatsoever. But that 50 to 55 gigawatts that is installed today in the market is going to double just in the next four or five years. So everything that the market has done in the last 20 or 30 years, we are going to double in the next four to five. So that's the market basis. Our proof point, to your point about our backlog, you know, we just ended our fiscal Q4, so we wrapped up our fiscal 26. In Q4, we booked $1.5 billion, which was twice as much as the amount of revenue. We did all in fiscal 25. Our backlog was up three or three and a half times. So depending on whether you look at any reported information that's out there, just go to a little

fashion voice of the customer and then use our data sets of proof points. We see no signs of this thing slowing down anytime soon. So, I mean, now when I think about the connectivity and some of the issues, it's a weird question. Are your systems alive? In other words, could they be attacked? Could they detect attacks? This is now, you know, mission critical infrastructure and data centers in particular

are going to be under high scrutiny if there are rogue agents and activity that needs to be shut down. So, again, you're a simple maker of electrical equipment, but the times have never been so complicated. Yeah, that's exactly right. It is. It's the intersection between being simplistic and also having complex systems.

So our systems are complex from a mechanical, electrical, electrical, the thermal standpoint, not really complex when it comes to controls and software. So the beauty of our business is, by the time we get an order, we see demand signals really early when power generation in the data center goes in.

We get an order after that product is ordered and after the customer has already started to develop their land. So there's very little risk of our purchase orders really not materializing because we are already in the stage where they have built that data center. From a cyber standpoint, the beauty of our product is it is complex enough that not everybody can do it. It is hard what we do. But we also don't have a tremendous amount of software control logic in there that would

say, okay, you have to really worry about being hacked. We're very conscious of cybersecurity every day, but where we sit in that ecosystem, system, that's not, you know, one of our top few concerns. Gary Needaproom, he is the CEO of Forgent. The ticker is FPSM Maple Grove, Minnesota. We'll call it Minneapolis, but then we don't want to offend the Maple Grovians. So, Gary, thank you very much. Have a great weekend.

Good to see you both. Take care. A good weekend. Fascinating. Let's get over to Julia Borson now for the CNBC News Update. Julia. Kelly, the Pentagon unveiled updated formal guidance today for testosterone testing for male service members who are 30 and older.

Officials say members with a deficiency will be offered replacement therapy or other hormone treatments. They also say the Pentagon will release guidelines on screening and treatment for female service members at a later date. The federal aviation gave clearance today for President Trump's proposed arch

near Arlington National Cemetery in D.C. The agency said it would not pose a hazard to aircrafts in the area. However, the FAA says it would have to be marked with a light on top of the arch and be lit by floodlights to make it noticeable to pilots. And NASA announced today it has awarded SpaceX three more crude flights to the International Space Station. This brings the total number of missions for Elon Musk's space company to 17. The three additional missions will cost $946 million, bringing the total contract to nearly $6 billion.

Kelly, back over to you. All right, Julia, thank you very much, Julia Borsden. future of health care. A big question, and we'll get into it with Oscar Health CEO Mark Bertolini right after this. Welcome back. The health insurance space could be in for a major shakeup. President Trump calling for big changes to the Affordable Care Act, with almost 23 million Americans enrolled through its marketplaces. One company betting big on an even broader shift in the industry is Oscar Health, whose stock is up 122 percent this year. Joining us now is the CEO of Oscar Health, Mark Bertolini. It's great to see you here. Welcome.

Great to see you, Kelly. Are you having fun? What's going on at Oscarville? It's always fun. Yeah. You're up 122% so easier to have fun. We're actually up 1620% since... I don't want to cut you short.

2020. And you went public? When did it go public? 2021? We went public in 2021. You've been involved, you've been CEO for about three years now. Yes, I joined April of 23. And what are your goals?

What's going on here? This is clearly paying off for investors. So the first thing was just to get the insurance company operating effectively. And insurance companies are really like banks, and you've got to do some certain things to make them work. And so we spent time building that. And then once we got clear of the basic underpinnings of the firm, we then started looking at how do we make the market bigger? Which market? The whole market.

The whole health insurance market? How do we make it bigger? How do we get more people in the individual market? Meaning on Obamacare plans? Okay. So that's specifically where you're working. Recreating. We started in the ACA.

And what we're doing is recreating that model for employers as they move their employees to define contribution. So with double-digit rate increases in a small group under 100, it's been over 20%. But is this a state-by-state effort? Or is this a national thing? So, you know, we still work at a fairly big company where you have benefits, but you're saying more and more companies are saying to their employees, you can go buy in the marketplace. How many other marketplaces are there? There are marketplaces all over the country. So there's state-based exchanges in a lot of places.

Then there's the federal network, the federal exchange. But the interesting part is that this project we're doing is with all of our competitors. And so we are all on the same exchange called ICRAX. And what we've done is we make our networks available to everybody. So we have 73% of all the physicians in the country on our network. What's it called again, the network? It's called ICRAX or Lucy Health is the new plan. Okay.

And Lucy Health will take that network and say to employers, if you put your employees into the plan, they can select from any one of those networks and any one of our competitors. So the idea of bringing our competitors together was to make a market. Right. That would make employers, large employers and small employers feel good about allowing their employees to select their network or their provider. How many members does it have now? It's just starting. Okay. So we just launched this.

Could individuals, for instance? It's about 600,000 now. Okay. But we think it would be 2.5 million by 29. Is this a point? You mentioned that the employers are using this to give employees a choice. Right. But at some point, if I'm an individual and I'm not attached to a company, could I shop in this network as well? Exactly. It's all one network.

I would keep doctors from leaving networks entirely and becoming concierge doctors. I know a lot more. They're just like, you know what? I'm out of, I'm sick of insurance. I'm gone. And they just deal with rich people. Or a lot of specialists where you go in and you try to get this more speech therapy or a chiroprice. It's harder and harder to find. Those markets aren't the market isn't big enough for everybody to do that as physicians or 760,000 physicians There aren't enough people who are willing to pay $20,000 or $25,000 to be part of a network Most concierge physicians, but what we propose to do is to change the model

Change the payment mechanism change the way they seek prior authorizations make it easier for them to be part of this individual network and then to deliver products So we deliver lifestyle products this year year we delivered a product called Hello Meno. It's for women of menopause. It's bone density scans, hormone replacement therapy, and counseling. So we're starting to build these plans where people in their current station of life can actually choose a product that works for them. There's over 100 in the ACA today.

And they can keep their network, their doctor, by signing up with their doctor. So it's an individual consumer marketplace. I want to know if you can solve the health insurance. Can you fix the deficit? Can you solve Medicare and I guess Medicaid? I mean, these systems are so expensive. So you have the public systems and then the private systems, which are themselves massive. But no consumer, I think, feels that great about how much they're paying, what they're getting, and the hassle of it all.

From 2019 to 2024, the average increase in trend in the ACA market, the network, was 3.5%. that was lower than inflation, which is the definition of health care reform. But because there were subsidies and it was federally, you know, is that why it was? Sure. Health insurance operates completely unlike any other insurance marketplace. And what I mean by that is, and it's different, I get it. But like, if I go on and I get a bunch of speeding tickets and keep crashing my car, I'm either going to be uninsured or uninsurable or my cost is going to be so high

because they're like, bro, you're going to wreck your car. You just keep crashing and getting tickets. health insurance is different than that because we don't say to somebody, well, you're 85 years old, you weigh 450 pounds and you smoke three packs of cigarettes a day for 75 years. You're going to be priced exactly the same as this guy over here who runs marathons. Right. And is a vegetarian. Right.

Why? Because it's the only marketplace where we don't have, I think, some incentives to act in specific ways. And that's why you need product differentiation. Instead of your employer offers, how many plans? Oh, two, I think. Right. And do you like them? Maybe one. Do we offer to them? Do you like your plans? I think CM is the only offer. I love them. It's a great company. This is a fantastic. It's wonderful. Everything's great.

So, the idea is you don't get a choice. You have another question for us. You don't. You don't get a choice. And so when individuals can choose their product related to their current lifestyle, they make better decisions. So if I've got a young family, I want a different product than somebody my age. whose partner and I, you know, we're in the longevity institute protocol. We're going to live forever. And we buy all those products and all those services that are extra. Real quickly. On a much.

Oh, peptides. There we go. We talked about this earlier. With Obamacare, what's going to happen to that exchange, that marketplace now that the subsidies have been removed? And a lot of people are. It's still growing. It grew by 3.4 million members this year. Even with prices reset.

So is there a future for it where prices are more economic? We offer product variability. So we said to people, lost their subsidies, here are all the other plans you can choose to buy. And here's a price point you can choose to buy them at. And so people, again, could select. Now, 95% of the people who select the ACA have a broker that helps them do it. So it's a very handheld kind of thing. But the interesting part, so back to your risk issue, the risk issue is we don't underwrite the members anymore. We underwrite the network. What does that mean? So we look at the providers

they're going to, and we price those providers out. And those providers then create the cost controls because we look for providers who practice good medicine. Wow, that's a great way to leave it for the next discussion. We'll get you back. Can we get you back? We have to go. We'll get you back on soon because this is a weird, complicated world that everybody's in and needs to understand. Mark Brilini, thank you. Have a great weekend. More power. You too. It's Friday, so let's do our stocks of the week. I'll start with Nike, where it just keeps getting worse. Today, the sports brand on, signing a soccer star away from Nike, and he's not the first athlete to leave Nike this year.

The shares are down more than 40%, although keep in mind. Rani Connick of Jeffreys told us a few weeks ago he thinks Nike's problems can be fixed. He pays a 4% dividend yield. On his losing momentum, footwear is hard to disrupt. Brian, we will see. We'll see if Killian Mbapé can change that.

On a more positive note, let's talk about power generac surging this week. We talked about it yesterday, I know, but just to remind you, it's down a little bit today, but the stock soaring. 40% Wednesday, $2.4 billion deal. Generac is going to supply backup generators to Amazon's data centers, and Amazon in exchange is taking warrants, basically buying a part of Generac.

So Generac down a little bit today, but the Brookfield, Wisconsin company, where I demonstrated my knowledge of Milwaukee area highways. Your knowledge of geography is unsurpassed. Well, I travel a lot. So anyway, good week for Generac and its stockholders. My son is obsessively. with license plates right now.

So you know, he saw Nevada the other day and he had my dad call me to tell me that they had seen Nevada. Anyway, thanks for watching, Power Lynch, everybody. Closing bell starts now.