Power Lunch - Software Sell-Off Continues 2/4/26

Episode Date: February 4, 2026

AI fears rattle software stocks. Enphase Energy shares soar.  And what should you do with some of the mega-cap tech names? Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Big tech getting smaller as the NASDAQ turns negative for the year. Welcome to Power Lunch, everybody. I am Brian with Kelly Evans. Hundreds of billions in market cap wiped out just today. Some say it's because of a new AI tool, or maybe it's just investors, throwing in the towel on some tech software slam. But does that mean opportunity for you? That's the big question. We're looking through the wreckage here. Plus, the sell-off in crypto has Bitcoin trading around $72,000. Its market value slumping almost half a trillion dollars in less than a week. is a crypto winter upon us. And it's the best of times and the worst of times for the two weight loss drug giants. Eli Lilly now up almost 10% on the session, while Novo Nordisk is down about five more than 5%.

We'll have more on the future of the space and the battle between these two Titans in just a moment. All right, we've got a lot more to do, but let us start here with the software slump, the sell-off showing no signs of stopping. One big software ETF, now down seven days in a row. And here are just some of the stocks, new yearly or multi-year lows.

Intuit, Salesforce, Workday, FICO, Atlassian, ServiceNow, Adobe, HubSpot, and more. A few of the big names getting hammered. But the recent drop has caused investors maybe to pause and ask one really big and really important question. Is artificial intelligence, AI, going to effectively kill software? Well, Nvidia, CEO Jensen Wong had some strong words to say about just that. There's a whole bunch of software companies whose stock prices are under a lot of pressure. Because somehow AI is going to replace them.

It is the most illogical thing in the world, and time will prove itself. So if you believe Jensen Wong, and why wouldn't you, this could mean it could be a golden buying opportunity. Let's dig in. More Citigroup, senior software analyst Tyler Radke. Joining us out, Tyler, welcome to the program. Do you agree with Jensen Wong? I mean, he basically said the sell-off. maybe not all the stocks he didn't name names seem to be a little bit illogical.

What's your take? Yeah, hard to disagree with the name like Jensen, but what I would tell you is not every software company is created equally, right? There's companies that have different business models. They sell to different personas within the organization. There's some companies that have business models oriented around the volume of data that they process. So I think the reality is this space in terms of,

of AI is moving so quickly. What do investors not like is uncertainty. And so what we've seen is these software stocks, which by and large, are still not that cheap on conventional valuation metrics like gap, price to earnings multiples. There's still a lot of stock comp. So just with this uncertainty, we've seen a lot of selling, clearly people running for the exits in terms of these software portfolios. But we do think this is a good buying opportunity, but I still think you need be selective. We do see some risk to some of the traditional software models. But again, everything is just getting sold today and over the last few weeks. So I would agree. I think broadly we're overdone. Let's be selective, Tyler. I mean, to the extent that you can or want to be.

I'm just going to pick service now because we have some numbers right in front of us. This is a company trading at 26 times forward earnings estimates. I don't see anyone slashing those estimates by 10, 20, 30 percent. So let's just call it 26 times. They're still growing if I'm, if I'm I'm not mistaken, 19, 20%, maybe more operating margin is what? Is it still around 32%? Something like that for next year? I mean, that's pretty good. I mean, by any companies sort of estimates.

Yeah, we're positive on service now. Look, I thought that was a great quarter. Net new ACV, so their volume of new business actually accelerated. I would say in any of the other years, I've been covering the space over the last decade-plus, that would have resulted in the stock being up. certainly didn't help that the night they reported, Microsoft also reported and had disappointing Azure numbers. But again, I think what investors are questioning is the terminal value of these businesses, just because we don't know exactly how this is going to unfold in two, three, five years down the road.

But service now, I think, is one that we would be adding to on the weakness. I think they're on the right side of AI. They got a billion-dollar plus AI business rapidly growing. They're maintaining that 20 percent. top line growth, which is super impressive at their scale. Based on the target prices and based on the current stock prices, Tyler, there's a huge gap. There's 30 to 40 percent potential upside, less those target prices come down and they could in many names. That smells like opportunity. Where are you recommending to your clients, Citigroup's clients, the best places to buy software

right now? Yeah, well, and it's funny. I think 30 to 40 percent kind of gets you back to where we're. we started the year. So it's not like we have to go back and look at, you know, years ago in terms of when we're at the high. So our top picks, look, the way I would frame it to you is you want to own the names that you think are going to be relevant as we get to the other side of this AI trade. I think there's a lot of uncertainty in application software. So our preferences are to own the names exposed to hyperscale, data volumes, et cetera. So Microsoft,

MongoDB, Snowflake are among the top names in our coverage. Service now is one in the application group that we do think has a good AI strategy and can continue to drive growth. So those would probably be our top four. We did recently upgrade Palantir as well. Obviously, impressive numbers earlier this week. Stop kind of getting back all those games today. So it just tells you how broad-based the selling pressure is.

You're the second person in two hours to recommend Snowflake and the shares are down 7% today. So it's, look, normally you'd say, great, the market's giving you an opportunity, but I just wonder what those sellers might know that everybody else doesn't. Or maybe this is just how the market works. People who are freaking out or have to get out because they have clients to report to or whatever it is, are all selling their positions and it's an entry point for everybody else. Yeah, look, I think the issue with Snowflake, and again, we're positive on the fundamentals. It's still one of the higher valuation stocks out there, right?

So if you're trying to value it on gap earnings, right, it's not checking that box. But again, this is a business we think continues to accelerate growth. They have a ramping AI business. And again, they're tied to data volumes, not developers, not knowledge workers, where there's a lot of concerns around those seat-based revenue models. Yeah, we put up the 112P. And I said, well, may, never mind. Maybe they have a point.

No, I'm kidding. Tyler, thanks very much. Really appreciate it and hope to bring you back to continue. to sift through all of this today. Thank you. With Citigroup, appreciate it. Sticking with software, let's bring in another investor who has a big position in Microsoft, a stock that has lost a quarter of its value since last summer.

Ellen Hazen is the chief market strategist and portfolio manager at FL Putnam Investment Management. Should we call it a, it is a software stock, I guess. But you, the whole market is shifting into semis and hardware. You like that as well. So just talk through where you see opportunities and whether you think this is all rational. Thanks, Kelly. So as we look at the tech space, clearly hardware is the bottleneck right now, not software, and specifically memory. So we like the GPUs. We still like Nvidia and Broadcom and other semiconductor names in addition to semi-cap equipment. But memory is where the bottleneck is right now. So we like Micron and companies like that, and we like networking stocks like Arista.

Now, on the software side, the thing that we look at when we're looking at the software stocks in the market is this. everyone is worried right now that they're going to lose their revenue, right? That if anyone can use Claude code and create their own code, then they don't need to buy software from Service Now or Workday or whomever anymore. But if you look even beyond that, the thing that's changing under the surface is that as all these companies add AI agents into their offering, suddenly the cost of goods of that software is not zero anymore, right? So every time the customer uses it, it's going to have incremental costs.

And so it's not only that the top line might go down for some of these companies, but the margin might be under pressure. Although I do wonder if AI is going to be ultimately more expensive than people. Like you lay off people to replace it with AI, but the cost of AI is a lot because you got to pay for the power. That aside, go back to the hardware. Micron today. They're all getting hit. So Micron's down 10% last time I checked. The name that you like, and you've made a lot of money in Micron.

Let's be clear. Today is one day. Would you use a day like today on weakness to add more? I would. I would because right now memory prices are going parabolic. Now, will this last forever? No, of course not. There will be a supply response.

There will be increased capacity brought online. But for right now, the memory is the bottleneck. A lot of that is commoditized, though. A lot of that memory is just kind of a commodity product. Now it's down 12%, Mike Ron. Again, one of the best performers. Just because we said something. Yeah, I'm not trying to make two.

I blame you. Right. But up until this morning, you could say this was a software, a hardware-beating software narrative. Well, what's going on this afternoon, you know? I think tech in general has been very strong performers for the last year. And yes, software's had a tough couple of months, no question about it. But if you look back over the last three years or five years, hardware and software and networking and chips, they've all done phenomenally well. So, yes, software is giving a lot back. And I think some of it is that the market is fearing this to be an existential crisis in a way that they're not quite for the hardware names. But having said that, if you look at memory stocks like Micron, they've gone up a lot this year. So sure, you can see a pullback. But that's doesn't change the underlying supply demand dynamic. There's a shortage. You know, it makes me happy aside for the fact that today ends the darkest three months of the year and that we're

going to have longer days pretty much. Is that true? Yeah, it's like the solar cycle ends today. So things are getting better. So let's be optimistic, right? Hopefully the ice is going to go away soon. Small caps. I know they're not sexy. We've talked about Nvidia for like every day for three years. Small caps have had the best outperformance against the macro market in multiple years, although we've been here before, we've had these fakes, then everybody gets disappointed. Is this truly going to be the year of the small cap stock? Can we actually look out at America and find names

we've never talked about before and make money in them? I think it's likely. I think it's likely. So you and I have talked about this before in the past. We've had one, two, maybe even three months of small cap outperformance over the last three, four, five years, but it always falls back. Why?

Because the earnings weren't there. If you look at earnings estimate revisions within software, where every single one of those times, the estimates were still coming down. What you see now, Brian, is that over the last three or four months, small cap estimates are going up. That's the difference.

And the valuations are there, the support is there. Now, there are still some reasons why it might not be a 100% winner this year. In other words, as we look at it, usually small caps outperform when we're exiting a recession, right? This isn't that.

So you can make a case for why it won't happen, but for the first time the earnings are there to support it, and so I think it has a pretty good chance of being one of the winners this year. Are you looking at them actively at FL Putnam? Absolutely. Working the screens, making the Bloomberg terminal smoke, you know, what a fax set, whatever you might use?

Are you replacing all of that with claw-generated software? Or yes. You can, you know, use yourself to go through all of this. We're using everything at our disposal. We have a number of AI tools that we've developed that we use to help sort through the Bloomberg and everything else and Yahoo Finance, whatever you use, right? So there are tools that can help, and we are using. those to help. But I think that small cap could be interesting. The one cap yet I would say,

though, to that is that a lot of small cap companies, and particularly the indexes, are not as high quality as they used to be because all the great small cap companies are staying private. They got big. They're staying private. Or they're staying private. I think you're going to say they grew out of being a small cap to a midcap. They went from Bobby Brady to Peter Brady. Imagine if you're a software company that stayed private because you could. And now you're coming into a public market that doesn't want to have anything to do with you. Right. So I think you need to be much more selective than just buying an index. Yeah, very nice. Best outperformance against the S&P 500 for the Russell since 2021.

So it's been five years. Yep, back since when interest rates were lower, they used to have an easier time. She's hard to believe that 2021 was five years ago. That too. We're getting old. What can I say? No, we're getting better. Like the weather. Like the weather, Ellen. I'm telling you, your snow in New York is so much better than ours in Boston. Apparently we clean our streets better than you guys. And the sidewalks. Sidewalks are great. Philly just entered the chat, too, by the way. Ellen, thank you.

Thanks for having me. All right. You're very welcome. Now, to the bond market's the benchmark 10-year yield, remaining elevated. It just stubbornly will not go down. It's at 4.27%. You had ADV private payrolls. That's the private sector number rose by just 22,000 in January, way short of expectations.

That impacting your money, your borrowing cost as well. 30-year fixed mortgage rate. Again, like the 10-year yield because they're kind of tied. stuck 6.2%. If you're trying to buy a home, I know it's frustrating. I got nothing for you. I'm checking all the inventory. Not a lot coming online either. By the way,

house went on sale near me. Sold in three hours. Wow. Multiple bids. I guess 6.2. Three hours. That's crazy. After the break, a tale of two pharma giants, Eli Lili, soaring today while Novo Nordisk, the trailblazer

in the weight loss space, is down 20% this week. We'll have us a closer look at why next. All right, shares of two big farmer companies moving in very different directions right now. Eli Lilly spiking after a blowout quarter demand for its obesity drugs surging. Meantime, Novo Nordisk, which, by the way, also makes anti-obesity drugs, moving sharply lower after warning sales could fall by double digits this year. Novo, by the way, has now wiped out about 20%, one-fifth of its value in just two sessions. But in an interview with Mad Money airing tonight, Novo's CEO assured investors,

Brighter days are ahead. My message to you, investors, myself, is be a bit patient. Better days are ahead of us because volume uptake will come on the back of lower prices. Again, it's also a weight loss company. All right, so who wins the weight loss drug war from here is Novo's Pain? Really, Lilly's gain. Let's ask Guggenheim managing director and pharma analyst. Seamus Fernandez, thanks for coming back on.

If one's winning, I don't want to say one's losing, but if one is doing better, than the other, does that mean people are shifting their GLP1 drug of choice? Yeah, it's a great question, Brian. Look, I don't think that we're seeing a lot of market shifts just yet in terms of their drug of choice. We're seeing a huge market expansion in general occur. I think there's a lot of dynamics in play. I think last year we saw a lot of changes in terms of the preferred drug.

in market. So that really was Lily's Manjaro and Zepbound coming into the market very aggressively. Lily told us that they have a million patients in Lilly direct alone, and that's only a portion of the market. So, you know, we really are seeing a patient preference, physician preference, lean towards Manjaro and Zepbound, in part because of the additional weight loss and the ease of you know, sort of the injection, weekly injection, you know, and a lot of patients being satisfied by only, you know, sort of a single titration step. But Novo's Wegovi is now available in pill form. People like to take pills. They don't like needles. They don't want to stab themselves effectively. Is that pill form of Wegovi going to recoup any market share losses?

I mean, we definitely think that it has an opportunity to recoup market share losses. certainly up until the availability of Lily's own oral pill orpherglyperon. So that won't be the brand name drug of Lily's oral pill. But that product is in the FDA approval process right now. It's expected to be approved in the second quarter of this year. So Novo actually has some runway to really establish Wigovi pill in the market. And they mentioned this morning that they already have 130,000 patients on drug.

You know, it isn't quite as visible to the market because not all of it is reported and out there, but what they've said is there's a lot going on in the cash pay market, you know, driven by other companies like Life MD, Rowe, and, you know, there's availability of Wigovie Pill predominantly in those channels. those channels. David Ricks gave a great interview this morning. I wouldn't be surprised if it's

part of the reason why the stock is doing so well. Seamus, he talked about, look, they have over 40 percent growth, revenue growth, right? Over 40 percent margins. And maybe only NVIDIA and Broadcom can top that in the entire market. So it's flirted with a trillion dollar market cap. I don't know where it is now. It's at $1,000 or so. I mean, maybe a stock split is coming. And their patent exclusivity, he said, he thinks they have it until the quote unquote late 2030s. So unless Novo or Pfizer, someone is able to come in and make inroads on this space, it's hard to see what stops this train. Yeah, I think Lilly is definitely in rarefied air here. You know, that is definitely one factor that is in play.

Their pipeline is accelerating. They've got a number of assets that are moving into clinical trials more quickly than any kind of. competitor out there at this point. So I really think that, you know, Lilly has established a leadership position with their existing portfolio. They have an incredible sort of runway from a patent estate perspective and this kind of flywheel that they've built, you know, with the incremental launches of additional products, satisfying other parts of the market, bringing in Lilly direct to satisfy the cash pay patients. It really is something that is, I've never seen it in my career of 25 years following the pharmaceutical space. It may, we'll let you go,

Seamus. I say this, not tongue in cheek, having been there, it may single-handedly help change the fortunes of the city of Indianapolis, where Eli Lilly's got a huge campus. There's so much money being made, hopefully by the employees as well. It's a big deal. We can get extra shrimp at St. Samos. Samus Fernandez, thank you very much. I remember when Novo was affecting like exchange rates in Denmark or something because, I mean, when these companies are doing well, because this category has risen so quickly and so strongly, you're absolutely right.

It has a huge macro impact. I think Novo at one point was or still is the largest company in Denmark. It was wind up there in Europe. Lego. Speaking of Big Pharma, we've got a big interview for you tomorrow. The CEO Bristol-Myers Squib. In a rare interview, we'll join us live right here. On set, Chris Burner, will join us here. On set. Very, very cool. Thanks so much. Yep. Coming up, crypto slumping again today with Bitcoin below 73,000 is a new crypto, crypto winter upon us. And what are the ramifications? We'll discuss that next. Welcome back. We've been talking about the software slump, but today it's hardware names. Also, we mentioned Micron earlier down 12%. Look at AMD, down 17% now.

Worst day since 2017. Let's bring in Christina Parts and Evas. Christina, what happened? I would actually have to say it was a relatively strong report. The revenue hit $10 million in the quarter for the first time ever. They said that CPU strength was just phenomenal. And that's a pretty bullish signal given Intel competitor Intel warned of supply issues. AMD doesn't seem to have any supply issues with those central processing units.

They also spoke about data center revenue beating. They talked about AI revenues falling into play. their next iteration of their AI chip is scheduled for the second half of this year and is going to ramp into the fourth quarter so that should help pickups. But the major concern, I guess, adding to some of the sell-off first is the stock has really run up. Even since January 1st into yesterday's print, the stock was up about 13% versus like Nvidia down 3%, Broadcom down over 5%. And so the investors were concerned for a few things on the earnings report. The fact that The China sales that AMD had for the quarter inflated the number a little bit more.

A lot of analysts weren't expecting China sales to be part of the equation, so that changed the game a little bit. And then you had operating expenses as well that came in slightly higher. And I know I mentioned the new product launch in the second half of the year, which is a much more powerful GPU. But it seems to be a more of a show me kind of story, right? They're saying things are going to ramp up later on in the air, but investors want to see things now. And I think that's reflective of the entire tech trade right now. There's a crisis of confidence just in regards to which names are actually starting to see return on revenue. For the last little while, it was memory, storage, and optical.

And now we're starting to question some of these compute names to see if they're actually getting the sales that they promised. Yeah, or maybe investors have just moved their money somewhere else because they feel like they can make more money in a different sector, because AMD has tripled effectively in about five years. Christina Parsons-Evels, thank you very much. So AMD, folks, not the only name or thing getting crushed. The crypto meltdown also rolls on. Bitcoin below $74,000, heading for its worst week in nearly a year. It's wiped out about 20% of its value on ether since Saturday. Salana also getting slammed on pace for its fourth week in about three plus years. McKenzie Sagalos joining us now. It's hard not to sort of look at what we just talked, AMD, some of the software companies, now crypto.

It's hard not to look at this all kind of as being related, but I don't know. There's certainly being a parallel drum between Bitcoin and the software names. You've got the world's largest cryptocurrency at its lowest level since the pro-crypto President Trump won a second term, nearly $500 billion in crypto market cap gone in just one week. And the selling pressure isn't letting up, and that's the big concern here. Those spot Bitcoin ETFs that were supposed to bring stability are now seeing some of their biggest outflow days since November. Three of them in just the last 10 days of January, you've got Michael Burry, the big short

investor who called the 2008 financial crisis. Warning of a potential death spiral. His argument is mechanical. If Bitcoin drops another 10%, then strategy, the biggest corporate holder of Bitcoin could be billions of dollars underwater on its digital asset stake with capital markets, effectively closed to it. And then if the slide deepens, Burry says the pressure can spill into the mining complex where weaker operators could be pushed toward bankruptcy, something that we have seen happen in past bare markets. He wrote that sickening scenarios have now come within reach and

perhaps the even bigger tell on how this market is trading right now going to your earlier point, Brian, Bitcoin increasingly behaving like a software stock. Its correlation with the I-share software ETF has hit 0.73. That is an index full of names like Salesforce, Adobe, and Oracle companies getting hammered on AI disruption fears. So while the NASDAQ 100 is only a couple percentage points off of its highs, software has taken the brunt of the selling. Bitcoin is writing down with it. Van Ex Matthew Siegel put it bluntly. Bitcoin is just open source software. Certainly hasn't proven out that whole digital gold narrative. And instead it is acting like an out-of-favor tech name. Meanwhile, actual gold, again, moving toward its all-time high.

All right, McKinsey, fascinating story. Thank you very much. And speaking of Bitcoin, don't miss, a big power lunch interview here on Friday. Fong Lee, the CEO of Strategy, is going to join us following their earnings report to break down their exposure to Bitcoin and what their strategy is now. Well, I got a news alert on Amazon and OpenAI. Kate, Rudy, joining us. Kate, what's going on? Hey, Brian, so I am hearing from a source familiar with this deal that Open AI and Amazon are now in talks for a broad partnership that could bring these chat GPT models into Amazon's ecosystem. Alexa in particular Alexa Plus that rolled out more widely today, other internal projects over at Amazon as well. Company here, Amazon did decline to comment. The information did have some of these details first earlier in the day.

The discussions, though, I'm told, are happening alongside Amazon's current talks, which we've reported to invest up to 50 billion. billion dollars in Open AI. There's an ongoing equity fundraise that we've reported. Again, according to a source there, as part of the deal, Open AI, I'm told, could also tap into Amazon's custom AI chips and cloud compute. The talks right now not finalized. A lot of this could change, as happens in private markets and sent with these deals. Andy Jassy, the CEO of Amazon and Sam Altman, I'm told, are also directly involved in these discussions. Amazon notably has a relationship with Open AI's rival, Anthropic. And Claude, that chat about Amazon has invested $8 billion into that startup, it does mark a major shift. If this does go through to a competitor, Open AI, though,

on the other side, partners with Apple. Sources I'm talking to say that Amazon is seen as a more strategic enterprise partner versus Apple, especially as they're going to compete on devices. Open Eye has been pushing deeper into these AI powered devices. We don't know what these look like yet, but they did acquire Johnny Ives startup I.O. for $6 billion, guys. But Alexa Plus getting a little bit the chat GPT makeover. And so, Kate, you said Amazon's going to possibly be 50 billion into this round? Yep. Into what could be a hundred billion dollar round that's still ongoing, but Amazon could make up roughly half of that. You also got softbank and video that we've reported. And so they are going through a mega fundraise. This Amazon deal is kind of happening in tandem.

So a strategic investment by Amazon here, and they report earnings tomorrow. I'm glad that Open AI can now listen on our Alexa devices. Would this replace the $100 billion that potentially maybe pulled out by NVIDIA, would this be in addition to it? I don't want to put you on the spot. Oh, yeah. But there's a lot of money going back and forth and it's hard to keep track up.

I know. Well, so it's sort of a nuance here. So the NVIDIA deal that reportedly had been on ice, we've been talking about, that is more of a compute infrastructure deal. That was announced in the fall. That is totally separate than this equity fundraise that Open AI is doing.

So you can think of that as sort of a separate NVIDIA OpenAI specific deal that there's been some reporting around. And then flash forward, here we are in February. Open AI is raising more money from other investors, Amazon, and NVIDIA. So it is kind of confusing. If you ever watch Homeland, you know, the Claire Dane scene where she's kind of taking the strings and putting them on the bag, I feel like that's what we have to do with all these deals. Because it's so hard to keep track up.

Feel free next time, Kate, to bring that with the straight. I will roll out the board. We'll visualize it. Kay, Rudy, thanks very much. The phone line to Beijing is wide open. A long and thorough call today between President Trump and President Xi will tell you what it means for trade and that high stakes trip to China next. Welcome back. Global Trade is certainly back in focus after President Trump said he has what he called an excellent conversation with China's President Xi,

reviving some talk of negotiations and a reset in U.S.-China relations. Eswar Prasad is a professor of trade policy at Cornell and a senior fellow at the Brookings Institution. He is also author of the new book, The Doom Loop, Why the World Economic Order is spiraling into disorder, which just came out yesterday. Convenient time and congratulations on the book. We've obviously been following your work for such a long time. So, it's great to have you here. Thank you for having me. Welcome. So, look, I was thinking about doom loop more in like the fiscal sense, right? There's many doom loops I think we could talk about. But what do you think is the one that we need to be most worried about here? So you know, Kelly, politics, economics, and geopolitical, always go along.

parallel tracks and sometimes they reinforce each other positively during the initial period of globalization, it looked like things were working in a positive direction. But now my fear is that these have become intertwined in a very important way and they're feeding off each other in a negative sense. So for instance, if you think about globalization, it was seen as a positive sum game that would offset the zero-sum game of geopolitics, but now even globalization, global trade in particular, is being seen as a zero-sum game. So it's setting off all sorts of negative dynamics and they're bringing

the worst in each other, these three elements. You write that the world is becoming frustrated or sick of, basically, I don't want to put words in your mouth, with U.S., as you say, dysfunctionality in global trade. Why do you say that? Because the United States, I understand we have a sort of a nationalistic view right now. We've always kind of done our own thing because we're geographically isolated from much of Europe and Asia. The U.S. has never been as open an economy as the rest of the world, but the U.S. has provided global leadership. If you think about the rules of the game that has enabled shared prosperity, not just for the U.S., but for the rest of the world.

And countries like China and the emerging market countries have really developed as a result of these forces of globalization. The U.S. has been very important in setting up the rules of the game and also in administering the rules of the game. And what the U.S. is retreating from right now is leadership. The leadership is really important because the U.S. was sort of the paragon that the rest of the world, you know, looked towards, and that leadership really helped. And now the U.S. is receding from that role, and there is no clear alternative. Do we want the world to look like China? Probably not. So who's going to fill in that void is the question? And ironically, and this was something Your Dedy Research was writing about just in the last 24 hours, that China has stepped up making deals with Canada, making deals with Europe. And at the moment when he says they haven't earned this position.

It's just that the U.S. is volatile enough that other trading partners are kind of looking their way. You've also written about a decade ago about the dollar trap. What would you say is going? When you watch the dollar lately, big fall in January, are we all making too much of it? Do you have a point of view about the dollar as it relates to this broader topic you're talking about? To my mind, what is really crucial about the U.S. role in the world is the democratic institutions and the broader institutional framework, the rule of law, the institutionalized system of checks and balances, the independence of the Fed. this has been very important for America's place in the world,

America's leadership of the world order, and for the maintenance of the supremacy of U.S. financial markets and the dollar. All of those institutions I feel are really fraying right now, and that leaves an opportunity for China to step up to the plate. China does want to behave like the adult in the room as a protector of multilateralism of globalization. The problem is other countries still don't trust it because of its weak institutional framework.

So what I think is the biggest advantage of the U.S., not just our economic and financial strength, but these institutions, we are loving that to fritter away. Well, if people are interested in this, and they should be, the book is called The Doom Loop, why the economic world order is spiraling into disorder? Why am I holding it up when we have a graphic? Eswar Prasad, really appreciate your time. My pleasure. You can also take his class if you happen to go to Cornell.

You could. Right? So there's also that. I'm not a student, but Dom Chu went there, so he could maybe pop in. So did Andrew, I think. I thought so, too. Yeah, we've got a couple of... Were they in your classes? No, they would have been before. All right.

We've talked about some of the biggest losers in the market today, but there are some bright spots. Again, we're trying to find opportunity. You're looking at one right now. It is up over 30%. Who is that? We'll talk about it and reveal it next. Our markets tech down across the board, but there are winners. And a big stock winner right now is Enphase Energy. It's a battery maker. It's soaring. Some of this move, no doubt, short covering because both Last quarter results and guidance just came in better than expected. That is sending many of the shorts scurrying. They got to buy the stock.

But N-Faze, now 50% in one month. But that move, not scaring off your next guest. RBC analyst Christopher Dendrinos joining us now. He just upgraded N-FAS to an outperform. He's got a $54 price target on the stock. Chris, I think, from your note and others, the big takeaway here is this commercial opportunity for end. phase, what is that and why should potential stock buyers care? Yeah, and I think it's the commercial piece of this, and it's, you know, I guess call it

less than feared fallout from some of the tax credit termination that occurred at the end of last year. And so for Enphase, you know, they rolled out a commercial product late last year. It's kind of seeing very early uptake for them. And, you know, the market in the U.S., it's definitely much smaller than the residential and definitely far, far smaller than the utility side of things. But it's an area where they haven't participated at all historically. And if you look at this segment of the market, it's Solar Edge who's a competitor of theirs in the U.S. And then there's a handful of Chinese players that were trying to compete in that segment of the market. That Chinese player had about a 20% market share.

And with the change in some of the tax rules this year, you can't. buy from a Chinese player anymore. And so that creates an opportunity, you know, 20% market share opportunity for Enphase to come in. It's interesting, Chris. Sorry to jump in. We just, I don't know if you heard the end of our conversation there with the professor in his book about globalization. And he made some good points about the world and globalization and U.S. or whatever. But Enphase, from what you're saying, appears to be a direct beneficiary of some rules that would make it harder for whatever people think of this for overseas competitors. particularly Chinese-made competitors, we don't know the labor conditions, et cetera, to compete on price, right?

NFA's direct beneficiary of maybe some of the pro-U.S. policies. No, yeah. And I think, you know, if there's one thing, I think President Trump has done right with some of the reworkingings of the, you know, one big, beautiful bill here. It was to put in place some of the protectionist policies around, you know, where you can source and where you can buy product from. And it protects American jobs. It incentivizes domestic manufacturing. honestly, the solar industry has spearheaded this and kind of gone all in on refocusing, manufacturing into the United States. And, you know, that's paying dividends here, definitely today for end phase where they've got the opportunity to go after this market segment. That's kind of opened up as a result of some of these policy changes.

Stock is soaring Chris Dendrinos. Really appreciate you coming on, Chris. Thank you. Thank you. Huge move and a tough day. Let's get back to Kate Rooney for the CNBC news update. Hi, Kate. Hi, Kelly. President Trump told NBC News today in an exclusive interview that Iran's supreme leader should be very worried right now amid a report that nuclear negotiations between the U.S. and Iran could fall apart. According to Axios, the U.S. rejected Iran's demands to change the location and format of Friday's talks with Iran reportedly pushing to move them to Amman. Secretary of State, Mark Arribio said earlier today the venue is still being worked

through. A U.S. official, meanwhile, tells Reuters' talks between Ukraine, Russia and the U.S. in Abu Dhabi today were productive, and the negotiations are set to continue tomorrow morning. The U.S. broker talks are focusing on Ukrainian territorial concessions and the fate of Europe's largest nuclear power plant, which does sit in a Russian-occupied area. And finally, a coalition of Minnesota school districts is filing a lawsuit to block ice activity near public schools. It comes after the Trump administration last year reversed a policy to avoid immigration operations in sensitive locations. The lawsuit asks for a ban on operations within 1,000 feet of school properties, guys. Back to you. All right, Kate,

thank you. It is now the time to snap up some of the big tech and software names trading at a pretty steep discount lately. We're going to get a trader's take on some of these big trades right after this. Welcome back. Let's do our power check today with AcuVest, CIO, Eric Clark. He's manager of the Alpha Brand's logo ETF. Eric, appreciate you joining us. We want to get right to the theme of the day, which of course is software. Getting crushed. has been crushed for a while now. You own a couple of the names in the ETF, one of which is App Levin, which is one of the worst performers lately, including today down 15%. What do you do here? Well, nice to see you back. I mean, listen, the software thing, it feels like Groundhog Day every day.

App Loven in particular, it's just a very expensive stock, an incredible innovator in an important category digital ads with a high valuation and anything that has. has a high valuation. Look at Palantir today. Great numbers of stocks down 12%. The market is just in one of those modes where fundamentals don't matter. Valuation, high beta, tech is just a bad thing. And so they're selling everything in that group and selling it pretty aggressively. But the business is still strong and the valuation obviously has come down pretty meaningfully. So it's a lot more intriguing here. But you never know when the selling is going to stop. That's the momentum trade. Right. Well, I suppose if you're getting in here, that's one.

thing, but it's been a brutal ride. So let's move along to Amazon, which is your number one holding, and they're about to report tomorrow. Why is you so bullish on it still? Well, I mean, you know, we're still bullish on retail, which we always thought nobody's giving retail any mind at all. It's still a massive business with a lot of operating leverage, cost of serves going down, margins are going to go up, the consumer's getting better, so that'll have more discretionary spend. So the retail business is great. People obviously don't care. They just want to know about AWS. I think the big issue that we all want to know is, is this capex spend for AI buildout an ongoing indefinite thing, right? I don't want to be on the treadmill of big capex spend

forever because asset heavy companies get lower multiples than asset light businesses. But, you know, we still love it. We're still expecting good numbers from AWS. They're still going to be capacity constrained. And it's cheaper than it's ever been. Literally, Amazon is one of the cheaper stocks in tech communication services, consumer discretionary as well. All right. That and I'm watching the tape as I talk to you about this. And it's really taken quite a nice move higher.

Dow was negative about an hour ago. And now we're up 315 points. So even as we're talking about these, it shows the volatility we're going through. So what about Apple, which was bucking the down tape? Now it's just experiencing an even higher move. it's up about 2.3 percent. What do you do with this one, Eric? Well, we hold it like we've been holding it since 2016 when we started. I mean, we're still, one, it's a defensive company. So I'm not surprised it's been really strong in a down tape for other tech. But two, we are at the beginning of this

refresh cycle we've been talking about. Now we have the news with Google, with the Siri refresh, which is obviously a huge thing because Siri is not very good. And we don't tend to use it as as we would like to. So massive growth cycle coming. Earning should accelerate after being kind of stagnant for the last three years. And they'll grow into that valuation. It's still a little expensive, but you wouldn't expect it not to be given the stability. And they just had a monster quarter. Revenues were good. Margins were good. So we still love Amazon and Apple just for slightly different reasons. Apple's a little more defensive. How's a growth acceleration coming? Amazon stable, predictable. And we just want to hear about AWS.

AAA, Amazon Apple, App Lovin for our power check today. You're long, all of it. Thanks so much, Eric. We appreciate it. Eric Clark. We have another A, AcuVest. I want to give you a quick update in the market. Really interesting, I don't want to say weird day in the stock market, but the Dow is up about 6 tenths of 1%. Not a big gain. We're not making too much of it, except the NASDAQ is down over 1.4%. So the Dow is up. The NASDAQ down, there's about a 2% difference between the Dow, sort of older industrial companies and a few software companies, and big, big tech, the NASDA composite, down 1.1%. So big divergence in the

market. By the way, silver, it's up 4% clawing back kind of what it tried to gain back what it lost rather on Friday. More power lunch next.