Power Lunch - S&P 500 Enters Positive Territory Year-to-date 4/13/26

Episode Date: April 13, 2026

The U.S. imposes blockade on Strait of Hormuz. Pickering Energy Partners' Dan Pickering joins to give his thoughts on the impact it will have on the oil market.    And can compute power supply meet the AI demand? Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The U.S. blockade of Iran and its ports takes effect, and the markets slightly higher. Welcome to Power Lunch, everybody. I am Brian Sullivan. Kelly is hosting Squawk Box all week. Stocks overall, they are up just a little bit this hour. The Dow hovering right around that flatline oil and energy once again in focus. June contractual WTI and Brent, they are higher, but they are down from their highs today, both up right now, about 4%. Welcome, everybody.

Glad you could join us here on a very accurate. packed hour, and we are going to start right here with arguably the most important map in the world, at least right now. That is ship traffic in and out of the Arabian Gulf, the Strait of Hormuz. This is a live map, and as you can see, still quiet. Not a lot of red dots or arrows, all the red dots and arrows. Those are tankers, thanks to our friends at Marine Traffic. Now, the news is This. The U.S. imposed what we call a blockade on Iran and Iranian-link shipping after peace talks broke down in Pakistan over the weekend. And while the term blockade certainly sounds like an escalation, it is always important to look a little bit deeper beyond most of the other headlines.

Here's exactly what we know. U.S. Central Military Command says its forces will not impede freedom of navigation for vessels transiting the Strait of Hormuz to and from Iranian ports. Iranian ports, a critical fact to remember. And in this story, the naval action that we are taking, which, to be clear, is in the very early stages and certainly could change in the hours or days ahead. Right now appears targeted only at ships either going to or from Iranian ports

or ships that are paying a toll to Iran. All other ships will likely be left alone and should be more free to transit Hormuz than any time in the last month. And here's another critical point. Iran's only real exports are oil and natural gas. So any ship leaving an Iranian port is likely carrying one of those two things. And here's another fact you may not be hearing anywhere else. The Strait of Hormuz is less critical to global energy markets than it was just to the couple of weeks ago. Hard to believe but true, and here's why. The Saudis just said over the

weekend that they are now at a full 7 million barrel per day capacity through their cross-country pipeline. This one right here, known as the East West. That pipeline load ships in the Red Sea right here, not in the Arabian Gulf. Also, the UAE, it is fired up a pipeline across its own country, taking another one and a half million barrels outside the Gulf. And if, And it's a big if, if Kuwait and Iraq can now simply begin loading safely their ships, those ships would theoretically be unimpeded from the blockade because they are neutral countries. They are not Iran. If all that occurs, and some is, some still has to happen, only the two million or so barrels per day of Iranian oil might be impacted.

Most of that oil is going to China, which has over one billion barrels of oil in storage. This is why oil prices, while up 2.5% right now to 98 and change, they're under $100 per barrel here for made delivery and not at $125 or $145 or higher per barrel. It's confusing. Let's make more sense of it and kick things off. Joining us now is Iran expert. Miedmalecki, he is senior fellow at the Foundation for Defense of Democracies, and he helped design the Treasury Department sanctions against the Iranian regime. He did some great math over the weekend on X, and Miodo really glad to have you here, because I am in no way suggesting that the Strait of Hormuz or the Arabian or Persian Gulf

is not important to the world. It certainly is. But did the point get made that relatively it is less important than it was just a couple weeks ago? I mean, you're making a good point. And, hey, thanks for having me. I think you're making a good point here. It is becoming less and less relevant, but also keep in mind it's not just crude oil and oil that comes out of a straight of hormones. You also have some kind of effect on commodities such as jet fuel that comes out of straight of hormones. So I think those are kind of commodities that if we don't see a flow out of a straight of hormones and a resumption of

normal flow of commerce from straight or foremost, you're going to see some effect on those type of commodities. But as you pointed out, rightly, you know, Iranian oil, they're 1.5, 1.6, now down to 1.4, billions of barrels of oil that goes, millions of barrels of oil that goes out of straight of foremost. That oil is only feeding Chinese mid-sized, small-sized teapot refineries that purchasing this oil at a discounted rate. and then to produce petrochemical products at much lower level,

and then they compete with U.S. products and U.S. market. So I don't think it's a bad thing that that oil might not reach China. And my guess is that you're going to hear that China has bought up a ton of the global strategic petroleum oil reserve release, greatly even more refilling. They're already full stockpiles. That said, your point is well taken, Miod. We have talked a lot on this network in this program about fertilizer, about helium for semiconductors, about potable water, about all the support.

supply disruptions that come through the Gulf, would you agree that the only real question that matters right now is will this naval blockade work to help more ships more safely enter and exit the Gulf, or will Iran still try to control it with missiles and drones? Because if ship traffic doesn't increase, all those things that we just talked about are kind of moot. I mean, that's a really question. It's a million-dollar question. I think Iranians are going to try to escalate.

I mean, this is their only leverage that they've left with. They don't have a nuclear program that they can use as a way of blackmail in the international community. Their control, or not really control, I would say, the ability to cause chaos in the Strait of Formals and the Persian Gulf, it's really what they've left with. So it really, I mean, the presence of U.S. naval forces and hopefully other nations that might joined to help might really disrupt Iran's ability or maybe cause a decline in Iran's ability to cause issues in the straight or foremost. I can envision some kind of air campaign or

air strikes to go after RRGC's Iranian Islamic Republic or Islamic Republic Guard Corps to conduct drone operations or missile operations against the flow of commerce in strata foremost. But I wouldn't be surprised if Iranians show all their cards now, you know, go after some of these tankers possibly go after some of the oil field oil production facilities across the Gulf. But that debility is going to decline very quickly. I would argue that Iran's economy is the most vulnerable economy. I would say globally to what's happening in straight of four months. They're going to have made issues as far as paying salaries domestically.

They're not going to get oil out that is paying their own forces salaries. So they're going to have to face some real problems domestically. And we're just going to focus on Iran, not all the other stuff that's critical that we talked about, meow. But if Iran cannot export oil safely, because there were no U.S. military ships there as a week ago, now there are. Things have changed. If they cannot export oil at all, how long can they economically hold out? Well, I mean, there are a couple questions. Really good point.

I think first of all, if they can get oil out and you continue to see some kind of a disruption to the flow of Iranian oil out of the strait of Hormoz, then I think they only have maybe two weeks of a storage left to keep storing their oil. Maybe like filling up all their tankers, most of them already filled up already. And the main problem here is they're going to have to drop their oil extraction. And when you drop your oil extraction, you're really causing it a permanent. or long-term issue or problem to your oil whales. And that might lead into some kind of a domestic friction, unemployment, rising, and strikes.

Economically speaking, I think if they can keep sending oil out, they're going to have less money in China that they can use for import. But keep in mind, the import is going to be subject to block it as well. So they really have to look domestically to see how much they can continue to tax their population. That's an issue. Steel production has dropped by 70% as a result of their strikes. Petrochemical output has dropped up to 80% I've heard because of their strikes. So they're not even generating enough tax internally to pay salaries. It's hard to come up with a number of days.

But I think that there's going out a couple weeks without. Isn't that when people and countries, because countries are literally just people making some decisions, isn't that when they become the most dangerous, when their backs are, against the wall, and I have spoken with counterterrorism officials, and they've talked about how there is a bunch of rogue IRCG, potential generals, that basically know that if the Iran regime collapses, they will likely be arrested and or killed, and so they're simply going to fight to the end because they have no other choice. And that makes them dangerous, because while we can negotiate in Pakistan, what's to stop some rogue commander with a stinger missile from

shooting on the shore at a, you know, at an oil tanker or sending a drone into Qatar or Dubai like they already have. Yeah, that's a concern that I've shared too. I mean, these guys, they don't have good passports. They have the Islamic Republic passport. They can't travel. They can't escape. They can't go to Russia probably, you know, but nowhere else left for these guys to go.

They have to fight to the end. And my, you know, my, you know, my guess is that you're going to see some defection. if they're not getting paid mid-level, low-level guards or militias in Iran, that siege militias, you're going to see defections. They're going to see no interest from these folks to crack down on internal opposition. That's when you're going to see some defections internally. But you're right. I think things going to get really bad domestic.

And quickly, by the way, we got Dan Pickering coming up next on oil, specifically. You wonder if the National Iranian Oil Company, the NAC employees, if they strike, if they decide they're not going to go to work, it's over, right? I mean, that's it. Yeah, and that's the point that I was making at the beginning. I think you have arguably one of the most anti-regime population in those provinces, who's in some province where you have the oil-rich province. You have 60, 70 percent of Iranian oil that comes out of that province.

That's where you have national Iranian oil company. And if they have to drop oil extraction, they're not getting paid. Salaries are not coming through. Folks on the Kark Island, 90 percent of Hong Kong oil goes out of Kark Island, And if they're not getting their salaries, you're going to start seeing labor strikes. And that will be a start of the end for this regime. We shall see, Miyadh, you really appreciate your insight and time. Thank you very much.

Thanks for having me. All right, you're very welcome. Now, let's focus in specifically on oil. And again, the question sort of everybody will ask or should be asking, will this U.S. blockade work to ease oil flows by making it safer for ships to go in and out of hormones, or will it make it worse and send oil prices? crisis soaring. We don't know, but let's talk about various outcomes with Dan Pickering, a Pickering Energy Partners joining us now. And I want to make that very clear, Dan, that I don't,

mead doesn't, you don't. Nobody knows how this is going to end or what Iran may or may not do. They may go quietly into good night, negotiate some kind of a peace, best case, or they may fight to the end with some of these rogue generals and launch missiles. Do you have scenarios in your head, your big brain of either, either. one or two or three scenarios? Yeah, Brian, I think none of the scenarios are great because they all take time to play out. I think that's the part that the market's probably a little bit too nonchalant about, is that let's assume peace breaks out.

There's a 60 to 90 day sort of logistics process to get everything back to normal. If peace doesn't break out, it's going to take a lot longer than that. So you're right, there is oil bypassing the straight, but not enough. Five to 10 percent of global supply is offline and needs to go through the straight. And so we've got to see those barrels move and for the next 48 hours. I mean, who knows how it's going to go? We just sort of have to watch and see. That's tough.

And I don't ever want to disagree with the great Dan Pickering, but I would say this, that those barrels, I think the 5 to 10 percent you talked about, maybe Iran, You've got Iraq issues, some Kuwait issues, and maybe Saudi Arabia is not where they were, right? Nine and a half to ten, now it's seven or maybe a little more than that. How many of those barrels can be made up by storage for maybe a couple of months? Because I think that's why the oil market is not at 140. It's at 98 and change. Absolutely.

We're drawing down on inventories, whether that's commercial inventories around the globe, strategic inventories, the oil on water, we knew that was there from Russia and Iran. So we are managing through this process right now, but it is a function of duration. And so if things don't start to move relatively quickly, then all of a sudden these inventories draw down and you are scraping the bottom of the barrel, pun intended. So, you know, I think time matters here. Back to the scenario analysis, says, what if those rogue generals or what if there is violence in the straight in the next day or two? Does that translate to that being shut down? It's very likely, Dan.

And I want to be very clear with our audience that I am in no way suggesting everything is fine. I'm simply saying that this idea of a blockade is on Iran ports and Iran ships, and that's mostly going to apply to oil, and most of that goes to China. if the other ships can now transit a little more freely and they aren't right now, maybe that's a positive. But in the worst case scenario, if there is some sort of significant outage in Saudi, there already is a small one with one of the refineries. But if there is on that pipeline, then what? Yeah. Right.

It's clearly good news if non-Iranian ships can get through the straight. Who's going to send the first one or the second one? don't know. And how risky is it to do that? We still don't know. If you look back to Saudi, they're getting east-west pipelines open seven million barrels a day. They can only send about four million barrels a day of that down through the Red Sea. So there are workarounds that are happening. As you start to turn things back on, we're going to figure out if there are issues that are going to take longer to solve. But right now, it's the question of the straight. and it could be good news.

We just don't know yet. No, and I want to focus on America because we are the supplier now. I don't say of last resort, but we're the biggest exporter and biggest producer in the world. Biggest producer, maybe not biggest exporter yet. You're in Houston. Are you seeing any indication that U.S. energy is going to start picking up the pace? Rig counts haven't really moved that much higher. Exxon's about 200,000.

more barrels a day than they were in the Permian Basin. But we don't see a big uptick yet in American oil production. Maybe we won't. Do you think we will? Yeah, the little guys are trying to go a bit faster, whether that's turning on wells that have already been drilled or doing workovers, but the big guys are not. Why? The price signal's not great yet. Brian, sure, we see $98 crude on the front, but if you go to 2027, 2028, oil's still hovering right around the low 70s, high 60s. Not a very clear signal yet that the market needs U.S. barrels for the intermediate terms. So I think the U.S. companies are taking a measured approach here. Why? Because there's so much volatility. Who knows what the world looks like in a month or two? Will this get solved or not?

U.S. companies are going to wait and see. And there is still a lag. We haven't talked about the last month. There's still a huge, those last ships that left the Arabian Gulf through the Strait Ormoos to wherever about a month ago, they're just arriving now and there's not a lot behind him. Dan Pickering, Pickering Energy Partners, Dan, always a pleasure. Thank you very much. All right, again, folks, I just want to highlight a couple key points here. First, we're talking about the oil markets going forward from now on. Let's be clear. The world is still facing a massive supply shock from when the war began at the beginning of March. Shortages are still likely in many places also. Ships can take weeks to go from the Arabian Gulf to their final destination.

So that adds even more time. And let's be crystal clear about something else. If Iran re-escalates, attacks on ships, Gulf ports, Southeast, West pipelines, or whatever, it is very likely. Oil prices will go higher, maybe much, much higher. Just keep that in mind. All right. Speaking of all things, energy, sign up for my forthcoming energy-related newsletter called Power Insider, a week. Peace. Key News. Meeting power players, calendars, what I'm reading and more. It launches this Wednesday. I hope. Use the QR code and sign up today. I'm writing it now and I can tell you, I have no idea what's going to happen in 48 hours. All right. I do know what's going to happen right after the break because we are just getting started. Coming up to two minutes, the one and only Tom Lee and how he is thinking about the setup from here.

Plus, a reality check on AI as we dig deeper into yet another sticking point. Maybe the stock news you aren't hearing about anywhere else. Welcome back. Blockade be darned, at least for now. Stocks, you can see, they are higher across the board. The Russell's up 1%. And here's an amazing stock stat for you to start your week. With that move right there, the S&P 500 is now actually higher for the year. we close there today or whatever is a different story.

But at least right now, the S&P 500 is up fractually for the year. And your next guest called it. He was bullish when others were fearful. Now the S&P 500 up 3.5% in a week and up eight of the last nine sessions. Joining us now is that man. Tom Lee, Fundsratz, head of research, also CNBC contributor. They will say the ever bullish Tom Lee was ever bullish, but you were also right.

I mean, is there anything that is going to stop stocks right now, Tom? Because they just keep going up. Hi, Brian. How are you? Well, I think stocks are holding up because the economy's actually doing better in the face of this war. And I know it sounds counterintuitive, but part of it is the defense spending, you know, at 30 billion a month. and it may end up being, you know, 60 billion a month, that's actually quite stimulative to the economy. This $20 rise in oil is only adding about $12 billion a month to the household burden. So on sort of net basis, the war is actually helping earnings right now.

Yeah, and it's hard to admit this because I do know that gasoline prices for a lot of families out there are a major cost, especially with all the other inflation, last five years. But with car mileage per gallon up, if you do the math, you're looking at maybe $50 to $100 per family per month in extra cost right now. Again, it's not insignificant. I want to be mindful of that. But it sounds like you're saying that is not enough to damage the economy and thus damage corporate earnings and the markets. That's right, Brian. I mean, nobody wants the U.S. to be at war. No. And of course, we're caught in a fog. of war, I do think one of the things we have to remember, even like going back to World War II, the stock market bottomed in May 1942, five months after the U.S. entered the war, but before any U.S.

troops were even on the ground, either in the Pacific or in Europe. So the market does have a really good way of sort of discounting outcomes. And I think the reason it's going up is I think we're going to end up with a favorable outcome, which I can't say I know why, but that's what it looks like. Well, and things could change, and I want to get your take on that, because let's pray for peace and hope that things toned down. We did have a power poll. I wanted to hear from our viewers and all of our ex-followers and whatever about how they feel. We asked a very simple question, Tom. It was what matters most for the markets right now. Is it the Iran War? Is it corporate

earnings, which are starting to roll out? Or is it interest rates? People can vote now by clicking on the QR code, how would Tom Lee vote on that? Well, I would say that of those three, only one can create tail events on both sides, which is the Iran War. So I think that the most important thing to watch and to really be mindful of is the war. Okay, because the other ones already known, earnings for the first quarter won't be that affected because the war began basically at the beginning of March. So we only have one of three months where you've got some energy disruptions.

The second quarter numbers will be slightly different. So with that in mind, how closely are you and your team going to be watching first quarter earnings versus second quarter earnings, which will maybe fully price in much of what we're seeing? Yeah, Brian, we're going to watch both because, as you know, some group. groups in the S&P are going to be affected immediately by higher transport costs or availability of commodities. And so we're going to get a pretty good picture of sort of that disruption that is working its way through.

And of course, that gives us a hint to the inflation shock that's coming. But all that being said, as you know, the world and the U.S. has been dealing with a series of shocks over the last five years. So in some ways, I'm not saying the market's becoming desensitized to it. But it's learning to not go into a full-blown panic. And you still, we're going to wrap it up, Tom. I think you still have your 7,700 price target in the S&P. And some individual names, you've got the One Oak, Texas Pacific land,

quantum. Sounds like you're all in on the energy expansion and growth story. Yes. And I think it's highlighting an important theme over the last few years, which is that every country wants three types of security. They want energy security. They want sovereign security, and they want cybersecurity. So I think all of those are going to be good areas for where spending grows in stocks should do pretty well.

Security, sadly, maybe the watchword of 2026 and going forward. Tom Lee, a fun strat, really always appreciate your time. Tom, thank you again. Have a great day and a good week, okay? Thanks, Brian. All right. We have got a market flash on the financials. It's actually one of the best performing sectors today, even as Goldman Sachs, sells off a bit.

Now, Goldman did post better than expected earnings, but maybe those good earnings, not good. good enough, or at Goldman's fixed income operations, revenue fell 10%. But as always, context is key. Goldman Sach stock, even with a 2% decline today, is up nearly 80%. In a year, meantime, some private credit concerns may be a little less concerning today. We say that because look at that. Stocks like KKR, Ares, Blackstone, Apollo, Blue Owl, all up. In fact, some having their best day in about a year. This comes after Adams Street partners, another name that could be on that list, but it's not a stock, closed its third private credit fund at $7.5 billion. What does that mean? Why do you care? Because it shows there is still interest

in private debt. KKR is up 6.5%. All right. Coming up, how about some relief for potential homebuyers? What about bond yields and borrowing costs? We'll get a check on just that. Next. All right, welcome, welcome back. Could be had a great weekend. good start to your week. Markets are having a pretty good start to the week, particularly relative to where we were last night. Got 90 minutes or so to the close. Here's where we stand right now. Markets are up, not soaring, but the NASDAQ up about six-tenths of 1%. The S&P 500, as we noted earlier with this move up about a half a percent. As of right now, it is now actually higher for the year. Wow. Check out the big moving software stocks. The IGV, one of the big software.

ETFs we talk a lot about. That is on track for its best day in a year. It's up about 5%. We will add, though, that the IGV still on pace for its fourth straight losing month. Longest losing streak since 2022, so basically in four years, but the last couple of days have not been too bad. And here are some of the names Lifting Software, Oracle, heading for its best day since September, as Circle and Service Now also rise. And look at Intel, old Intel. writing a nine-day win streak. In fact, that matches a run that was last seen two and a half years ago. So we love these like little streaky RBI facts.

So if Intel closes higher tomorrow, this is incredible. That'll be Intel's longest winning streak since 2005 when I was eight years old. That second part is a total lie. but Intel 2005, if we're higher tomorrow, it'll match the longest win streak in over 20 years. Team, that could be a lead. We'll see what happens with Iran. All right. Now to the bond markets, the failure of peace talks between the U.S. and Iran, further shifting bond market focus to a little bit of inflation and reinforcing expectations.

Interest rates will stay higher for longer. Maybe, because they're down a little bit right now. Rick Santelli knows where they are and where they're going. He joins us now with the bond report. Rick. You know, Brian, you nailed it. Logic would dictate that we should see interest rates higher because it seems pretty logical that what's going on in the Middle East is going to push inflation ultimately via energy prices.

But sometimes markets aren't logical. And even though we had hot inflation data last week, as you pointed out, yields are a bit lower. We're down a couple basis points in both twos and tens. And it's all about oil today. If you look at oil for a six-hour chart against tens, it is shadow boxing. As oil goes down, forget about inflation. We're just looking at the here and now in oil.

And if we look at the fact that when yields are up, yields are down, prices are up. So let's look at prices on 10-year futures versus the S&P futures. And you can see once again, oil is making everything move together. And finally, let's look at what the dollar index in oil are. doing. Once again, this is a two-day chart, shadow boxing. So in the end, don't look at fundamentals. What you want to look at is what oil is doing because it truly is what's making the markets move today, Brian. Back to you. Yeah, it really does. It plays into so much. That's why we talk about it so much. Rick Centelli, thank you very much. All right, still ahead. A closer look at the hidden limitations

of AI, including maybe something. We talk a lot about energy in AI. There's another aspect to it that we don't talk about, but we will after the break. We get a follow up on a big story we talked about on Friday. We got a news alert on Anthropic and it's new, somewhat say scary AI model called Methos. Kate Rooney's not scary and she has the details. Brian, well, we do have an update. You may have heard this model by now. It's got a lot of buzz for its cybersecurity capabilities. One of Anthropics co-founders, this is Jack Clark on stage at a semaphore event, saying in the last hour that the company is in the process of why the availability just to other companies.

It rolled out initially to 40 companies, including companies like AWS. You had Google on that list, some of the banks. They are saying they're going to be opening this up to more companies, not to the broader public. That is key. The company said, in the beginning of this rollout, it is not going to be generally available. That is still the case of spokesperson, just confirming that.

And that was the vision originally. They want companies to get ahead of some of the cyber risk and use the model, while it's also capable of finding these vulnerabilities. The CEO, Dario Amade, said in the beginning of this, it actually was not trained to be a cybersecurity model. It was meant for coding. This is one of the side effects that it's been able to find these vulnerabilities. But it is going to be more widely available to more Fortune 500 companies as AI and cyber risk get even more attention out of D.C. Quickly, it's Monday.

The market's up a little bit. I want to be optimistic. Okay. The weather's turning here on the East Coast, Kate. Happy to your folks know that. Happy high. Yeah, exactly. They're here in Jersey.

Exactly. So let me ask you this. Should we be happy that mythos is identifying these holes? Because maybe the upside is that we're finding out what it's able to do. Like we know where the bad thing. We know where the burglar may enter the house. Right. I think the upshot is that companies would be able to have these capabilities.

And some of the examples they cited were 30 years old, and some of these are really hiding in plain sight. So the upshot would be, yes, companies are able to find and fix the holes before bad actors get them. Anthropics model is one example. but you have other companies working on similar capabilities and cyber models. It's just a global story, too. As we talk about what the U.S. companies are doing, there's others abroad.

There's models out of China coming out. So it is safe to say that Anthropic might be ahead at this point. There will be others that catch up, and we want, you know, the U.S. perspective, we really want these companies to be the first to have these and to plug those holes before that happens. Well said. All right. Kate Rooney, do appreciate that. Thank you.

All right. It is an essential question for the A. I build out? Is there, or maybe more fittingly, can we build enough compute power to meet demand? The Wall Street Journal out with an article this morning saying that some AI companies are starting to ration which users get access to what services during computing power constraints. Here on set with us, neoclassic capital co-founder and managing partner, Michael Busella, they invest in all three parts of what they call the Web3 ecosystem. Michael also on the board of Terawolf, data center operator.

Their CEO and founder, Paul Prager, has been a frequent guest with us as. Well, key player all around, Michael. So we talk a lot about the energy side. Is there enough computing power to make all of our dreams come true? I sure hope so. So I think, I mean, I'm very happy here Anthropic is going to be releasing their product to a broader set of enterprise customers. So you're not scared. It's going to take over and kill us.

I mean, there's an underlying long-term fear of what the implications of AI are, both the good and the good. It's overwhelmingly at the moment good. and Anthropic as one of our partners on the hyperskiller side has been a fantastic partner for us, and it's good to see the success. You know, we talk a lot about can we make the energy, can we make the energy, can we make the energy? So let's assume, and you guys are doing your part of Tara Wolf with Lake Mariner and other projects, we can make the power. Do we have the ability to make the computing processing power that the energy itself is meant to provide?

So that's our role, right? So, I mean, I think the idea. making sure that happens. Correct. Because if it doesn't, not a lot of what Kate just talked about happens. Right. And you're seeing in the article this morning referenced in the journal referenced the kind of the uptime limitations of some of the models, right, where typically you look for a 99.99% uptime and we're seeing things in the 9-8s, which, you know, I think is a function of the difficulties in building this large-scale infrastructure. So I think, you know, for Terrell Wolf and for others in the industry, I think this idea of bringing your own power is very important. I think we're doing that. We're building more of the grid. We're enhancing the existing grid.

And I think with respect to the companies in our space, operational chops is a very important. Because for most things in life, 98% is a, I'd love to do a 98% great show every day. Yeah. But I don't want to get on a plane and have the pilot be like, we expect a 98% successful flight today. That's not going to make me very happy. Is 100%? I mean, it has to be the goal for AI. because if this is going to power the future, it has to run all the time.

Is 100% an achievable number? That's key. I mean, again, I think if you look at the broader set of AI infrastructure companies, I think this idea of operational capabilities is going to become incredibly important. You'll start seeing different names trading at premium or discounted multiples based upon management's ability to execute. And so, you know, when I joined the Board of Terror Wolf, one key consideration for me was the history of the team building power assets. and building, you know, data centers. And, you know, that is, again, that is what we do.

You know, I think getting distracted with other kind of bells and whistles is not something that AI infrastructure builders should be doing. But go from a stock perspective. I'm not going to ask you to pick stocks, but we've talked about a lot of the things that aren't sexy, i.e. concrete for the data center floors, fiber optic cable. Look at Corning.

Corning stocks up over 300% in a year. All eaten, all the stuff that goes into these bill, HVAC, heating, air conditioning and cooling, how critical are those older industries, boring industries. I'm not offending anybody I hope with any of that stuff to this amazing technological future. I don't think any of the shareholders would be upset with the comic. If you're corning and you're upset 300% a year, you're like, I'll take boring all day and twice on Sunday. So again, these are massive undertakings and the complexity of the logistics is, you know, something that I've never seen before. And I think, again, it comes down to, you know, as a board member, just having conviction and a lot of trust in your assets, your team's operational capabilities and your customers.

And that all comes down to leadership. And I think Paul Naz, Kerry, Patrick, the whole team there has been incredible. And I think the key part is communication with the market. And I think a lot of people, that's where there's a big disconnect. And I think. What does that mean? Disconnect, meaning, you know, these are long-term projects, right? And so having maintaining consistent communication around the progress of those projects is incredibly important because a lot of these contracts have clauses on operational deadlines.

And so the ability to hit those deadlines is very important to the long-term EBITDA of these businesses, of which they ultimately trade on. Well, we'll look forward to getting Paul back on. Paul Prager back on the program as well, hard down there in Easton, Maryland. Michael Buccello, really appreciate your time. Great stuff. Thank you very much, by the way. Ter Wolf's up today, about 4%. Coming up, your trader, looking at some stuff.

stocks down in the past month, but that he believes are poised for a strong comeback, including this mystery name that is a direct play on rising geopolitical tension. Who is it? The name ahead. All right, time for today's power check. As investors proceeding with caution amid the uncertainty in the Middle East, your next guest, still finding opportunity in the market. Here now to break it down, give some picks. Tom He'llick, he is CEO of Strategy Asset Managers. Tom, Tom, Before the break, we teased, literally teased our audience with a mystery chart. If you're on the radio, apologies, you just had to guess. That stock was Lockheed Martin.

Earnings are out, I think tomorrow. Stock's up 28% year-to-date. I would assume a beneficiary of all the fear that's in the market right now. Well, thanks for having me again today, Brian. We really see the market positioning itself for this kind of V-shaped recovery. recovery post the settlement of the war out there. And why is Lockheed Martin important in that? Obviously, defense company. But as we've positioned our clients in front of this for years, it's a defensive growth position. It's a geopolitical hedge. And it's obviously benefiting from

this sustained global defense demand that we have. Lockheed Martin's position very well right now. All right. The next one that's positioned very well is Eli Lilly. We know we know, we know about the GOP1, the weight loss drug story. I mean, they seem with novonordis problems, I mean, Lilly seems to be the clear winner, but they also, by the way, they have another business outside of GOP ones. People have forgotten about. They sure do. And, you know, if you can go beyond the headlines in the marketplace right now, and you can look through what the opportunities are out for clients as an active manager, Lily has been really performing very well. Obviously, the continued strength driven by the GLP1 franchise, both oral injectable. The new oral drug that they

have rolling out is going to expand access and demand. A lot of people aren't understanding the true benefits of these GLP or triple agonist drugs out there. Plus, they have a strong pipeline in oncology and metabolic therapeutics. I really think that this is a missed industry right now in the pharma and the biotech sector that's going to explode over the next. a couple of years. And we're seeing a lot of M&A activity out there right now. What is exploding is demand for American fuels and Kinder Morgan's got to be a longer-term beneficiary on that as well. Yeah, what a better company to be in a transport company. Although it's trading near all-time highs, a strong year-to-date performance, I mean, you've got 79,000 miles of pipeline helping

the gas and liquid natural gas get there. So great core energy infrastructure and income position. Awesome company to be in right now. We like Kinder Morgan a lot. Tom, you'll look strategy asset managers, Lockheed Martin, Eli Lilly, Kinder Morgan. Tom, thank you. All right, let's get a CBC News update with PIPA. Hey, Brian. President Trump today deleted a truth social post after widespread backlash across the political spectrum. The image showed the president as a Christ-like figure tending to a sick person. The president later said it was meant to portray him as a doctor. The post came after the president called the Pontiff Week on crime and terrible for foreign policy. Pope Leo said the president's post last week threatening to end Iranian civilization was, quote,

truly unacceptable. The House Ethics Committee today launched an investigation into Congressman Eric Swalwell. Swalwell dropped his bid for California governor late last night amid sexual assault and misconduct allegations. The Manhattan District Attorney says its office is also investigating. Swalwell denies the allegations. And the Trump administration today agreed to keep flying a rainbow pride flag at Stonewall National Monument in New York reversing its decision after removing the banner in February.

The White House was facing a lawsuit by historic preservation and LGBTQ plus groups to block the move. Brian, I'll send it back to you. All right, Pippa, Stephen, thank you very much. All right, we're going to wrap up the show, give you another check on the markets, and maybe some things that are on the move. Right up for this short break. All right, let's wrap it up by revealing the results. mostly. Today's power poll. It's open for like another hour or so. So if you haven't voted,

go now to X and vote. We asked a question, what matters most for the markets right now? Many of you appear to agree with Tom Lee, or maybe he agrees with you. 57% of respondents said the Iran war is the most important thing for the markets. Earnings came in second at 24%. And only 19% of you said that interest rates were the most important thing for the markets. A little time to vote. So go now. And by the way, leave you with a big winner. Sandisk, another monster day. Sandisk just keeps going up and it's going to join the NASDAQ 100. Next week, it is up nearly 300% this year, 10.5% today to 941.28. With that, we'll say goodbye. We'll see you tomorrow on Power Lunch.