Power Lunch - S&P 500 Hits Record Intraday High 4/15/26

Episode Date: April 15, 2026

Nasdaq attempts to have 11th positive day in a row. Terawulf CEO Paul Prager joins the show to discuss the AI buildout. And what impact are rising fertilizer prices having on farmers?   Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

And we have just hit a new record high for the S&P 500. Welcome to Power Lunch and happy Wednesday, everybody. I am Brian Kelly. We'll be back here next week. The biggest index crossing a major milestone, 7,003. That gives the S&P a new record high. We were close to it earlier today, but we did indeed hit that technology. It is leading the NASDAQ.

The NASDAQ, by the way, also closing in on its 11th, great day of gains. We close higher. That is the longest win streak in nearly five years. And by the way, amaze your family and friends tonight with this stat. If the NASDAQ closes higher today and tomorrow, that would be the NASDAQ's longest winning streak since we came out of the subprime crisis all the way back in 2009. We're going to stop talking because we don't want to jinx it. All that is ahead. Plus, more on a company we talked about on Monday, an exclusive interview with the CEO of Terrell Wolf, the energy infrastructure stock soaring this year with a new data center in Kentucky on the way. All right, folks, welcome to Power Lunch.

That is all ahead. But let's begin on the news moving markets, and that is optimism for a real resolution to the Iran War. That's what's been powering stocks. The NASDAQ's big run lately, it is likely because the market is hopeful. We get a peace deal soon. But as you all know, hope is not a strategy. And as you can see from our now daily check of marinetraffic.com, still very little ship activity in that Hormuz Strait.

In fact, data from its parent company Kipler shows that only about seven oil or liquids tankers have crossed the straight since the U.S. imposed the blockade on Iran two days ago. Now, that is certainly not looking like the market believes that everything is back to normal. So where is the good news? Well, it's that peace talks do appear to be gaining momentum. According to published reports, America and Iran,

moving closer to a framework agreement to end the war. In the meantime, oil prices remain relatively stable this after falling sharply yesterday. And crude oil here in America for June delivery is now trading back below, $90 a barrel. Let's talk about all of this with your lead guest, joining us now, S&B Global Vice Chair, Daniel Yergan. Also the subject of the new inside line interview feature in our Power Insider newsletter,

and of course the author of many, many amazing books, which have all made me smarter. Dan, thank you very much for joining us here on Power Lunch once again. Well, thank you, Brian, and let me congratulate you on the issuance of your first Brian Sullivan newsletter, which will be, I think, a weekly occurrence and very timely for you to get it started. Well, it is. And it's thank you, Daniel, and I appreciate it because, Dan, we did this great interview, sort of a text message style interview with Dan in the piece. Check it out. But it's also a weird time to launch it, Dan, because I don't need to tell you, every hour,

every day, things certainly change with your best estimate, best insight, best maybe guesstimate. Where are we right now with everything happening in the Persian Gulf? Well, I think, as you say, in the financial markets, there's great optimism that this is all going to be resolved. The reality is that the nightmare scenario in terms of oil is still in place, the strutting of the Strait of Hormuz. And Iran has a position of primacy it didn't have before controlling the strait. And we're seeing in the physical markets the effects of it, aviation fuel, flights starting to be canceled because of jet fuel, diesel, fertilizer. And I think one of the things we've discovered, Brian, is that, which wasn't really thought about, people thought about Strait of Hormuz in terms of oil and then LNG. They didn't

think about in terms of all these other commodities and how integrated the Gulf Arab countries in Saudi Arabia have become overall in the industrial fabric of the world. And that's showing up in so many different ways. We just heard about it in the previous broad segment about copper being affected by a lack of sulfur. We heard about fertilizer. And people just didn't realize how much more significant that region has become to the global economy. Well, and what a perfect point? And what does it mean then, Dan, for the next two months? Because even if things are fixed, whatever word we want to use tomorrow, how long will it take for all those supply chains to get back in order? Well, I think it varies by the commodity. Of course, it also depends about how extensive is the destruction of

facilities, but it'll take a couple of months to get it unsnarl. The last tankers, of course, already arrived that it left before the war began. And then on top of that, you have just all of the ships that haven't moved and everything. So, you know, some countries will be able to step up oil production quickly. Others, some production will be lost. And I, you know, I think, I think in terms of some of the facilities, it may be not months, but years before they're repaired. So there's not going to be a quick solution to this, and we're going to still be feeling the impacts of it for, you know, at least a couple of months. So I know you're not a stock market guy, Dan, but you must have just a personal take then

on why the financial markets do appear to be kind of signaling the all clear. Well, I guess there's so much tension and fear around this. And the thought that a deal is near, we really don't know what a deal would look like, that a deal with Neil is felt exuberance. Maybe it's a sign of relief on top of everything else and that things have, of course, been oversold. But we've also seen, Brian, how, you know, day by day, this thing can go back and forth. I mean, meanwhile, the U.S. is manning a blockade of the Gulf, which is actually a... All right, I think, Dan, if you're out there, we can't hear you. Maybe you can hear us.

All right, so we lost the link there. It's kind of like the blockade of the Strait of Hormuz, but we did not do that to Dan Yergan. I promise, Dan, if you're out there, we appreciate your insight. As always. So let's see if the war and surging energy commodity prices have impacted Federal Reserve thinking at all. And we know this because the beige book was just released. And Steve Leasman joining us now with the highlight, Steve.

Yeah, and the answer is yes, Brian. This is a very interesting beige book, which said that economic activity increased at a slight to moderate pace in eight of the 12 districts. Two districts reported little change to saw some modest declines. But the mid-east conflict is cited in the Bayesbook, which is a collection of economic anecdotes from the 12 Federal Reserve districts, is cited as a major source of uncertainty impacting decision-making around pricing, around CAPEX, and around hiring.

Manufacturing saw a slight to moderate increase or pace of growth. Consumer spending increased slightly, despite a heart. weather as well as that increase in gasoline prices. Now, many districts are reporting signs of consumer financial strain and increased price sensitivity. And I've never seen the next one in a Facebook report before. Maybe I've missed it, but it said the rising demand is reported at food banks and other social services from several districts. Employment was steady to up. Labor market described as stable. Low turnover, minimal layoffs, but not a lot of hiring. Hiring was mostly done for replacement. And districts noted demand for higher

demand for temporary or contract workers, a sign of caution on the part of employers. Some districts noted that there was AI-driven productivity improvements, and that led to hiring delays or even, in some cases, hiring reductions, not widespread, however. The key issue of wages rising at a modest to moderate pace. There was, however, continued wage pressure seen in health care and skilled trades. Inflation remained moderate, overall, a good sign for the Fed here, but input costs increased, but they outpace selling prices, and the conclusion of the basebook is that compressed margins for sellers. Last one here, energy and fuel costs, the rise rose sharply in all districts. That meant higher freight, shipping costs, plastics, fertilizers, and other petroleum-based products.

Prices were rising, also cited to be rising, Brian, for metals due to tariffs. Brian? It's a little confusing, Stephen. Maybe you can help us clear it up because somebody's got to be eating all these higher costs, right? We know inflation is up, but it's not nine. percent. So all these input costs, we talk about it every day, the Fed's talking about it, you just talked about it. The input costs are going up. Oh, and by the way, we can layer tariffs on top of a lot of those things. And inflation's up a little bit. You referenced, though, that inflation was not

soaring. So who is eating those margins, as you put it? Well, I think you find it along the production chain, Brian, which is you're going to have a little bit eaten at the production level, a little bit eaten at the middle, middle market level, and then onto the consumer, a bit of it passed along. We've seen estimates, Brian, for example, on tariffs of 30 to 60 percent passed along. And then you have issues like who's doing the selling. If you're Walmart, you have thousands of skews, maybe millions of skews to spread the price of a tariff over. If you're a small business, well, you don't have that, so you end up passing along more of it or you go out of business. There's margin compression along the way, and there's also higher prices along the way.

So it's hard to finger a single place, Brian. And the other thing that happens, I think, right now, is that when you have a huge surge in prices, a spike like we've seen in oil, there is not this, at least, other than at the gas pump, this tendency to pass it along right away. You try to wait a little bit, you try to hold the line and not lose market share.

But at some point you get to a point. In fact, yesterday, I can point out when I reported the NFIB Small Business Report, there was an individual quoted from there, an interview from Iowa saying, look, I can't pass these prices along. I'm going to have to raise them or I could lose market share. That was the direct quote from the Iowa retailer.

Yeah, it is fascinating who or what is taking that margin. To your point, I think maybe it is just kind of everybody's taking that little slice. Steve Leesman with the beige book, Steve, we appreciate your time. Thank you very much. All right, folks, just a reminder, we are now on record watch, the S&P 500 minutes ago, hitting a new record high. But what's to watch in days, weeks, and months ahead? Paul Hickey knows, and he's up next.

All right, got some breaking news out of the White House. Megan Gisela has more. Megan. Hey, Brian, the White House just held a press briefing with Secretary Caroline Levitt, as well as the Treasury Secretary Scott Besson, and a few top lines here, mostly on Iran and on oil. The Treasury Secretary told reporters that he expects that the U.S. blockade in the Strait of Hormuz will lead to a drop-off, a pause, he said,

in China buying Iranian oil. He said he threatened secondary sanctions on any Chinese banks or any banks anywhere that are proven to have Iranian money flowing through their accounts. He said China had been purchasing more than 90% of Iran's oil. He expects that to fall off. He also ruled out further sanctions relief, saying the general license for Russian oil and Iranian oil that had been in place, he says that will not be renewed. He also sort of downplayed the economic impact of the war. He acknowledged it, but he called it short-term volatility for long-term stability. He also was asked several times about gas prices where he expects those to go.

And he was downplaying the impact on gas prices as well. He says he's been in touch with his counterparts across the Middle East, finance ministers in those nations who have told him that once the straight is reopened, they believe they can start pumping oil again within a week. Caroline Levitt also sought to sort of clarify the terms of the U.S. blockade. She was emphasizing that the U.S. is allowing and supporting the freedom of navigation in the region. Just not with respect. She said to any tanker that would benefit the economy. of Iran as long as these negotiations continue. And then just on one other topic, Brian,

when it comes to the Fed and what we've been talking about with Steve Leesman as well and this fresh threat from the president this morning to fire Chair Powell, Secretary Bessent was asked about that and he sidestepped any concerns there, downplayed them again. He said he's very optimistic that Kevin Warsh will be confirmed on time, making it a moot question what will happen to Powell if he has to stay in his chairmanship beyond May 15th, Brian. All right, Megan, thank you very much. Certainly is hard to buy. if your ships are being stopped by the U.S. Navy. All right, so as we said at the top of the show,

the incredible stat to watch right now is that the NASDAG looks like it's headed for its 11th straight higher day. Now, if we hit it, that would tie its longest win streak in five years. The broader S&P 500 is now positive on the year, and as just hit maybe less than an hour ago at a new record high. But don't forget this. even before the war, stocks were struggling a bit. Some different sectors, they got hit by concerns that AI might displace their business models, fears over a possible issue in the private credit markets on Wall Street head investors on edge,

and many of the mega-cap tech names were negative year-to-date, again, before the war began. So let's talk about it all the macro market earnings and more with us on set, bespoke investment group co-founder. Paul Hickey, one of our favorite guests, Paul, thank you. One of my favorite anchors. Well, there we go. It's a mutual admiration society. I love it.

To what you ascribe this incredible 11-day streak for the NASDAQ? So I think it's just optimism on the part of the market that we are seeing a resolution. You know, it reminds you of last April when every day after a liberation day, we started seeing headlines to the effect that this was going to be an economic catastrophe. yet the market bottomed within a day or two after Liberation Day, the negative headlines kept going up. You know, there's tons of negative headlines we continue to see about oil and the disruptions that it's going to cause. But the market is sending a completely different message. And it's hard to-

Why? What's the disconnect? Well, so I think the underlying economy has been very strong. You look at the banks reporting today. Their loan growth is up 10% year over year. That's the highest rate since we've seen since going back to the financial crisis. So you haven't seen that level of growth. You know, you talk about concerns in the labor market. The unemployment rates at 4.3 percent.

That's very low. And jobless claims remain low. So we're not seeing incredible job growth, but we're not seeing those jobs falling apart. And in the beige book, we saw eight out of 12 districts reporting growth, which is not a deterioration of what we've seen versus recent page books. and for all the talk that this disruption in these higher oil prices we're going to derail the economy, it's only been one month. If that goes on for three months, we have a problem. But one month does not make it. And what you're saying is a critical, critical point, because we've got this wall of earnings, all these banks and financials out this week. Goldman Sachs beat, J.P. Morgan beat,

Wells Fargo beat, City beat, Bank of America beat Morgan Stanley beat. First off, if you work for those banks and you don't beat, you should fire your CFO and hire another one because that's your job, is basically beat the street. But this idea that two of the three months that these companies and everybody else either reported or is going to report, that was pre-war. The war effectively, the supply chain shock began the beginning of March. So two months were sort of normal. With that in mind, how much are you watching the first quarter? So we'll look ahead to see what the company say. Again, last year at this time, we would say no company would, in their right mind, would raise guys.

or even talk positively about the outlook, given the tariff situation. But we saw more companies raise guidance and lower guidance. So as companies report this earnings season, that's what we'll be looking for. Are they really, is it really impacting their businesses? Our bet would be that we're going to see more benign reports than the negative outlooks per se. So we've seen analysts lowering forecasts at the margin heading into this earning season. But that negative sentiment typically sets the bar low. I think the one sector where you've seen some negative sentiment is in the consumer discretionary

sector, and that's where you could see some positive surprises. So what are you? I know you guys do amazing work. You've talked about consumer discretionary, but you've also talked about the Dow Transports, because transports are seen as a leading indicator. Philadelphia's semiconductor, the SOX. Even more, even more, the leading indicator. It is.

Okay. So my question was going to be, of those three or anybody else, is there one index or group of stocks that you're watching more than others? So I think the semiconductors, what we've been calling them for years now is the transports of the 21st century. They are the leading indicator of the digital economy. And their relative strength, they're not only hitting new highs, their relative strength versus the SEP is hitting a new high. So that's important to watch. AI infrastructure stocks are still hitting new highs.

So those two areas are what we're looking for going forward. So for all the concerns, I mean, you think back six weeks ago, people were concerned again about the AI trade and about all the infrastructure. those stocks are now hitting new highs. And even as NVIDIA has been sideways, the rest of the sector and these infrastructure stocks are doing well. We actually have a CEO of one of those companies coming up, but I can't tell you who it is because it's a mystery chart. Oh, the mystery chart.

It's the mystery chart. But we said it at the top of the show, so if anybody was listening, they know. Okay, all right. It's a mystery, though. I was in the hallway, so I didn't really know. You don't know. If Paul Hickey doesn't know, nobody knows.

Paul, thank you. Thanks for having me. I really appreciate your time. Good to be. All right. We've got a market flash on two major movers right now. One of them is Robin Hood. That stock on fire.

In fact, Robin Hood headed for its best week in a year. It comes after the SEC approved the removal of day trading limits for smaller investors. Also, Robin Hood had a pretty miserable beginning to the year, so it's probably catching up. Second one is Tesla. That stock, shall we say, hitting ludicrous mode. If you drive a Model S, you know what we're talking about. That stock on track for its best day since June of last year. But again, keep in mind both stocks.

Still down double digits for the year, but today, this week, they have been red hot. All right, what about the bond markets? Well, the rally in treasury bonds stalling a bit, oil prices hold steady. Remember, oil and bond yields have kind of been tracking each other. The 10-year yield, trading around 4.28%. The surge in oil prices, really the dominant driver of yields, driving steep increases in consumer inflation gauges, and wiping out some expectations for most. interest rate cuts this year. Treasury Secretary Scott Besant telling CBC this morning that if

the Fed wants to wait for some clarity, he would, quote, understand that. So kind of a nice word about the Fed from the Treasury Secretary. All right, we just referenced it, folks. This mystery chart among Morgan Stanley's best ideas in the AI buildout. The stock is up 700 percent in a year. We have an exclusive interview with the CEO. Do you know it? Well, you do if you've heard the top of the show, but we're back right after this. All right, no doubt, some of you eagle-eyed viewers figured it out, or you listen to the top of the show. Teral Wolf was our mystery chart.

Before the break, we showed it to you. The stock's been on a monster run in the past year. It's up 700 percent, and Wall Street remains bullish with virtually every firm that covers Terilwolf, still carrying a buy-reve. And today, it announced the nearly billion dollars in capital raise to fund a data center buildout in Kentucky. Let's welcome back in, Paul Prager. He is CEO of Terawolf. Paul, great to have you on the program.

We actually had one of your board members on on Monday, Michael Buccella, and that kind of got us thinking to have you on. So thank you for coming on. Why sell 47.4 million shares of stock? What are you going to do with the money? We sold it because we could. I mean, typically, we would take a sort of lower risk strategy. of raising some equity after we've signed a new tenant deal.

But there was tremendous opportunity in the market due to primarily a scarcity of financial product for HPC AI folks and the scarcity of power to meet the AI demand. So we played offense instead of a more reserved approach to go out and raise that capital yesterday, and we did it. With the help of Morgan Stanley, Bill Graham and Canter Fits, Pascal Bandelier, our equity advisor,

they did a fantastic job together with, of course, Patrick Fleury, our CFO management team, just nailed it. And so we brought home, it'll be a little bit over a billion dollars with the shoe having been filled. Are we to assume then, Paul, and I love the honesty. You sold it because you could, that are we to assume that you, in part did it because you see demand increasing for the product that you provide, because there has been this narrative, and I'm sure you've heard it, that a lot of these data centers aren't going to happen,

maybe there's some doubled up in the line and the queues, if you will, and that there's an overestimation about how many might be built. This is nothing about being in the queue. I mean, our Hawsville property has electricity. We've got a power contract. We will, we're trying to keep a tense and competitive process for who our tenant will be. be. We like super high quality credit names. By getting the capital today instead of waiting

until we sign the tenant, again, we were able to get it on great terms. It's an indication of the tremendous confidence in both the opportunity of HPCAI and in our management team's ability to deliver, to execute. But now that we have the capital, we have a little bit more strength in our negotiations with that tenant because we have a fully equity capitalized transaction. We have strength and leverage in our discussions with the lenders after we announced that tenant in raising that final piece of capital for that structure. The answer about Hawsville, it's a tremendous site. You've got a 500 megawatt site, scalable, double that size. You've got a very, very pro-business, pro-industry, pro-industry,

Pro construction, pro-drops, government administration regulatory framework there, side of a former aluminum smelter. It's got all the energy infrastructure you would want. So we're very excited about the opportunity. We also have a fantastic balance sheet. So if we see other opportunities, something we want to acquire, we're ready to go. Now, you did earlier this year. So you're there in Maryland.

And in southern Maryland, there was this old coal plant that just sat there and it got shut down a few years ago. You guys swooped in earlier this year. You bought it. It's kind of near D.C. I thought to myself, first off, good deal. How did somebody miss this? How many remaining opportunities are there like that, Paul, in this country? I would imagine there's fleets of pretty smart people driving around this, literally driving

around trying to find any old power plant that may be available for sale. Yeah. Well, first of all, the demand for HPCAI is massive, but the road. block there is available power. So our team here is all energy infrastructure guys. We know how to spot the opportunity. We know how to mitigate risk of a former coal facility. When we went into Morgantown, we saw an opportunity to add generation to the grid, something the governor and the state are really keen to do. We saw an opportunity to create great jobs in Charles County. This is a fantastic county. They very much wanted data center. They want the jobs. They want the additional

generation in the state. It enables us to jump to the front of the line of PGM because we're giving surplus generation into the grid. So there are sites like that that are around, but you've got to be able to get comfortable with your ability to mitigate the risks of those former sites. Do you know how to handle brownfield remediation? How do you source the equipment, the major equipment is necessary to build new generation. Our team has that unique ability, and we've been doing it together for 25 years. Are you going to have to go, not you, but does the industry have to go to these sort of more remote areas? Like you know, Lake Marin in New York, you've got, Montgomery, Maryland, you got Hawksville, Kentucky, because they're in more suburban areas, Paul.

You know, you've heard about it, not on you guys, but there's been pushback. People are saying no new data centers. Do you have to be willing to go literally a little further out? out. I don't think that's the case. I think it's a combination. I mean, our sites are not that far out. We're part of the community where we're located. And yeah, we have heard it. We've heard it ourselves in some of the communities where we want to be about the resistance. But the answer is in transparent communication. We are beneficial. When we are in Lake Mariner and getting those megawatts, we're improving the grid upstream. Okay. When we're in one, Morgantown, we're taking what is currently, you know, liquid generation, and we're going to turn

it to gas fire generation. It's so much cleaner, so much safer, we're going to be able to provide surplus generation to the grid. But it's about community focus, a community orientation, and transparency in your communications. Listen, there is no such thing as a perfect place. What we're focused here on is what's right for our customer that is also a win for the community. Our locations are right for our customers. Paul Prager, CEO of Terawolf, launching inequity sales, stock down a little bit today, but it's up 700% in a year. Paul, really appreciate we're going. We're going to keep it going. All right, Paul, thank you very much. Right, optimistic. There you go. All right, still ahead. Speaking of meta and Broadcom, doubling down on AI, extending their

partnership to build a new custom chip, could they move challenge or maybe even unseat Nvidia? We'll talk about that next. All right, welcome back. Got some big news in the semiconductor space. It's on Broadcom. Christina Portsonelis has more. At a basic level, this is really about Broadcom helping Meta build its own AI chips.

So instead of buying everything off the shelf, meta is designing more of its own custom silicon to run AI models with Broadcom as a K-partner, also within the networking space. This isn't a brand new deal, as you said Brian before the break, but tells you meta is definitely sticking with its in-house strategy. some confusion about that. It also shows how close the relationship between these two companies

is getting. Broadcom's CEO, Hawk Tan, is actually stepping off Meadows board into a Silicon advisory role, keeping them close to how these chips actually get built. Broughtcom now has six major AI chip deployments, including Google, Open AI. So this is really about how big tech is building out AI at scale, especially for running these large language models, where cost and efficiency really matters. And that's where these custom chips comes into play. play. Invita CEO Jensen Wong addressed this competition problem directly on the Dwar Keshe podcast just earlier today. Companies are going to try other options according to him, but, quote, if they don't try these other things, how would they know how good ours is? And it's, quote,

not that easy building something better than Nvidia. But that's the shift, Brian. Companies aren't replacing Nvidia, but they are starting to carve out pieces of the market. All right, so, Invidia, is anybody you're talking to, Christina, suggest to, that Nvidia might actually lose market share because of this? The argument right now is that Nvidia offers more than just the chip. It's the entire architecture, right? It's not, it's networking. It's just how these chips are talking to each other.

And most importantly, it's the software that goes along with it, which would be CUDA in regards to Nvidia. And so that is the major argument. Again, from that same podcast that just published today, you know, Jensen Wong, the CEO of Nvidia, really pushed that, that their software, their architect is the most, abundant in the world. They have the most customers in the world. So if you are an AI startup, why would you go towards some of these custom chip makers when you could go with the

Nvidia platform that is incredibly abundant? I thought you can't get it. There's no like a multi-year delay in getting some of this stuff? Some of the more advanced blackwell chips, yes, because that's just in production, but then you have the older chips that are still incredibly relevant and the prices are still really high, which is the argument as to why Coreweave is doing well and some of the other neocloud. Fair point. And also, I I think a good message in there that just because something's old doesn't mean they're not relevant. Christina Parts a Nevelas. Very relevant for you to say, right?

Very. I'm going to write in my ink well. Christina, thank you. All right, let's bring in a broadcom shareholder with my quill. Jay Peters, portfolio manager at New Edge Wealth is here on set. All right, Christina, jokes aside, laid it out pretty nicely. All right, big news here. You've got Broadcom up 27 percent.

in April, actually the best month for Broadcom since December of 2024, your take on that story. Yeah. And the stock. I mean, it's been a great performer over the last couple of years, Brian. It's one of our larger holdings, a name we still have a ton of conviction in. I think what we've seen with Broadcom and why they've done so well is not only are they a big beneficiary, the data center buildouts, the networking, the infrastructure at that point, but this growth of custom chips is really a function of the supply demand and balance.

We've seen, and you talked about the other day, how compute demand is surging. enterprise adoption is leading to, you know, more robust needs in terms of compute. Companies are looking to, I mean, we've seen tremendous investment. We've brought some more gigawatts of data center capacity online this year, but what we're seeing is companies need to find more efficient forms of compute. And I think that's exactly where these custom chips come in. They're continuing to power broadcom's overall revenue on pace for 60% revenue growth this year. That's up from 30% last year.

You know, a great business in our view that I think, you know, I think the overall pie for compute is going to continue to grow and who ultimately wins or loses market share is still up for debate. All right, switch gears a little bit, service now. Stock's down 50%. 50%.

Investors have lost half their value if they bought the day it hit the high, but you think with service now, the selling has been overdone. Yes. We've talked about a few software names over the last couple months, Brian, and the fundamentals

and the earnings prospect for these companies have continued to remain sound. The re-rating has continued. And ultimately, we think you want to focus on the companies in the software space that offer a little bit more installation from the AI disruption fears. And that's where ServiceNow sits. This is a company that offers a product that sits at the top of the enterprise or the corporate IT stack, really focus on IT infrastructure, a database management, huge enterprise customer base, all things that can provide some insulation from the AI threat. ServiceNow company has produced 20% plus revenue growth for six straight years on pace for 20% growth again this year, trading it just 20 times. earnings. So a discount to the market, more than a 50% discount to its long-term average. So, yes,

we think it's worth starting to look into some of these software names that have seen such indiscriminate in selling and could provide some upside. Totally different gear. And I mean, gear, like physical gear, like a purse, like a bag, is Hermes. Yes. We don't talk about Hermes hardly ever, trades in France. Stock's down big today. A lot of concern about what's happening in the Middle East, trade of hormones, a lot of money there that would be spent on Hermes is not going to be made and thus it won't be spent on $30,000 bags. You have a take on Hermes? I don't think I've ever talked about Hermes stock in 30 years.

Well, you'd be surprised me. This is a stock that's produced 20% annualized gains for the last 10, 20 years. $1,000 scarves? I can see why, I guess. Yeah. We look at Hermes and we see a company that really dominates the luxury category. As you said, geopolitical tensions and growth skills. typically cause a pretty big repricing and discretionary segment.

Luxury is one of those more durable, durable places. I don't think they're immune. As we saw in the earnings report this morning, growth came in a little bit lighter than expected. You know, the U.S. growth numbers were 17% year over year, so I think there are some encouraging signs. Company with really, you know, storied history, incredible brand power, pricing power. Trading today at like a 34 times PE multiple, it really only gets this cheap in recession. So I think you have a company with really a clear. their path to kind of consistent, maybe more modest revenue growth, reasonable valuation.

Ultimately, it has created a lot of shareholder value over the years. Yeah, maybe we should change the red in the Hermes chart to orange. Their signature color for today. Jay Peters, look at an Hermes, Service Now, Broadcom. Thank you. Thanks, Peter's New Age wealth. All right, let's get over to Pippa Stevens. Free CNBC News Update, Pippa.

Hey, Brian, Saudi Arabia, a sovereign wealth fund is reportedly close to cutting off its support of LiveGulf. That's according to the Financial Times, which says no final decision. decision has been made, but an announcement could come as early as Thursday. Live executives said earlier this year that the fledgling rival to the PGA tour wouldn't be profitable for another five to ten years. FIFA President Gianni Infantino told Iran on Sarah Eisen today that Iran will be, quote, coming for sure to the World Cup in North America this summer. He said sports should be outside of politics.

But last month, Iran's sports minister said under no circumstances would Iran compete. and President Trump said they shouldn't come for, quote, their own life and safety. And Variety reports that Paramount Skydance CEO and chairman David Ellison will host a dinner next week honoring President Trump and CBS News White House correspondence. Word of the invitation-only dinner comes as Paramount Skydance awaits government approval of its acquisition of Warner Brothers Discovery. Brian, back to you. All right, Pippa Stevens, thank you very much. All right, coming up, you're going to get a sneak peek at our new newsletter.

called Power Insider, and we're going to reveal something in it. Five of the 10 energy-related names with the most upside scene according to Wall Street. We're going to name names. Next. That's a cool graphic. I've never seen that. That's really neat. All right, now we're on a black screen. Here we go. Today is a special day. We're launching Power Insider. It's a weekly newsletter focused on energy. All right, it's going to have my sort of PowerPoint hot take of the week at the top. a cool text message interview segment called Inside Line every weekend to try to sort of do a little back and forth with somebody you know or maybe don't know and kind of get some hot and quick takes on things. Also have our data on stocks, calendars, maybe an RBI as well. The idea is to make

this kind of a valuable asset, dare we say, a must read for energy investors and the industry globally to be clear. It's not just going to be about oil and gas. We're going to focus on wind, nuclear, solar, batteries, and more. And here's kind of a teaser from the first issue. I list out the top 10 energy-related stocks with the most upside scene by Wall Street analysts. Now, if you want five through one, you've got to subscribe.

It's free and read it. But I'll give you 10 to 6 because I like you. Talos Energy, Wall Street sees about 18% upside ahead. Delic, a big refiner, about 19.5% upside. seen EQT, the natural gas company, 20% California resources. The target price, 21% above where it is now. And Devin, which is buying Expand Energy, seen as a 23% more upside. That is 10 to 6 for 5 through 1.

Again, you need to sign up, check out Power Insider. To do that, you can hit the QR code that is on your screen right now. If you don't want to jump up and rush, you can also go to the web or go to X and Twitter. and LinkedIn, and I'll share the link with you. Look forward to taking this journey with you. All right, oil, certainly not the only commodity in the crosshairs of the Iran war. Fertilizers, we've talked about it a lot, but is it starting to actually hit home here in America with the farmers?

Talk about that. Next. Shipping disruptions from the war in Iran not only impacting energy, a lot of other commodities, like sulfur, Pippa talked about it last hour, and ammonia. are typically transported through the Strait of Hormuz. Now, both of those things are actually critical ingredients in chemical fertilizers, and the shortage of materials has caused a spike in prices. And a new survey by the American Farm Bureau Federation indicates

a nearly 60% of American farmers say their finances are suffering as they struggle to keep up with the price surges. So where are we right now? Well, Brandon Gomez is the author of that article, CBC's Food and Wellness Reporter, and joins us now. This is how the war literally hits home. And this is the conversation that we were having, right? When are we going to see that impact?

They're making these decisions now about what crops they're going to grow because there are some crops that don't require as much fertilizer. I spoke to a farmer down in North Carolina. I spoke to one in Oklahoma. They're both saying that they're going to be pivoting away from crops that require higher fertilizer in order to produce a yield, moving over to products like soybeans. So you're going to see a reduction in crops like rice, in wheat, and so many others that you typically would see in the growing season,

we're just not going to be seeing those as much this year. Yeah, I mean, believe it or not, I used to trade fertilizers, and some people say I still do, Brandon, but that's a whole different thing. Thank you for laughing at that. This is a huge input cost for farmers. Is it not? It's also expensive to move around.

And you're seeing the price increase in the acreage, right? Again, the farmer that I spoke to in North Carolina said, maybe about $130 bucks last year per acre for nitrogen and fertilizer input costs, now going up to 217. That's why she's pivoting her farm away from some of these high fertilizer yield products. This is an interesting graphic that we have up on our giant wall behind you here. Some of these farmers, through either luck or just necessity, because maybe where they're located in Minnesota, they bought it already.

So I assume they're in better shape. Up in the Midwest. They're in better shape in the South. They're paying all these super high prices. And then we have another chart, too, that shows those who say they can actually afford the necessary fertilizer that is going to be coming up. Same map, basically. The South is saying that they're not going to be able to afford it. 78% of folks saying they won't be able to afford the fertilizer that they need.

So that really is about this year's growth season. And again, these decisions are being made now, even if the straight were to open up tomorrow. It's a global market. The prices might fluctuate, but they're already pivoting how they're going to use the land. Well, I think we have this coming up, but if not, you've seen the price of beef, right? Two and a half bucks a pound for the first time ever. It's doubled. Steak, who can afford steak?

Beef has doubled. in five years. Beef, don't feed these cows, chemical fertilizers. These are dangerous, by the way. Phosphates, nitrate. But the grains that go. But the stuff that goes into some of the feed is grown with fertilizer. It may be in, we could see $3 a pound beef soon.

We're talking about more than just the basic commodity, right? Wheat, grain, all of this does go into livestock feed. They've talked about that and how that could impact beef, chicken, poultry, pork prices going forward to. And this is a one shot, right? I mean, I don't think you're a farmer. I know I'm not a farmer. Not on the weekends. This is it.

Generally, once or maybe twice a year, you're going to fertilize your field. So they don't have a chance to balance this out. They got to eat literally, in some cases, these higher prices. And we're talking about the North America and the Northern Hemisphere Growth Market. The Southern Hemisphere has a completely different agricultural schedule, right, opposite calendar years. And so, again, depending on how long this goes, we could really be bleeding into the Southern Hemisphere's growing season as well. All right. Brandon Gomez, Food and Wellness Report of The Peace is up on CNBC.com right now.

Talking to farmers. I love it. Yeah. Got to know what's going on the ground from the people who are turning the land. The only turning the land. Churning the land. Churning the land. It should be the title of your next piece.

There you go. That could be a newsletter. Maybe in yours. Churning the land with Brandon Gomez. Maybe there's like a little segment of your newsletter. I feel like we're doing something. This is good. Synergy.

This is what they want. This is what they want. More power lunch synergy. right after this short break. All right, three quick things to do in the 45 seconds we have left together. Number one, kind of a fun story for you on AI. Starbucks is rolling out a beta app in ChatGPT that will suggest drinks based on your mood.

Here it is in action. Someone asked Chat that they're looking for an iced pick-me-up. It then recommended an iced Dragon Energy drink, whatever that is. You can then order those straight through Chat-GPT and finish checkout in the Starbucks app. All right, you know what is getting powered up? The markets. S&P 500 earlier today,

hitting a new record high in the NASDAQ up and on pace for its 11th straight day of gains. Perfect segue to wrap it up here. I'll see you tomorrow. Red Hot Markets and closing bell right now.