Power Lunch - Stocks bounce after Tuesday's sell-off 11/5/25

Episode Date: November 5, 2025

Torsten Slok joins the show to discuss market concentration and possible risks to this rally. Warner Bros. Discovery targets Christmas deadline to announce a sale or split.  And what kind of year for equities is 2026 shaping up to be? Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The record rally, it is back on. Welcome to Power Lunch, everybody. I am Brian. Kelly will be back in early December. Thank you very much for joining us. Stocks are higher after Tuesday's very brief selloff. Big Tech getting a lift from AMD and it turnings. Broadcom Oracle rallying today.

Oh, and speaking of the record rally, one of our favorite people in the house, Ryan Dietrich here on set, always bringing the heat and the numbers. He'll lay out his bullcase for a Santa Claus rally into year end. and beyond. Plus, does President Trump actually have the power to levy tariffs at all? Supreme Court deciding on just that, and it could have big market implications. And Amy Zangabalger is here with three of her favorite stock picks. Can't wait for that. All right, folks, it is a big hour, and we're going to begin by checking out some of the biggest risks to this big-time rally, because all markets, they do come with risk. Never forget that. And today,

the risks, plural, may come from Washington, D.C. First, the Supreme Court began its hearing on the legality of the tariffs that President Trump has imposed. Does he actually have the legal power to implement these new taxes? Plus, the government shutdown, now the longest ever, really no clear end in sight. And outside of D.C., tech valuations, they're getting more focus. As concerns mount over whether the companies that have become the AI, darlings can not only sustain some of these, shall we say, lofty levels, but really sustain the

entire market. The right question, I guess, to ask is whether some, all, or none of this will ultimately really matter. Maybe it's all about AI. Let's kick it off with one of the smartest people out there. Apollo Global Management, Chief economist, Torsten Sloc, love the stuff on the data that you and your team put out, Torsten. One of those is this. Earnings, expectations, expectations for the so-called magnificent seven have gone up. But for the other, say, 493 S&P 500 stocks, they have not. How do we read that? Well, the key issue here is that since the beginning of the year, we've seen a very bifurcated market, obviously, and it's not only in terms of performance, but what is also very important to remember is that it's also in terms of earnings and also in

terms of profit margins. So exactly as you're saying, Brian, as the chart shows, you've seen in the dark blue line at the top that earnings expectations to the Magnificent Seven have been going up since earlier this year. And at the same time, earnings expectations with the S&P 493 have been going down. And the same thing is the case if you look at the same chart for 2006. So the first conclusion is the market is coming to the conclusion that in the S&P 500, we all walk around and say, oh, earnings have been revised higher.

It's all driven by the Magnificent Seven. Whereas for the S&P 493, it's not so much. And that is also the case for profit margins, also revised up for the S&P 7 and revised down for the S&P 493. And that's a very long guy up. I'm going to use Thanksgiving as a terrible metaphor for this, Torsten. And Bear will be on this one because I hope it makes some sense. Tell us what's more important. So the 493, they're all the sides, right?

They're the stuffing and the mashed potatoes and the dressing and whatever it is. The mag 7 is the turkey. And if the turkey is good, I don't know if anybody's going to care how the other things come out. I think you get my broader point. Does anything else matter except the seven or eight stocks that we are showing on our wall right now? You are absolutely right, but the turkey has been growing in size. The turkey now makes up 40% of the market cap in the S&P 500. It is very unusual to have such a high concentration.

And that is the core of the problem for investors today. if I take out a hundred fresh dollars, am I willing to take the risk of essentially putting them all into the Magnificent Seven because the Magnificent Seven now has such a high weight? And that is the key issue. You are simply, in my view, not diversified in the S&P 500 if you put your money into the index today. And that's why this distinction between the S&P 7 and the S&P 493 and especially when it comes to earning revisions is so critical at the moment. I love you just rolled right into that turkey metaphor. Thank you for that. I mean, at some point, though, does the so-called turkey, I'm going to milk this for all I can, Torsten, get so big that it eats the plate, that there's at some point other companies and their earnings, they have to matter to the markets, to the economy, to the job market, or maybe not. Maybe they don't matter at all, and we should just every day talk about the same seven or eight companies. It matters because, Brian, you and I need a balanced diet. That is the best advice we all get. And the balanced diet in finance is to have a diversified portfolio.

That is not only in the magnitude 7. And in particular, when you look at profit margins, they've been revised up for the S&P, but it is all an upward revision because of the max 7. The S&P 493, profit margins have been revised down since the beginning of the year. And if you really step back and think about what the consequences are of this, it is exactly that as an investor, there's just so much. weight on my plate now on the max seven. And it is a good time to take some chips off and begin to think about, well, what is it that I'm doing elsewhere? Because when you think about

GDP, when you think about unemployment and inflation, the S&P 493 are more important. I love you just rolled right with it. I love it. I want to switch gears a little bit. Yesterday, we led the show with this SEC filing from Michael Burry of the Big Short, how he may be betting against Invidium Palantier. Again, we don't know. He was buying puts. That could be a hedge. we're not sure. But today, the Financial Times talked about Deutsche Bank having a potential or looking at the potentially shorting of some AI stocks. Is that just, is that impossible effectively right now?

Would be betting against these companies not only be foolhardy, but economically catastrophic because of this? Well, I think, as you also said earlier, there are now some other risks on the horizon, in which of course is the Aipa Terribes, which is both here in the short run, including today, but of course in particular here over the next month or so, though there's also the government shutdown. And the question is what these other risks do to valuations? And if we're now on top of that half, that we all agree that valuations for some of these

companies in the max seven, I mean, test evaluations at more than 300 on the Australian PE ratio, it all tells you that there's just so much weight on a lot of these companies having in the overall basket. That means that it may be, it is not surprising that some people are beginning to look at this and say, hmm, is this a right risk reward that I'm taking relative to where these has been historically? And that doesn't mean that the risk cannot run on. And of course, we continue to see an expansion of the AI theme. But it does mean that as that process continues, it makes sense that some people are beginning to step back and think a little bit more about

whether these valuations are not reaching very too high levels. All right. So let me ask you this then, Torsten. What are you and your team watching? It's day 36, the government shutdown. We'll get more on the tariffs, by the way, with in just a moment. We don't have any official, nor not a lot of official government data. Is there enough private sector data to make sense of everything that's going on right now?

Well, Jay Powell, last week said it very clearly. The Fed has a dual mandate on they do have data on inflation, and inflation is still at three. And what we also got today was ADP. And ADP is actually still telling you that the labor market is strong. And if you combine that with other labor market indicators, there's labor market indicators

from Challenger Gray and Crispus saying, announced job cuts is still okay. There's another job cut indicator for macro itch. That's also still okay. There's also production of data from the what's called Revilleelaps about job growth. That's still okay. Paychecks for small business jobs is also still okay. And jobless claims, which is the indicator we all look at every Thursday. It's also telling the labor market is okay. So the answer, Brian, to your question is that both sides of the Fed's dual mandate, namely infation is a bit too high. And the ADP today is saying maybe labor market is actually also still doing okay. That all comes to the conclusion.

that the economy is actually in pretty good shape. There is not this falling out of bed moment that a lot of people are talking about. It's still the case. Yes, there is certainly a case-shaped recovery with high-end consumers doing well and low-end consumers not doing well. But let's look at the aggregate data,

and it still tells you that the economy is actually in relatively good shape. Okay, relatively good shape. We know the big earnings from the MAG 7 or the grade 8, whatever you want to call them, and now I'm very, very hungry for Thanksgiving. Torsten, Slok of Apollo. Love your stuff, as always.

Appreciate that. All right, so you heard Torsten talk, about it. Let's get a little more now on the Supreme Court and the tariffs, because really all of this may come down to a rule last used by one Richard M. Nixon. Amen Jabbers, live at the Supreme Court, Amon, am I right? Are we're going back to the 1970s to try to figure this out. Yeah, absolutely. There's a lot of invocation of Richard Nixon. Those arguments of the Supreme Court just wrapped a short time ago. I just got back from the Supreme Court here to our bureau. And I got to tell you, Brian, the one thing that raised my eyebrows was the degree of skepticism that you heard from some of these conservative justices, including some of the Trump appointees to the Supreme Court, who were pushing back on the Trump administration's argument that this 1977 law known as AEPA does give the president the authority to conduct tariffs as well as to regulate global commerce.

The argument here is that, you know, of course, the Constitution gives Congress the authority to raise taxes and to issue tariffs, not the executive branch. And therefore, unless Congress very explicitly says we're going to delegate that power to the executive branch, it hasn't done so. So that was the fight this morning. Have any ideas of timeline? You know, we don't know how long the Supreme Court's going to take. But is this going to be like a one-day decision or are they going to talk about this for weeks? I think it could be more like weeks, Brian. And we don't have an official deadline here from the Supreme Court.

The expectation is before the end of the year, we're going to get some kind of determination from them. And, of course, the big pressure on them is that all these tariffs continue to be collected, right? So every single day, American companies are paying at the border when these products are coming across the border. So that means that the bar tab, so to speak, is growing round by round as we get closer to the end of the year. As of right now, the Treasury would have to pay about $90 billion back if the Supreme, Supreme Court decides against the Trump administration here. That number, of course, growing every day by the time we get to the end of the year. You know, what's amazing about this, Aeman, is that you and I've talked about it a little bit.

We've had a couple guests who've kind of danced around it, that this may be a much larger market event than people think. And here's why, because this tariff revenue, whatever people think about the tariffs, it is bringing in revenue, is it not? That revenue is theoretically supposed to pay down some of the deficit, some of the debt, and the bond market, if it does. not get this revenue, you do wonder, is it going to react if that revenue is suddenly pulled away? Yeah, I mean, that's a question for bond market experts, but you can hear the administration making something similar to that argument all year long. They say, hey, look, we didn't put these tariffs in place in order to get the revenue. We put the tariffs in place in order to change global trading patterns. But boy, look at this revenue. Isn't this great? Look at what it's doing

for our deficit problem that we definitely have. This, you know, 90 billion, is certainly not jump change in a relatively short period of time. The other way this could be market moving, Brian, I haven't seen this calculation anywhere. I'm sure somebody smart has already done it, but to go back and look at which publicly traded companies have paid the most so far in tariffs this year and see exactly how much each of those companies will be getting if there's a refund check that's going to be issued by the end of this year and whether that amount of money is material for those individual stocks. somebody's got to have that number already

and be sort of waiting to place bets on whether or not a material event is going to happen for some of those companies in terms of just a gusher of revenue coming back from the Treasury, which you just don't often see. It's a great point. There's probably like four PhD physicists

somewhere in a backroom at Goldman Sachs who have that data. We don't have it, but I think it's well said that basically they're going to have to write a refund check to these companies that have been paying in if the court says invalid, although I think the White House

will say, even if this ruled invalid, they have other tools, right? They're not going to just say, oh, well, we're done. Well, that's exactly right. So, in fact, we have a graphic prepared, which shows you some of the other tools that the administration could use. You know, there's something called Section 338 that has some restrictions to it. Tariffs only up to 50%. Section 122, tariffs there are only up to 15%. So the president's a lot more constrained under these other options than he is using the so-called AEPA tariffs that he's been using. So that's why he likes those and he doesn't want to use these other authorities. But even if they use these other authorities, it seems likely that in the event of a loss, the Treasury would have

to pay back all those American companies, the money that they've taken in so far. And then they could reimpose tariffs going forward on the basis of these other authorities and start collecting tariffs there. But a check would have to be written back to these companies for what they've paid in so far this year. You can't go back and put tariffs on retrospectively using different legal authorities. We're going to find out, Supreme Court, checking out something they've really never analyzed before. Amen Javers, thank you.

You bet. All right, speaking of D.C. in a different way, the government shut down now reaching a record 36-day. That means the lack of data around the state of the American economy continues to not come out, or maybe it does. Because your next guest has some of his own proprietary data that you have to see in here, you will, but only if you keep it here on Power Lunch.

Well, the blockout of official government economic data rolls on, but that does not mean the markets and investors are not getting critical information and data. It's just coming down more to the private sector. One example, the widely watched ADP private sector jobs number. That came in stronger than expected. But we also have another one for you. We're going to call it Zeta Data. It is the latest Zeta Global Economic Index.

Zeta Global is a global. the marketing and AI company that analyzed literally billions of data points for clients. So let's get more now on how the Zeta data is coming in. Joining us now is David Steinberg. He is CEO of Zeta Global. And there's some good news here. As I read it, it was kind of weakening for about six months. Looks like it now, David, may be starting to firm a little bit.

Yeah, totally right, Brian. For the first time in six months, we saw the Zeta Economic Index go from contracting to expanding. It expanded, you know, 150 basis points to 67.7%, which is a very healthy place for the economy to be. What are we looking at in the Zeta Global Economic Index? Because you've got so many data points looking at all these things for your clients, what are some of the main features of the ZEI that we should be paying attention to? Yeah. So, I mean, we're looking at 240 million Americans, everything they're researching,

everything they search, all their credit card transactions. We're looking at their sediment across multiple different categories, and we're ingesting, quite frankly, trillions of signals into the algorithms that then tell us the state of the economy. And right now, it seems like the consumer and the private sector, even though they're concerned about the government shutdown, they continue to spend. They're sort of cutting through the noise. We're seeing categories like financial services, travel, entertainment, retail, automotive, and tech, all simultaneously expanding. That's a very big deal. And quite frankly, you're looking at what's going on from a government perspective. You're seeing a positive economic indication. What they're not

spending on is moving. Now, we know there's not a lot of houses for sale, but your index, I'm looking at it is showing a continued lack either of mobility or simply the desire or ability to move. I think it's ability. I mean, you saw a contraction to the moving index, and quite frankly, you saw contraction to credit, both of which come down to interest rates. And, you know, I think that the Fed cutting rates was a mental boost. And I think in the next month or two, we're going to see consumers begin to loosen up as it relates to drawing down credit, which of course is important to our economy, and to moving.

But right now, moving, you know, most people either have a low-cost mortgage and don't want to give it up or can't afford to make that move. Well, this also goes to another data point that you've got, David, which is credit line expansion intent also falling just about as much, meaning people are just less willing or less able to take on new credit. I would imagine some of that is the mortgages they don't need because they're not moving. But is there also maybe another way to read that? Because like it or not, borrowing and credit are a pretty important part of our economy.

That is the American way, right, Brian? First of all, it fell half as much as it did last month. So it's falling, but it's falling at a 50% rate to what it fell last month. So I look at that as it relates to a positive. But I think a lot of this is tied up in very expensive mortgage cost versus the, the average mortgage costs that individuals have prior to moving, and as we all know, you can't really take those mortgages with you. So if you're sitting on a two or three percent mortgage, and you're now looking at a six or seven percent mortgage, and in markets where housing is

already expensive, it's going to cost you substantially more to move. And I think consumers are just not drawing credit to do those types of things. Well, the positive news there is the Zeta Economic Index score rising to... is 67.7. Up a little bit. First firming in about six months. We'll see you next month, David, to again see if maybe this is a one-month wonderer or the start of a new trend. David Steinberg, thank you very much. Thank you for having me. All right. Take care. All right, the markets, big bounce off the April lows, got your next guest thinking. Can the record rally keep running into next year? Our friend, Ryan Dietrich, dug into the data,

and he joins us next. All right, welcome back. Let's talk. markets and more with one of our favorite guests because Carson Group's Ryan Dietrich always brings the heat and he always brings valuable market insight. He's also been bullish even when others were not, which means he's also been correct. Let's welcome, Ryan on set, Chief Market Strategist at the Carson Group. Ryan, good to see you. Good to see you as well. Don't worry, we're not talking about the Bengals and Joe Burrow. We'll save that for off camera. He had to go there fast. It went right there. All right, but we're going to start with something else. This is interesting. So I posed a very simple

question to all of my lovely followers on X. Is the stock market in a bubble? Before you answer, Ryan, here's how it came in. 48.8% said yes, 51.2% said no. I'm not a math whiz, but that's pretty darn close. My guess is you would have answered no. We would have. That's pretty close to 50-50. And again, thanks for having me. Always is going to be in your city. You know, there's parts of the market clearly that are frothy. I mean, guests have pointed this out. We know that. You know, you mentioned Joe Flacko.

I like to say bull markets, they don't necessarily die of old age, right? Age is just a number. This bull market's in its fourth year. If you look in history, Brian, last 50 years, five bull markets made it this far. Every one of them got to at least their fifth year. Really? The average was eight years. We're not saying it's going to go eight years.

I'm just saying, I say bold markets like a cruise ship once they get moving, the hard to slow down, really hard to turn around. Let's just think about that. There are pricey parts of this market. But yes, but that doesn't mean the bull market's over and we do not. So you are here to proclaim on international TV, this is the Joe Flacco market day. This is a similar market, right, that when you think things aren't looking so good, guess what? You find new life.

Suddenly you're throwing five touchdowns a game that this market still has room to run. And you've got to go to your X side. I know some amazing data to back this up. What am I pointing at here? I'm not sure which one that is. These are all the historical stats. Yeah. So there's a few things we can.

talk about here. When you're up at least 10% for the year going into November, November's been higher the last 14 times in a row. When you're up, that's 100%? That's pretty good. When you're up 15% for the year, like we were this time, going into November, the last two months have been higher 20 out of 21 times. Wow. Those are just some numbers. So we're up 15%, which we are heading into November 1st a couple of days ago. Yes. 20 of 21 times we end higher. These final two months have higher. And again, better than average. Even November and December do better. And I know I sent a graphic and the team put it together. You know, when you're down 15% for the year, like we were, obviously, around April, call us a slingshot. You play a slings shot? Slingshots as a kid, by the way?

No, but I'm watching stranger things. Now I know I'm a few years behind it and one of the kids has a slings shot. So it's kind of dangerous, but it's good for bull markets because when you finish the year up 10%. I know this year is not over yet. Only three times in history, 1982, 2009, and 2020. The next year was higher at least double digits every time, like 19% on average. The slingshot is real. I mean, one of the things, one more thing, Brian, I'm fascinated by how people just keep doubting this. I mean, people say it's a bubble. There's all this negativity. We've got like record number of bears in that AAI poll, and I know that's maybe flawed. But I get to travel the country, talk to people. It's like people are very excited. I love seeing that.

Well, there is also the poll. I mean, and I know it's just our ex poll, and it's going to be sort of adjusted for whoever follows me and you or whatever on Twitter, the finance crowd. But when I see almost half the people say it is a bubble, now I should have a follow-up, which should say, but are you going to keep investing? Even for the 48.8 to think it's a bubble, are they going to keep investing? My guess is, Ryan, they will. Yeah, and that's a great point. And if you think it's a bubble, where do they think it's a bubble? Probably the AI part of the world, right? That's okay. You can invest in other things. They're one of the fascinating things about year, we're hitting new highs virtually on every stock market around the globe.

I mean, they're all hitting 52-week highs. Other places you can invest. That's what I love about you. You knew that immediately the United States market. We've done great. Most of the world has done better than us. It's a global reflation. Yeah, I call it a global bull market.

And again, the last couple of years I came on with you. When we had the evening show, we got the talk. We said, we like the U.S. This year we've gone a little more developed international. We think there's opportunity around the globe when you have a crazy time like April in the Liberation Day, you know, obliteration day. It was really nice to have more diversified portfolio. Bottom line, we're overweight equities, yes, but we have more international exposure that we had the last couple years.

How much is that quickly? How much is international? Yeah, well, if you think a 60-40 portfolio, we're about 71% equities, about 19% or so is international, developed international. And that's the highest has been in a while? That's a lot. For an RIA, that is a lot, as most we've had in the while. We have the most U.S. still overall. But, yeah, we think there's opportunity for sure.

I think you're due for a multi-week trip through Paris and VIA. And they're lovely this time of year. Brian Dietrich, great stuff, the data. We'll see where it comes in, but very bullish. Ryan Dietrich, appreciate that. Thank you. All right. Now to a move in Treasury yields, the 10-year yield just keeps moving up.

Rick Santelli joining us down with the bond report from Chicago, and it's really amazing, Rick, this trend we've talked about. The Fed has cut rates twice now, and the bond market doesn't seem to care. Well, maybe it's the Fed should care more about the bond market, would be my answer to that. The bond market keeps going up. And I've said many times, and I don't mind if I'm wrong once in a while, but in this case, long-term treasury rates will remain stubbornly high.

Stubbornly high. And the answer, why that occurs is pretty easy. We compete with all the issuance for investors, and it looks like we may be giving more supply in the future. Let's look at a two-day-of-toes and tens. A couple of things there. The reason I picked the two days because right around 10 o'clock, 9.45, when we're getting the ISM PMIs, which were better than expected, although prices paid was at a three-year high, we started to go higher. And we took out yesterday's high yields at the same time.

So that's kind of a double whammy. The technicals meet the fundamentals of the few data points we're getting. And if you look at a chart since the Fred Ray cut you pointed to, look at how much higher yields are. And finally, the dollar index also two days in a row, it looks like, is it close over 100 hasn't happened in six months. The ultimate story here is that rates are going to go higher, and if tariffs were bad when they got put on, does that mean it's better if they get taken off?

I don't know what the Supreme Court's going to do, but I know that it seems that everything this administration does is considered bad. Well, look at the equity indices. Maybe, well, maybe they're right. Rick, do you think part of this moving yields have, to do with the Supreme Court and worry about the tariffs? Nope. I think it may in the future, but these moves started long before we started to get any inkling about some of the inquiries of the Supreme Court justices.

Well, we shall find out and wonder if the U.S. has to maybe issue more debt if they're ruled illegal. Rick Centellie, thank you very much. All right now, folks, we've got a news alert on both Apple and Google. Steve Kovac. What's going on? Hey there, Brian. Yeah, Bloomberg reporting that Apple and Google are getting closer to their deal to use Google's AI Gemini system to power that big update to Siri that was supposed to launch this spring. That was now delayed. Now, Brian, we've known for some time that Apple was planning to partner with a third party in order to make this new version of Siri happen. What's new in this report, though, is that Apple would be paying Google for it up to a billion dollars a year.

According to this report, there's been a huge question about that. If one of these deals do you happen, which way does the money go? we already know that Google in regular search is paying at least $20 billion a year to Apple to be that default search engine. That relationship is allowed to continue because of that DOJ case and the ruling there. And what's also interesting here is something we talked about, talked with Tim Cook about, rather, last week during earnings. I specifically brought this up with him, Brian, and said, you know, what do these partnerships look like? Is it going to be an Apple experience? Is it going to be a Google experience?

And I just want to point out really quickly what he told me here. He just talked a little bit about the private cloud compute and how that is all Apple's technology. But he told me it's only the world knowledge piece that you're integrating out to chat, GPT. And so you can think of Apple having and continuing to have more third-party relationships. And when he talks about world knowledge, that's search. That's when you use perplexity, Brian. That's when you use the Google AI overviews or the AI mode in Google. That is what he's talking about here. Apple does not have a search engine. There's no indication it's playing to build a search engine related to AI. But partnering with Google makes the most sense here. And again, I just point out the financials being reported here for the first time. One billion dollars being paid by, potentially being paid by Apple to Google. I'll just note. I reach out to Apple on this. They have no comment, but we do have some thoughts here from Tim Cook last week, Brian.

All right, there we go. Look at that. Look at the bull stock. Steve Kovac. Fascinating stuff. Thank you very much. All right, coming up. Exclusive CEO sound from the world's largest oil producer and how it's leveraging AI to help it and the world find more oil. All right, turning now to the oil market, let's kind of combine oil with artificial intelligence because AI is not just a buzzword in big tech. It is also causing some big changes to big oil.

And the biggest oil company in the world is not only trying to help power AI, but also use AI to find out. find more power. Sarah Isid joining us out for the New York Stock Exchange, but she is recently back from both Riyadh and Dharan, Saudi Arabia, with an interesting look inside of a Ramco. Sarah. Brian, thank you. I've been very excited to share this with you. So the world's largest energy company, Saudi Ramco, is focused on diversifying its revenue streams and building up its technology.

Did just get back from Saudi Arabia, where Ramco CEO, Amin Nasar, showed us around headquarters and gave us an inside look into why he said. because Ramco has a competitive edge over all these other companies that are adopting AI. Listen. You need first the computing infrastructure. If you don't have the computing infrastructure, and this requires investment over so many years. And it takes tens of billions of dollars. Second, you need the quality of data.

We have the quality of data for 90 years. Third, you need to ensure that you have that talent. And the talents, I don't talk about data scientists only. The BPU and chips alone will not give you what you have seen. In our operation, there's 6,000 trained on AI. Employees train at a building which looks like a college to become experts on everything, from drilling wells to geology to data analysis. And everything that you see over here is a true representation of how the fields look like

below the surface. The company uses its own large language model, a Ramco MetaBrain. It's comprised of 90 years of geological data. So we are benefiting a lot from our metabrain or our large language model. It is really helping us to increase the efficiency. You can see it in every component of our operation. Every component of their operations. Ramco is using AI and everything from geological analysis for oil exploration to saving

billions of dollars and costs on maintenance of wells, where the analysis can predict signs of corrosion, for instance, flare monitoring too. Ryan, you know about all of these things. You've seen them up close. A Ramco says it has more than 400 use cases now and is creating over $2 billion in value from AI in a year. So bottom line, most companies we cover are adopting AI, but it was really eye-opening to see a company as large and complex as A Ramco,

biggest oil exporter and producer in the world, of course, huge player in natural gas and increasingly renewables as well, and how they're using that scale and almost 100 years of data to change the game on cost, on growth. And ultimately, Brian, also, they say it helps them cut emissions, too. Yeah, and what was amazing, I listened to the whole piece, or at least what we had on money movers. And it was fascinating toward the end where basically Nasser said,

listen, we're going to need everything we can to make all this power. And they're also more bullish on oil demand than maybe the IEA or some others. They are. And he directly addressed that in the interview. He said that he's bullish on oil demand for decades to come. even though they're still diversifying, of course, and helping Saudi Arabia, the kingdom, diversify away from oil as well.

But he is bullish. And even though IEA, it talks about supply gluts, he says he doesn't see it. He sees a market that's very much imbalance, and he sees a lot of demand coming, particularly from emerging markets and even from China, where they're shifting over to EVs, but they're increasing their oil usage and demand

in other parts of their economy. As far as the powering of the data centers, that's the other big story here. It's not just investing in AI, it's being able to power the AI revolution, Brian. And that is why, you know, this company has really up, and a number of companies you cover have upped their production of natural gas. And just increased the targets, in fact, this week when they reported earnings. They're also increasing renewables because I think as he characterized it to me, what it's going to take to power the data centers is four times as much as what it takes to power the electric vehicles right now.

It's not even close. It's truly an incredible number. And I think he would agree and we'll let you go, Sarah, that the IEA for as much good work as they have done has been wrong on oil. They've kind of... He would agree with that. They would have... And you know what? He's also called out... A wild speculation on my part that he might agree with that. And not just that, Brian. He's called out the industry for reducing how much they're spending when it comes to exploration, which is why potentially. You know, we're still, we still have an economy in a world that demands hydrocarbons and oil. And he has said, you know, there's been underinvestment in this sector and partially blames forecasts for being wrong.

As well as, of course, pressure from shareholders as well to come back. Some wildly wrong. Just a wild speculation on my part. Sarah is in a really interesting look there inside of it, literally its own city. Sarah, thank you very much. All right, let's get out of Julia Borsden for a CNBC news update. Hey, Brian. The first civil trial over the 737 max crash in Ethiopia six years ago began today in federal court in Chicago. The proceedings will decide how much Boeing will have to pay to the family of one of the 157 victims.

The company negotiated settlements and most of the other wrongful death lawsuits it faced. The California Republican Party says it will sue over the voter approved Proposition 50, which creates new congressional maps that could give Democrats five more of the state. state's 52 congressional seats. The party claims this new rule is unconstitutional because they use a voters race when determining how to draw the districts. California Governor Gavin Newsom says he is confident the maps will withstand any legal challenges. And FIFA announced a new award called the FIFA Peace Prize, which will be given to its first winner during the World Cup finals draw in Washington, D.C. next month. FIFA says the award will recognize individuals who have taken

exception and extraordinary actions for peace. Brian, back over to you. All right, Julia, thank you very much. All right, Warner Brothers Discovery has its list and it's checking it twice. We've got some breaking news on WBD with Alex Sherman. You're going to want to hear it next. Paramount Skydance TV network and movie studio has a clear holiday message this year or wish, buying Warner Brothers Discovery, which is fitting because the company will have to wait around Christmas to find out whether or not that's going to happen. that, not according to me, could do a brand new scoop from our very own Alex Sherman. I'd call him Alex Scoop Sherman.

And you joined, you don't like that. I know you're joining us now. What do we learn about this media saga? I got a copy of the letter that David Ellison sent to the Warner Brothers Discovery Board. Okay. And in that letter, he outlines why Paramount's $23.50 bid, unsolicited bid, to buy all of Warner Brothers Discovery is more friendly

to Warner Brothers shareholders than anything else that Warner Brothers Board could possibly come up with, which is either splitting the company into two and having these two different companies, one called Discovery Global and one called Warner Brothers. Warner Brothers has HBO Max and the movie studio. Discovery Global

has the cable networks. Those two companies could exist as publicly traded companies on their own and grow from there, or Warner Brothers could sell one or two. Didn't they used to be? Well, yeah, right. So we're just going back to the way it was.

Yes, well, to some degree we are. I would say everyone realizes that the Warner Brothers and Discovery merger was a failure. It didn't trade well at all as a publicly traded company. So David Zaslov and the board is now saying, we're waving the white flag here. We've got to do something different. Why is Warren, time, remember, AOL Time Warner?

Anybody remember that? Yeah. Why is Warner Brothers always involved in deals? Not only are they always involved with deals, They're always involved in massively shareholder losing deals. AOL Time Warner thought to be the worst deal in the history of all deals. Maybe the second worst deal was AT&T buying Time Warner. Every single one of these iterations of a deal with Time Warner doesn't turn out well for shareholders.

No, and I think some AT&T execs got rich on that deal and now don't work there. There's that arrested development meme about like this hasn't worked ever before, but it might work for us. It might work for us. And maybe that's what Paramount is thinking. Okay. So what happens to CNN? which is owned by Warner Brothers Discovery. They're a news organization.

Right. CNN in its current iteration will go along with Discovery Global. That is the cable networks portion of this split business. And then it will either trade independently as a separate company or if Paramount does in fact buy all of Warner Brothers Discovery

or somebody else does, it would then become part of that company. It hasn't worked in the past, but maybe it will work for us this time. I love it. Sounds familiar. Alex Sherman. great scoop.

Thanks, Brian. I'm not going to call you scoop. Don't worry. All right. A mystery chart. Your next guest says this company saves lives, headaches, and money. The stock is soaring. We'll get the name and the rest for picks.

Next. I got a big interview tomorrow with Tony Sage. That is the CEO of Critical Metals. Of course, his company and other rare earths, all at the center of U.S. trade negotiations, traders have loved them, investors have loved them. We're going to talk to Tony Sage about their production. line. The stocks rapid runs up 500% in the last six months. A lot of questions. We'll get answers. That's on power lunch tomorrow in the 2 p.m. hour right now time for a power check on three

stocks that could and should be on your radar. Amy Zhang is fund manager of the Alger midcap 40 ETF, which is rated five stars by Morningstar. That's not enough for you. We need a six star. Amy, good to see you again. Yeah. Thank you, Brian, for having a young. No, no. Well, amazing fund manager, won a bunch of awards, ETF as well, got three picks. Let's start with a company I know nothing about Gene DX, a biotech. Why do you like them? Well, it's actually a diagnostic company. It's a leading exome genome testing company to diagnose rare disease. So one out of 10 Americans have rare disease and have them and children. So gene dX being around for a long time. and they specialized. They started with pediatrics, and no company has done more genetic testing

than they have done for children. And it's a really big market because, as you know, we're always investing companies that save time, life, money, headaches, and it typically, you know, takes five years on average to diagnose a sick kid, and the gene desk can do it within weeks, if not days, and hours.

So this is a profitable company. This is not like a biotech sort of betting everything on one drug. It's a diagnostics company. Yes, very profitable. This is their fifth consecutive profitable quarter. And they really had a smashing quarter, as you would say it, you know, beating all metrics and both revenue and profitability growth accelerating. And we expect them to continue to accelerate. But more notably, they are also a hidden AI play, as I would say, because they have a very underappreciated database.

you know, using AI machine learning. So with that, they can get higher diagnostic yield and get much better clinical outcome. So that's a huge competitive advantage for them. Only Amy Zang could pivot from Gene DX to Wing Stop. Much more of an approach. I know a lot about chicken wings, but I don't know about the stock.

What makes it attractive to you, Amy? Well, as we talk about AI adopters, we really think companies can adopting AI early and very well integrate AI into their own. operations will be winners. And just like GNDX, Wingstop is such a company. As you know, many years ago, I talked about Winstep on Worldwide Exchange. I said it's a technology company sells chicken wings because they've done a phenomenal job in digital transformation. In fact, now they are over 70% digitized and there goes to be 100% digitized. Going forward,

the most important growth initiative for them is AI-powered Smart Kitchen. With that, they can cut cooking time in half, and also they can use the AI engine to predict demand and streamline operations. So they've already, they wrote out 2000 already, and they're going to do $2,500 in U.S. by year end, and they already have proof statement. The company has smart kitchen has increased sales meaningfully. Very quickly, Cloudflare. Why? Well, Cloudflare is started with its roots in content that deliver, uh, um, delivery network and then cybersecurity. But nowadays, they have the most comprehensive global cloud platform.

And, you know, the Internet is really very AI-centric. And this is one company, since we think AI as a GoRush era, and I would say Cloudflare is the best, probably one of the best hardware store in the mining town. And, for example, their new products, you know, they can do edge AI. for the inference for their customers, and they can also block AI clowers. Great stuff. Let's a cloud flare, wing stop, Gene DX, nobody can do it, but Amy Zang. Really appreciate your time, Amy.

Have a great, no, thank you. Folks, thank you for watching. Closing bell starts right now.