Power Lunch - Stocks recover after early slide 11/18/25

Episode Date: November 18, 2025

The Nasdaq fell 2% before mounting a comeback. Microsoft Commercial Business CEO Judson Althoff discusses Microsoft's $5B investment in Anthropic. And a look at a biotech company whose stock is soaring.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Buyers starting to come back in as the AI bubble chatter begins to ease off, at least for now. Welcome to Power Lunch, everybody. I am Brian. Keller be back in a couple of weeks. A decent turn for stocks in the last hour. We began where we left off Monday and last week with more selling. But some dip buyers, they are starting to pop their heads back up. A couple of big cap tech names making moves in stocks. Oh, and in the AR arms race will tell you about a very interesting deal from Microsoft, partnering with one of its biggest competitors? It's interesting. We've got an exclusive interview with Microsoft CEO, the commercial business, Judson Althoff.

That guy right there about all that and more. All this as Bitcoin rebounds a bit from a brutal run to below 90,000, ether climbing back above 3K in D.C., President Trump and the future king of Saudi Arabia, happening right now, a big meeting, and the outcome could move stocks with billions in defense spending on the line as well. Oh, and we're going to also highlight a stock we first brought to you two weeks ago. That is now doubling today. It's not in video. We'll talk more about it. All right. You can tell it's a busy day on the street of Jean. Dreams is jump right in because this week it really is all about that company right there. Invidia and its earnings,

those earnings, they are due out tomorrow afternoon, and it kind of feels like stocks and maybe the overall market are a bit of a coiled spring all ahead of that NVIDIA result. Let's talk more about that and more that matters to your money with our friend, Steve Saznik. He is chief strategist at Interactive Brokers. And Steve, welcome. I'm looking at your most active stocks. NVIDIA, number two, maybe with a bullet. How big of a deal are these earnings going to be tomorrow night?

Brian, you know, it's one of those things. I don't like to overstate the importance of any one single company's earnings. But if there is a single company whose importance I'm going to rely on, it's NVIDIA. The bull market that we're in has been predicated on enthusiasm for artificial intelligence. And there is no company more central to the AI trade than NVIDIA. If they give us the all clear and say that companies are continuing to spend and it's all systems go on data centers and chip. then we get a nice rebound. If they don't say something positive or market-friendly, we're going to see this continue. Yeah, okay, so let's go through either scenario, Steve. They come out wildly positive numbers. We know the numbers are going to be big, but wildly positive guidance,

the positive commentary that you just referenced. Good for NVIDIA. How big of a deal, though, is NVIDIA to the macro market, being in hundreds and hundreds of ETFs? Oh, and by the way, the options market also relying, I think, heavily on NVIDIA. Well, NVIDIA is the center of this ecosystem, Brian, and that's really the key to it. Think about it this way.

Their biggest customers are the other MagS7 stocks. And so, yes, mathematically it's quite important because it is the biggest stock in the index and therefore the most important. But there's others that are close, Apple, Microsoft, things of that nature. But in terms of market psychology, and in terms of really the fact that this is the standalone tech stock for this time, you know, you've had most of the other big stocks report a month ago. Now it's basically Nvidia and the retailers. So it's a different characteristic. And so I think we're going to be hungry for the fresh data that they can provide. And again, I think a lot is depending upon whether they say good things. Now, one thing going into the numbers, the stocks come off a bit. Some of the other times we've gone. into the numbers on highs and the stock reported great, you know, they reported everything hunky dory and reported good guidance and the stock did nothing because it was already priced in. Now I think we've had a little bit of a pullback in the stock. So you do have some more room

for upside. And what we're seeing in options activity is the skew is very flat, meaning people are just as likely to be playing an upside as they are playing a hedge downside. Well, what if they come out with guidance that is not as good as some hope? I your guess is as good as mine on that one because we've already been going through this risk off sentiment. We've seen customers using this as an opportunity to buy dips. And so if the guidance is such that it causes other institutions to start selling, and remember, we've seen SoftBank, we've seen Peter Thiel, we've seen Viking Global, all selling out their positions, if this is a catalyst for other institutions selling their positions, that

that could get pretty ugly and that will spill out beyond just NVIDIA. So there is a lot writing on this. Yeah, and we've got a conversation with a Microsoft group CEO later on in the program talking in part about a big deal they made with Anthropic, which is interesting because Microsoft is the biggest investor in OpenAI, whose biggest competitor is Anthropic. It's like we're trying to date both sisters or both brothers, whatever it might be. Is there any part of Steve Sosnik and interactive brokers that, worries about this idea of circular money that we've been talking about for a couple of months,

or is that just media hype and over-worry about something that doesn't exist? I've been worried about this since the Oracle deal. And as I started to think about the numbers there, you know, so just with Oracle alone, you're talking a $300 billion commitment from Open AI. Open AI is hoping to get $20 billion in revenues this year. That's a big leap to be able to afford that much. terms of spending. Plus, there's all the other commitments that they have with all sorts of other vendors. So, yeah, I do worry about this circularity because, you know, so much is dependent

upon bottom line, well, top line growth, really, from, you know, from the AI industry. And so without that, it's hard to sustain the sort of data center purchases, which involve buying Nvidia chips, involving Oracle, involving Microsoft, et cetera, without some actual money flowing in to pay for all this, I do worry about the circularity. That is an existential risk to the sector in my point of view. Well, if it's an existential risk to the sector and the sector is the heaviest weighted in the market, is it an existential risk to the macro market, Steve? Short answer, yes, because I think we are so dependent upon AI. Think about it this way. The bull market that we're in, and we are still in a bull market until proven otherwise,

began in November of 2022. What also began in November of 2022? Chat GPT, I don't think it's a coincidence. As early as February 23 at their earnings call, Nvidia used the term AI or artificial intelligence. I think it was 82 times in that call. This has been all about artificial intelligence. It's a huge factor in GDP at this point in that spending.

It's I think 60% of all cases. capital spending that's going on in the economy. We are all dependent upon this AI trade. And if it can, if it can go as planned in terms of all the money being spent, well, then let's carry on. But there's a lot of risks out there. And that if we stumble on that, it is a big problem for markets because we've become so reliant upon that trade. And ultimately, honestly, I'll leave it here, Steve, but it kind of comes down to one guy, Sam Altman, out in California, who's kind of just like, and you get a car, and you get a car, and you get a car, and then we just hope everybody gets a car.

Oh, and they don't get a big tax bill with that car, but it really does come down to Open AI. Sam Altman just doling out power pledges and money. We'll see where it goes. Steve Sosnik, appreciate it, and video earnings tomorrow night. Steve, have a great day. Thank you. Thanks, Brian. All right, so let's talk about the bond side of the market as well, 10-year yields.

They're not moving at all. Rick Santellie's in Chicago. Rick, I mean, is there talk on the floor? floor of the CBO or the CME about this idea of just circular money that we first propositioned a couple months ago that it's now kind of all the rage. Yeah, it's definitely part of the conversation, but the bigger part of the conversation continues to be what's all the missing data going to do when we start to see it brought out of the government and back into our computers?

Many are wondering, have we priced in too aggressively some of the weakness in the labor market or inflation, only time will tell. If you look at the S&P futures on top of 10-year, they have kind of retract each other. The big downside of late with stocks was largely ignored by the complex of treasuries, but now we see the bounce off the lows earlier. We really did track it with 10-year note yields. And if you look at a November 10-year, the entire month, has been in a closing range, as you pointed out, between 407 and 417. JGB's Japanese government bond tenure today closed at a 17-year high yield. And one of the reasons we talked about yesterday,

we continue to see their currency move down against all the majors. That's a year-to-date of the euro-yenne and the dollar yen. Euro-yen is at a 33-year high. The dollar yen is at a 10-month high. Brian, back to you. Nobody can ever say that Rick Santelli didn't focus on Japan, because you were on it, my man. Rick Sinteli, thank you very much.

All right, coming up, well, Trump's big meeting with Saudi Arabia's crown prince mean billions for Lockheed Martin or billions for NVIDIA. What about oil? Talk about all of it. Next. All right, welcome back, everybody. That is a live look at the White House. And we're showing that to you because at any moment, I'm kind of hoping he walks in.

out. Saudi Arabia's crown prince, Muhammad bin Salman, is set to depart after meeting President Trump. This is the future Saudi Arabian King's first visit to the White House in seven years. And billions of dollars may be at stake through a variety of deals. Amon Javers following the developments, he is live also at the White House. Amen. Yeah, Brian, it looks like at least $600 billion are at stake in this series of meetings today here at the White House. We just saw the Oval Office session between President Trump and Muhammad bin Salman. Fascinating meeting between the two leaders. The first topic was the F-35 purchase. We saw the president yesterday suggested he was going to authorize those. He did today a little bit

not clear on whether these F-35s will be as technically capable as the F-35s the U.S. sends to Israel, but still the president said he wants them both to have top-tier aircraft. That $600 billion pledge. Fascinating. The president said it was a $600 billion pledge from the Saudi side. And then he's sort of jaw-boned Muhammad bin Salman into increasing that to a one trillion dollar investment pledge, which the Saudi leader said he was happy to do, given the scale of the investment opportunity, he says he sees inside the United States. Then the president said that they're negotiating on export licenses for certain chips. He said a certain level of chips will be authorized to be exported to Saudi Arabia. Didn't specify what level of chip specifically he's going to authorize the Saudis. to be able to receive.

And then some discussion of Jay Powell, the Federal Reserve Chair. The President said he'd like to remove Jay Powell immediately from office, but some people he didn't name are holding him back from doing that. And he also suggested that he does have a selection in mind for who he wants to be Fed Chair.

Said he wanted Treasury Secretary Scott Besant to take the job, but that Besant didn't want it. And so now he's going to begin the interviewing process for candidates for the Fed. And as you can see behind me here, Brian, here at the White House, They're bringing in a whole lot of gear for the state dinner tonight. Not officially a state dinner, but it will have all the trappings of a state dinner with the Saudi royal family.

And a whole host of luminaries. We are expecting Cristiano Ronaldo, the soccer star, to be here at the White House today. We're also expecting Elon Musk to be here. And we'll see what other luminaries we get as the list starts to trickle out this afternoon. Ronaldo, who plays for a Saudi soccer team, Elon Musk, and a box truck behind you. Amon Jabriss always bringing everything. Amen, appreciate it. Thank you.

You bet. All right, well, obviously, folks, oil is in focus. Whenever Saudi Arabia is discussed, Saudi Arabia, the largest producer in OPEC, and the past year OPEC and its allies have been adding oil to the market. Crude oil prices, they're actually a little bit higher right now, but overall, still down about 15% this year. And there are a lot of questions about what, if any, kind of done. deal Saudi Arabia may make regarding OPEC and oil output. The Saudis are the swing producer in OPEC, which oversees just over one-third of global oil production. But also at stake

defense spending. You just heard him and talk about it. President Trump announcing that America will sell advanced F-35 fighter jets to Saudi Arabia, CBC's defense expert and host of the 4 p.m. and host of the show that you just saw the 1 p.m. today anyway. Joining us down the significance of this deal. Morgan's good to see you. I feel like we just saw you on the exchange. Yes. And we'll see you and John today on the 4 p.m.

Triple duty. Is this a done deal with these jets? What do we know? No. I think the short answer is no. Here's what we know. At least since 2017, Saudi Arabia has been asking for F-35 fighter jets, which are made by Lockheed Martin.

It looked like it might be starting to move in that direction, and then that was put on ice under the last administration. And now, perhaps, and we don't have the details, but we know based on what Saudi has asked for in the past, they've requested up to 48 F-35 fighter jets, which would be worth about $4 billion. Is that meaningful over the long term to Lockheed Martin's bottom line? No, not necessarily. But it's much more meaningful in a variety of other ways. Not the least of which is the fact that for a defense contractor, like Lockheed Martin,

it signals the fact that you have a growing queue of allies that are really. really, really hungry to get their hands on this fifth generation, highly sophisticated fighter jet that has been on display with some of the incredible strike capabilities that it is capable of, case in point Iran a couple of months ago. And for Saudi specifically to potentially get this jet actually calls into question this idea of Israel's qualitative military edge. That is the phrase to know when it comes to defense buys by Saudi Arabia and others in the Middle East because, and it is written into law. And lawmakers, Congress will ultimately have a say in these foreign military sales of things

like F-35s to Saudi Arabia is whether this puts Saudi on equal footing with Israel's military and whether we would even allow that. There are other fighter jets in the world. So I also would imagine, aside from the money, to your point, not really material to the bottom line of Lockheed, it is a giant stamp of approval to Lockheed Martin to say, this is the jet that Saudi Arabia wants because I would imagine it is considered one of or the top fighter planes in the world. That's right. And it comes after what's been in particular a voracious year of criticism and scrutiny of F-35 and some of these other high-priced, big-ticket, sophisticated systems

as, for example, here in the U.S., within our own military in the Pentagon, there's more and more focus on automation and AI and things like drones. That's much cheaper and faster to make. Yeah, so I know you talk to Palmer Lucky about this, Anderil, they're a big drone maker, right? I talked to a lot of people about this. Talk to a lot of people about this. Is it the idea that, and this is massive respect to all the fighter pilots and all everybody in the world, that this idea of fighter jet combat, human powered fighter jet combat is not the future of warfare, that the unmanned drone run by somebody in a room somewhere in Nebraska. I think the folks making those drones and autonomous systems would say it like that. Lockheed would respectfully disagree. Yeah, but I would say I'd say the truth is probably somewhere on the in-between. And what I mean by that is you're going to need increasingly need both for the future.

So I don't think there's a world in which you don't have manned fighter jets like F-35, but do you need as many? And that's kind of the key question. And if the U.S. doesn't necessarily need as many, how do you offset that the climb in future orders and deliveries, if you're, say, a Lockheed Martin, you do that by selling to allies, like potentially now Saudi Arabia. One other thing to bring this full circle, keep an eye, since you are the oil guy here at CNBC, I think keep an eye on India, because it's my sense, and I'm sure it's yours to you, that

Saudi Arabia is the linchpin in terms of supplying oil to offset Russia to India to potentially get to a trade deal. Yes, because India didn't buy any Russian oil forever, and then they were told to buy Russian oil from the Biden administration. They bought a bunch now. The Trump administration is saying to India, don't buy any Russian oil. Poor India, Narendra Modi, the prime minister sitting back going, you told us to buy it. We did. Now you're telling us to not buy it. Saudi Arabia has excess spare capacity, meaning they could turn that on pretty quickly. By the way, bring it full, full circle. They might be able to make enough money for future oil. A lot of dealmaking happening.

A lot of deal making. Sell more oil, make more money, buy more fighter jets. It's like Invidia. It's like the same money. He's in the Middle East, and maybe you bring Nvidia and other AI capabilities into the mix, which, by the way, you can't talk about AI as anything other than a dual-use technology. It is a geopolitical topic. It is a national security topic, and that's why that's in focus for Saudi Arabia. It's also an energy topic because all these AI deals are actually just energy deals in disguise. Isn't that amazing?

Look at us. It's such a holistic approach to all of this. If I wasn't taping U.S. Markets Edition, I would be free to appear on the 4 p.m. show with Morgan and John. Morgan Brighton, thank you very much. much. All right. The recent little sell-off in big tech, and yes, it is a little sell-off, has us all wondering, is it time to buy the dip? Any dip we'll get a technician's take on what is in the charts next. All right, welcome back to Power Lunch, and here's a bit of a mini RBI for you with the recent drop. The S&P

500 closed below its 50-day moving average on Monday for the first time since April. And with that, it officially ended the S&P's longest streak above the 50-day moving average since 2007. That, my friends, an excellent, random but interesting stat on just how strong the markets have been over the last couple of months. And even with the little drop that we have seen in the past few days, and yes, it is a little drop. The S&P 500, on pace, Right now, for a very good year, currently up 13%, not including dividends. There are, of course, still about six training weeks left in the year, so let's talk about it. Joining us for the New York Stock Exchange, Jay Woods, chief market strategist, freedom capital,

CNBC contributor. Oh, and Jay, there's this little thing called Nvidia earnings tomorrow night. You might have heard about that company and those numbers. What's the market set up technically right now? Yeah, technically we are breathing a little bit of a side relief. We got below that 50-day moving average. That streaks out the window. We ended the 10 straight Mondays up in a row.

So now we're going to look to levels. And we hit an interesting level today that we bounced off of. We were down exactly 5% from the all-time high. So now we can throw that checkmark in the box, an average of 3, 5% corrections per year. We just got her second after a 40-plus percent rally. off the April lows. So we are digesting, we're digesting with some big hits in the technology sector, and now we're focused on one stock, NVIDIA, and why is it so important? Well, let's count it. It's almost 8% of the S&P 500. It's almost 10% of the QQ. It's the number one weighted

stock in the XLK, the technology ETF, and the semiconductor ETF. So this is where traders are focused now, and then technically, let's see if we get that bounce back, back to the 50-day moving average. Invita tested 185, a key level of watch there. But as Nvidia heads into this earnings, it's doing something it hasn't done in the last two years. It's selling off. It's down 12% from

its peak. So we aren't about to take another leg higher. We're about to resume that leg higher into the end of the year. So that's why it's so important. I got a question today from somebody they asked me off air. They said, are we in an AI bubble? I said, I don't know. But the one thing that does worry me is just

how big these stocks, to your point, have become in ETFs, in options, in derivatives, in Delta 1, which is sort of a complicated Wall Street strategy. Is there any part of you that worries that there's just, there's more ETFs than stocks right now? There's just too much attention and size and focus on NVIDIA and a couple of other stocks? It's concerning, but they're the leaders for a reason. These are the seven, the 10, dare I say, we had Broadcom and we throw in Berkshire. Give them a shout out. The biggest stocks in the world for a reason. And when the biggest stock has a chance to lead us back and get the metas to a mean reversion would lead to a nice rally, an Oracle,

which has been beaten down. We get a lift from that on the tails of Nvidia. That's why it's so important. Was there fault in this market? Sure. We saw it with some of these crypto names, these high-flying IPOs, the quantum stocks. So they've deflated. You know, you talk about some of the Aklos of the world. They've come back to normal. So I think we've taken some of the fraught out of this market and we focus on two things. Fed policy, we'll get the minutes tomorrow. That shouldn't have the impact. But we'll go back to earnings. And guess what? Nothing's changed on the earnings story. The growth has been there. So if Nvidia can just give us a nice sign that things are progressing nicely, we don't have to crush it like they have in the past, but just

hold these levels. I think we're set up for a nice year-end rally. And I have an RBI for you as well. All right. October 29th, March of the recent high. We have only made a high in the S&P 500 going back to 1950 in October six times. The last time was 2007, that is ominous. But to me, I think the stage is set that we buy this dip. Invidia leads us. We're going to go and get back to those old highs by the end of the year, and we will be knocking on the door at 7,000 sometime in mid-December.

I loved everything except the 2007 reference. Well, I had to throw it in there. true. But it doesn't sound like you're worried about that, Jay. No, I'm not concerned because what I've seen is constructive action underneath the surface. We've guessed two days below the 50-day moving average. If we can recapture that by week's end on this Nvidia earnings call, I think we're set up to have a good year-end rally in Santa coming to town by 2026. I'm going to steal that RBI. Only seven new highs in October going all the way back. I tweeted it. I'll tag you. We got to do. I'm at the pay like a copyright fee or something on that one.

Jay Woods, Freedom Capital Markets, C&BC contributor. Thank you. All right, why not? Here's another RBI for you. Despite the overall S&P 500 being slightly lower right now, every sector inside the index is higher except one. It's what they call information technology. It's the only one of the 11 that is down. Of course, IT is really now just a market euphemism for semiconductors. The losses, they're not huge today, but we are seeing some red. So let's talk more about what is going on and this invidia thing that we're going to focus on tomorrow night.

Christina Parts and Evellus joining us now for the NASDAQ, promising me the highest rated segment of the show. We're going to find out. How big of a deal is this? How big of a deal is this invidia thing tomorrow night? And will you sleep tonight? Yeah, of course, I'll sleep. the big concern is that Jensen Wong on October 28th was at GTC and DC and he revealed that they had orders of $500 billion. That's half a trillion dollars in Blackwell and Ruben chips. These are

the latest and greatest Nvidia offerings. And so he was saying that they have those orders through next year, 2026. Normally, Nvidia doesn't do that. First, they don't make a big announcement before earnings. And then they also usually guide, you know, quarter to quarter. So he was giving visibility out into next year, which kind of takes away the surprise factor. Jay just talked about the stock jumping the next day on October 29th to $212 an all-time high. It's down almost 10% since that level. And so perhaps that's the hesitation with moving into the earnings print right now is like, how much more can this stock go?

We know the company is the underpinnings for all of the AI infrastructure. We know Jensen Wong, the CEO and Collette Crests, the CFO are going to be extremely bullish about demand, saying that they're sold out. They can't keep up. Supply is going to be an issue, which is a narrative we've heard for quite some time. The hyper-scalers keep spending. Sovereign AI is a huge contributor. I'm sure we'll get some news from Saudi Arabia in the next 24 hours as well,

given Mohammed Ben Salman is here in the United States. But overall, it's just the magnitudes of the beats are just diminishing a little bit. And if you're looking for more upside, maybe this isn't the stock to do so in the near term. Invidia is attached to the Crown Prince of Saudi Arabia's visit at the White House. I know that we just talked about fighter jets, but you heard Morgan and I talking about Nvidia as well. They are a big part of this story. Yes, that's because they run on AI startup called Humane.

And in the past, Nvidia has been involved with them, as have many other tech companies. So I could pretty certainly say that there's going to be a few more announcements just over the last 24 hours involving sovereign AI and involving Saudi Arabia. Arabia, but in terms of moving the stocks from many of these names, this is maybe more of a longer-term deal. I don't know the details just yet on which companies and how much money is going to be involved, but we could be sure there's going to be some type of announcement. Yeah, we can be, and I can also be sure of one more thing, Christine. I'm not sure much, but I am sure the fact that we're going to see you on TV about 150 times tomorrow, and it's going to be great. Unless they go to analysts instead, but yes, I'm going to be working.

It's going to be great. 150 times on Power Lunch alone. Christina Ports and Everest. Thank you very much. All right. Coming up, a biotech stock that is more than doubling today. We spoke to the CEO three weeks ago. We'll talk about the name and why it's up so much, and it's the name you have not heard on this network at all today. Stick around. All right, if you've needed it, here's another reason to watch CNBC and hit CNBC. I want to show you shares of Olima Pharmaceuticals today. Now, Olima is a smaller cap biotech stock that we featured as a web exclusive interview from CNBC.com in San Francisco just a couple of weeks ago.

And based on the average analyst price target, actually wrote about a piece about stocks, the Bay Area that analysts currently love. Olima was one of those names. You can read it there. There you go. So we interviewed the CEO on CBC.com exclusively about, their breast cancer therapies. Here was his update on Olima's progress with their own breast cancer treatment. Those trials have let us start two phase three trials, Opera 01 and Opera 02,

so the second third line setting as a monotherapy of palisesterine, and then in the first line setting in combination with Kiskali, ribocyclib. And those trials will lead to registration and launch commercialization. The first one, opera 01, will read out in the second half of next year, 2020. All right, technical stuff there, but guess what? The stock is soaring. Look at that. Olima's up 137% right now. And based on that interview, we actually wrote a follow-up piece called Shares of Olima could more than double from here. Well, guess what? They are doubling today. We're actually up 300% earlier, but a double right now. Why? Well, it's larger pharmaceutical partner, Roche, had positive drug trial results for a rival breast cancer treatment

that is giving Olima's potential treatment a huge pop. I want to be very clear. Olima, still in early stage trials, it is a long way for potential commercial use. But given how many people know somebody who's fighting the fight, the good fight, against breast cancer, we are more than happy to report on this and a huge stock pop from a company that you only see here on Power Lunch. And be sure to check out our full piece. the other interviews we did that week at San Francisco, you never know. It's on CBC.com right now.

Or you could scan the QR code that is about to pop. No QR code. Anyway, just go to the internet. It's great. Let's get now over to Bertha Coombsbury, CNBC News Update. Brian, the Department of Education says it will move multiple parts of the agency to other federal departments. The move by the Trump administration is part of the effort to close the agency completely. President Trump signed an executive order in March to that effect, but only Congress actually has the power to do that. Still, Secretary Linda McMahon has vowed to dismantle what she can from within. A federal appeals court just upheld a lower court's dismissal of President Trump's $475 million defamation suit against CNN. The three-judge

panel ruled the president did not show the network's statements calling his 2020 stolen elections claim, quote, the big lie were false. And a federal judge blocked Texas today from using its newly redrawn congressional map in the upcoming midterm elections, which could have added GOP House seats. The ruling orders the state to use district lines adopted by the legislature in 2021 instead. The decision is likely to be appealed and highly watched by other states that are doing the same, Brian. Does it invert California's Prop 50? I don't know. We'll see. Bertha, thank you. That's a question. That is a question. Maybe for the courts. All right. Your market

navigator is looking at the other key earnings report this week. It is not called NVIDIA. And it could be really, really big for the consumer trade as well. The name and market navigator up next. Navigator. We're joined now by Eric Clark. He is the CIO of Acubest. Eric Clark, I know all the attention is going to be on Nvidia tomorrow night. But you argue there's another little company, and I'm being facetious, that is rolling out its earnings on Thursday. That is just as important, at least to the consumer. Why are you watching Walmart? Well, boring is beautiful, Brian. Didn't you know that? You know, sometimes you want. That's describe my life, Eric.

Listen, I, you know, Walmart is certainly not as sexy as NVIDIA. It is a nice compliment to having some of those other tech stocks. And they are a part of our everyday lives. You know, they're the largest grocer in the world. Yes, they have earnings on Thursday morning. We do think that they deserve to be part of the trillion dollar club. You know, you got 700 billion in revenue with a little over 800 billion in market cap. And they are using AI and technology to enhance the business and increase engagement

at the store level, at the e-commerce level. And so we just love the brand. And frankly, it's a good downmarket brand, too. Walmart historically does pretty good when markets get volatile. So it adds a little bit of that to the portfolio too. Yeah. So one trillion dollar market cap, they're at about $820 billion now. I don't have the perfect math, but that's about 22 percent more upside from here. You think they deserve in one big reason, Eric, and this is fascinating. You brought the stat to us. Revenue per employee is up 50% in seven years. That tells you that they have been early to the operating efficiencies. Long before AI was the sexy narrative for every company to talk about, they were implementing technology across

this system, you know, a little bit taking Amazon's place. with Amazon retail, but they have been focused on that adoption and it's been showing up in metrics like revenue per employee, and we expect it to continue. So profits growing faster than sales, more and more consumers turning to Walmart for deals when they're feeling the pinch of inflation, you know, other names like T.J. Max, Costco, Amazon could all be in the same narrative, but Walmart seems pretty right. Now, one thing I did note, there's been some interesting put buying ahead of the quarter on Thursday. And last quarter, there was a knee-jerk selling opportunity after the after earnings. And then the stock goes right back to all-time high.

So when I look at it, technically speaking, it has been building this pressure underneath that 107 level for the ultimate breakout that we see. So I'm not into the when, but I'm pretty confident that it will. Yeah. And it deserves to be part of the trillion dollar club. And it sounds like with the put buying you're referencing, don't necessarily. believe the initial first trades because they might be related more to the options set up into earnings. Eric Clark, CIA of AcuVest, really appreciate it. Eric, good stuff. Great to talk to you, Brian. All right, very much. All right, Microsoft's seeing its worst day since April, some AI overspending fears, starting to rattle the markets a little bit, but

it's not stopping Microsoft from doubling down on making a big tech announcement partnering with one of the biggest competitors of one of its biggest investments. You'll hear why about that and more with one of its top executives coming up. Well, there nearly isn't a day that goes by where we don't highlight a massive AI spending-related deal. Well, today, that deal involves Microsoft.

They were investing up to $5 billion in Anthropic. Now, that's fascinating because Microsoft is the biggest investor in Anthropics' main competitor, Open AI. Let's talk more about why and what Microsoft can get out of the partnership as well as more. Steve Kovks in San Francisco with Microsoft Exec, Judson Althoff. Steve. Hey there, Brian. Yeah, I'm joined here at the Ignite Conference in San Francisco from Microsoft's Ignite Conference with commercial CEO Jutson Outthoughts, thanks for joining us.

Let's start right with this Anthropic deal that is the top of everyone's mind here. And watching your keynote, one of the things I picked up on was this kind of expansion of the platform into other areas, including potential competitors and things like that. Anthropic is one of those, and you're investing in Anthropic. How much of this deal was about getting access to their technology to run it on Azure? And how much of it do you see now that this deal with Open? and AI has been renewed as kind of, hey, Sam Altman, you don't hold all the cards here. We can spread some of the money around as well.

How do you think of that deal? Thanks for being here, Steve, at Microsoft Ignite. We're thrilled to have you here and thrilled to be able to have you cover all of our announcements. Look, the Anthropic Partnership is critical for us and very, very strategic because our customers are demanding model diversity in all of their scenarios. To us today, as we build out more and more robust AI applications and solutions, you see multiple models show up in a single scenario because it's about the right model for the right solution at the right price point in the right scenario and the right level of quality and fine

tuning. So the partnership we have with Anthropic allows us to bring some balance into the models that we provide. We've already supported over 11,000 models in Microsoft Foundry. Now this is a big anchor tenant for us as well to serve up to customers. And we're going to start seeing this bleed into more Microsoft products, the Anthropic models. You already had a previous partnership within now that's going to presumably grow and expand. Yeah. And it's fantastic. In fact, if you use Microsoft Researcher today, you can use it with GTP5 and you can use it with Claude.

And it's pretty fascinating to actually see the difference in the responses that you'll get. If you're asking for a research paper to be prepared for you, GPT5 can go pretty deep in text. Claude actually brings the color and context of visualizations to life a little bit more effectively in that type of a scenario. So you can already see the differences and model diversity popping in some of our first-party agents. And presumably the customer would want to select what's better for them. And when this news came out a few hours ago, my social media feed, my emails, et cetera, everyone,

circular economy, circular economy, this is, you know, vendor financing, whatever you want to call it. There is a lot of concerns about this nature of the people who are accepting the money from these AI companies, also financing them. Do you think we're in this kind of circular economy sort of mode right now? Or why invest in the company that's paying? Sure. Well, if you think about it, the partnership that we started with Open A.I. years ago, we invested a billion dollars in Open A.I. to help get them off the ground. And that's flourished into the AI standard, if you will, in the market today. We're doing the same thing with Anthropic to help bootstrap their growth and to help bring them to a new level of parity because they have fantastic models that have great use cases. We showed some of them on stage today at Ignite. And we want to make sure that the companies that are empowering the future of AI actually have the right kind of ground. in the market, and we're happy to be able to support them the way we're doing.

Now, you announce a ton of new products here, and, you know, one of the things we talk about with lately is just these massive deals being done, massive capital expenditures. Microsoft spent 34-some-odd billion in the September quarter alone just to build out these AI systems. What did we see today on stage that is going to show us the growth necessary to make up for this? The beauty of all of this is, yes, we're investing the way we're investing today, but we still can't keep up with the pace of demand. And I would say that it's not just AI demand that is fueling this need to build out more capacity. You have to remember, AI is a stimulus for cloud acceleration, right? So even in the core of getting customers to the

cloud, we're seeing pickup in that business, because customers realize that they can't imagine the future forward with AI and becoming frontier without having that strong foundation in cloud. So So what we announced today around work IQ, Foundry IQ, and Fabric IQ brings a new layer of intelligence on top of the cloud platform to allow customers around the world across all industries build on things that are better than just a sea of connectors out there in APIs, to build on real intelligent building blocks. And that's something I hear so much. So I talk to CTOs all the time, what are you using, what AI tools you're using.

I spoke to one last week, and he told me something incredibly interesting. He says, we're going with OpenAI Enterprise because they're just able to push out these updates faster. Eventually, sure, it comes to co-pilot and things like that. In fact, they said they've kind of put co-pilot on the backseat because they think Open AI can move faster before it comes to you. How are you addressing those kind of when a customer comes to you saying something like that? And does this entropic deal and presumably others down the road? I know Gemini is part of what you guys worked on today too. Does that allow you to move faster on a product?

I mean, first of all, what we're actually seeing is an acceleration of co-pilot deployment, both the paid and premium version of the product. We demonstrated that today on stage, and this connection back to work IQ, which knows how you work, with whom you work, and the content over which you collaborate coming to life right in the flow of your work. That's in stark contrast, then, a model first or a model forward approach that says, I need to suck data through a thousand small straws and inference over it to try to guess what you might be doing, or to guess with whom you work,

or to guess about the content. We're actually providing precision to that through work IQ, and we find that to be a huge accelerant for what we're doing. So customers are adopting at an accelerated pace right now. Again, Microsoft 365 co-pilot, fastest growing service we've ever had in the Microsoft 365 family. Can you put a number on that? Well, Amy will in a little bit.

But we, look, to cut a long story short, we're very excited about the growth potential and we think the unlocks here are across IQ as well as the manageability and observability that we announced today with Agent 365 are going to be huge accelerants to adoption of AI and profitable adoption of AI, by the way. I want to get your thoughts on something Suda Pachaya of Alphabet said. You might have seen this in the BBC interview. He said there's some irrationality around all this AI spending that we're seeing.

He's kind of talking about himself. I'm sure he's talking about everything else we're seeing. Make that rationalize the irrationality for me. I know you keep saying we see the demand. But down the road, we don't see the revenue picture as clearly. How do you rationalize this rationality, or is it just spend now and figure it out later? It's a great question. And look, there are random acts of innovation for sure happening.

In fact, a big point that I made in the keynote today was to distinguish AI transformation from what we call frontier transformation, which is really grounded more in business results that come to life through the enriched employee experience, better customer engagement, better product design. And that's really coming back to this notion. having an IQ layer that you can build upon to deliver really real results. So sure, will there be micro bubbles that burst in the world of AI? There for sure will.

But we have crossed a point of no return in terms of the adoption of this technology, and you're going to see it proliferate across every industry. I think we're going to have to leave it there. Judson Althoff from Microsoft. Thank you so much, fresh off day night conference. Brian, I'll send it back over to you. All right, Steve and Judson Althoff. Thank you very much.

All right, let's go now to D.C. because we actually have a news alert from Capitol Hill. Emily Wilkins, joining us now. Hey, Brian. Well, the House has just voted overwhelmingly to ask the Trump administration to release all of the files related to Jeffrey. Epstein, this, of course, has been a big political battle

that has played out now on Capitol Hill for months. The measure will now go over to the Senate. Remember, Trump has actually gone to kind of given his approval for House members to vote in this way, all but one did. Now for the Senate, Senate Majority Leader Chuck Schumer is saying that he will actually try, it looks like this afternoon, to potentially bring this to the Senate floor and ask for unanimous consent, which would be an expedited way to potentially have this passed the Senate. Now, if he does do that, any one senator can hold it up for any reason. There are some concerns that we've heard about victims' names being potentially released within this trove of documents. So we'll have to see exactly what happens there.

But the House vote clearly shows there is some strong momentum for getting this done. Brian? Do we have any idea of when this might occur? If they vote yes, like when will we start to see some of the stuff which is captivated huge parts of this country for a long time? Brian, I believe that these files would have to come out pretty quickly in that case. Obviously, there are a lot of sort of, we've seen different files kind of from different places, but in terms of what the Justice Department has and releasing a number of those files, interestingly enough, you did actually see Speaker of the House, Mike Johnson, making a appeal that if this were to happen, that the Senate would actually amend parts of what the House

passed, just to make sure, again, that when it comes to victims, victim identities, keeping those safe. And so we'll see if there is the ability for the Senate to move forward today, or if this is something that could potentially take a little bit longer to get done. Been a lot of speculation about which bold-faced names have, Will, might be in these documents. It can be fascinating if and when they are released. Emily Wilkins in D.C., Emily, thank you very much. Right, quick check before we go. Mid caps, small caps, they're higher right now. The S&P only down two-tenths of one percent. In fact, we opened up way weaker. Looked like the selling was going to continue from Monday and last week. We'll see if it does, or do we turn higher in the next hour? The markets know, and closing bell will have it all. The closing bell starts right now.