Power Lunch - Stocks Sell Off Despite Nvidia Earnings Beat  2/26/26

Episode Date: February 26, 2026

Nvidia posts a blowout earnings report, but stocks fail to rally. Oil prices tick up as U.S.-Iran tensions continue. And Stellantis posts its first ever annual loss.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The Nvidia earnings hangover, sending stocks into a tailspin today, at least technology. Welcome to Power Lunch, everybody, with Kelly. I am Brian, the biggest company in the world a little bit smaller today and taking down a whole bunch of tech with it. Investors frustrated with the stock stuck at the same price for nine months. Yeah, we're talking about Nvidia. We'll dig deeper into what it means for all tech and what really has been the hottest trade of the year. Plus, a software company that has seen a sharp sell-off in recent months. Trying to hold its gains today, it's up 2.5% still after better than expected earnings and the expansion of its strategic partnership with AMD.

Yes, another one this week. The CEO is coming up exclusively. And the U.S. and Iran are meeting in Geneva for a third round of nuclear talks. Oil and energy are moving higher today. The president has ordered a huge military buildup in the Middle East, and RBC's Halima Croft is here. All right, welcome, everybody. We've got a big show on this Thursday. But let's start here. The billion dollar market story today, Invidia, of course. Now, on the surface, the numbers, they look pretty good.

But under the hood, some investors did not like what they saw or heard. Not only Nvidia down, but the NASDAQ 100 is losing more than 1.5% right now. Some semiconductors also taking a hit. But the idea, folks, I'm told, is to buy low and sell high. So let's find out what investors are both selling and buying today because they are buying. Stephanie Gill, is Chief Investment Officer at Robin Hood. She and I did there under the hood. Stephanie, welcome.

There are buyers. When every trade, people need to remember this. When every time a stock is sold, somebody else is on the other side, buying it, what kinds of order flow and data flow and stock flow are you at Robin Hood seeing today? Yeah, we're seeing our customers take advantage of some of the downturn and some of the more software names. They have been selling actually in VVIDIA into the earnings because the stock has. had been up in the near term. And they've been buying things like Amazon and Microsoft that haven't been faring as well.

And we see this repeatedly, that they look for the opportunities where things may be oversoles. So they're not dumping out of Mag 7 as a group. Sounds like they're swapping dance partners inside of Mag 7. Yeah, I mean, my general view of Mag 7 is that there's more to life than the Mag 7 and that you need to look at it just like any other company. And that's what our customers are doing, too. They're analyzing them individually rather than just as a group. And here they are trading today, metafractually higher. Tesla, I mean, what does that have to do with what Nvidia said last night?

Maybe nothing, down a couple percent. Apple on the sidelines of this whole thing. And meanwhile, a lot of people have been going into the hardware trades and the memory names and the stuff that is part of that build out. What do you see there? Yeah, we do. We see that too. And I think our view is that you want to be investing in a, like, we have like the three R's.

And that is the receivers of the CAP-X, which is certainly in the memory trade, but in other places, too. The resources that have to power that. And then some recoveries, because we want to find individual opportunities that aren't necessarily going to be related to the AI trade, because you're seeing, like, yesterday it was a MagS7 day. Today is a software day. So what are some recoveries that maybe have nothing to do with all of this? VF Corp is one of them. It's in the retail space.

And they've been doing things on a micro basis, like getting rid of some non-performing business. paying down debt and doing things that, you know, can restart a retail business. And I think they were under pressure, obviously, last year because of tariffs and hopefully working through some of that. Up 9% year to date. Who else? Where else do you see recovery stories? Also, I mean, it's the kind of stock specific. Like, it's cleanup stories. Exactly. Yeah. I mean, in the software space, I do think there is like some room for that. I don't want to be a hero. I don't think you should be buying the entire sector. But there, I think there is starting to get a little silly. And there are places you can look for that. I think your point is, or

direct point is well taken because there is a psychology for traders and investors, right, people on the Robin Hood platform and whatever, that if something is one price and it goes down 20%, it must be a good value. Oh, it's sold off, Kelly, 20%. That is not true. There's a, the market doesn't care, right? There's no emotion here. It's what something is worth at that moment in time. Well, I think there's emotion in that people see that and there's probably some people who really care and just sell because they want to get out of it. But I think there's... Losing money is emotional, right? No, it is. And they've proven that the pain of loss is greater than a similar gain. If you lose $100 playing blackjack, you feel disproportionately

worse than if you won $100 playing blackjack feeling good. Absolutely. But I think there is also a lot of money hanging out in some of these cash cows of software companies. And that is obviously starting to change. Like, they're being looked at, again, individually. It's to like, and also, because are so fragile. If you have not great guidance after a good earnings report, then you're going to see your stock move really considerably. And I think you've actually seen that from Nutanics as well. Yeah, that's interesting. So where does that leave you then? A market that's churning and just trying to find new leadership and, you know, and it's all positive. I mean, these are not, it sounds like anything to worry about, even with an Nvidia down 5% day? I mean, when you look, I was thinking about

this. I was talking about this on the desk today. When you look, like if you're somebody who doesn't really pay attention to the market and you just invested in like S&P, you don't even know something has really happened. So there is a lot of stuff happening underneath. And what that tells me is that I think the word diversification can get overused, but not this year. And I think you want to have a little bit in every bucket and make sure your bias is towards the thing you think will do well. Well, you just did it. So with Kelly, you just recommended an oil and gas servicing company, Baker Hughes, and a company that makes backpack and vans shoes. VF. Yes. Doesn't get more different or diversified than that, Stephanie.

You want something in a little bit of everything. Now, did you reference Nutanics because we have the CEO on, or is that a stock that's in play on the Robin Hood platform? I haven't seen it be in play in the Robin Hood platform. We did own it last year in Robin Hood Strategies, which is our digital advisor, but we sold it in November because we weren't sure what the future for that company was. Well, you got it right. So far. Any final words then of kind of like what would then become the new markers. If Nvidia, like you said, if you could own the index and it doesn't really matter that Nvidia is down 5% today, then what are the new most important markers for the rally from here? I think you want to have some positioning not only diversified here, but also globally.

Like, I do think there is some starting to be some interesting places in the emerging markets. And I know I'm not alone in that. And then I also think that you want to be, you want to be careful, I think, in some places like the banks. We do like the regional banks. but I'm starting to get a little nervous about the credit space. Credit space, okay. I mean, I just, you don't have as much clarity as to like how much this sort of, you know, SRTs and things like that, sorry, these derivatives. It's a Dodge car, but that's not what you're referring to.

Actually, I forget what it stands for. No, but it has it with the blue owls, the private credits the world, right? It's like off-balance sheet financing from banks that just makes me nervous. It's more of a derivative play where the banks weren't allowed to provide these loans, but now they have this other way of doing it and going around. And it's just making me nervous because you, You saw, like, I think it was FSKKR, they cut their dividend by more than 30%. And that, you know, it's the smoke is there.

Yeah, with the banks, it's always an alphabet soup. It is. Every, every, there's always so much complexity to unpack, let alone when there's something an asset that you're not sure about. Stephanie, thanks. Appreciate it today. It's been great to have you here. Appreciate it.

Stephanie Gill, joining us from Robin Hood. Speaking of Invidia, analysts and Morgan Stanley are doubling down despite a muted reaction from investors. The stock's down 5%, but they're reiterating they're overweight on the stock and raising their price target to 260. They say this report provided the largest and cleanest beat in the history of the semi-industry. Joining us now to discuss the author of that note, Morgan Stanley's semi-industry analyst Joseph Moore. Any relation to Gordon? Do you get that all the time? Joseph, welcome. I get to question. No relation, unfortunately. Okay, yeah, I was actually reading the book with Intel that Andy Grove wrote when he said they had to pivot

I guess they were a big memory business, and they were trying to figure out whether to go into what we now know them for, the microprocessor. And, you know, Gordon Moore said to him, well, if we do, I mean, half our executives are going to have to figure this out, you know, overnight. And they did. I mean, having to take a company through a strategic inflection point like that was extremely difficult. Here we have Nvidia. This one's not difficult right now. They have a lot of business. They're going to meet it. Why is the stock down 5 percent?

Yeah, look, I think it's a great quarter. it's been a couple of great quarters, really. This quarter, I talked about it being the biggest dollar beat and raise that we've seen. Last quarter was the biggest before this, and the stock also kind of underperformed. I think people are looking at these big numbers and questioning the sustainability. I don't think people anticipated guiding to the high $70 billion range. But you look at those numbers and you look at the hyperscalers who are, by our models, you know, running cash flow sort of neutral on these investments.

and I think people want to see those returns. The thing is, I think people will see those returns. And Jensen was pretty clear to talk about the potential profits that people are going to have from the investments that we're making. But I think what you're seeing in the market now is people want to see that. People want to see those investments paying off for invidious customers. And then I think people can start to believe that this is something that's durable into 2027. This is an inexpensive stock.

People are worried about the sustainability of numbers, not the valuation, not a thing like that. And it was, you know, expectations were high, but I'd say they comfortably surpassed those expectations. 23 is the PE ratio, which is, you know, it's probably eight a year ago now that we know what the actual earnings power was. But regardless, so Michael Burry raised some concerns. They say this company has a lot of performance obligations, $95 billion worth. He likens it to Cisco. They all had a similar amount of kind of committed capital in the 90s.

When the cycle turned, they were left with that. Could Nvidia face a similar fate now? Well, there's always risk associated with that. I think what we're seeing differently in 26 than the last three years in this AI buildout is that the semiconductor ecosystem is really stretched to its limit. The foundries are full, you know, memories and shortage. When this started, that was not the case. And so, Nvidia was to grow out of slack now to sort of meet their obligations, they're going to need quite a bit of investment from their suppliers. And that requires you to make these commitments. The thing is, I think that the demand will be there. I think the fact that

you're governed by some of those supply constraints actually keeps you from overbuilding. You know, generally, you have a big investment cycle like this, you know, railroads, internet, whatever, there's a period of overinvestment that you have early on. I think these constraints are keeping people from overinvesting. And, you know, very clearly right now, there is more demand for AI compute than there is supply. And I think that's sustainable. So there is some risk. inherent in doing all of that. You can look at some of those historical precedents and say that's risky, but there is a strong demand underlying what they're doing. Can your clients, can investors still make money buying Nvidia stock right now? I think so. I think what has to happen. You know,

the company sounds great. The company said all the right things. I think when they talked about the focus is on the profit that their customers are going to make with these investments they're making, all the right things to say. I think what we need to hear, in addition to, to, to Nvidia saying the right things at their developers conference at our conference next week, I think we need to hear the customers start to talk about those profits as well. And you've seen very high capital spending from the hypers. I think if we start to see profits coming through from the investments that they've been making, and so it doesn't look like we're sort of as cash flow depleted as maybe people think we are.

I think that's the key. And so I do like to stock a lot. It's our favorite stock in the compute name within semis. And we do it. We have a price starter 260, so we definitely think there's a lot of upside. still from here. Where else can you make money in the space? Should we mention an Intel? I mean, again, that's kind of a side. I don't know if it's fair to call it a side story now. It certainly feels that way. AMD, obviously, some big traction with meta earlier this week, but again,

lagging on a much longer term basis. As semis generally are still and remain kind of the leadership group, a lot of different ways to slice this onion, I guess you could say. What other companies do you think are best positioned? Yeah, look, I think compute strong for everyone. So all the companies that you mentioned should see the benefits of that. Our topic actually is Micron. Because you're seeing these buildouts really strain the supply chains. And so you're seeing, you know, significant improvement in profitability for really everything. Semiconductor, DRAM, NAND, hard disk drive, optical components, microprocessors. Everything is really robust. So it's a target-rich environment for companies that can participate in this data center. So we like Micron a lot. I think

the company's reporting next week, Broadcom and Marvell should both have strong results around AI. AMD's in a great spot. We're still sort of waiting to see what they can do. But I think, you know, it starts with Nvidia. The question is kind of, Nvidia needs to continue to put up good results to kind of carry this whole group. Yeah. And I think, you know, they believe- Joseph, I'm sorry, these numbers seemed good. Why is the stock down 5% when the numbers on their surface seemed good? I think the numbers were good. And I think, you know, to be fair, people are picking on certain things. I think OPEX is coming up a little bit in the next quarter, you know, gross margins have some things. But really, these are good numbers. The bottom line is

coming into this quarter. Everybody knew 2026 was good. And the market's kind of saying, okay, you know, 2026 is good, but we're, you know, maybe people thought this was a catalyst. I certainly thought it was a better catalyst than this. I'm surprised at this all off. And I think people are saying, okay, what's next? We need to get visibility into 2027. I think that visibility will come. But that's really the key is we need to get that. And Nvidia's investing in the whole ecosystem to make it work. And so they're betting on it as well. I think we need to see all of those bets play out. And I think they will. Joseph Moore, Morgan Stanley, semi-conductor industry analyst. No relation to Gordon Moore. And I believe the book is Only the Paranoid survives. Thank you. One of the best

business books ever written. Joseph, thank you. All right. Meantime. Crude oil ticking up again today. U.S. Iran tensions rising as well. Helene Mccroft will join us next with what's really at stake. The U.S. and Iran reach a nuclear deal soon, or will it be war between the United States and Tehran? That is the big question hanging over the entire market, both energy and stocks. And folks, if you think that war is too strong a word, think again. You may not realize it, but right now, the United States has the largest military buildup in the Middle East since 2003, dozens of ships and many, many jets. Iran itself, warning, it would respond.

forcefully to any attack. Let's talk about the geopolitical risk and more with Lima Croft, head of global commodity research at RBC Capital Markets. At a CBC contributor, Helima, as you probably know, talks in Geneva just ended moments ago. But Axios earlier today reporting that White House advisors Jared Kushner and Steve Whitkoff were not happy with what they heard from Iran today. The evening session again just ended. What do you see as some of the high probability potential outdoors?

cops. I mean, Brian, if the United States sticks with a zero enrichment demand, I don't see how we avoid military action. The question is, is there some narrow pathway whereby which Iran comes out and says that they will not have a nuclear weapon, that they agree to suspend all enrichment? Like, is there a way that we can bridge this divide? But again, I don't think the Iranians are going to give up the right to enrich domestically. And we think, again, that's the make or break issue. There were some reports today that the United States was demanding the complete destruction of the Natanz facility, the Fordo enrichment facility, the Isfahan reactor. That is something, again, we just don't see the Iranians agreeing to that. So talks are set to resume in Vienna next week,

but remember, Brian, in June, we had talks going up to the moment the Israeli jets started pounding Iran. So I don't think we should take the continuation remarks as an indication that we are pulling back from a military confrontation. And Iran recently massacring, masks, not too strong of a word, thousands or over 10,000 of its own people who were protesting. But I hate to be cold about it,

but that's, we're talking energy. Is there a chance that if the U.S. does strike Iran, that would hit any, it would hit any of the oil facilities, or would it strictly target military and nuclear targets because, number one, Iran itself, the Iranian people are not the problem. They would need the oil revenue to rebuild their country.

Number two, this is a president, President Trump, who does not want to see a spike in gasoline prices? 100%. President Trump does not want $100 oil. So I don't think Carrg Island, for example, which is the central point of failure for the entire Iranian oil export system, I don't think Carg Island would probably be on the initial list.

The real question, Brian, is that the United States does a strike on. Iran, even if it's a limited strike, do the Iranians seek to retaliate using their missile capabilities, using their small boats from their, you know, facilities along the Strait of Hormuz? Do they target tankers? Do they target regional energy infrastructure to raise the economic cost for Washington of engaging in another confrontation?

And Halima, you know, as we have waited kind of trying to, we've bought the rumor, we've sold the rumor, we're not sure what to do with the rumor. we're not sure what to do with the fact here, right? And what made a response look like? And is this like many of these more short-term operations that we've seen? Or is this going to accidentally turn into something more drawn out or intentionally turn into something more drawn out? I mean, Kelly, I think your point is so interesting

because we've never had such a large military buildup targeting an adversary and have stood down. And so the question is, is there almost a fog of war risk as well? Like, do the Iranians misread our intentions because we have such a large military buildup? So I do think the question about could the United States do a limited strike in this environment and contain the fallout regionally? I think that would be challenging, especially given what happened in Venezuela. We did execute a regime change operation in Venezuela. Will the Iranians believe that any U.S. military action or action with the Israelis would inevitably be a regime change operation?

So again, in this current climate, the question is, would a limited strike by the United States remain within the borders of Iran? I think that could be really challenging, given what transpired in Venezuela and given the size of this buildup in the Middle East. Again, maybe there is some rabbit pulled out of the hat in terms of negotiations. But if we don't see movement on this enrichment issue, I think everyone in the market should prepare for military confrontation. And we've seen bullish bets and oil soar. In fact, there are some people that have $100 calls on a barrel of oil. Those are far out of the money, by the way, for now. We'll see.

I know you talk to everybody, Halima, all the time. If something were to happen with oil output and exports from Iran, would the Saudis and or UAE and or others have the ability and the incentive to add more oil to the market? I mean, Brian, this is their great question because we are heading into an OPEC meeting on over the week. So the question is, do we see more barrels returning to the market in advance of this? I would just say that if you look at spare capacity, it is sitting in Saudi Arabia at the moment. We do not have a lot of spare barrels outside of Saudi Arabia. This is really a Saudi spare capacity story.

And you have had officials say that the run-up that we saw in 08 terms of that run-up to 148 was driven in part by fears of little spare capacity. So every time the White House asked OPEC to put more barrels on the market, you have fewer in reserve in the event of a supply disruption. That's a good point as well. And there's Brent crude around 70. Oil prices kind of poised and waiting to see what comes next. Everyone's in watch and wait.

Absolutely, aren't we? Thank you so much, Lima, for joining us today. Appreciate it. Thank you. Thank you. Thank you. Coming up, we're going to take a look at our screens and bring you the biggest and most important.

important movers of the day, including one company we checked in with just earlier this week. More after this. Let's get to some of the big stock moves of the day. You're looking at one of them shares of PayPal down 5% after Semaphore reported the company is not in talks with Stripe about a takeover. That cool speculation that had helped spark a rally earlier this week, when reports suggested they were drawing buyout interest. The stock has plunged more than 80% over the past five years.

And Schneer Energy is having its best day in nearly a year. a year after earnings beat expectations. They produced a record amount of liquefied natural gas last year, capitalizing on robust global demand. Just a reminder to the viewers, if you missed it two days ago, we had Jack Fuscoe, the CEO and president of Schneer on this, celebrating a few things, 10,000 cargo. But, you know, in Jack's way, and he's a pretty straight-laced dude,

he was fairly optimistic, and I think that shows the results. Yeah, to kind of read them, read between the lines on that one, I think. And Paramount is leading the S&P 500. despite mixed results on a couple of price target cuts on the street, but the shares are up 10% right now. Let's bring in Julia Borson, Julia, with more. Why is the stock popping? Well, looking at earnings after the bell yesterday, the company did report higher revenue than anticipated, a larger per share loss than expected, but guidance both for the first quarter and for the full year, higher than expected, both on the top and bottom line.

But I think the real question here is what's going on with Paramount's offer to buy Warner Brothers. discovery. We are anticipating any day now, we could hear back from Warner Brothers about whether or not they believe that Paramount's offer for $31 a share, their sweetened offer, is going to be seen as better than Netflix's offer for the company. If Warner Brothers Discovery does come back and say, yes, Paramount's bid is better, then Netflix will have four days to respond and either match or top that bid. We are dealing a little bit with apples and oranges because Paramount's looking to buy the entire of Warner Brothers discovery, whereas Netflix is looking to buy just the studio and streaming division. But I think the stock is higher today, both on the better than expected guidance

for Paramount, but also the anticipation that we might have some clarity in terms of a deal. It seems pretty obvious that David Ellison and Paramount want Warner Brothers and they want them bad. This has been one of the biggest ongoing merger fights I can remember in years or longer, Julia. Do we know what is behind that? I mean, what, someone, point is this just we want to win versus clearly they believe there are a lot of value in the underlying assets of Warner Brothers Discovery? Well, I think for a company like Paramount, which is on the smaller side in terms of the media landscape, they see having the scale and the complementary assets of what Warner Brothers Discovery would bring them would really enable this combined company

to compete on a streaming scale, but also on a global scale. So we'll have to see what happens and also have to note that Ted Sarandos, the Kosi of Netflix, is reportedly in Washington, D.C. today could potentially be meeting with the presidents. We'll see how that goes. Julia Borsden in L.A., Julia, you literally couldn't. Neither company could script this as well as it's playing out. Julia, thank you very much. All right, well, from James Bond to the bond market,

because as Tom Petty saying, the waiting is the hardest part, and many in the market are waiting for 10-year yields to break below 4%. We're still waiting. Look at that 4.025 right now. Right there. 4.025. Bond yields at a four-year lows. You talked about with Diana yesterday.

Kind of stubbornly, Kelly, around that 4% mark. Tomorrow's PPI inflation number, in Kelly Evans' opinion, does that have the ability to move the market below 4%? It's actually a really good question. What would it be? I hope it's not bad news that would move the market sub 4%. But if we get, I don't know if PPI would do it, but certainly if you got one of those biggies, like a CPI that was really cool, that could do it. that could do it. I don't want bad eco news. What? Good inflation news. Coming up, we'll speak to the CEO of one of the many software names that have gotten crushed this year. But he says he operates in a segment, say, from AI disruption. Stay with us for our mystery chart reveal and our interview after that. Welcome back and take a look at shares of Newtanics. That was our mystery chart just before the break. Shares are up about 4.5% today, as the broader software sector actually is getting a little bit of a bounce. But that's not the whole story. This stock ripped 20% after hours after its quarterly earnings beat yesterday, and they announced a multi-year

partnership with AMD to jointly develop AI infrastructure. Despite today's gains, it's still down 20% on the year, and it was part of the recent sell-off in software. Joining us now to discuss it all. And an exclusive interview is Rajiv Ramoswamy. He is the CEO of Rajiv. It's great to have you here. Welcome. Thank you for having me, Kelly. Am I correct in saying that you had previously been an Nvidia partner? So you signing a deal with AMD is a big deal, no? Oh, yeah, we are very much an Nvidia partner, and now we've extended our GPU partnerships to AMD. Just to be clear, we've been working with AMD for quite a while on regular compute, and now we're extending that partnership to accelerated compute or AI compute.

Why? Do you and others worry that, you know, if Nvidia is the only dog in town, they can just charge whatever they want? Yeah, our philosophy as a company has always been to provide choice to our customers at every layer in the stack, in the software stack as well as in the hardware, provide them the choice, of your hardware partners that they'd like to use, right? Service from the likes of Dell, Cisco, HP, Leno, etc. But the underlying hardware being Intel CPUs or AMD CPUs. And now as we came to the world of AI,

it's Nvidia, AMD, and perhaps others down the road. In your last earnings release, use the word shortages four times, CPU memory issues that make it harder to scale. And let's be honest, make it possible, perhaps, or enticing for customers to go elsewhere, are you seeing or anticipating any date in the near future where these shortages may end?

Yeah, I mean, I think it's a good question, right? Why do we have these shortages today? It's driven by this massive AI spend at a handful of very large cloud providers who are spending across them, perhaps $600,000, $700 billion in annual spend. So that's what's driving the shortages. And I think the shortages across the board

when it comes to CPUs, memory, et cetera. And there's really no place to go, right? because there's only a handful of people who provide memory. There's a handful of people who provide CPUs, Intel and AMD. And then if you look at memory, it's Samsung, SKHinix, and Micron, for example. So we've got to wait for the supply chain to normalize, and that's going to take some time. Reggie, okay, I'm going to try to put this in the best way that I can understand it. You guys are a pioneer in hyper-converged infrastructure.

Is that right? Okay. My understanding is you help to modernize data centers by replacing hardware setups with software ones. So what happens when AI comes along? Is it a next step in that journey, or does it somehow disintermediate you? No, we see this as a huge opportunity.

To put this in perspective, right, we are a platform on top of which customers, enterprise customers, service providers, all kinds of customers out there and companies in the world, run their business-critical applications, the applications that keep their businesses going and manage all their data. So they run it on top of our customers.

platform. And what we see now is with what AI is doing, there's a whole new set of agentic applications, inferencing applications that companies are building. And those applications also need platforms, and we are a great platform to run those applications. So for us, I just want to point out that as an infrastructure software provider, we see AI as a long-term growth opportunity for us to capture all these workloads. We're not worried about being disrupted by AI, like, you know, the other software companies out there are different layers in the stack are. For us, it's a huge opportunity going forward. And as you can see, that's why we have our partnerships with Nvidia, with AMD, and the like to take these solutions to market.

Let's brought it out a little bit, Rajiv, because you're running a company with thousands of employees. The big debate right now, it doesn't matter what business you're in. Concrete to cloud infrastructure is will AI destroy jobs? What do you think? Yeah, look, I think we've got to embrace AI, and that's going to make our workers. In our case, we are a software company. The vast majority of people are software developers and people who sell our stuff. We've got to use AI to make them more productive.

In fact, what we are seeing is by using AI and embracing AI, we have gotten so far about a 20, 25% productivity increase from our developers. What that means is that we can do more with less, and that's the reality. So we're going to be able to produce a lot more efficiently and sell a lot more, using AI. All right. It's a nice vision in the stocks of 4%. Reggieve, and we appreciate you joining us today. Thank you so much. Thank you very much for having me. Rajiv, Ramoswamy, with Nutanics. Now, I learned something today. Yeah, it's an interesting view. And I think every CEO kind of deserves that question of what is AI going to do to your business,

right? Absolutely. Well, speaking of software, it's kind of an odd day in the stock market today overall. Yes, big technology is down. The NASDAQ 100 is down about 1.5 percent. But many software stocks are actually higher at Lassian, Z-scaler, DocuSign, App Lovin. They're actually some of the best performers today, today, in the S&P 500 up between 5 and 8%, because we know, Kelly, that over the past year, they've been some of the worst. And some more earnings after the bell to keep an eye on, see if they can confirm that trend or not. All right, let's take a moment, get out of the world of business. Go to Courtney Reagan. This TVC News on. Hi, Brian. Former Secretary of State Hillary Clinton briefly halted her deposition today with the House Oversight Committee on the late sex offender Jeffrey Epstein.

After Republican Representative Lauren Fobbert leaked an image from inside the proceedings to a right-wing influencer. It resumed about 30 minutes later. Clinton is insisting today she has no information on Epstein and does not recall ever meeting him. A federal judge denied a challenge today to block the president's White House ballroom project. The National Trust for Historic Preservation asked the judge to freeze construction on the $400 million ballroom on the site of the demolished east wing. The group is calling for independent reviews and congressional approval. And Walmart agreed to pay $100 million to settle FTC allegations that it deceived delivery drivers in its Spark network. The FTC and 11 states say the company told customers drivers would receive 100% of tips and also show drivers inflated based pay and tip

amounts. Under the settlement, Walmart must create an earnings verification program to ensure drivers are paid what they're promised. Brian? If you get delivery at home, fair to say, Courtney Wright. We love you, Courtney Reagan. Thank you, Brian. You always tip, even though I know they're paid hourly, I always tip. You know you're my second favorite person from Dayton, Ohio. I know. If only I could be your first, but that honor is reserved for your wife. Yeah, my wife. Hi, honey, if you're watching. Courtney, thank you. Thank you. Instead of trying to figure out how to play the AI disruption trade, maybe just buy names that are AI proof. But what are those names? We'll talk about it in our market navigator with a shot of Vail Colorado for some reason. That's your clue.

That's our, oh, that's the clue. That's the clue. I was just there. Reveal is next. And welcome back to Power Lunch. I'm Dominic Chu with your Market Navigator today. There's been a lot of focus lately on AI disruption and who could fall victim, but not all companies may face the same level of risk. Our next guest is looking at a few names, he says, are immune from what he calls the AI sector wrecking ball. So joining us out for the case is David Bonson, the chief investment officer over at Bonson Group. David, thank you very much. Take us through what exactly is the, or the cadre of factors that go into what you think makes a company relatively AI proof. Well, I happen to think that there's a lot more companies that are relatively AI proof than even

on the list today, because I don't believe in the transhumanist distrust. notion that AI is going to take away all the really human things. But obviously, some sectors are more exposed than others. So you're trying to focus on things that require direct human involvement, human activity in their revenue model. All right. What types of industries then would you be looking towards and the types of companies that stand out to you? Well, because we're bottom up investors, we think more about the companies than the sector itself because there are companies, Dominic, in all sectors that meet this criteria. but when we focus on something like Vail Resorts where people are skiing and I don't believe

AI is going to ski for people. Okay, so you're talking about something where there's a very obvious human component that if you take away the human skiing, you don't have a business. AIs can't do that. To me, there are a lot of examples like this, but I think people are overthinking what AI will do in the human elements in some business, but something like Vail Resorts takes away and the ability for AI to go interfere with that aspect of the revenue model. And what about some of the service-based industries where humans are a big part of it,

the services that are sold to people that might be automated away by AI? Are there places that are relatively immune to that on the human services side? Yeah, I would argue that there's places that are not only immune, but will benefit from it. And so you think of investment bankers. A lot of people are saying, oh, AI's going to come in and do a lot of the analysis, do a lot of the kind of junior level work that used to be done. That to me is going to make the process more efficient, but there is no scenario in which investment banking becomes a dehumanized activity. It's a very relational business. So you look at a company like Mollis that is not bringing capital markets in the way Goldman Sachs or Morgan Stanley does. It's really

their advisors, their relationships, their rolodex, their history, experience, expertise, can play a big role, but it doesn't disintermediate the human element, relationship-oriented businesses. So Moles is a great example. All right. Skiing and investment banking. David Bonson, thank you very much. We'll see you again soon, sir. Thank you for that. Kelly, I'll send things back over to you. All right, gentlemen, thank you both. Appreciate it. Coming up, this automaker posted its first ever annual loss due to some EV writedowns. The name and the full story right after this. All right, Stalantis, the parent company of Chrysler, Dodge, Ram, Jeep, posting its first annual loss ever. It was driven by a 25 billion euro write down for electric vehicles.

Phil O'Bow joining us down. Phil, listen, I know we've been talking about this for a while. All these charges have come out. Yep. Is this kind of the kitchen sink moment? Is this kind of the like Ford, GM, Stalantis? They're just getting it all out now? Yes.

And now that they finally can say, we've put 2025 behind us, let's focus on 2026. And there's no, there's no putting a good face on what they result, the results were for the second half of last year. I mean, by any standard, they missed what the analysts were expecting and we knew it would be ugly. That said, the reason the stock is up is because they are planning on getting back to profitability, maybe not in 26th. Although they're shooting for it this year, guys. But a lot of it comes down to fixing the core brands that really have been dying on the vine to a certain extent. Jeep and RAM here in the United States, a lot of their issues in Europe, those are the two areas where they need to fix the situation. And I think

most people look at what Antonio Filosa has laid out, and they've said, look, it seems reasonable that they can get back to profitability and continue to grow sales from there by selling the vehicles that people want and focusing on the strongest brands. Yeah, because I think the question, you've reported a couple billion over here, a couple billion over there, Ford, GM, whatever, whatever. Boy, Jim Farley, had a big sit down in Car and Driver magazine, which, you know, is like a little more long than we can do here on TV. So I know you've talked to him and Mary Barra and others extensively, better than anybody, Phil.

Do they get the feeling they got it right this time? Like, we figured out what the company wants. And I think to Jim Farley's point, what they're willing to pay for any product. Well, we'll find out when it comes to electric vehicles. And look, they've all made it clear that they're going to have internal combustion. hybrids as well as electric vehicles, though a much lower emphasis on electric vehicles than compared to a couple of years ago. With regard to Ford, it's all about whether or not this next generation of electric vehicles at a lower price point will succeed. We'll find that out over

the next couple of years. General Motors believes that it has its portfolio set up correctly in the United States. Stalantis is getting there. Look, ultimately, guys, they've had a lot a curveballs thrown at them in terms of policy here in the United States. And this is what happens when you have one administration go this way. The next administration comes the other way. The CEOs are trying to navigate it as much as possible, but there will be writedowns when this happens. And still, Phil, to me, feels like the biggest kind of global auto story is Chinese EVs. And I don't know what the, you know, we're actually acting fairly protectionists. Are we not? You know, we have, what, 100% tariffs and so forth. Yeah. But how do you think

this plays out over the next few years? It depends on what the United States decides to do when it comes to Chinese vehicles being built here in the United States. Most people I talk with do not believe that that's going to happen, let's say, in the next couple of years. Is it permanent? Look, I don't know what's going to happen by 2030. It could be that you see some joint ventures and Chinese vehicles are manufactured in some sense here. One thing to keep in mind, Kelly, we talk about electric vehicles with China. They make a lot of internal combustion engine vehicles and a lot of of hybrids that they sell around the world. It's not just electric vehicles. And they're very

successful. This is the problem that Europe is facing right now. The Chinese are grabbing market share, not just with EVs, but with hybrids and internal combustion engine vehicles. That's putting pressure on Volkswagen, on Stalantis, on all of the companies that are based over there and have operations there. This is why Germany is, at this moment, wrestling with this question, how much of a tariff do you put on the Chinese vehicles coming into this country? Do you allow them to do some manufacturing in this country? It'll be interesting to see what happens here. What do you think, Phil? Do they ban them? I know it sounds anti-competitive. Well, not now. I mean, I guess, look, I guess the EU could try to ban them now. How do you compete with that? But what about the consumers who are paying

$50,000 on average for a car? There are people who sometimes to say, you know, I don't want China to win this too, but I wouldn't mind having a $20,000. They're like some of these cars look pretty good. I'm not going to argue that they look pretty good. Having driven in them and ridden in them around the world, they pretty much have closed the quality gap with the Western automakers. Are they as good as some of the vehicles made here in the United States? Probably not as good, but pretty darn close to the point that most people are not going to notice a difference. The bottom line is this. You were right, Kelly, people would like a lower priced vehicle. Are you guaranteed that's going to happen if a Chinese automaker has a joint venture here in the United States?

You can sit there and say yes. But look, at the end of the day, automakers will sell a vehicle for as much as possible. They are not in the business to say we're here only to sell $30,000 vehicles. There are some who try to make money in that area and focus on that area. But generally speaking, automakers will get the most money they can from the vehicles they're building. Yeah, it still feels like we're on the precipice of like Japan in the 80s, like one of those moments, you know, depending on, as you say, depending on exactly how this works out. Phil, thanks. Appreciate it.

Phil Lebo. You bet. More power lunch after the break. High-stakes talks that just ended in Geneva. Earlier, we talked about how the morning session that Steve Whitkoff and Jared Kusherson did not go well with Iran per Axios. Well, Axios, apparently the evening session did go well because Axis now saying that they were happy with the way the talks. But again, these are the critical talks of Geneva with Iran over their nuclear program. Kelly, the outcome of this could determine a lot. I think the Dow will reflect. I mean, look at the intraday of the Dow or the S&P,

And they're trying to figure, same with crude right now. It's fluctuating around trying to put in its last bets here. You know, as these deadlines loom and they try to read what's going to happen. Yeah, watch oil, watch the markets. Big tech right down. But thanks for watching, everybody.