Power Lunch - The Market Waits for Nvidia Earnings 8/27/25

Episode Date: August 27, 2025

Nvidia reports earnings after the ball. Bank of America initiated coverage of nuclear energy player Oklo.  And could this be the first time since 2020 that the Russell 2000 beats the S&P 500? Listen to Power Lunch here.   Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Stocks making new money again as the world waits on Nvidia earnings. Welcome to Power Lunch, everybody. I am Brian Sullivan. There was a lot going on today in the markets, but there is only one story to rule them all, and that is Nvidia earnings tonight. And we know, we know. We talk a lot about Nvidia. Here's why. Invidia is likely the most important stock in the world.

Well, why do we say that? Well, Nvidia is the largest company in the world with a market cap of about $4.4 trillion. In fact, this year, as John noted at the top of the show, they've added five Qualcomms or 10 Starbucks's worth of value. That's just this year, a trillion dollars this year. And that size means that Nvidia has an outsized impact on the S&P 500. Invidia alone is fully 8% of the entire index. It and Microsoft account for about 15% of the entire S&P 500. That is the largest concentration by two stocks.

ever. It also means Nvidia is a huge holding in many funds you might own. ETFDB in fact, set note that Nvidia is held by about 670 different global ETFs, and it's a huge holding in many of the largest ETFs as well. It's about 16% of the XLK,

about 14% of the Janice Henderson Global AI Fund, and the Vanguard S&P 500 ETF, the VOO, now owns more than 100 billion worth of Nvidia stock. Vettify notes that this is the most popular ETF that you're with about 80 billion

worth of inflows since January. Oh, and here's a real kicker. There are now more ETFs than there are stocks in America. So, when Nvidia moves, the market moves, and hundreds of big ETFs move,

the bottom line really is that in our lifetime, there really has not been one stock that is so important to how every other stock may do than NVIDIA right now. So how will NVIDIA do tonight and tomorrow after earnings? Well, we wanted to know. So we looked at the data to find a clear trend. We went back to last eight earnings and looked at how NVIDIA stock does the next day after earnings.

Well, there is, sadly, no clear trend. You can look at that chart, judge for yourself. Last earnings on May 28th, stock rose over 3%. But the previous time it had earnings in February, it fell over 8%. It had a slight gain in earnings back in November, had another big drop one year ago in August. And you could see very clearly from the rest of the numbers that the only trend that we see is that there is no trend. You will just have to wait and see tonight like us. And of course, we will have it all on fast money, by the way, at 5 p.m. Eastern time.

But we just started the show. So let's kick things off with none other and top semiconductor. analyst, Stacey Razgon of Bernstein. Stacey, I probably bored the heck out of our audience, but I was trying to make the point about why we talk about NVIDIA so much. How important is this stock? Well, as you said, it is the biggest company by market cap in the world and by a pretty good margin. It's been getting bigger and bigger. And you're right, it's an ingredient in many, many indexes. And frankly, even other companies where it doesn't directly impact. the stock price, but I mean, their customers or their suppliers, you know, their fingers are

sort of around everything that is that is out there. And certainly like in my job, it takes up a disproportionate amount of my time, which I don't think is actually a bad thing. That's where the interest is. I'm happy that interest is there and I'm happy, you know, to supply into that interest. So for me, it's a good thing. You picked a pretty good time to be a semiconductor analyst, Stacey. In fact, one of the top rank, maybe the top rank on Wall. Street. So let me ask you this, how much institutional client interest, how much trader and hedge fund interest is there in Nvidia? I mean, it's especially going into earnings, it's probably more than half of my client incoming. And it's, it's universal, right? Like, sometimes you get stocks that are

focused on fast money hedge funds or focused on long-loaes, whatever. This is everybody. Everybody's calling in. Everybody has an opinion. Everybody wants to know what everybody else thinks. It's universal. So again, from from where I'm sitting, it's, it's fantastic. I'm a self-site analyst. I've said this before in the show. What I need are interesting things to talk and write about. The stock provides those in spades. What are the one or two most important things that you will be focused on tonight with those earnings, Stacey? Yeah, sure. I mean, clearly, like a lot of attention is on the guidance, and, you know, especially now that China's out of the numbers, can they continue back to those patterns of pretty consistent beats?

And personally, I think the numbers will be fine. The biggest incremental I'm looking for is actually that commentary on China and whether or not they will be able to sell anything there. And it's not really about the near-term numbers. There's no China in the numbers for the quarter. It's unlikely that there would be any in the guidance, even if they were allowed to sell simply because it takes time to ramp the supply chains up. So this is more about, can China provide a further growth tail when does we go into next year?

So if we get really, if we get really positive, Sorry to interrupt. If we get really positive comments about China tonight, do you think that's another layer that could pop this stock? Yeah, possibly, because you have to remember last quarter, they pretty much took China out of the numbers. They've suggested, we know that licenses are now being approved. And so I think some people may have started to put a little bit back in. But by and large, I think the numbers going forward mostly don't have very much China in them. So if we could have that as a further growth driver, that certainly would be helpful. But there's a lot of uncertainty, both on the U.S. side as well as on the China side and on the different products and everything else. This would be the biggest incremental that I'm looking for on the print because actually the numbers in the near term should be okay.

In your coverage universe, Stacey, I'm not going to ask you if there's another, a next NVIDIA. But is there a next NVIDIA? I mean, to be fair, to your point, I've been doing this job almost 20 years. I've never seen anything like the current NVIDIA before. So I don't know. It's been a long time since we saw something like this. It may be a while before we see something like this again. Yeah.

Is the market got ahead of itself at all in any way? Four and a half built trillion dollar company. Stacey, Nvidia alone is basically worth two times more than every company in Germany combined. Yes, but. So you have to, you can't just look at the absolute valuation and isolation. You have to look at what it's based on. If the numbers are anywhere close to being correct, the stock isn't even that expensive. Like, it's at a massive run.

But I mean, the earnings have actually gone up far more than the stock price has. And if you compare the valuation, the multiple today versus it was, say, in the beginning of 2023 before there's all started, the stock today is much cheaper than it was back then. So you can argue on an absolute basis, like there's a lot of value there. But I would argue that that value is entirely justified, just given the, the financials that we've seen coming out. Wow. Strong words from a smart guy.

Stacey Razgot of Bernstein stocks up a little bit. Everybody's waiting on those numbers tonight. Stacey, appreciate it. Thank you very much. You bet. All right. So your next guest is plugged into really every corner of that technology supply chain from semiconductors,

but also to software and hardwareies and constant conversation with leaders driving this innovation. Dan Newman advises the C-suite on some of the technology-shaping business today, where the next big disruptions may come from, Dan, thank you. You heard the top of the show. I tried to lay it out. You just heard from Stacey Razcon. Is there any part of you that thinks that this NVIDIA hype, AI hype, is overdone at all? I don't think so, Brian. I think we want that story to be true. You heard that 95% MIT number come out this week, that 95% of AI projects aren't deriving value. We do have a human challenge. By the way, that study worried me. It means that maybe AI is overhyped, and a lot of this stuff that we talk about every day is overhyped. So let me respond to that.

Every major revolution we've had, there's the two conflicts. There's how well the technology works and how people work. And people are struggling at the pace of change that we're dealing with right now. The AI that's being implemented in businesses, it's taking a long time. In fact, the long tail of enterprise AI is barely cooked into these numbers yet. What we're seeing is these consumer applications, the chat GPTs, the Google Gemini's. That's the stuff we're all adopting. But when we're trying to work across the SaaS stack, we've heard this SaaS is dead narrative.

And in some ways, I think over three or four years. Software as a service. Yes, software as a service or these enterprise software companies are in trouble. You've heard it about Salesforce, service now. They're all going to be in big trouble. In the long term, Brian, if they do not change their course to support the AI model, because you and I probably have all used that kind of software every day in our lives. And the last thing we want to do is something that's harder than getting on chat GPT.

You want to build a search and you want to see your enterprise numbers, your sales numbers. It's still too hard. So there's a lot of work to be done. But your question, are we overcooked? this infrastructure boom is very well-in-lawful. Is that why we're seeing like, you know, Salesforce and others? They have like Matthew McConaughey telling us that they're actually an AI company? Well, they obviously...

Because they have to convince the world that SaaS software as a service is alive and well because of AI. Yeah, the entire software industrial complex needs to be rebuilt. You know, OpenAI and ChatGPT has changed the way we interact with software every day. Invidia is the backbone of this. Now, you asked a question earlier, who's the next company? I'll give you one to think about. Okay. Broadcom.

So the major hyperscalers are all building their own chips. You've heard about this, right? Jensen says it's not going to happen or it's not going to work as well as their GPUs. But the margins that are being pulled out of Microsoft, meta, Amazon, by using all this Nvidia is going to get challenged. And our latest numbers actually show that by 2028. You know, this is fascinating, Daniel. So sorry to interrupt because I think stay on that.

Apple did this. Yes. Apple computer did this. this. They went from, I think, Intel? I think it was Intel chips. They did. People could at me on the interwebs. And they went to their own chip. Not that they don't exclusively use it, but they went to their own chips. So you're suggesting that if you're in Amazon, if you're Jeff Bezos or whatever, you're thinking, or Andy Jassy, maybe you're thinking, why are we paying Nvidia so much money? Let's just make our own chips. Yeah, we've documented this. It's going to buy

for K. It's going to split. Externally, these hyperscalers that are selling to enterprises, it will be all in video. We think it'll stay over 90% all the way to. the end of this decade. Internally, though, meta using it for their own products for their 3.3 billion daily users. Google, they've already done it. Google Gemini Advanced is built on Google's

own infrastructure. It was trained on Google's broadcom-supported, made TPU chips. So it's already starting to happen. They have huge numbers, and this CAPEX is still largely favoring Nvidia, and we see Nvidia clear sailing, Brian, for at least two more years

before this really becomes a problem. Well, two years is not long for the stock. If the stock market thinks that Nvidia in two years might start to slow down, slow down is a relative. They're going to sell the stock. We still see an overall cagger of the entire market. We have a number over $580 billion for AI chips by 2029. It's going to slow down.

But moreover, what's going to happen, though, is these custom chips for meta. There's 6,000 rack scale. This is the rumor. 6,000 rack scale, large systems that meta's building with their own silicon, meaning these gigawatt data centers that you talk about are going to be possible. by their own shifts. They will make more money. They have to, to your point about Apple, they have to vertically integrate to make the most money. Invidia's still the best option to get their fast, but these companies in the long run need to deliver EPS to their customers.

And by the way, on the, you know, I do energy. That's what I let's my world. That's what I love to do. They're going to need to find the power. Is there any part of you that worries that all these great estimates you talked about compounded annual growth rate, $583 billion, that that's not going to happen because we just run out of power? There's two, major problems. One is energy and the second is going to be capacity. We heard about the Intel deal over this last few weeks. We need Intel to succeed here in the U.S. TSM needs to build more capacity. We need more chips. So, you know, that side needs to be taken care of. And Brian, to your point, we need more power. We need these nuclear buildouts, these small modular reactors need to be built

out and scaled out. Because at the speed we're going, the rate limiters aren't the demand for AI. The rate limiters are energy and production. Did you meet Dimple in the green room? I did. Well, she was sitting right across from me. Dimple, who is a guest that would be on in three minutes, is talking about Aklow, which makes, or hopes to make, small modular nuclear reactors. You didn't even know that when you said that, did you?

I was super happy to have the opportunity, Brian, to set you up for the next guest. This is why your company's called Futurum. You literally looked three minutes into the future and correctly predicted what we're going to talk about on this show. And now we'll see if my 2029 numbers right as well, Because if I do that, that's even better. Well, it's still 2025, okay? Well, we've got those numbers. Fascinating conversation.

You know what? It kind of reminds me to this, Daniel. I urge anybody out there, use the Internet. Look at a picture of New York City in 1900. There's like two rich guys with cars. In 1910, everybody had a car or close to it. And I feel like that's the pace of this change right now. Daniel Newman, thank you.

Appreciate that. All right, so we are just getting started. And, well, I kind of just gave it away. There's the mystery chart. It's a company that's helping to power this AI revolution. I just told you what it is, but if you weren't listening, send in your guesses. We're back after this. Well, technology and AI may be the hottest trade of the year,

but the companies that are powering the digital revolution are burning even hotter. Case in point, ACHLO. It is a nuclear startup. They focus on small modular reactors, basically small reactors that are scalable. The company is backed by Sam Altman and used to have, current Secretary of Energy, Chris Wright, on its board. Oclo, to say, has done well would be an extreme understatement. Stocks up 1,000 percent in the past year.

Your next guest says the gains are likely not done. She just initiated coverage on Oclo with a buy rating. It's welcome in Dimple-Gosai, Clean Energy Analysts at Bank of America. The aforementioned Dimple-Gosai, it's good to have you on the program. Thank you for having me, Brian. The only problem with small modular reactors is that currently there are no small modular reactors. This is still kind of a hope and a dream. They hope to roll

this out in 2027 at Los Alamos. Is it going to work? Look, that's almost like saying utility scale solar didn't exist before 2005. Technically true, but the trajectory is on the upper trend. Think about policy aligns,

you know, demand from customers too, and then you've got the technology which is coming together nicely. Similarly for SMRs, you've got some strong customer interest from data centers today. The policy is there. And so, you know, you've got the designs that are coming together and there's some clear momentum. But aren't we, we are betting in some way on a relatively unproven technology and we hope it, we wanted to work. I think we needed to work. Sounds like

you're pretty confident that it will work. Well, you know, there's a regulatory process. And I think, for example, let's take new scale. Their design has been approved. They've got the standard. design approval, which means they're likely a step ahead in the game in getting their regulatory license from the NRC today, right? So that is a step forward. And then you think about the policy support. There's been recent executive orders that are obviously boosting the momentum here, and you might see this momentum continue. Today it's not about whether it will work or it won't, Brian. It's almost about who gets there first and what technology is better than the other. Well, is it a zero-sum or one winner game? Is it going to be New Scale or

Oklo and the other one goes away? Well, it depends what the end demand is, right? So I think the one thing that we really need to unpack here is where the end demand is coming from. So today, if you think about electricity demand, we think that that might increase by 25% by 2030. Half of that is going to come from AI and data centers. Now, today, Oklo has the largest pipeline of all SMRs at 14 gigawatts, and majority of that is backed by hyperscalers, right? 12 gigawatts of that alone comes from switch, and then they've got orders from the likes of row power and equinex 2.

So as long as the data center trend continues to unfold, and we see more capex going in there, I think this is going to underwent growth. Okay, so electricity is confusing. It's even confusing to me and I sort of talk about it for a living. When you say gigawatt, people, that's like 750,000 homes, roughly, average-sized homes, average-sized climate. So you're dealing with 14 gigawatt.

You're dealing with carry the one, you know, like 12 million houses worth of power. These are gigantic numbers. They're modular and you can stack them on. This is enough to power. Think about a 12 gigawatt module. That's enough for a million homes. That's just one of new scales, you know, reactors. Wow.

It's enough to power a million homes. And they're not physically that large, correct? No. And that's the beauty of these designs, right? as opposed to large nuclear, which has siting requirements. You might see cost overruns, you know, tens of billions of dollars to spend. 17 billion in Vodal, the big Georgia power plant, state of Georgia, is running. It was $17 billion over budget.

But one would hope that would not be the case with everything. Let me ask you this. The current Secretary of Energy, who we're going to actually chat with in about a week and a half at a conference, Christopher Wright, a friend of this show, friend of this network, he used to be on the board of this company. That can't hurt. Definitely not. In fact, he was also ex-CEO of Liberty Energy. And let me tell you about the beauty of this partnership that Oaklo and Liberty Energy have today. So one of the greatest pushbacks I get today as an Aklow analyst is that the first deployment will not be until 2030 plus, right? So from now until then, what do customers do? What do hypers do? Are these orders really firm orders? Will they come through? And the beauty of this partnership between Liberty Energy and Auclo is that, energy will provide gas-fired power in the interim.

So, you know, Oklahoma will then benefit from this royalty or revenue sharing and prevent customer attrition risk in the interim. So it's like a solution in the interim. It's a nice deal. It's a nice deal. So it doesn't hurt to have some political backing. No, and I don't think that it does. Sam Malman, by the way, he of OpenAI and Chat GPT, like him or hate him, he is a big

backer of this company, is he not? 100%. So the company that may use the company. the most power of anybody is backing the company that may provide the power. There's a lot of very positive relationships built around Aklo. Is it Oklo? Did I mispronounce the name? Oklo? It's the same thing. Dimple. Potato, potatoes. It's all good. So quickly, thousand percent gain, though. Thousand percent gain. That's a lot of gain. Your price target indicates about another or implies about another 20% upside.

Yeah. Look. But not a thousand percent upside. No. Look, there's a few things. It's a blue sky scenario, but regardless of whether it's up 1,000 percent, it comes down to valuation. Everything is relative, right? We look at EV to EBADAR as a valuation metric. And today, our Klo is trading at around 6.6 times on 2033 EBADR and our numbers, right?

That's relatively attractive next to data centers, which are trading at around 14 times. IPP independent power producers at seven times. And then also, you know, the SMR developers of fuel suppliers that's around, call it 12 times, right? So relatively attractive. And then you've got some of these milestones or catalysts, which we're looking out for. Number one, if any of these Data Center awards,

which are MOUs today, turn into binding PPA contracts, that is a positive. If we see any initial deployments from the Department of Energy or Department of Defense today where there is 17 sites for the DOE and 50 potential defense sites, that could potentially come sooner than the 2030 because they have approval to, you know, deploy at a faster rate than the NRC.

And yesterday, I'm going to trump your, pun intended, your acronyms. Tell me. The DOE yesterday, Department of Energy, approved more fuel for SMR, small module reactors, a type of enriched uranium that is a different. that is in relatively short supply, or we don't have enough of it. And yesterday, the DOE run by Christopher Wright just approved more of this enriched uranium to help power small module reactors.

That's another great pushback that comes my way, is that there's not sufficient supply of halio in the market today. That's the uranium you're talking about. Exactly. So, you know, the DO is obviously supporting these efforts. We see centrists that is building out enrichment and fabrication facility in the U.S. And the beauty of Oclo's technology today is that its reactor can actually run on a number of fuel types. So down-bledded uranium, weapon-grade plutonium, and then, you know, recycled spent fuel as well.

So, you know, it's pretty flexible from that perspective as well. Well, it's great to have you on. Dimple Gossi, Bank of America. Great conversation. We talked about AI, NVIDIA, then we transition to the power, to power all that stuff. I can talk about it all day, but the show is almost over, and we have another show. behind us. I'll be here next time.

Thank you so much for having me. Welcome back anytime, Dimple. Thank you very much. All right. On deck, even as we count you down to the aforementioned Nvidia, they are not the only earnings game in town. Dom Chu was some of the other big names to watch. And there are others right after this.

CryptoWatch is sponsored by Crypto.com. Crypto.com is America's premier crypto platform. All right, welcome back. As we discussed at the top of the show, the big focus today, of course, on InVIDIA, those earnings are out in just about 90 minutes. Invita will rule the market. But do not forget, Nvidia is not the only name set to report after the bell. Some of those stocks that are going to report that are not named Nvidia have made some pretty serious gains this year. And the aforementioned Dominic, who I have to say, Dominic, you are just dressed, Fent beautifully today.

You know, I think you're saying that because we're both wearing orange ties today and blue shirts and blue shirts. And blue shirts. But you're so handsome. This is pretty good stuff. Anyway, we talk about the main event, right? The Nvidia report here, but the undercard for these particular names could be pretty good as well and might provide some fireworks. We're talking about three names in particular. The first one's going to be five below, which is already up about 35% on a year-to-date basis.

Then you've got Snowflake, which is up about 26%. And then, of course, there's Crowdstrike on the cybersecurity side of things, which is up 22%. And each of these stocks could. be in store for a fairly volatile report. Here's what we're saying. If you take a look first of all at what's happening with CrowdStrike, the expectations for CrowdStrike on an earnings per share basis, 83 cents, revenues about $1.15 billion.

Those are the headlines. But the options market as of this afternoon is currently pricing in what could be a 7% move up or down in those shares on the heels of its earnings report. And that compares to an 8% move up or down on average over the last. last eight quarters. So that's something to keep in mind there. Slightly less volatile, but even more so, at least from an options pricing perspective, than Nvidia shares could be. The next one here, from CrowdStrike, we move on to what's happening with Snowflake. Earnings per share. Look for 27 cents there. Revenues are about $1.09 billion, but the options market here is pricing an 11% move,

up or down, and that compares to an average 13% move up or down over the last eight quarters, the day after the results are reported. So Snowflake could be volatile as well. And then five below. Another one to keep a close eye on. 62 cents in earnings on $933 million or thereabouts in revenues. The options market, again, pricing an 11% move up or down. But the 6% average move over the last eight quarters is where you could see that real gap.

So again, over the last eight quarters, only about up or down 6%, but the options market pricing in an 11% move. So yes, NVIDIA, remember, options there are pricing in a 6% move. That's roughly in line with the average over the past eight quarters. But these ones here, Brian, could be more volatile. Look forward to talking about them all tonight on fast money. Which you are hosting. I wouldn't tease it if I wasn't.

There you go. 5 p.m. Eastern, 2.30 Mountain Time. Are you going to take the jacket off? No, nobody wants that. That's not good for anybody. Don Chu. Thank you very much. All right.

Speaking of Snowflake, the CEO's on Mad Money with Jim tonight. That's an exclusive. You've got to tune in. All right up next. Small cap, but big gains. Your next guest forecasting, new record highs for one key index. All right, let's hit a quick bond report because the hunt is back on, the hunt for yield, that is. Investors continue to look for higher payouts and what some consider more risky areas of the market. We talked about it a little yesterday on our market navigator segment, demand for high yield corporate debt, often called junk bod, surging. the reason is that the average yield on high-yield bonds, about 7%, some more, some less, about three-ish percent more than on U.S. government debt. In other words, you are being paid for taking on a little bit of higher risk,

and it's not just the debt that is rising. Two big ETFs that track high-yield bonds, the H-YG, the JNK, junk, they're both near 52-week highs, and that is your bond report for today. All right, now back to stocks, which are mostly making new records, again today. But one group that is not at record highs is the Russell 2000 Small Cap Index. The Russell 3,000 actually did make a new high today, but the more widely followed 2000 is still just under 4% from a new high. But your next guest says a new record could be coming. Tim Rabanowitz is chief investment strategist, Innovator Capital Management. Tim, could you have you on set?

Great to be with you, Brian. Man, we've been waiting for the small cap breakout for a long time. hasn't, it's happened a little bit, but we're still not at a record high. Should we be bullish? I think there are catalyst, Brian. And if you look at this and take a step back, we've had this valuation gap, small caps, so large caps, for a long time. And that in and of itself is not a reason for small caps to break out. We need a catalyst to trigger that.

We view that valuation as a spring that is compressing. The more of that spring compresses, the more upside potential that we see. But right now, we look at the Fed potentially cutting rates. we view that as a catalyst to really help springboard small caps forward. We've had the economic growth story, which is most important. The rate cuts are where we need to be. Most debt that small cap companies have is floating rate. We think this provides some relief and could be the catalyst.

There's so many amazing companies in America. There's so many amazing people in America. But these companies and these management teams largely get ignored to him because guess what? People like, they say, I'm going to buy Nvidia and let it ride. InVita, I think, as amazing as that company is, Takes a little bit of the oxygen out of the small cap room. It does. And look, I mean, Brian, we're of the mindset that that trade is going to continue.

Large cap tech is still a place you want to be. You look at the earnings momentum that we saw this last earnings season. It was very strong. We think that continues. We took a little bit of a breather over the last week. A lot of those names became overbought. But look, the AI infrastructure trade is still a place you want to be. But we think small caps can catch up with the help of rate cuts.

You know what I think is probably one of the most. interesting trends of the market, but maybe the most sort of not covered. If you've been bullish on Bitcoin, I know you have, a lot of people say, well, Bitcoin's going to kill gold, right? Bitcoin's going to kill fiat currencies. It might kill gold. Gold and Bitcoin continue to move higher. Are you surprised by that? Well, Brian, I think it makes a lot of sense. I mean, you look at the fiscal situation in the U.S., all of all of the money that's being printed, the big, beautiful bill that is coming down the pipe. That's on top of $2 trillion. in debt that we're already trying to service. So right now, especially when we see the Fed

cutting rates into what we view as an economy that's still very strong, it's so important to find ways to inflation proof your portfolio. And we think that's three things, things like gold, things like Bitcoin, and then also finding ways to get more equity exposure into your portfolio. Very important. V-a-vis small caps, I assume. That's a big piece of it. But, you know, large caps as well. And, you know, for a lot of the advisors we're talking with right now, who are working with your retirees and pre-retirees, it's finding ways to cautiously increase that exposure. They don't want to necessarily take on more risk. That's why I think we're seeing this huge shift into risk-managed options-based ETF strategies, buffered ETF's floors as a way to get more

exposure, but still make sure. There's a risk to that, though, Tim. I, listen, you're a Chicago guy. You live outside of Chicago. That is the capital of the CTAs. That's the capital of options. That's the capital of, I think, some of the smartest traders out there, but they're people that are willing to take big risks. How much risk should like a non-CTA sitting in Chicago be taking? Well, that's the beauty of the, you know, the ETF market and all the evolutions that you've seen here over the past several years. A lot of ETFs have hit the market. In this options-based category, you can choose the risk tolerance that you want. If you want 15% protection on the S&P 500, there's a suite of ETFs that can give it to you. If you want a 10% floor, so on and so forth,

There's so many different options, which really gives the advisors the choice of what is the appropriate risk tolerance for their clients and which... Are they expensive? So relative to the annuity world, they're lower costs relative to cheap beta ETFs. They're more expensive. Average cost of a buffer ETF in our lineup is about 79 basis points. Not terrible. It's an interesting way to maybe buy a little protection, too. You know, we insure our homes, insure our cars.

Maybe we should insure our investments. Tim Rbanowitz, Innovator Capital. management. Great stuff. Good to have you on. Great to see you, madam. Thank you very much. All let's get now to Julia Borsden for a CNBC News update. All members of the United Nations Security Council, except for the United States, voted today to call on Israel to stop further expansion of its military operation in Gaza.

This comes as Israel plans a ground offensive in Gaza City, which has called the last bastion of Hamas. The U.S. was also the only country that did not sign onto a statement saying the famine in Gaza was a man-made crisis. Kansas City Chiefs Wide receiver Rushi Rishi Rice reportedly accepted an NFL suspension for the first six games of the season. That's according to the NFL network. Rice entered a guilty plea last month to two felonies stemming from a street racing incident in Dallas that injured four people. He was sentenced to 30 days in jail. And U.S. Captain Kagan Bradley is leaving his golf clubs at home for the Ryder Cup. He has considered adding himself to his six captain picks to become the first playing captain of the Ryder Cup since Arnold Palmer in 1963.

The U.S. is looking to win the cup back from Europe after losing in Rome two years ago. Brian, back over to you. All right. Julia Borsden, thank you very much. You think your car payment is high? Well, coming up, Philibault lays out just how many people are paying four digits a month for a car truck. All right, welcome back. Listen to this staggering stat of every four people buying or leasing a new vehicle with a loan.

One four has a payment of more than $1,000 per month. Philobo joining us now. There's a lot of cash buyers out there. I get it. But are those people borrowing or leasing. Holy mackle, you referenced this on Friday. These are big numbers. Yeah.

And let me correct that, Brian, because I think the numbers were added up a little incorrectly. It's a little under 20 percent is more. accurate in terms of the number of people paying over a thousand dollars not one in four that said it's still a large number of people and and it comes down to two things one you have got more vehicles selling at 55 60 65 70 000 than ever before and there are still people who say look i want to pay this off in five years you're going to pay off 60 000 in five years or 70 000 in five years even if you put down a large down payment you're still going to be paying close to a thousand not over 1,000. So that's part of what's driving this. And the other issue that is out there right now,

Brian, is that for a lot of people, they are still committed to buying a new vehicle, a pricey new vehicle. And that's a reflection of the fact that the unemployment rate remains relatively low. And as long as that is the case, you will continue to see strong demand. Yeah, one in five is still a lot. I mean, I know price tags have gone up. And I assume, Phil, you've also reported how car loans have gotten longer four years, then five, six, seven. There's people that have, I think nine year loans. So you're not only dealing with a higher number, you're dealing with a longer term as well. And more people than ever, Brian, are upside down. We know that from the people at Edmonds. They reported that not too long ago. The number of people

who are upside down on their loan, essentially meaning you owe more than what the vehicle is worth when you go in and try to buy another vehicle. That's a, a sign of a consumer that is definitely under stress right now. But in terms of those longer than six-year loans, it's now 31% of the auto borrowing. And that is staggering to think about the number of people who are comfortable paying off a vehicle over seven or eight years. Or as you mentioned, some people even do nine-year loans. Wow. One last thing to keep in line in terms of these longer loans, Brian, the default rate and the repossession rate, they are creeping higher, but they still remain under, you know, the alarm bell point where people would sit there and say, stop it.

This is out of control. We're not back to the recession levels that we saw. Can you totally unrelated? I'm putting you on the spot here, putting the whole team on the spot because I saw your coverage note. I, car and driver this month has a cover of the slate little EV pickup truck. So in my first car was a 1981 Toyota Tacoma pickup truck. I got it in I think 1987. It was like $2,800. It never broke down, by the way. You've got amazing coverage, I think, tomorrow, right, of this Slate little mini-evee truck two-seater. Yeah, and we're going to be with the Slate CEO tomorrow morning on Squackbox talking about this. Slate believes that it can sell an all-electric, small SUV, small crossover that could also be considered a small pickup truck with a short bed, a two-door model, but they believe they can sell that in the mid-20,000s.

Now, they haven't done official pricing. look, they don't even go into production until the end of next year. But, Brian, keep in mind, we have seen in the last 10 years a number of companies, really in the last five or six years, a number of companies, often through SPACs that have come to market, electric last mile, Lordstown Motors. I know. A number of these that just, Nicola, that's a good example. Remember when Nicola came out?

Everybody said, I got to have the badger. That's a great pickup truck. Yeah, but then they made a video of a truck rolling down a hill and pretending that the truck was power itself. That's a completely different story. I know. And the Lordstown truck was ugly. It was an ugly truck.

It was ugly. Right. But the Badger pickup truck is a perfect example. People were like, I am going to buy this thing because it comes out. There was no specs on it. There was nothing to indicate that this thing was actually going to be built. Now, that doesn't stop people from saying, sure, I'll put down 50 or 100 bucks. And, you know, if it doesn't get built, most of the time it's a refundable deposit,

as is the case with Slate. But there are people who they want a mid-20,000. EV. They are dying for that. If Slate can pull this off, it likely would be a big seller. But a lot of hurdles between now and that. I know. But I tweeted out, I didn't even know you're doing the story. I tweet out. I want to drive it because I want to have the memory of that tiny little Toyota pickup truck. I have no idea how I fit in it. I think it was a four speed. I had a bench seat, no air conditioning, but it never broke down. Philibault. Thank you. Yeah. You bet. Coming up, we're going to help you get a head start on where to invest.

and when the Fed begins cutting rates. All right, welcome back. Let's give you more information you can act on because stock buyers are beginning to adjust their investment playbook for a lower interest rate environment. Case in point, Wolf Research has a new no doubt laying out what has happened in both rate cutting cycles or all rate cutting cycles going back to 1989.

This is a big note, but we'll summarize it for you. The main takeaway is that the NASDAQ is likely to keep doing what it has been doing, outperforming the S&SQ, S&P 500. That's what Wolf research found happens in early rate cut cycles. After six months, the NASDAQ is up an average of 7.3% versus just two and a half percent for the S&P 500. Over a year, it's even more pronounced, with the NASDAQ typically seeing 12.2% jump compared to a 3.3% increase for the S&P 500. For a more specific investing approach, the firm also lists some of the best internet stocks and subsectors that they believe will,

outperform the broader markets when, if the Fed starts cutting rates. For the mega caps, Wolf Research has outperform ratings on three of the Mag 7 names, Amazon, Meta, and Google. It also thinks some larger cap names like Uber, Shopify, DoorDash, and Roblox have the potential to outpace the market over the next 12 months. And they also like a few smaller stocks, like a chewy match group, Pubmatic, and Magnite, all with outperform ratings on them as well. In terms of sub-sectors within the internet, we'll flayed out the average price change compared to the S&P 500 in the 12 months after a rate cut.

The year 2000 came in first, than over 80% outperformance compared to the S&P 500. Of course, that didn't end well. Some e-commerce names followed by subscription-based names like online advertisers, rounding out the top five with double-digit outperformance in mobility, delivery, and online travel stocks.

It was a lot there. Bottom, bottom, bottom line is this. Wolf Research found that when we start to cut rates, technology stocks tend to outperform six and 12 months later. I mean, they will, but it's what has happened in the past. All right. Still to come, the rebranding and unrebranding reverberating across America. All right, before we go and send it over to overtime, one of the most read stories on CNBC.com right now is also one of the hottest business topics in America. It is the potential rebranding of Cracker Barrel restaurants. Or shall we say the un-rebranding because the chain is undoing much of what it said it was going to do.

Cracker Barrel is dumping its new logo after widespread backlash against the change. If you're not familiar with the story, here it is. The old logo is on the left. It's got a man in a chair leading against the barrel. A guy's name apparently is Uncle Hershey, Herschel. It's an old-timey logo. and maybe that was the point. Now the new logo is on the right.

CEO Julie Messino tried to modernize the logo by making the new one without the old man and changing some of the lettering. Well, a lot of people apparently went nuts and it didn't work. So now, Massino, to her credit,

has quickly flipped back to the old logo and said they were listening to their customers. Probably a good move. The stock right now is up 8%. It had fallen after the initial rebranding change, but now that they're re-un-rebranding, I don't know what you call it.

Either way, that stock is up 8%. Now we'll see if the board of directors has some other calls around the CEO. We're going to find out, but either way, the Cracker Barrel Gate, Uncle Herschelgate, whatever you want to call it, is over at least for now.

All right, that's it for this show. Before we go, though, we've got to do a final wrap of the markets, the S&P 500. not soaring, but it's up enough to make a new record high up four-tenths of 1% for the Dow, about three-tenths on the S&P 500. We talked about small caps earlier. The Russell 2000, not on a new high yet, but it's getting close up about seven-tenths of one percent. Oh, and by the way, there's a company called Nvidia. Their earnings are out in about an hour's time,

the 3 o'clock going to lead you right up to it, and then I'll see you on Fast Money 5 p.m. Eastern for more reaction as well before. We've got it full team coverage. Thanks for watching Power Lunch, everybody. See you on Fast Money. Take care.