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Okay, Carl, thank you very much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, the tech trade. That sector remains the only negative one so far this year. We will discuss and debate it with the Investment Committee and a big-name investor. Speaking of 13Fs, making some really interesting new moves there. Joining me for the hour today, Joe Terranova, Amy Raskin, Jim Labenthal, Rob Seachin. We'll show you the markets.
Despite talk of tariffs today, obviously, we are green across the board. It is the NASDAQ that is leading today. Technology is doing quite well. I do want to focus on these Tepper 13F, David Tepper.
already filing his 13F earlier this morning. We talked about it earlier on Squawk on the Street. Notable are the increases in position in several of the China internet names. Alibaba bumped up, as we talked about, by 18%, Baidu by 7%, JD by 43%, and PDD by 1%.
You know, Rob, I know you own Alibaba, so I'll start with you. I think this is just simply a case, from what I understand, of thinking that these stocks, many of them just got too cheap. And if we were to show, for example, I can throw up a six-month of BABA,
It will show you sort of what I'm talking about in a chart, which tells the story better than words. October, the stock was around 117. There you go. And you see that. And then in, you know, early 25, it was down to 80 bucks. Tepper looks at that and is like, I told you guys on CNBC already a few months ago how much I like China. And I don't think that story has changed at all. Now the stocks came down a lot. So I'm increasing my positions in a lot of names that I had.
Totally agree with him, frankly, Scott. You know, this is the name, Baba, that we added in January, I believe, of 24. So we've owned it for a bit.
I know David was on talking about it in September. And I love the fact that as these stocks have re-rated since September that he's bought more. You know, Chinese tech stuff's not just about being cheap. They've been cheap for a long time. It was about geopolitical risks, low relative growth rates, regulatory headwinds.
underweights from a positioning standpoint that is what sets them up for periods of outperformance there's opportunities in China but I think like Dave we we want to be selective we own Tencent we own ping on both of which we talked about and bought on the show- but I think this is an example of getting quality tech exposure outside the U. S. and when you look at a company like Bob's
This is a name that resembles very much the business of Amazon. They dominate key secular growth industries. They're in e-commerce. They're in cloud computing. They trade at one third the valuation of Amazon, which we happen to own, too. But this company, despite
being a relatively modest grower is one that you have a huge margin of safety. And I think there's just peak pessimism around tariffs and around China. So this is one where we agree with Dave. That said, these things re-rate very quickly, as we saw in September. So we will see. And if the tariffs end up being more, you know, more bark than bite, we'll
I think these are names that you can own and you can certainly own them for a long time. A lot of these stocks tell a very similar story through the chart. Baidu is another one which you can pull back to six months as well. You can see a spike in the China names when he came on and said buy everything, ETFs, names, whatever. And then you had to come down in the share price, Joe. And you could see then that this became an opportunity that was too good to pass up.
The K web was up a bunch today as well. Tepper can be tactical as as
best as good as anybody in that regard. 13 F's can be dangerous because they are backward looking. Obviously, this is at the end of the last quarter. But I understand this to be the real deal right now, too, that he likes these plays. They just got too cheap. I think the inflection point was the middle of September last year, where we heard that finally Chinese policymakers were going to be introducing aggressive stimulus measures.
And it was at that moment where you saw these names begin to rally. Look at JD's performance since then, up 57%, BABA up 31%, Baidu up 11, PDD up 19. And I also think what happened is you had a lot of outflows from India.
INDA, look at the ETF down 13% from the middle of September. MCHI, the China ETF, you've got that one up 23%. So you had that negative correlation trade that has continued geographically. It's been in the last several years
When India does well, you see capital moving out of investments in China. Now you saw the reverse of that. I think it was a major inflection point. I know our exposure is in Yum China. A week ago, I said to you I was a little concerned. I didn't think I saw the momentum being there. They reported earnings two days later, and clearly that reignited some positive momentum. So I think they're in the right place.
if you would ask me of the four names that we're talking about today which one do i like the best for further appreciation that would be baba i think it's very close to returning uh... to its high and there was you know the narrative had become
China is uninvestable for many. And it's like Tepper trying to play chess when others are trying to play checkers. And your trash is my treasure. Is it investable now? I mean, because of the advances in AI, BABA has an AI model, which it suggests is pretty good. DeepSeek making us all think about what's happening over there as it relates to AI and the competition that exists. Is this the moment again?
If you missed it the first time when Tepper told you to do it, do you follow his actions and do it yourself? I'm not going there, actually. And I don't think it's not investable. My issue with a lot of Chinese companies is that they're not really run for profits. They're run sort of as extensions of the government. And that makes them a little bit more risky and a little bit more volatile when policy changes. That said...
I think we are very overweight ex-US. So we're very overweight Europe at this point. We have a big position in Japan. I do think the rest of the world relative to the US is very inexpensive, China included. Obviously, Europe has more exposure to the Chinese economy. So if you do get a big stimulus, that's going to help those companies
in Europe. So I do think, I wouldn't say that they're uninvestable. It's not where we're choosing to go right now. I would tell you, Jim, the other interesting moves in the 13F that we're watching from him today, Tepper, cut Amazon by 19%, cut Meta by 21%. We know that Meta's been on this tour at pace. All of you, we've talked about it every day. Meta's trying for its 16th straight day up.
That's the longest streak of any of the Mag 7 ever. $270 billion in market cap since January 16th when all that began. Rob, you own Meta. I know, Joe, you own Meta. But what about this taking...
you know, positions in mega cap down a little bit as you increase the exposure elsewhere within this universe? I think it's all a question of degree, Scott, and I agree with it. And you saw me a couple of weeks ago trim Oracle and NVIDIA, for that matter. These stocks have had home run returns, so there's nothing wrong with taking a little profit off the table. I still own positions in all of them. And I think, you know, if you look outside of tech, you mentioned the lackluster performance here today of tech.
There's a lot of other sectors of the market that are doing really quite well. And I think we'll continue to do well simply because as you looked at projected earnings growth through the rest of this year, the Mag 7 and the other 493, their growth rates converge by Q4. Now, this is a projection and things may change.
But they literally converge to pretty much the same growth rate by Q4. And when you consider the weightings of the Mag 7 and the lack of weightings in the other 493 stocks, there's a case to be made for the rally continuing to broaden. By no means am I saying Mag 7 are dead. Otherwise, I wouldn't own them. But I think it's perfectly reasonable to trim these stocks and look for better opportunities elsewhere. That's what Adam Parker is suggesting today, says sell some Mag 7. We're changing our mind.
and we believe lowering exposure is prudent. The high beta and increasingly high capital intensity combined with the elevated valuation of the Mag 7 is in our judgment an increasing cause for concern. Everybody's got Alphabet.
A lot of you have Microsoft. Joe, you sold it in the rebalance. Amy, what about that? Is it time to sell some of the Mag7? Is it time to change our minds and lower exposure there? Yes, we've been underweight the Mag7. I think that is the right call. I do think the capital intensity is going up. The free cash flow numbers are looking worse. They're looking much worse than the earnings growth. And everybody's still focused on the earnings growth.
So look, these names are over-owned. I think they're, as Jim said, we still own a lot of them. We're underweight pretty dramatically as a group.
Amazon's the only one that we're a little bit overweight at right now. But yeah, no, I think there are other opportunities and other places to look in the market. Rob, JPM says Amazon's reiterated today their best idea. I said everybody owns it. You're hard pressed to find many negative calls around any of these names. If you take Apple out of the mix, we know about the, I don't know, over the last month.
a bunch of downgrades that those have gotten, but that's about it. Most of these other stocks still remain well-loved by a broad swath of analysts on the street. Yeah. I,
I would say, you know, when you look at companies like Meta, I would not be surprised to see some give back in price performance. Know that this is our largest overweight of the Mag 7 by double. OK, so here we are owning it. We have enormous price performance. We're up 500 percent since we added it in December 22 on the show. We're not selling any of it, but I think you could see some give back.
I think it's about haves and have nots, Scott. So when we look at where we would be buyers, even though we're underway, it's NVIDIA and Amazon because they trade at slight discounts to where they have traded historically from a price standpoint. And when you look at what's happened, Microsoft, Google, Amazon all traded lower on weaker cloud revenue and higher CapEx plans.
In saying that weaker cap revenue, cloud revenue is about capacity, inability to keep up with insatiable demand. That is why you want to focus on those. I think really expensive things like Tesla, we don't want to go near. Microsoft has basically been dead money for the last year. That's why we're neutral.
we trimmed at the end of last year on that major price performance that we saw. Google is still cheap but these companies have huge cap X and operating profit is up a lot but free cash flow is only up minimally because they're becoming capital intensive. So if you focus on protecting yourself with price and owning the names that are relatively cheaper you're going to be fine here.
It's the expensive stuff you have to be careful with. Wolf, though, Joe, today asked the question, are tech's best days in the rear view? They say the path of least resistance for the group is to the downside in their mind. So I got Parker and Wolf saying, OK, lighten up.
Or at minimum, think about these as the best is maybe behind these names for a little bit. I don't know. I want to use the word moderation. I think it's moderation in terms of price appreciation, moderation in terms of the revenue growth. I think that's the right word. And when you use the word moderation, you understand that, yes, these are core holdings in a portfolio, but the degree to which you own them is what you should be questioning right now. So David Tepper selling off some of these...
I think that's proper risk management, and I understand it. We've seen evidence here in the most recent earnings report that's the right thing to do. You really don't have strong reaction after earnings for the majority of these MAG7. Now, the only one you did was Meta. Yeah, and we're really waiting for NVIDIA, so...
I could be wrong on that because Nvidia could turn around and depreciate significantly. Well, I mean, Nvidia, Evercore today says the deep seek sell-off was an opportunity into the print. They want a tactical outperform. They do report on the 26. So you've got to wait a little bit. By the way, from the 13F, I saw that Tepper increased Nvidia position by 8%. A little small bump up.
And, you know, that stock has obviously been in question. I know you laugh because it's a small bump up. Eight percent. For a big fish. Yeah. For a whale. For a whale. Right. I think NVIDIA's quarter is going to be fine. You saw the CapEx numbers from all of these guys and they were up huge and that's going to be to their benefit. But from a long term perspective, would I be adding to NVIDIA right now? Probably not. You know, we've owned it forever. We had clients who were
kill us if we sold it at the end of last year those same clients are saying you know what you can sell some now it's funny how when something goes down 25 people are less in love with it and that becomes a little bit of a self-fulfilling prophecy but look nvidia is a great company they have a great position the question in my mind is all about valuation should it be a three trillion dollar company at this point okay and i think that's that's a fair question so if not tech then what
Right. If you say you're one of the few on this show who's been underweight tech for a while, if not that, then what? European banks look great. I mean, they've done great. Europe's done better than the U.S. year to date. There's a lot of names over there that we like. Health care has been working and much cheaper valuations. We like energy. It's also been working year to date, kind of surprisingly, given the policies that
of the Trump administration, but we do think that they're very cheap and they, for the most part, we're going back to a fossil fuel world and that's gonna help these energy companies. So there's a lot of places in the market that we like. - By the way, you did trim another one of your big winners. This is not the first time you've trimmed this name. It's a quantum computing stock, IonQ. We talked about it on numerous occasions. The stock had a great run and I know our viewers, certainly some of them,
because I've heard from them on social and whatever. They bought. They bought, and they made a lot of money. Yep, it was a great, we bought it at $12 or $13. It went up to $50. Then we had the Jensen warning about quantum. It fell back to like $30 or even high $20s. It came right back into the low $40s.
We've been trimming just because it's a very volatile name. This should be a relatively small position in portfolios. There's a lot of upside if it works, but it is a risky stock. So, you know, the $9 billion market cap, we've been just trimming it back.
But long term, this is a real company, $100 million of bookings last year, real customers. So we like it. Yeah. You have a number of other moves that we'll get to throughout the show in just a little bit. I do want to stay on the theme, though, at least for the moment, on semis, off of Taiwan Semi, guiding their revenue towards the lower end of the range. Rob, you own that name, TSM? Mm-hmm.
We added it in early September, I believe, of 24. Increased our weight on what I would call Deep State Monday. The name was down 15 percent intraday. We're plus nine on that right now. Deep Seat. Deep Seat. Yeah. What did I say? I'm sorry. That's OK. I get it. You brought your conspiracy theories in. It's OK. It's all good. But you can go back. I said Deep State or whatever.
Anyway, it's a company with incredible market share in advanced chip manufacturing. It's a key beneficiary of AI CapEx. They're the world's largest chip manufacturer, dominant market share, 90% advanced semiconductors.
Listen, they have an expertise that very few of any companies can match. And they continue to benefit by what's happening in this marketplace with a valuation that still remains reasonable. And that's primarily what gets us interested. I'll remind you what network you're on some other time. Hopefully you'll figure it out by yourself by the next time I come to you. We can keep our eye on the ball.
Broadcom, upgraded today, overweight. You got stuck.
Reports in early March, and there is clearly demand still for network processing components, and Broadcom has the lead in that. I think what's happened in the semiconductor industry is you have seen capital significantly move away from it towards software. I keep talking about these negative correlation trades that hedge funds are engaged with, and it seems as though we're isolating the opportunity surrounding AI semiconductors to NVIDIA,
to Broadcom and then some of the semi-equipment names, Jimmy, like KLA Corp, like Applied Materials. Other than that, Scott, there's a lot of names that are struggling. I mean, AMD, the decline in AMD is just absolutely remarkable. The fact that you really haven't had any form of a significant bounce, that's somewhat troubling.
Dan Ives today, by the way, if you're talking about chips versus software, says that AI software era is here now. We know about Palantir. Massive run, obviously. Salesforce in there. Jimmy, your Oracle. A lot of the, like Dell was up, you know, a bunch. Not software, but AI-related things like Oracle in the software space are front and center for us, too. Twilio today reiterated a buy at Manas Crespi.
The shares are up 36% over the last month, but I'll give you a quick on Oracle before I really, really take care of you today and let you talk about a stock that I know you've been dying to talk about. - Okay, well then I better keep this quick. - Yeah, you better. - Now look, software makes sense. We're in the third year, right, of the AI revolution and many of us, I think all of us, are looking for where do the applications come home to roost? Where does this actually benefit the world outside of tech? And software is that interface by which it happens.
So it makes sense to me, you started with the infrastructure, the chip makers, NVIDIA's, Broadcom's of the world. You're migrating to the interface, which is software. And pretty soon, and I think it's already happening, frankly, you're looking at how does this enhance productivity and profits outside of tech?
All right. And I'll let you do it now. I did that quickly. You did on purpose. Because the story we haven't even gotten to, we're 20 minutes in, and we haven't even talked tariffs yet. Why? Because the market doesn't seem to really care today. A few stocks obviously do. Steel-related names like Cleveland Cliffs. Cleveland Cliffs? Yeah. I mean, so...
Didn't you figure that tariffs were coming on steel and aluminum? I mean, didn't you read the playbook last time? Well, I feel like it had to come. Because if you look at what happened to steel prices, and this is why Cleveland Cliffs has been a dog as far as share price goes over the last year. Operationally, it's been fantastic. But the share price has reflected steel prices, which in the last year went from $1,100 to
a ton in spot hot-rolled coil price to $660 a few months ago. Now they're at $850. And the reason that it's been all over the place is because of dumping, because of international flows that have really crushed the markets. And President Trump, I don't think it's surprising that he said, we don't want that. We don't want foreign producers to be able to put our companies out of business. No, we know that. Here's my question to you. Here's my question to you. I'm simply thinking of it along these lines and no other way.
If you thought that this was going to happen, why weren't you pounding the table on Cleveland Cliffs, whose stock, by the way, has traded like garbage? Okay, wait. You're not joking. No, no, no. I didn't hear you come on and say buy it because there's going to be tariffs. You didn't say tariffs. Did you say tariffs? No. What I said, Scott, was, and I'll do this again for the umpteenth time, okay, and I have pounded. Answer my question for the first time. Yeah. This is absurd.
about steel prices. It has always been about steel prices. With a modest increase, which we've already got in steel prices, you can get to $25 billion in annual sales very easily. At the historical EBITDA multiple of 12%, that's $3 billion in EBITDA. If you take the historical average enterprise value to EBITDA of seven, gives you a $21 billion enterprise value. You compare that to where the market cap and debt levels are right now, and it's a triple.
And I've said that. And I don't know. I know you said it. I know you said it. But at a $9 stock, my only point is at a $9 stock or wherever it was, right? It was, like I said, it traded like garbage. Yeah. If you were very quick to get out of General Motors when you thought that tariffs were coming there. Yeah.
I didn't hear you suggesting that, well, hey guys, remember the playbook from '16 where Wilbur Ross held up the Campbell soup can on CNBC and talked about aluminum and steel prices? Well, I think Trump's going to double down on that again. So this is the moment for that reason alone. You have heard me say repeatedly, and I'm not even going to get animated about this because it's factual, and you as the judge will back me up that this has been entered into evidence.
that multiple times over the last few months i've said it's a triple from here at ten dollars a share today it's eleven fifty i've said that multiple times now listen if i see it's a triple i don't need to beat my chest and do monkey moves here
Okay? That's all I need to say. I can't, if nobody wants to believe me on the numbers, that's fine. But if somebody believes my analytical capabilities, not everybody will, and I say it's a triple, I don't need to pound the table more than that. We've seen stocks go up and down on tariff headlines. Yes. Is this a believable move in the stock? Or if you've been, if you were in it at nine, do I sell it at,
where it is now with 11 and a half because I'm like, this doesn't have staying power. I mean, I...
and i want to make sure that two months from now we're not coming back and saying jimmy you didn't say this pat no we won't we won't pay i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i
iron ore company. That's all it was. They've made very good acquisitions, and as I just said, they're in shooting distance of $25 billion in annual sales. Right now, the estimate is $21 billion, but that's before the price hikes. They've done great jobs controlling costs, having good labor unions.
They got caught up in a whole lot of drama about U.S. Steel that hopefully is behind them. Right now, though, my passion is intact, and what I'm waiting for is as this year goes on, let's see the financial results and see if I'm right and if management's done a good job. But I think my position is clear. Quick point on the tariffs. Sir.
the headlines surrounding tariffs and the introduction of tariffs is not going away. It's going to accelerate. And I'll tell you what you don't say. No. And think about this for one second. Amy, you know this. You mentioned Europe. Europe is up 9 percent. Where are we? Mexico. Mexico is up 6 percent. Canada is up 3 percent. China is up 7 percent. The economic team and President Trump's administration looks at that
and they gain even more confidence to say, okay, the market's fine with it. Let's take it a step further. And I think that's exactly what's going to happen. Joe, I've got to add something here. I know you're quick to go, but I was in Washington, D.C. on Thursday, Strategist Conference, Robert Lighthizer, Larry Kudlow, Mike Gallagher. I can tell you now, all Republicans, I can tell you the Republican Party, their tentpole is tariffs. And it's not bluster. They straw
I strongly believe that middle class incomes have been decimated over the last 20 years. Jimmy, I understand that, but what I'm saying is the market reaction is what they're looking at. If the market was not resilient like it is, if foreign markets were not resilient like they are, they would pull back. You are correct. Their resiliency is why they're going to push forward. You think they care about foreign markets? They care about our market. Amy's right. It's the market. I totally disagree too, Amy.
It's the U.S. market that Trump— Amy, I totally disagree, too. I mean, Larry— This is about trade debt. Guess what? We're not going to debate tariffs anymore. We're going to take a break because we have our calls of the day next. We have a pair of price target hikes on two big retailers ahead of our earnings, plus a sell call on one of Amy's biotech names. We'll debate it all when we get back.
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All right. Calls coming up. McDonald's, though, is leading the Dow today. You might be like, why? I mean, the earnings were kind of disappointing. Rob, this is yours. Revenues were disappointing. U.S. same same store sales down one one point four percent. The stock, though, is having its best day. It was at least since 2020 because total comps were up zero point four percent. And there is a belief, according to some, at least that things have bottomed. Is that how you see it?
You know, Scott, to be candid, we trimmed this name in early 24. It's a smaller position for us. We have not been adding to it primarily due to valuation and continued cost pressures. We've been worried about sales growth stagnating, consumers being pinched by higher prices, increased competition. And while things are turning in the right direction, I don't think it's a name we're going to add to.
Okay, thank you. Disney, Jimmy, is lower today. Interesting article in the Journal over the weekend about even Disney execs are worried about the high cost of a Disney vacation. I don't know if that's the reason why the stock is down here or not.
But what does that present? What kind of problem potentially does that present for the company and then shareholders? Yeah, I pretty strongly feel that the price hikes have to stop at the theme parks and everything else. If they just hold them where they are, remember, they're going to increase capacity by a lot. They're leaning into the tunes of tens of billions of dollars of capex.
in the coming years and over the last two years building more cruise ships building extensions to the theme parks this is about getting more people on at the current price it cannot be about price hikes they're already past the point of maximum pressure for consumers and they will start to lose consumers
I do think the stock is down on this news today. However, given what the strategic plan is with regards to capacity and given the valuation and given the fact that streaming is turning out to be more profitable than was projected just a year ago, I think this is a good stock to hold. All right. Speaking of price hikes, J.P. Morgan has done just that.
to shares of Walmart. They say 112 is the new target, not 97. They expect 3% to 4% sales growth, 5% to 7% operating income growth. This is yours. They report earnings next week. Absolutely reasonable. Both Walmart and Costco are benefiting from the economy of scale.
They have massive market share leads right now over its competitors that's only going to grow, and their spend is going to result in further market share gains and revenue appreciation. Depot, as in Home Depot, added to the analyst focus list price target to $4.75, Rob. JP Morgan reiterate overweight. They expect conservative 25 guidance. They believe that's good. Optimistic on better housing trends. They believe home improvement spending will revert towards wage growth.
Listen, this is a long-term monster, a company that we've owned forever. It continues to be a high-quality business, as evidenced by their healthy profitability and capital efficiency. But ultimately, it needs to be a beneficiary of a recovering housing market activity, Scott, and home improvement spend, which will require lower rates. And that continues to act as a headwind.
And just in this market environment, macro environment, valuations continue to be a little elevated from my perspective, but we're going to be patient with it. All right. Illumina downgraded, Amy, to underweight. Price target to $100 from $130.
That's at Barclays today. China uncertainty, we were talking about that earlier. Pricing headwinds as well. What do you think? We really like this name, longer term. China's 7% of their sales now. They were one of two companies that were blacklisted in China and retaliation to the tariffs. But China's business for them has been down double digits for each of the past three years.
They've had some pricing issues just because more customers have switched to their high throughput product, which is a lower price per genome sequenced. But genome sequencing is still going up 30 percent a year. And we think that transition is largely behind them. Billion dollars of free cash flow a year, sub 20 billion dollar market cap for the leader high gross margin business. We like it long term, but it's going to be noisy here. All right. Let's get the headlines from Sylvana. Hi, Sylvana.
Hey, Scott. Good afternoon to you. A federal judge in Boston will hold a hearing today on Elon Musk's so-called fork in the road directive, which offers buyouts for federal workers. The original deadline to accept was last Thursday, but the judge put a temporary stay on the program. Several labor unions are challenging its legality. According to the Trump administration, at least 65,000 federal workers have agreed to the buyouts so far.
Hamas announced today it's postponing the next Israeli hostage release scheduled for Saturday, claiming Israel isn't abiding by the terms of the ceasefire agreement. The Israeli government has yet to comment. And President Trump says he's ordering the Treasury to stop minting new pennies because they cost more to make than they're worth. The U.S. mint lost $85 million in the past year on pennies, as it cost nearly $5
to make and distribute each coin. The higher costs are partly due to rising prices of zinc and copper, but it is unclear whether the president has the power to eliminate the penny as the size and metal content of coins are dictated by Congress, Scott. All right, Silvana, thank you. Silvana, now up next in today's ETF Edge is passive investing approaching dangerous levels. Bob Pisani breaking all of that down for us next.
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All right, welcome back. Let's do some committee moves. I said earlier that Amy had several, and I want to document them. After the bell today comes Vertex Earnings.
You're trimming it ahead of that. Why? Well, not so much ahead of earnings. I think earnings will be fine. But the stock's up 20% year to date on the launch of their new pain medicine. So we're just taking a little bit off the table. We still like Vertex long term. We think their pipeline is very undervalued. But we're just trimming a little bit because now some of the pain bump is already in the stock.
I'm not trimming. You own it. Yeah, I own it. I'm not trimming. I'm not taking shots at Amy because this comes under the heading of risk management. We've already discussed that. Well, you'd be in major contempt of court, and then I'd have to call the bailiff, and your butt would be on the street if you did that. So please, carry on. Well, the shots on gold, as we call it, and you referred to it, the pipeline, they've got a lot of them. And the pain drug, which just got approved, there's now this question of what the ramp will be, how many indications it will get. I do think that one's a game changer, and that's why I'm sticking with it. I agree.
You trimmed the Terra? Yes. Why did you do that? So, again, a big winner of 150% over the past year. We think it has a key franchise in cancer detection recurrence. And we like it, again, long term. It just got to be a very big position just due to this movement of the stock. And we're making room in health care for a new name, which we'll talk about.
What about trimming? Is it Cadent? Cadent. It's an industrial company. Again, like it long-term, just trimming. What's the ticker? KAI. Oh, there it is right there. How long have you owned that? Multiple years, probably five years. Okay. So this is a new buy that we get to next. It's CDNA. Yep.
CARE-DX. CARE-DX. Okay. So this is a leader in blood-based organ transplant rejection. So typically, if somebody has an organ transplant, prior to CARE-DX's new technology, you had to do a biopsy and see if your body was rejecting the organ. Now, CARE-DX has new technology, it's genome-based technology where they can test the blood
to see if the organ is being rejected. And you find out much earlier, all the biopsies are already covered under insurance. This is a cheaper, better way to do it. So it's a $1.2 billion market cap company. Again, relatively small, but we think it has a lot of runway over a long period of time. All right, getting a little bit of a move, as you mentioned that.
Impinge. So this is a long-term. You bought more of Impinge. Yeah, this was a long-term holding for us, ultra-high frequency RFID. The stock was a moonshot last year. It's come back. Customers have a little bit of extra inventory due to one or two customers pushing some things out. But longer term, we like this name. Okay. You want to do this next one here? Are we doing it here? We're doing it here. Okay. Yeah? Is that a yes? Okay.
Okay. You bought more Uber? Got back into Uber. You got back into Uber on Friday. Got back into Uber on Friday. Rules-based, mechanical, go right back in. Rules-based or Ackman-based? I have never said...
Well, you have to hold on. You have to attribute the move in price to Bill Ackman being in the stock. Obviously, that's why I asked you. But you react to that when you say, I'm going to put my emotion to the side. OK, so let's go through the history. In February of 2023, I buy the stock below $37. At that point, I thought this company was a fantastic company.
fundamental company that had significant upside potential. That has not changed over the last two years. I got out of the stock October 31st of 2024, a little bit below $74. I've sat out for the last three months as the stock has waffled below 70. And I told myself, I am not going to allow this name to go up to 100. You said, if Bill Ackman gets into this name. No.
By golly, I'm buying this damn thing back. Is that what you told yourself? I said there's no way. You do have a lot of conversations with yourself. There is no way this stock is going to $100, which I believed in February of 2023. No way it goes to $100 without me. So I had a resting order in.
above where I had gotten out in October at $74 to get back in. Thank you, Bill Ackman, because you're the one that triggered my elective stop to buy it back in. I mean, it's been a pretty remarkable move. Can you throw up, let's throw a one week. We have the one week of Uber, because, I mean, he announced a position that stock
went up like 8%. And then here you go, another 4.3% there. You see clearly what we're talking about here. So that's interesting that Joe did that. All right, Santoli, he's next with his midday word.
All right, welcome back. Senior markets commentator Mike Santoli is here at the desk. Most of today is a tech story. Yeah, for sure. You know, if you look at the mega caps that are up, I don't know if you have an opinion on, you know, this Tepper upping his positions on a trade that he told us on this network in the fall that he really liked and he apparently still does.
maybe even more 'cause the stocks came in as we showed. - They did and just today, the US NASDAQ 100 type names did grab the baton off of that. It felt like that was part of why you had a little bit of a build of strength in the NASDAQ going into the regular session. What I also find interesting is when you do have Nvidia, Broadcom, Microsoft working on a given day,
It's like, well, we can now sell off the banks and take profits there because, you know, it's not going to hurt the index. And they're up 7%, 8% on a year-to-date basis. So they probably have to cool off. I mean, it's not obviously that scripted and conscious, but it almost seems that way when the market is just kind of looking for a way to churn in place. And, you know, you've got most stocks up today, but the equities doing not much of anything. I think you've outperformed.
Obviously had a bit of loss of altitude in the very acutely economically sensitive areas outside of banks. But it hasn't really hurt too much. You know, tomorrow is going to be interesting. Day one of Powell. Right. And, you know, the Republicans are feeling a little bit of a flex, obviously, in their position in D.C. I just wonder how that's going to play into the questioning of Powell. He's going to be on the hot seat.
for sure. - He will. What is interesting though is if you think about how Republicans likely want to stage things in terms of fiscal policy, in terms of arguing that tax cuts are the thing, they want to project really strong economic growth
to kind of make the math work on tax cuts. So do you want to be saying, hey, we have a policy mix that's going to have this economy humming and then say, we really need rate cuts right now? I don't think that's necessarily the way it's going to go, especially after the president more or less said, eh, he was right to pause in the last meeting. Yeah, all right, we'll see. And I'll see you a little bit later on Closing Bell. Mike, thanks. That's Mike Santoli. We'll do our setup next.
All right, we are back. It's time for the setup. Robbie, you remember where you are? Coca-Cola is tomorrow before the bell. What do you have on this one?
I think we're going to see 7% organic revenue growth, Scott, which would indicate that they are seeing stabilization in the business while benefiting from a healthy pricing mix. Okay. Deere is Thursday before the bell, Jimmy, and you're not expecting a good quarter. Why not?
This is one of those cases where the stock is doing much better than the company would otherwise suggest it should be. It's not the company's fault. Share prices have been in a free fall for several years, and that ties directly to farmer incomes and whether they can buy tractors. That is projected to turn around. Now, I will admit, I'm not comfortable with this. I don't like this when a stock is doing really well and the underlying fundamentals stink. But the projection here is that we're at the trough right now, cross-segmentation,
prices should increase and then sales with it. Management has done what they need to do, which is control inventory so that prices don't go down. We'll see. I'm a little tepid on this. Well, JPM raised the price target today to 500 bucks.
I saw that. And I read it. You know, they're putting a 24 multiple on, I believe, next year's free cash flow. I mean, 24 multiple. And what they say is that at trough, that is the right multiple to use. I get it. That makes sense. But 24 kind of makes me queasy. However, if it got to 500, I think that's probably my chance to exit. It's been good.
It's been a good start. Also this week is Applied Materials. It's Thursday after the bell, Joe. Which looks to me like it wants to turn up higher. Lamb Research, KLA Corp, already reported Applied Materials responded positively to that. We need to see how much the decline year on year from China revenue is going to be. There's some very negative estimates, close to 30%. Options imply 6% move here. Jimmy?
AMAT. AMAT. I thought you were going to go to the next one. Well, Wynn Resorts? No. Are you going to give me a pass? Okay, AMAT. Let's talk about AMAT. Don't you own AMAT? I love AMAT. I'm just following the order of what's on the paper. Maybe you should look at it.
Hey, Matt, look, we've had good results from ASML. And who was it, Joe? Lame Research at KLA came out recently with good results. Lame and KLA just said that. The issue here, I'm sorry, the issue here is how much is sales to China going down. But I think at this point, the worst is priced in on that. And when? No, just kidding. We've got to go to break. Finals are next.
All right, I'll see you at closing bell, 3 o'clock Eastern time with Gene Munster, Stephanie Link. I hope you'll join me then. We'll track this market into the close. Rob Seachin, what's your final trade for us?
NRG, like Vistra, another independent power producer, it's an inexpensive way to get exposure to AI data center demand. All right. Thank you, man. Appreciate that. Farmer, Jim. Thank you. MP Corporation, rare earth elements mining, refining, and turning into magnets. This will be a trade war beneficiary. All right. Amy Raskin.
As I said, CareDx, a new position for us, a relatively small cap health care name, but we think has a lot of growth in front of it. Joe T. A few weeks ago, I gave App Lovin as a final trade. A little bit of an update here. I think it's about to take out its December all time high at 417. Thank you very much. Thanks, everybody. See you on Closing Bell.
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