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Carl, thanks so much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, surging NVIDIA shares higher today after the company's earnings show demand is still very strong for AI. The rest of the markets, we will trade that too with the investment committee. Joining me for the hour today, Josh Brown, Jenny Harrington, Bill Baruch, and Bryn Talkington. We will go to the markets here. We are mixed, and NASDAQ's off its best level, too.
And many stocks that were nicely green have peeled back a bit. The Dow's off one half of 1%. Josh, we obviously overnight were reacting to the trade court ruling. It's really hard to trade that, though, because it's far, far from the end of it. No one knows what really the next step is going to be, which is why we're going to focus on NVIDIA. It's the biggest story in the market.
moving higher, obviously, after their earnings. It has retaken the spot as the most valuable company in the market. It's up 4%. Your take on the quarter and what to do with the stock now is what? Look, I think NVIDIA, we talked about this going into the print earlier this week,
It's just in this really singular position, and everybody is aware of that. The multiple is not crazy, given how popular the AI theme is, and given how badly people want to be allocated to it. So I wouldn't say it's like this outrageous multiple on expectations. There are tons of stocks like that, and this isn't one of them.
Obviously, the growth rate is decelerating. It's still incredible. It's still the most important company in the entire AI theme. It probably will be for years and years to come. We all agree with that. But, like, what are you looking for?
They got it to $45 billion in revenue for Q2. The estimate was $45.9 billion. Some of that you can blame the chips not being able to be sold in China. Fine, we all understand that. The analysts have long ago pulled all of that out of their estimates. In the end, if they can hit that number, it's great.
It's just not what Nvidia was doing a year ago, two years ago. So I think the stock coming back to this old high, stalling out a little bit makes sense. I'm along. I'm not going anywhere. Everything that I heard discussed in the Q&A section of the call is exactly what I would have wanted to hear as a continuing long-term shareholder. This company is just absolutely on fire.
Bryn, going in, we talked to you yesterday on Closing Bell ahead of the print. You suggested the market was going to be pretty careful about letting this stock go higher from where it was because it had such a great run. Here we find ourselves even higher. We're not that far away from a new high.
so we talked about it yesterday the options market i think was pretty spot on a plus minus six percent move overnight it was up plus six or about four and i think ultimately between the run-up but also to josh's point uh where it is right now trading close to an all-time high i think to punch above that you're going to need clarity around china and whereas jensen was really clear i think this is the first call
I've ever heard him read a script, first of all. I mean, he didn't have one extemporaneous word. It was all very scripted out. I think they're definitely treading lightly. Is that a problem to you? I mean, I saw you're not the only one who's mentioned that. There was an analyst notation today that the call felt closer to an Apple call than an NVIDIA one for that same reason. Does that even matter? I think if it were a consistent call,
quarterly call that he's reading off a script yes it would matter because jensen's always so vibrant and so off the cuff and so i think right now you know he obviously owes a debt of gratitude to trump for negotiating you know with the saudi and uae i mean that was definitely has has the president's hand handprints are you know all over it which is great and so
I think that it's appropriate right now. There's a lot going on, a lot of conversations. I think China, he was really clear, I thought, threaded the needle really well that half of the AI researchers are in China, $50 billion market, and effectively they're cut out right now. And so I think he's really asking the president when he says he's on the call,
do we want the globe to be a US tech stack or a Chinese tech stack? And I think we're hopeful that it's a US tech stack. And so I think that there's really good upside if you actually got as part of the Trump-China negotiations,
this reuse of the H20s, which right now are only good in China. So I think that the stock, like I said yesterday, I think it's capped out close to this level. I think you're going to have to be patient. But once again, this is a great name to add to your portfolio this year. It's a cheap stock. They're going to continue to do billions in revenue. And between Jensen and Collette, it's like Satya and Amy Hood. It's like, to me, one of the best one-two, you know, CEOs, CFOs out there. Yeah, Bill, I mean, these guys have laid it out well. China issues well-known.
which is why it really became what does demand look like X China. That's what the market was keyed on. Jensen Huang saying, quote, global demand for NVIDIA's AI infrastructure is incredibly strong. And as AI agents become mainstream, the demand for AI computing will accelerate. And that's what everybody really has tried to push back, especially
on the deep seek reaction was this is going to cause more compute not less and he really reiterated that 14 price target increases two upgrades to buy mostly unknown shops that did that but nonetheless those are the calls you get you own the stock too it is our largest position at this moment here
I really like what we heard from Jensen. Scripted or not, I mean, if there's time to script out the call, this would be it. This would have a treacherous sort of time here, charging off the H20s, everything that's going on geopolitically. But to your point, they highlighted, he highlighted Microsoft deploying tens of thousands right now of their GPUs, and it's going to turn into hundreds of thousands of the Blackwells. And at that point, too, all of these hyperscalers, they are going to have to follow. I think some of the price targets right now
raising. They're trying to just beat people to it. Yeah, I would, to Josh's point, consolidate. I think it's fair to expect that right here. Maybe getting back some of this 135 to 155 consolidation. But I now think a month ago, you asked me about 180. I now think 180 is
is the next stop up here as it consolidates. Let's talk about something else, free cash flow. Free cash flow, $26 billion this quarter, $72 billion in the last 12 months, $13 billion they're returning to shareholders in buybacks right now, $40 billion in buybacks trailing 12 months.
They're returning cash to shareholders, and that's powering the stock as well. I expect that to continue. The fact they were able to meet that expectation of revenue, $45 billion, tells you that free cash flow is coming still. Certainly helps the semis trade, which has been on fire in the month of May after sucking wind for a while. It's the best month since May of 23, so two years for the SMH.
Winners across the board, not just NVIDIA, obviously, Micron's 26 microchip, which you have the preferreds in. It's Broadcom, which reports next week, reiterated by today, 205 at Deutsche Bank's, the price target there, Taiwan Semi, Lam, and AMD. Right, but I think we need to be careful when saying, hey, this is a great month. I had a client ask me the other day, they said, why is the microchip preferred that you bought for me a month and change ago up 40 plus percent? And I said, because it shouldn't have been down 60%.
So there was that really just like air, all the air was sucked out of the room in early April and it reset those prices. So a lot of these huge upward moves are really not because their stories have changed, I don't think, but just because the share prices a month and change ago were down too much. That's a good point. The SMH itself, the index, is only 13% off of 52-week highs, but the median stock in the SMH ETF is
is 36% below its 52-week high. So the benefit of the SMH is that 40% of it is the top three names. It's Nvidia, it's Taiwan Semi, and it's Broadcom. And the other 60%, they've rallied, obviously, with the overall market. They're nowhere near those old cycle highs.
I don't know if they get back, but it's almost not that important to the NASDAQ because they're just not big enough. There's only one stock in the SMH that's below its 50-day moving average. Can you tell me what it is? Microchip?
Intel. Oh, Intel. Sorry, I've blacked that out. Do you know that I've blacked it out? The entire index. I don't even know what you're talking about. You've never heard of Intel. Never heard of it. The entire index short-term is rallying, but those big three are really the critical names in the space, and they look good. This is a helper, if nothing else, Bryn, to the overall big cap tech trade. You couldn't have NVIDIA do anything
You know, to question demand, you would see many of those stocks down today. They're not having the greatest day. However, the Nasdaq has just been a ripper this month, up 10 percent. The MAG7 ETF, which is known as the MAG's best month ever since the inception. As many of those names have just absolutely ripped this month.
Yeah, I mean, I think besides, you know, Jenny's very, very accurate point about a mean reversion trade. I think what you're seeing, I think going back to the call with Jensen, he's like, AI diffusion is off the table. We're not seeing these hallucinations. These AI reasoning models are coming. And so it's like we're getting these very large step functions up versus more linear incremental. And then you heard Microsoft talk about it and Jensen about these tokens, but all
All these tokens getting used and the cost of the tokens coming down. And so I just think you're really seeing this not only adoption, but I think it's important ultimately this return on equity, which at some point we see the return on equity in video, but I think Microsoft talked about it as well. They're doing really well. And so I think these names are tough not to own because of the free cash flow, of the growth, of the opportunities going forward.
Yeah. Bill, I think people get that, agree with it, know it. Tough not to own. You think they're tough not to add to. I guess that's the way I'd put it. Even at these levels with these kinds of gains, you bought more Alphabet earlier this week. Yeah, I did buy more Alphabet. And to my point, when the S&P did go to 5,700 for that first time, we were trying to raise a little bit of cash. We dialed Alphabet back just a little bit. I talked about it on the show. But
You know, there were some concerns. Where is the search going to go? And after comments from Apple. But when we saw the event, the I.O. event last week or two weeks ago, I mean, what they unveiled with Bayo3 and what they're able to accomplish, they are putting their data set to work. And you need the data. No one has more data than Apple.
alphabet as well as meta and being able to implement it. I think that this is something here that we want to be, make sure that we're at above market weight on and own and look at, I think in the market in general, you're talking about a lot of people worried about that. It's not going to catch up.
or the MAG7, there's been a lot of outflows in the SMH. And I think this is very similar to what we saw in 2019, where there was a lot of almost historical outflows in the first half of 2019 as the market rallied. But guess what happened in the back half of 2019? It rallied even more. You were skeptical of the NEQ, so to speak, sell-off. Yes. Right? Yeah.
that day that we all remember because we covered it so heavily as it was unfolding, you know, he's
in a courtroom makes a comment that, you know, Google searches on their browser, on Apple's browser, we're down for the first time. And you're like, OK, is this an existential issue here for what people have feared because of generative AI? I think it still is. I do too. Well, let's get to that in a minute. It's only going to get worse. Sorry. Bill was one of those saying, you guys are overplaying that. The market's overdoing it.
And sure enough, the stock had rallied back and eclipsed the sell-off and then some. So you're firm in your belief, despite what they're going to argue counter to you in just a moment. Yeah, I am firm in my belief. At that time, we trimmed it. We got a little lucky. We did it before that comment. And now we're able to take a step back and reevaluate the situation.
And I think, and not only that, again, I look at flows, the way the market reacted, the NASDAQ as a whole, after that IO event, there was levitation. This was acting, it was almost like the AI trade was a reminder that it's still alive. And the market was gravitating higher on that. So I think from a flow standpoint, from a technical standpoint, I think that there's a lot of room that we can see this run. Yes, search is $56 billion.
57% of their revenue, and that's going to take a hit to them if it starts to come down. But the thing to think about, too, go back to Apple. And as the product revenue starts coming down, services revenue picks up. If Alphabet, they're running the DOJ problems, if they actually are forced to break this company up, I think that is a positive. There is so much value that can be unlocked in this company even by breaking it up, too. Yeah, but nothing is as valuable and important
as search. But it's not what you're doing for me now in tech. It's what you're going to do for me in the future. No, but these guys are going to make the point right now that what is a maybe slow decline now is you're not going to be able to turn the spigot off. That it's just going to keep dripping and dripping and dripping.
And I think that's the problem. When you say, what are you going to do for me in the future? Let's say Google does do AI for you in the future better than any of the other AI competitors. But the thing is, we don't know how profitable it's going to be relative to search.
It's an expensive tool to run and we don't know what the monetization is going to really look like. So I know just taking myself as a cherry-picked example, I'm going to bet you that my search on Google is down 50% in the last month because I'm using ChatGPT, Grok, Cloud, and I'm using them
all the time and I'm getting much better results. I think I'm a little ahead of the curve on that, but that's going to trickle everywhere. And I'm not seeing any advertising on those. So even if I use Gemini, that's not profitable for Google in the way that it was. Great results, great results. But when you look at-- have you seen the videos that are coming out of Veo 3? Yeah, yeah, we've all seen them.
Yeah, this is Tom Cruise's last Mission Impossible movie, but with this video construction, there's going to be Mission Impossible 30. Guys, hold your thought for a second. I want to get to Julia Borsten, who has a news alert regarding Meta, which just today, Julia, Mark Zuckerberg said they have one billion monthly actives
in Meta AI. Is this related to that or we got something new? No, this is new. That was news coming out of the annual shareholder meeting yesterday. But today, Meta is announcing it's partnering with defense tech company Andral Industries. Now, Meta will design and build a range of integrated XR products. That means probably
wearable glasses and the like, which they say will provide warfighters with enhanced perception and enable intuitive control of autonomous platforms on the battlefield. Now, here's what's so interesting here. Palmer Luckey, who's the founder and CEO of Andral, also founded Oculus, the VR headset maker, which he sold to Meta
Palmer Lucky was then pushed out from from Meta and Oculus. So now they are collaborating again and it all comes full circle. Mark Zuckerberg saying that they are proud to partner with Andral to help bring these technologies to American service members to protect our interests at home and abroad. We have seen a real surge in investment in this defense tech space and Andral is really at the center of it. Back over to you.
Julia, thank you very much. Julia Borson, perfect segue to what we just told you going in that came out at the shareholder meeting to Jenny. One billion monthly actives for Meta AI. Right. And so...
In addition to that, Facebook's got a $68 average revenue per user. They are minting it. So when we think about Facebook or Meta and monetizing their AI versus Google, that's like all to me, that's all whipped cream and cherry on top for Meta. Whereas for Google, it could be a
a little bit of cannibalization of the other business. So I look at this and I'm like, wow, that's great. AI is just more money, more profitability. Google, I'm not sure it is. It's a tough one. So when Bryn said before you have to own, or I can see owning the Mag7s, I'm not sure that you really want to own all seven. I think it's still going to be a time where maybe you want to own three of them or five of them or a few of them, but I'm not sure you want to own all seven. Or just weight them underweight significantly and overweight significantly.
And if they really perform-- But here's the thing. From a portfolio management perspective, if you're going to underweight something, then why bother owning it? What would happen to Google's market cap if and when OpenAI files for an IPO? Where is the shareholder base for that stock in the public markets coming from? It's a $300 billion valuation.
Those are people selling Alphabet to buy OpenAI, which many perceive to be the next wave of how consumers find what they're looking for on the web. Google's awesome. They have amazing technologies. They have huge investments in things like Waymo. They're going to be big in quantum computing. Nobody is saying that Alphabet is not well positioned for the future. But in this particular business, which accounts for half their revenue, they have never, ever
had to fight with one hand tied behind their back the way that they have to fight now. And when I talk to people about chat GPT, you have people paying $20 a month. They don't even know how to use it. You go on someone's phone and say, go into settings, personalization,
turn on memory. Why don't you have your memory turned on? You're using it like Google. The thing is not getting to know you. Have you introduced yourself to your chat GPT yet? Have you literally gone in and said, hi, I'm Scott Wapner. I host a show on CNBC about stocks. And that way the thing knows how to help you. I know the Gemini is not
a total also ran. It's just not where it needs to be. And from a monetization standpoint, it's all Wall Street cares about. Wall Street doesn't care about Tom Cruise. Wall Street wants to know, will they ever make as much money in this as they used to make when they had a monopoly in search? I think the answer is probably not. We want to move and talk about cyber because if you were watching our program yesterday, things did get a little bit spicy here on the Halftime Report, a debate about Palo Alto Networks.
Stephanie Link, long the name and has been buying more. Malcolm Etheridge selling it and telling us why.
When you look at a company like Palo Alto where 50 to 60 percent of their revenues comes from the federal sector, that's scary to me. There's no way this administration is cutting anything in cybersecurity. They were just on Congress defending their stance to cut the budget by half a billion dollars. There's no way. They can't afford to. They can't afford to. There's no way. They'll find other places to cut. I agree with you that they should not, but I believe that they will.
I like that. I like that. Well, I don't know what you're going to think about this. Palo Alto CEO Nikesh Arora, he saw that debate. He responded and refuted Malcolm's key claim in a post last night on LinkedIn saying, quote, I don't care if people sell our stock, but please ensure your guests know their facts. We are not 50% reliant on the Fed. House 5% have discussed de-risking our Fed business in both earnings calls. We're not only...
Only on-prem, we crossed $5 billion in next-generation security all delivered through the cloud. One of our fastest-growing businesses is Zero Trust. We might know a thing or two. We are platformizing our way not just into customers' hearts, also into their cybersecurity budgets. Our largest deal this quarter was $90 million.
Here's the key point to be made and where I think we had some issues with what Malcolm had to say. 50% of government spending on cyber goes to Palo Alto. 50% of what the government spends on cyber goes to Palo Alto. Not that Palo Alto itself relies on the government for 50 to 60% of its billings.
What percentage of Palo Alto's total billings come from government? In Q3, the company reported single digits. And you saw what Nikesh Arora himself said. In his own words, was 5%. Yes, there have been concerns about slowdowns in billings in prior quarters, including from the government. But the numbers were way off. And the facts matter. They matter to you.
Mad at us. Mad at the companies we talk about. I wanted to get that cleared up. All of that as I go to Bryn to talk about the cyber ETF. We don't have to talk about Palo Alto because you don't own it individually, but you do like these stocks.
- Oh yeah, so Steph won on that one, on that little debate, so good stuff. Yeah, I think this is a secular grower and it's that if you look at areas, you have AI, you have cybersecurity, where else are you gonna get this consistent secular growth rate
So I just think this is a global trend. It's not slowing down. And so I like owning the basket of names because CrowdStrike will do well. Okta had a bad day the other day, but then Palo Alto will run about. So I feel like a larger size position because I own the basket. But this is a secular growing trend that's not going away. So I just think buy the basket, let it run in your portfolio and call it a day.
on my best stocks in the market list we talked about z scaler a couple of weeks back stock still looks phenomenal it's hanging high right by 52 week highs right now and of course the name that i own that i think is the dominant player in the space for years to come crowd strike
which just made a new record high yesterday and seems to be doing that a lot lately. There's like a lot of different ways to win. I agree with Bryn. I've just chosen to pick the one that I think is gonna basically be the biggest name in the space and I'm not changing that strategy. - Okay, let's talk about,
Before we take a break, momentum, because the MTUM, I mean, what was it, six months ago, maybe even more? We were talking about that as a factor doing so well, and then it had a major, major roll, excuse me, rollover. It did hit a record high.
And in May, names like Applovin are up 43%, Constellation 36%, Robinhood 31%, Carvana 30%, Tesla 28%, Vertiv 26%, Roblox 26%. That's a smattering of names from that index. Bryn, you are trimming Palantir, you are trimming Robinhood, and you are trimming Tesla. You want to tell us why?
Well, so to be clear, all of those positions got called away last Friday because my options expired and the stock was above the expiration point. And so to me, it's like a great way to have an exit on a stock. So I think it's hard to know when to sell. Palantir, I've continued to sell down that position. This got called away because I do think it's in the nosebleed from
from a valuation perspective. I still own some, but that to me is a great discipline of it forces me to sell because the stock gets called away. I never buy my calls back early to keep the stock. I just let that process work.
All right. We'll take a break. We're going to come back. We have committee moves to talk about from Brynn. She has some other names out of the retail space that you're going to be very interested in. We have a huge week for that sector. Plus, Josh is back with his best stocks in the market. His stock spotlight today just hit an all time high. It's a tasty one, Judge. Tell you what it is. We'll be right back.
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All right, some brand moves to talk about. They're out of the retail space. Well, that didn't take long. You sold Nike. You took a risk. And the stock's actually been working lately. And then you sold RH. So what's up? OK, if you remember this, it was last time I was on set in the middle of the trade tailgate.
tariffs and quotes, you know, restoration hardware got down to 145. So I said I bought restoration hardware at 145. I sold the May 23 180 calls and I got $200. So the stock was above 180 on Friday, got called away. So if you followed me in, in about six weeks, you made about a 39% return.
and it got called away. So I think it was a good rebound trade off the nonsensical cardboard billboard box that we saw back in April. Nike was the same trade. It did okay. I sold it anyway. I bought it around 57, sold it around 60, 61 on Friday. I just felt like that trade had made its pop. Obviously, restoration hardware moved far more than Nike, so I'm out of the trades. Both trades. Do you just not believe that Nike...
is on a longer term trajectory, higher, the turnaround story isn't as durable as maybe you thought it could be or would be?
No, I purely did this because about a third of shoes writ large in America are made in Vietnam. Nike has 500,000 employees in Vietnam. And I just felt like we're not going to make iPhones, we're not going to make shoes in America. And so I just, that's why I went into the trade. Nike's trading at like 2016 prices. I actually think longer term, going back into Amazon was incredibly smart. I think they got above their
But they do need to do a refresh because people love those on shoes. People like hokas. People like all sorts of other tennis shoes. So I just think it's very competitive. But I think here when you have the stock that's been flat since 2016, for the fundamental folks looking for a turnaround, it could be a good name. I just don't like buying retail to begin with, and I just did it as a trade.
That stock is going lower. I want to make a point here, though. I think she did the right thing. Yeah. But you know what's really important is that Brynn had the guts and the presence of mind to buy on those days when they got down to $145 and below $60. And that's a very brave, very important thing. It's a sign of a real professional portfolio manager. And it's hard. On those days, I was getting calls from individual clients thinking they should sell. Like, no, you know what the professionals do? They buy on those days. So well done, Brynn.
I mean, Nike is... This is a stock that is effectively sitting on an eight-year low. It keeps making lower lows, even when they have a quote-unquote better-than-expected quarter. Like, within a week, the stock's down. The superstars that are all aging. LeBron James is in his 40s. Michael Jordan is...
30 years retired. I don't even know what we do with something like Nike here, but it's just a perennial fallen knife. It's a really tough stock. Price tells a story here. The fact that it's coming back down after the earnings report, it's telling you something. What is a price that tells the story today does not a turnaround story tell tomorrow.
What does the turnaround look like? I'm just throwing that out there for a point of debate. I don't have facts in my back pocket to say this is what the company is going to do and it's going to work.
And they're going to counter the fact that, you know, LeBron soon to be retired and they no longer retire. Let me ask you, let me ask you. Serena's gone and all these other athletes. I get that story, but it's still Nike. Yes, but they have been getting by with the staples. Bryn, one sec. Like they have been getting by selling dunks and Air Force Ones and Jordans. And this is the same thing they've been doing. And look,
You've got these other brands that have come along. They don't have meaningful market share, but they're forcing Nike to fight defensively in key markets like running. Right. And then this thing that they did with Foot Locker and Dick's and all of their retailers, like basically saying, we don't need you. And now coming back to them hat in hand, what did they think would happen? The shelves would have nothing on them. They've been replaced. You know what this does? This brings us back to our Google conversation where Google...
two years and five years and 10 years ago had no competition and now they do nike has more competition now than it did 10 years ago and 20 years ago the competition is changing and that's why the stock's flat hammer sports is your play here yeah yeah we've we bought that you know i was waiting for a better price but when it broke out above its february ipo we bought it last autumn
and really caught the Chinese ramp on it. This thing hasn't looked back. Talk about a company that has a portfolio of brands, Salomon Sports, they have Wilson for paddle sports, Arc'teryx. I mean, the list continues to go on. They've done a lot of those acquired at cheap levels. They had a blowout report last week
and raise full your guidance, raise quarter two guidance. And I see a lot of momentum. Maybe it settles in a little bit above here, maybe between here and $30. But this reminds me of the elevation, the hockey stick that Decker's had a couple of years ago. All right, let's get the headlines with Contessa Brewer. Hi, Contessa. Hi there, Scott.
Health Secretary Robert F. Kennedy Jr. said the Make America Healthy Again report sourced what he called gold standard science, citing more than 500 studies. Now, this is a report that was commissioned to investigate the factors contributing to the rise of chronic disease in children. But...
Seven of the cited sources don't even exist, according to Notice, a nonprofit nonpartisan news platform. Health and Human Services did not comment on the inconsistencies. Israel has accepted a new proposal from U.S. envoy Steve Witkoff for a ceasefire in Gaza. Israeli media reporting that Prime Minister Netanyahu also notified hostages.
or their families rather, about the latest proposal. Earlier today, Hamas announced it received and it is studying that same proposal.
Victoria's Secret website is still offline today, days after the lingerie company was hit by a cyber attack. The company said today it took the site down as a precaution but wouldn't confirm when the cyber attack happened or indeed point the finger at any potential hackers. Victoria's Secret is just the latest retailer to be hit with a digital breach, including British companies Marks & Spencer and Harrods. Scott, that's the news.
All right. Contessa, thank you. Contessa Brewer up next. Josh Brown's got a new name to talk about and his best stocks in the market. Shares just hit a new record high. We will tell you what it is next.
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All right, we are back. Josh Brown's Best Stocks in the Market, a new name, and it is, you said it was tasty. Hint, hint. What is it? You like Capital Grill, right? I do. Yeah, that's nice. That's low-key my jam. Consistently good. Yeah. Darden Restaurants. Okay, I've learned a very long time ago that my taste is not necessarily important when it comes to selecting investments. And what I
I think people should do, should buy, should spend time, should spend money on. Doesn't often matter. And Darden is a really great example of that. I don't go to the Olive Garden. I live in Nassau County, Long Island. I live 10 minutes away from Matteo's, Bellinotti's, Chris and Tony's. I could go to 388. I go to like the best Italian restaurants anywhere outside of Italy anytime I want. Olive Garden supplies...
Italian food to people all over the country who don't have those same options. And they were doing a really good job.
Darden's biggest chain is Olive Garden. It's about $3.8 billion in revenue. System-wide sales at Darden are $12.1 billion. They also own Capital Grill, Eddie V's, Longhorn Steakhouse is a really big part of the business, Yard House, Ruth's Chris. So they're basically catering to the consumer at every level, every income level. They have, we'll call it a solution. Olive Garden is the biggest part of the company's revenue, and that's where things really matter.
Profit margin is increasing. The company has been growing earnings at about 12% a year over the last five years. That's why this stock is on the best stocks in the market list. I think it's way less susceptible to the things we worry about. Who's getting hurt? The low-end consumer, the high-end consumer, the middle consumer. They've got offsetting properties in different markets, and they're doing a really good job. So this is a great stock. What I would do here...
I would use that $200 level as kind of like a line in the sand if I'm trading this short term. That's where the short-term uptrend breaks down. As an investor, I would say more like $180. The stock had resistance there. Then it found support there. That would probably be the level that I would use. So long as this name is above $200, though, I think you can own it. And it acts great. In a difficult market where people are questioning the consumer, this thing is ripping.
Rook. Never-ending soup. You're a restaurant guy. Soup, salad, and breadsticks at Olive Garden. They're not doing that anymore. They're not doing that anymore? I think they still do never-ending pasta, but I think they chilled out with the breadsticks. Nobody needs that. America gravitates towards the all-you-can-eat, the lunch and the dinner. I mean, it's not a surprise that they've been able to be a staple.
I mean, if you drive through some of these suburban areas, you're going to see outside Chicago. Olive Garden's there. Longhorns across the street. Road trips. They're all over the place. And they're attacking, I think, strategically, placing these in the right spot. Capital Grill, the old one.
Quav New York strip. Like if you ever, you don't know where to go, you're at a shopping mall, there's a Capitol Grill, get the strip or they do a ribeye with like a... That's my favorite, the patini rub. What is that? Oh, no, like a Kajan. The Kona rub, right? The Kona rub, that's the one. Josh, can I finally deliver the line I've been wanting to use? Go ahead. Josh isn't just an investor, he's a customer too. Look at you. Wow, we're going to have to leave it there. Wow.
Stealing from commercials past. All right. Up next, Berkshire, Bitcoin and big energy. The debate on three committee movers next. All right. Committee holdings on the move. Bitcoin ETFs pulling in nine billion dollars as investors ditch their gold holdings. Bryn, you've got Bitcoin ETF. Bill has Bitcoin ETF. Josh has Bitcoin personally. But you get the first crack. Buy buy gold. Hello, Bitcoin. Is that where this trade is now?
You know what, at the end of the year when Bitcoin hit 109, it was not able to hold that and you got right close to it yesterday and it's not able to hold it. I think you see between like 95, maybe like 103 support here, but I definitely think it could not break through so you have a double top. Yeah.
I'm a dollar cost average guy on both. They don't trade on anything other than whatever's happening that day. There's no valuation here. Neither one of these has a cash flow attached to it that you could say it's worth 18 times because blank.
So I think the rational way to be in these markets like gold, like Bitcoin, if they're gonna be a long-term part of your asset allocation, set the rules in advance. I buy X dollars each month and no matter what happens, the price gets cut in half, I'm still a buyer. That way I'm rooting for it to come down. The price keeps going up, I keep buying.
That's what I've done. That's what I think works. I know it works. And I think it's more rational than making up price targets based on magic and fairies and rainbows. I think technicals matter here. We own IBIT. For trading, yes. For trading, yes. We own IBIT as a diversifier in portfolios, about 75 basis points. But there are days where this diversifier works. Not necessarily IBIT.
I would not be throwing gold out. Gold looks really constructive. A lot of people were really, really negative on gold recently. And it held a really great technical pattern. It is capitalizing on days that the stock market's down a bit. But speaking to cash flow, you can build out a real asset bucket in a diversified portfolio. You have something like gold miners, which I think are in a tremendously bull market. They do pay tremendous cash flow. Gold itself, if
I think is, again, a great diversifier. There's ways to place this in the portfolio, the way we look at IBIT, the way we look at miners, the way we look at gold, and being able to diversify because the traditional 60-40 just isn't there anymore.
Gold's not that far from its all-time high either, with some predictions suggesting 4,000 is the next. It's in a secular bull market. The big thing is that it's a secular bull market, which means it could go up 50%, like when it's in one of these phases. I'm calling it a generational bull market. I do run a gold—
fund. It's a CTA. I mean, we are very bullish on gold, but we do try to monetize some of the larger moves. I think it's in this elongated bull flag pattern. It has an $80 average true range right now, $80. That's crazy. So you have to manage risk in a very volatile market, but I think it's higher to go. It does need some of the other metals to wake up, copper, silver, platinum starting to really wake up. I think this is just getting started. Okay. Next, Santoli, after this break.
We're back with breaking news from the White House. We go to Megan Casella for that. Megan, what do we learn? Hey, Scott, we're just learning that Federal Reserve Chairman Jerome Powell was here at the White House today to meet one on one with President Trump. The Fed put out a statement on this, saying the meeting came at the president's invitation. He says that they discussed economic developments, including growth, employment and inflation. The statement goes on to say that Chair Powell did not discuss his expectations for monetary policy.
except to stress that the path of policy will depend entirely on incoming economic information and what that means for the outlook. The statement also concludes saying, finally, Chair Powell said that he and his colleagues on the FOMC will set monetary policy as required by law to support maximum employment and stable prices
and will make those decisions based solely on careful, objective, and non-political analysis. So here, Scott, in this statement, the Federal Reserve saying they did take this meeting, they had this meeting with the president, but clearly here sticking to the Fed's role of this third party, not clearly listening to political press
pressure and that sort of thing coming after the president many times over the course of this term so far this year, trying to put some pressure on the Federal Reserve chairman. And this does come, Scott, just for a little bit of context. After at the last Fed meeting, Powell was asked about meeting with the president. He said he had never asked for a meeting. He thought he never would. Now saying the Fed saying today this meeting did come at the president's invitation. Scott. Yeah.
As one usually does. I mean, just to be clear, it's not normal that the Fed chair necessarily reaches out and asks for a meeting with the president to begin with. So this is sort of true to historical norm. Megan, thank you. Megan Casella on the North Lawn of the White House. As you see, our senior markets commentator, Mike Santoli, is here with his midday word. I mean, just speaking about the Fed...
No one's really speaking about the Fed. Right. It's not really about that right now. Well, you have to put the Fed in the category of one of the many things that are wait and see mode. And as long as the economy looks like it's performing OK and you can sort of say it's being resilient or steady as she goes, the market can live with...
a Fed that's going to be completely agnostic about the next move. I do project ahead to July. I think right now, I mean, the market's only priced for like a one-third chance. Maybe there's a cut in July. But there's a good distance between now and July 30th. And we'll see if the conditions remain. But it's interesting because all the back and forth on tariffs this way, that way, court, not court, high, low.
It kind of redeems the Fed stance of saying, we're not going to project what's going to happen because it can change so much. They feel like they're in a good spot. I mean, the market obviously is more interested in NVIDIA and economic data that's coming around. We've got a job support coming up than it is in monetary policy. And the bond market is kind of steady in its range. All the action has been on the long end. And the Fed-sensitive areas of the market have been pretty benign.
I just find it fascinating that the Fed thinks it can control inflation with overnight rates as if they ever have been able to produce inflation before, trying as hard as they could for 15 years and not able to. And now they think they can have inflation resume. We're looking at continuous claims of
continuing to rise in the labor market and the mother of all disinflationary bombs in the form of AI, literally making it so it's getting harder every month for people who have previously laid off to get a new job. Are we just going to ignore that and think the Fed
by cutting 25 basis points is going to resume 2021, 9% inflation readings. It's never going to happen. They're not that powerful. It's not going to happen, but it's not going to hurt. Housing's 30% of CPI. Have you seen the housing data recently? Case-Shiller, home price index all coming lower. Housing starts this morning.
I mean, that's why it's disinflationary. We've got to bounce, make this quick. Look at what Best Buy said today. The stock is pancaked right now. They literally have this demand-destroying tariff thing going on. It's not producing inflation. And the Fed won't make inflation worse by cutting rates. It's just not how it works anymore. It's a different world. I'll see you on Closing Bell. Well, we'll see you on Closing Bell. That's right. Final trades are next.
Bryn, what's your final trade?
Silver. If it can break out here, I think it runs and catches up with gold. All right. Thank you, Bill Baruch. I love her trade. Another diversifier, CCJ. Trump is pushing uranium nuclear. So look for this to settle in. Goodbye. OK, Jenny. Devon Energy. JP Morgan hosted a call this week with the CEO and it was extremely encouraging. The Josh Brown. Toast is three points off. It's 52-week high and I think we'll re-challenge. All right. Good stuff. Thanks, everybody. We'll see you on the bell. The exchange starts now.
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