The Surging Tech Trade 6/10/25
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Okay, Carl, thank you very much. Welcome to the Halftime Report. I'm Scott Wachter here at One Market in San Francisco. Front and center this hour, the surging tech trade. The sector up big over the past month. And that has sent stocks within spitting distance of a new all-time high. We will discuss. We'll get the trades to make right now with the Investment Committee. Joining me today, Brenda Vangelo. Big Technologies' Alex Cantuas.

is with us here on set, Malcolm Etheridge along as well. We will check the markets here where we are in the green across the board. We, of course, are still waiting for some headlines to come out of those now completed meetings in London between the United States and China on the issue of trade. We'll track that too. But the S&P and the Nasdaq up five of the past six days, Bren. And we're on the march, as I said, to new highs in large respects because of this trade. It seems from the commentary today that we are

going to take out those old highs. It's just a matter of when, not if. Yeah, I think if we look at what's happened within the technology sector, it was such a laggard during the first quarter. There were so many concerns over whether spending on AI was really going to continue at the pace that we had experienced last year. And what we learned is that actually corporate earnings were fantastic for the group. They were a leader during the first quarter.

And valuation was attractive at a certain point back in late March, early April. And so we've seen a really big resurgence. And the group continues to be a leader, a projected leader for next quarter in terms of overall revenue growth. So I think as long as the growth can stay intact,

that some of these names can continue to work. Although I will say that there are some where growth looks like it's going to be a little bit more challenged and valuation's still high. So I don't think every name is a value in this group. Malcolm, Barclays today says the path of least resistance is to the upside. Wolf Research, new highs are ahead. You feel the same way?

Definitely feels for the moment that the tech trade especially is intact. But I will say that I'm growing a little bit more skeptical of this market at 22 times on the S&P, where, as you just pointed out, we're still waiting on some substantial, some substantive news coming out of the trade talks with China, let alone all the different regions where

those trade pauses are set to unravel toward the end of this month, at least that 90 day pause that a lot of those countries got. And we really haven't gotten any clarity there as far as tariffs. So I think that we should at least be cautiously optimistic. But I definitely understand that the momentum is on the side of pushing past those February highs.

What about the idea, Malcolm, that it might not necessarily take all that much in a readout of what actually happened in London to get stocks moving higher again? Maybe the bar is reasonably low at this time, just thinking that any incremental advance deemed to be positive is going to be good enough.

I think that's true probably for the next three or four weeks, right? We're heading into a period where we're going to get Q2 earnings. And I think that's where the real rubber meets the road. We're going to get guidance from those CEOs of the retail institutions. We're going to get guidance from the banks. All of those that are really being hit by those tariffs and have a lot more clarity now

on the impact of those tariffs, even though they don't have a lot of clarity as far as the roadmap for where we go from here. Is it 30 percent? Is it 20 percent? Is it 10 percent? We still don't know. But I think just getting guidance from those CEOs of what earnings will look like the rest of this year will really be the telltale sign for markets in the second half.

As we said at the top, we're not even talking about new highs without the resurgence in tech. Dee Bosa is here at OneMarket, as she always is, with what's been driving that comeback, Dee? Well, a lot of it has to do with the AI trade being back, not just because of hype this time, but because investors, they're finally seeing enterprise deployment, strong infrastructure demand, and this is key, monetizable scale. Now, just consider some of the recent headlines over the last few

few days and this morning, OpenAI hitting $10 billion in revenue, Glean raising it a more than $7 billion valuation, Microsoft, it's at all-time highs, Google powering its own rivals. This is all part of the same shift that underscores we are still in early days. Now, take this chart from Goldman Sachs. Enterprise AI adoption, it surged this year, but it still remains below 10%. So,

It's still early, and that is where the upside is for investors. Now, look at the public stocks. Alphabet is up 8% since its I.O. keynote. NVIDIA is up more than 20% over the last month, a lot of that on inference demand and sovereign AI, despite China challenges. And then CoreWeave, of course, the meme stock of the AI world, it's nearly tripled over the last month.

The private trade, Scott, it's booming to new valuations for darlings like Scale AI and Glean. Now, this morning's report about a new and surprising Google Cloud Open AI partnership, that's also positive for the tech trade at large. It means that demand for AI infrastructure, it's outpacing even the biggest partnerships. If that lasts, that will continue to run this trade. But of course, when we get to next quarter, investors are going to again want to demand to see return on investment from all of these investments.

All right, Deirdre, thanks so much. That's DeBosa really setting the table for us. I mean, everything's up a lot since the April low. I think everybody knows that, too. But technology far and away the best. It's up 34 percent and comm services up 26 percent. Big Technologies' Alex Kantrowitz is at the desk with us, too. The news that Deirdre brings about these new developments from the hyperscalers and the deals they're cutting really only underscores why money continues to flow to these names from investors.

Absolutely. With AI, what we've seen is that in hard times, it's an efficiency play. In good times, it's an expansion play. And so we now see leaders like OpenAI taking off some of the restrictions from the early moments where it could only work with Microsoft. It partnering with Google, as Dee mentioned, is a very big deal, right? Because now you see that it's able to take its leading technology and sort of spread it across the entire ecosystem, maybe outside of Amazon.

at this point. And that bodes well for any company looking to build with this stuff, because the real opportunity for growth here is outside of ChatGPT. It's companies that are trying to figure out ways to implement this in their workplaces and use it for that efficiency and expansion. If you have access-- let's say you're a Google Cloud customer, and you have access to OpenAI now,

If you're a Microsoft customer, you can get everything. An Amazon customer, maybe you're still working with Anthropic or Amazon's Nova models. This idea that you can now basically take the best in breed and implement it should lead to an expansion of building, whereas these previous deals have held it back.

What I think is so interesting too is that competition here is so fierce, right? We talk endlessly about an AI arms race, but you don't generally have arms races where you have competitors doing deals in some cases with each other.

Despite the rivalries of the open AIs and the alphabets, Googles, and what have you, you still in some cases have to do deals with your perceived rivals to get ahead. It's who has the better technology that you need to be willing to embrace.

Silicon Valley is all about frenemies, right? You got to have these partnerships. Think about OpenAI. What they built, that was right on top of Google's innovation because Google wrote the paper that basically ushered in this moment of generative AI with the Transformer paper. And so you have OpenAI building on top of their innovations and Google's building right back.

Every single company here pushes the cutting edge forward. They understand that there is room for a tremendous amount of growth throughout the entire ecosystem. You have multiple companies that are over $3 trillion. That doesn't happen if one company takes all the gains. So I think you're right to point out that you have to work with your rivals. And if you do, it's sort of like may the best technology win. And we see that there's a leapfrog every couple of days.

And each company that's trying to be the leader thinks that it has the capabilities to leapfrog next. And that's why they play this way. It's so interesting, too, that what is the best technology today may not be the best technology quite literally, not just figuratively tomorrow. And that's the way that we need to think about all of this. You own Alphabet.

Brand new own meta they agree to take a 49% stake in the data labeling firm scale AI for 15 billion dollars our depots are confirming that as she just did a few moments ago so how about both of those stocks

Yeah, I think about both of them a little bit differently. With Google and Alphabet, we are a little bit concerned just about how the evolution of traditional search ultimately ends up and what happens to their business model. No doubt that Google has a ton of data that's incredibly important. They've invested a ton of money in AI. Gemini is completely legitimate and competitive in the marketplace.

but what happens to their traditional advertising-driven search model. With Meta, I think we're seeing that the investments they're making in AI is paying off with advertising, and I think they were ultimately, that platform, I think, is positioned to be a continued winner in this environment

where traditional search is being disrupted, traditional media is being disrupted from an advertising standpoint. So I think that when we look at a place like Meta, where they're making more investments now, I think we had an announcement just today about further investments in AI from Meta, I think partially to justify their CapEx guidance, which was higher last quarter. That's been a source of some controversy. But I do think the company is making the investments where they need to make them and is really positioning its model to continue to be a winner in this environment. Back to the arms race.

aka Mark Zuckerberg personally hiring to create a new quote, super intelligence AI team, according to one report today. What does that mean to you? Well, Meta has been really working hard to further the state of the art in open source artificial intelligence.

But the problem is it hasn't worked according to plans. Llama 4, their latest model, was largely viewed as a disappointment outside and inside. So they needed something to supercharge that company. Now, superintelligence, that is a jargon word. It's a hype word. But I don't think we should look past what they're doing with this acquisition. It's sort of like an aquahiresition because they're going to get 49% of the company. Alexander Wang is going to come on board. I spoke with him right before New Year's, talking to him about where he thinks

AI is going to go this year. He's interesting for a couple reasons. First of all, he fits perfectly with that company in terms of his political adeptness. He has been very close to the administration. He speaks to the people they speak with. Now, maybe this is a weird data point, but he was on the Theo Vaughn show, which is sort of becoming an indication that you're kind of in with that crowd. And that was a great episode. But also, his bet is very interesting. He's betting on using data to scale AI models. We talk a lot about

NVIDIA and the infrastructure side. But there has been a undercurrent in Silicon Valley that if you don't have the data, it doesn't matter how much compute you have, you're going to eventually hit a wall. So scale is all about building that

that extra data source for artificial intelligence, in some case hiring PhDs to feed information into these models so the models get smarter. And if what Mark Zuckerberg saw was that compute is hitting a wall, remember, he has so many GPUs, they've had the lead because they needed them to optimize Instagram. If he saw that wall and said what we need to get to the next stage,

is going to be data. He just partnered with the perfect company. Yeah. It's interesting, too, when you look at, as we say, this resurgence in tech has stocks really on the doorstep of a new high. We're talking 2% or so on the S&P 500. What was a terrible trade for a while has turned into a great one, and that's the semis.

The SMH ETF is up 44% off the April low. Some of the components within there, it's just astounding the gains that we've seen. Microchip, a double. Micron, 74. On Semi, 70. And on and on. The SMH is up five of the last six days. Christina Partsenevelos follows this so closely. She joins us now with more on why these stocks are moving yet again.

Yeah, they're staging a comeback with just to add more stats for the SMH, the ETF heading for its third straight weekly gain driven by specifically strong earnings and shifting policy wins. So the biggest catalyst today is a White House official signaled President Trump could ease chip export restrictions to China in exchange for faster rare earth exports. So a rocks for chips deal that could help names like AMD and NVIDIA. NVIDIA's dominance got another boost when Huawei's CEO admitted their chips

still lag U.S. peers by a full generation. This according to Chinese state media just over the last 24 hours. NVIDIA's CFO reinforced this edge just last week at GTC Paris, citing margin recovery and improving black oil supply. And that's why you're seeing shares up 22%.

and a half percent just in the last month. And the momentum spreading. Micron jumped 3% today after announcing their shipping high bandwidth memory, HBM4, 36 gigabyte samples to key customers, while TSMC gained about 2% on a 40% year-over-year May sales spike. TSMC now on its longest winning streak since December 2023. That's seven straight days in a row. And then here's the key metric, Scott, to your conversation. SMH has really climbed significantly

16% this past month versus just, what, 6% for IGV, which represents software, and 6.5% for the SPY ETF as well, which really signals a performance gap and a clear rotation back into hardware as AI infrastructure builds and those geopolitical risk ease. Scott?

Christina, thank you. Christina Partsenevelos, let's not kid ourselves either. You go back to NVIDIA's earnings day, which was so highly anticipated, and you needed that to go well for this trade to continue to work. It did, in fact, and that in many respects is why we find ourselves here today as well. Brenda, you own that stock along with Broadcom.

We do. And what we've seen, obviously, when NVIDIA reported, the market was in a much different place. But now we have, when Broadcom reported recently, they reported a perfectly fine quarter, gave strong guidance. AI is really continuing to drive that story. Even the non-AI semiconductors stabilized a little bit more than I think everybody had expected. But the stock had a bit of a ho-hum reaction. So I think it's just telling that this group has come a long way fast,

and the expectations are pretty high. Still believe that it's an important exposure to have in a portfolio, absolutely, and that there will continue to be ongoing demand as AI infrastructure spend continues, that both of those names will be very relevant and important, but have to be mindful a little bit of how far we've come and that expectations just ratchet up

as they get more expensive. Malcolm, they may have come really far really fast, but B of A, for example, and I'm assuming many others are still bullish on the space. They put out a note today because of demand trends, data center and AI levered companies like the NVIDIAs of the world, the Broadcoms, the AMDs and the Marvell. You own in the very least of that group, NVIDIA too.

And Brenda pointed out the fact that they've come so far so fast. I think it's really important to point out the fact that they're really pegged to, I would say, Broadcom and NVIDIA. Whatever direction NVIDIA goes, you know, we saw NVIDIA's earnings basically touting the demand that still is there and their ability to ramp up production to meet Blackwell demand. Now we're hearing that they have to actually increase production even more to meet that demand. And that's a very positive situation.

signal for the entire sector. So I think it's still that same trade. As NVIDIA goes, so goes the rest of the semis trade. So I think investors should just be very cautious to pay attention to how fast this trade has run and be concerned a little bit about how much further it can go instead of maybe considering the fact that this is going to continue to run at this pace throughout the rest of the year.

We're watching Apple shares today, too, which are modestly in the green a day after the highly anticipated WWDC. It's what brought us out here to the West Coast.

in the first place. Steve Kovach was alongside us yesterday. He's here today with some reflections as everybody has now had some time to take everything in that happened yesterday in which you put on social media, you called it, and this is cold, man, the Worldwide Meh-velopers Conference. Why was that your big takeaway?

It's not just my big takeaway, Scott. That's what the street is saying this morning, too. And that was, by the way, I was linking to the Kramer's investing club's takeaway when I tweeted that. But look, the street has the same reaction that we had right after the event on closing bell yesterday. And it was just kind of

lackluster, muted. If you're hoping for more artificial intelligence announcements, you didn't really get anything groundbreaking. Let me just show you what the street's saying right now. UBS, more evolutionary than revolutionary. Mellius, nothing that moves the needle, and so on and so forth. There are some positive sides, and you do have some analysts also, on the other hand, saying, like I

Goldman and Morgan Stanley and so forth giving some more positive reactions, saying the foundation is there, the groundwork is there for artificial intelligence. It's just going to take more and more time. One thing that I did digest a little bit overnight, though, Scott, is this idea that developers, this was the biggest announcement probably on the AI front, developers can tap into Apple's AI model on the

phone. So it doesn't have to either pay OpenAI or one of these other cloud-based services. This is a way for them to kind of save costs and develop an Apple's AI ecosystem. That is one kind of carrot, if you will, to keep developers making AI stuff on the Apple platform. But we'll have to wait and see how the rest of the week goes and how developers are reacting to the tools Apple is giving them. And at the same time, the competition is just not stopping here. So

We're now spinning it forward. A lot of the street also saying, let's wait for some cool hardware. There's some optimism about this new thin iPhone coming out. And then even further out next year and the year beyond, the anniversary editions of the next iPhone, believe it or not, hitting close to 20 years. And some new foldable form factors and things like that that might juice some excitement. But for now, Apple's kind of sitting AI out, Scott.

All right. We'll see what happens. Steve Kovach, thank you once again for setting us up for our next conversation. Eric Woodring is Morgan Stanley's star analyst. He covers this company and he joins us now. It's good to see you, especially the day after this event. And you heard the commentary not only from Steve, what what feels to be sort of pervasive here fails to clear a low bar was a headline. Lackluster, meh, nothing that moves the needle. Does that match with your own takeaway?

I think those are generally fair takeaways following the Developer Conference, Scott. I think the problem, and your prior guest alluded to this, is the market in the industry is moving so quickly. And if we rewind back to the Developer Conference of 2024, we got a lot of features that Apple previewed that were very exciting, excited the market, excited consumers.

And we want to see progress towards those goals, towards those targets. We didn't get much. Software head Craig Federighi talked about having a more intelligent, more personalized Siri in the coming year.

Listen, the market is very impatient when you see the quick pace of AI development. And so it's a combination of what we got wasn't necessarily what we're seeing from others. And then what we are seeing from others is moving so quickly that the concern is that Apple will be left behind. Now, I would mention that historically we've seen Apple come in late to technologies. They kind of see how the market develops.

They try to create something that is better, and then they try to take all of the profits. And so it's not necessarily unusual to see Apple somewhat late to technologies. And as your previous guest mentioned, adoption of these technologies is still very early.

But the name of the game is progress. And what we didn't get at the developer conference was tangible signs of significant progress. We got steps forward. Opening up the large language models for developers is an important step forward, but it's just not enough when the pace of the market is as fast as it is right now. Yeah, it's hard for, you know, I guess the analyst and the investing community to have to rally around another P word, that being patience. We're sort of tired of

of being patient, but you make a good point. It's one that we raised with our group yesterday. Traditionally, Apple marches to its own beat, its own drum, its own timeline and timeframe. They don't really care what the investment community nor the analyst community really wants. They'll deliver what they think they can deliver when they're ready to deliver it. And history has been on their side.

That's correct. And again, I think it's very easy to take a step back and think about how we all use our Apple devices, whether it's our phone or the ecosystem of our devices, and say, let's kind of dream the dream if Apple could deliver a very high quality device.

kind of virtual digital assistant that is voice controlled. They have the data, they have the user base, they have the privacy standards, they have the ecosystem. So these functions can work kind of across all of your different products. They have the partnership with OpenAI. They're seemingly willing to make partnerships with other large language and foundation model providers. You know, it's very clear or I think easy to look forward and say,

We can envision a world where Apple is a clear winner in this AI trade. But then you take a step back and, again, you think to last developer conference and you say, well, we're not at the point of where even the company introduced some of the features a year ago. Again, it's this patience factor that I think investors are not willing to tolerate right now. The stock trades at 25 times earnings on calendar 26 numbers.

Over the last year, it's traded kind of 25 to even above 30 times. And so the market has discounted the multiple to say we're concerned about growth. We're concerned about predictability. We're concerned about the competition within the AI landscape. And until we as the market feel better that things will be moving forward with kind of more tangible, larger steps, the valuation multiple will have a ceiling on it.

Yeah, that's a good place to leave it. Appreciate your time very much, Eric. We'll see you soon. That's Eric Woodring of Morgan Stanley joining us with his first take on what happened yesterday. Malcolm, you told us right after it ended yesterday that maybe the stock was attractive here, that maybe you were thinking about adding to it. What about that? Did you? Would you? Will you?

Yeah, so I haven't found the opening yet, but I do think we've reached what I'm referring to here as peak pessimism around Apple. We started getting analyst calls almost two years ago now, at least starting to sound the alarm when we saw declining iPhone sales start to kick up around then. We've seen the issues with tariffs related to China. Obviously, that's going to impact

Apple more than a lot of other companies. We've also seen the lag in AI development that's been covered a ton. There's all the reasons that, you know, investors may not be considering Apple. It's the reason it's lagging behind its peers significantly, like a Microsoft or a Meta right now. I'm thinking that this is probably setting up to be the place where you want to be adding shares somewhere in here. We saw right after Liberation Day, I think it traded down as far as 172, somewhere in that range. So we know that that's roughly where the floor is

as far as bad news in this name. We're right at the 50-day moving average, but momentum's not on its side. It's well below the 100 and 200-day. All of those things together, I think that we're probably on the cusp of a hardware event that is actually going to impress. And I think that we're probably setting up here for Apple to make some sort of announcement that does get investors excited again. And I think that

all of the conversation we're having around WWDC and Apple specifically really reiterates just how important it is that a company like this gets this right, because Apple is reflective of how much opportunity there is in what I'll refer to as consumer AI, where everything else we've been talking about to this point has been strictly in the enterprise.

All right. We're going to take a quick break. We have a move of Malcolm's to get to today, and we certainly will. We also have our call of the day, a rare one at that, a double downgrade from Mickey D's. Doesn't happen all that often. We're back in two. Lights, camera, innovation.

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All right, welcome back. Our call of the day today, a double downgrade for McDonald's at Redburn Atlantic. Kate Rogers is back and we are so happy to have you back and you have the details for us. Thank you so much, Scott. Great to see you. So Redburn hitting McDonald's with that double downgrade this morning to sell from buy on concerns over GLP-1s leading to declining foot traffic, coupled with worries, of course, about the economy. It also lowered its price target to $2.60 from $3.19. McDonald's oftentimes

performs well during economic slowdowns, but clearly Wall Street is challenging that narrative. The issue here is value and consumer perception around costs as restaurant inflation continues to outpace grocery costs. On the GLP-1 front, the note refers to behavioral science. So if one person in a home is on one of those drugs, that reshapes dining habits for an entire family. Worth noting here, this is the third downgrade that McDonald's has seen in the last two days. The note says foot traffic declines are expected at lunch and dinner and will impact not only

McDonald's, but also other chains, including Domino's and Yum! Brands KFC. Scott, back over to you. All right, Kate. Thank you. That's Kate Rogers with a rare double downgrade. Malcolm, you have any interest in this name? Have you ever owned it? If not, why?

Having owned McDonald's, don't love anything, especially right now, that's tied to consumer spending, as we keep getting stories about whether the consumer is actually slowing down or not. But I do think the one positive buried inside of McDonald's is their growth plan and their plan to add additional franchisees and open additional stores from here. So, if you are looking through at where the profit engine is going to come from, it's going to come from them collecting those up front with new franchisees coming into the system.

I mean, for a double downgrade, down one and a quarter percent, not that big of a deal, at least from the market standpoint today. JP Morgan's price target in terms of other calls raised to 320 from 300 at Wells. That's Mike Mayo, the well-known analyst over there. Are you on the stock?

We do. And I think if we look at, you know, J.P. Morgan is the most dominant bank in the U.S. And I think we're in an environment where large banks are going to continue to gain market share just as we move to the digitization, AI, how that impacts the consumer experience at the bank. So there are a lot of investments that these large banks have the ability to make that small regional banks do not.

And I think that's going to continue to set them apart. So we continue to own JP Morgan. We've owned it for a long time. It's our only position within banks. Oh, the only one. It is the only one in traditional banking. So we're sticking with it. How about Disney, which you own as well? The price target to $130 today, reiterated buy at loop.

They finalized the Hulu purchase from our parent. What do you think about this name from here? Yeah, so I think the Hulu purchase was really a lot lower cost than was originally speculated it could be. And this will allow them to really leverage Hulu and do more bundling with Disney+.

So, I do think it's a positive. And, overall, this name has really recovered quite nicely. Trends have picked up. I also think this deal they have with the Abu Dhabi location is fantastic. I mean, they're not paying to open it. They're just going to manage it and collect a service fee.

And so that, I think, is a great economic proposition for that name, as well as just great for the brand overall to expand more globally. Let me get your take on Tesla while I'm on this topic, because there were two more calls on it today. There were a couple yesterday as well. Reiterated underweight today at Wells, 120 bucks is the price target. Reiterated underweight at J.P. Morgan today. And there were a couple of downgrades yesterday in this fallout between Musk and the president.

where that goes from here and whatever ramifications there are resulting from it. How do you view that stock today? Yeah, so obviously it's a bad moment in terms of PR for Elon Musk. But I actually do think the more I've thought about this after this breakup happened, I actually think it's the best thing for both parties because Elon can distance himself from the president. I think that's hurt some perception of Tesla, especially in certain areas of the coasts.

But when we look at the company overall, I mean, this week on Thursday, we have the robo-taxi event. That should be a catalyst or at least give us a view of how that project is coming along. Then you have the lower-class vehicles, which are coming down the pipeline.

robotics. So there's a strong pipeline there of innovation that I think we don't see in a lot of large companies. It's a highly controversial company, highly volatile stock, but we're sticking with our position. Okay, Malcolm, I mentioned that you had a move to come out of the last block. It's a sale that you've made and it's the cybersecurity ETF.

the cibr um why now simply because of the gains that we've seen from many of these stocks that are that are within that that index that etf it's yes and so it's up six of the last seven weeks it just put in a new 52 week high uh last week our new all-time high last week and that actually uh

SCARES ME A LITTLE BIT, MAKES ME LOOK UNDER THE HOOD AND SEE WHAT'S REALLY DRIVING THAT. AND IF YOU LOOK A LITTLE CLOSER, YOU NOTICE THAT IT'S BROADCOM THAT'S ACTUALLY NUMBER ONE, THE TOP HOLDING IN THAT PORTFOLIO AT LIKE 9%. AND THEN ROUNDING OUT THE TOP FIVE, YOU GOT INFOCIS AND CISCO. AND SO IT'S NOT NECESSARILY ONE THAT I PLAN TO GET OUT OF AND STAY OUT OF.

after they rebalance and reset the holdings, the waiting in those holdings a little bit, we'll be looking to get back into it. But to your point, with us up more than 30% since we got into it last year, with it meant to be a tactical overweight to play that cybersecurity trend, I think it was a good place to take some profits and just wait and let the rebalance happen.

I just feel a little crowded to you. I mean, how do you view this space? Yeah, I like what Malcolm's saying. The shifting balance in that ETF doesn't seem right to me. However, I will say that this space is definitely going to be a big one. If you think specifically about AI, and AI drives so much of what we see in technology today, we have very powerful, open source, artificial general intelligence models.

generative intelligence models, like DeepSeek, for instance, that bad people can get a hold of, deploy on their own machines, and then send very personalized phishing attacks out to folks. So I expect that we're going to see an increase in these type of attacks, and therefore cybersecurity is going to be very important. And by the way, this isn't just text, it's moving into voice.

So you could have people's voices cloned and then call their family, like our family. We have a code word that if somebody calls and says I'm in trouble, we ask for the code word. Because if you don't give the code word, you might be an AI voice. And so I don't think most families have that. So I think we're going to see so much more. I think that probably extends beyond just like the traditional cybersecurity companies. But this is going to be a very big issue. So if you can't invest in the companies trying to prevent it from happening,

I think that's a pretty good idea. All right. Let's get the headlines now with Silvana Hannau. Hi, Silvana. Hey, Scott. Good afternoon. U.S. Ambassador to Israel Mike Huckabee told Bloomberg News today that the U.S. no longer wholeheartedly endorses an independent state for Palestinians. Huckabee said there needs to be significant changes to the culture and that it probably won't happen in our lifetime.

Asked if a Palestinian state even remains a goal of U.S. policy, as it has been for decades, he said, quote, I don't think so.

House Speaker Mike Johnson said today that California Governor Gavin Newsom, quote, ought to be tarred and feathered over the protests in L.A. because he's a participant and an accomplice in them. Newsom and State Attorney General Rob Bonta sued the Trump administration yesterday, claiming the state's sovereignty was trampled when President Trump ordered the guard troops to immigration protests in L.A.,

And Uber is teaming up with Startup Wave to test self-driving vehicles in London. The companies say they chose London because of its different road layouts and traffic laws compared to the U.S., where most testing has been done so far. Scott, I'll send it back to you. All right. So, LaVonna, thank you so much. LaVonna Hannau coming up next. AI driven investing. We'll hear from the co-founder of Portfolio Pilot. This company is looking to revolutionize the way you invest with the help of AI. Halftime's back after this.

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That's 1-800-Flowers.com slash Pandora. All right, welcome back. Our next guest company bills itself as the world's first AI-driven personal investment coach. Alex Harmsen is the co-founder and CEO. He joins us here at OneMarket, a portfolio pilot. It's good to see you again. Hey.

Hey, thanks for having me on again. It's been a while since we've spoken with you. Last time we had you on in September of 23, you had 13,000 users, $6 billion in assets on your platform. Now you have 30,000 users and some $30 billion in assets on the platform. How have you achieved that growth?

It's been exciting, absolute massive excitement. The biggest thing I think is that, I don't know if we're quite ready for AI to manage your money for you, but the idea you could hook up your finances, accounts, answer a few questions, and then have AI find optimization opportunities for you.

I think just as the Overton window expands, as people get more comfortable with AI, that feels like an obvious solution. And we actually have a lot of people just reach out and find us. Sometimes even chagity or perplexity sends people our way as they're looking for this kind of solution these days. So to be clear, and you underscored this at the top,

AI, your platform doesn't use AI to actually manage people's money, but it does in terms of, I would put in my personal information, my net worth, this, that, and the other, and it comes back to me with what? Proactive financial advice. And so, actually, the parent company behind Portfolio Pilot is a registered investment advisor. So we can actually give you an individual fiduciary financial advice, everything from

A specific investment advice on how to increase your risk-adjusted returns, increase your downside protection, lower fees, optimize your taxes, think about long-term retirement planning, estate planning. Actual stock picks and investment choices or no? Individual stock picks, ETFs, mutual funds, crypto.

even takes into account your house, jewelry, cars, private equity, student loans, truly across the board. How does it work, though, in an environment like the one we're in, where we're so susceptible to... It's a headline-driven market. It's a, in many respects, the people who come on and say it's a stock picker's market. I can understand this working well in what is a set-it-and-forget-it environment where everything seems to be going up and you're generally...

have the assumption that it might continue to do that for a while. But what about in this kind of environment? How accurate is it? I think this is one of the best things about having a platform like AI trying to remove a lot of the human bias from the situation. It's very focused on long-term investing. And so it's not, we're not trying to say, you know, you should buy this stock today because it's really hard because it's reacting to the tariffs.

It's for the 80% of people that want to be somewhat involved in their finances, that know there's optimization opportunities that must be there across all these different accounts. They're not trying to trade the market every single day. And so for them, a lot of it is about making a more efficient portfolio, finding high expected return, low correlated assets, and then making sure you have the right mix of downside protection at your risk level with the lowest fees.

It's $29 a month for what you call a gold platform, and platinum is $100 a month. $100 a month is a lot. What am I getting for a platinum subscription?

It is a lot. This $99 a month tier, that platinum tier, is mostly for people that want to be a little bit more involved, actually interact with the agent. We have this AI equity research tool. But Scott, for most people, the $29 a month tier is perfectly fine. It's $20 if you buy an annual plan.

And our hope is that it pays for itself with tax optimization opportunities on its own and thinking about even a small increase in your expected return or small decrease in your downside. Our hope is that it pays for itself, it doesn't break the bank,

And it's something that is mostly just there in the background to give you this sort of proactive optimization advice. All right. Appreciate you being back with us. We'll follow the trajectory of your company. Wonderful. Thank you so much. All right. Up next, Mike Santoli. He's back with his midday word. We are back on the halftime report today from One Market. Our senior markets commentator, Mike Santoli, is here with his midday word. What do you make of the price action today?

Upward grind, Scott. You know, when the market's in wait-and-see mode, which we clearly are, you know, we're digesting two strong weeks, which came at the end of two very strong months, it can kind of waver and find excuses to back off. That's not what we're doing. We're sort of finding ways to stay supported up near these levels. You know, today's high in the S&P where we are right now is a marginal new high for this move. So grinding toward progress, but supported by

the parts of the market that haven't as much participated that are maybe more risk-seeking. You have the Russell 2000 outperforming again up three-quarters of 1%. I also was looking, the 20 best-performing S&P 500 stocks year-to-date, 17 of them are down today. Of the 20 worst-performing stocks year-to-date, 17 of them are up today. So clearly money just kind of looking for places that haven't moved as much yet. That can't last forever. Obviously, you're going to need some of these –

cards to turn over in a favorable way to keep going here. But volatility continues to leak lower. The VIX now below 17. So everything seems pretty comfortable and benign for now. We'll see if the headlines cooperate with that.

Yeah, slow and steady. I'll see you in a bit, Mike. Thank you. That's Mike Santoli, our senior markets commentator. Up next, CNBC unveiling its annual Disruptor 50 list. The company's degenerative AI revolution is transforming that list, as you might expect. We'll have the details next.

CNBC unveiling its 13th annual Disruptor 50 list today. Julia Borsten joins us now to discuss. Give us more information on this. Well, we've really seen the power of AI impact this list. There are so many companies on this list that say AI is an essential technology. In fact, 21 companies on this year's list said it's an essential technology.

say that AI is an essential technology for generative AI is an essential technology for them up from 13. And if you look at AI more broadly beyond generative AI, 38 companies on this year's list say that AI is critical to their business up from 34 in last year's list. And just looking at the top five here, Andrel in the number one spot, Scott, this is a big deal here to have a defense tech company in the number one spot. OpenAI at number two was the number one company both last year and the year before.

It is interesting. You had to figure too, Julia, that AI was going to be the central theme in all of this, of course. Certainly. And what's fascinating is if you look back at before ChatGPT launch, which was really that pivotal moment for the tech ecosystem, only

Only 11 companies on this year's list were on the list before ChatGPT launched, and many of those companies have really embraced generative AI. Andrel, a perfect example, has really leaned into AI. Canva, number five on the list, that was a design platform, and they've leaned so heavily into AI just in the past couple of years, really integrating partnerships with ChatGPT and the like. So the story here seems to be if you want to succeed,

in this tech landscape, AI has to be essential to your business. AI is the new technology. Yeah, no doubt about that. Julia, thanks so much. That's Julia Boorstin. And on that note, we have a special closing bell coming up from OneMarket in just a bit. A look at the next wave when it comes to AI, the people, the companies, the trends in tech.

technologies that will drive this revolution forward and, of course, how you can invest in it. We'll have exclusive interviews today with the AWS CEO, Matt Garman, Andreessen Horowitz, general partner Anj Mita. He was the first outside investor in Anthropic. VC Jeff Richards with us today, along with portfolio manager Ankur Crawford. She invests heavily in the AI trade. We'll do final trades next. Do final trades. Malcolm, what do you have for us today?

Yeah, believe it or not, I'm going to go Apple with all of the coverage we've been talking about the last couple of days on this name and the fact that there wasn't a sell off in the shares or even a meaningful downgrade by analysts. I think that's a good sign. Time to buy Apple.

All right. Thank you. AK, thanks for being with us these last couple of days. And you actually have a final trade for us. I do. Mine is Alphabet. Bets in consumer AI. Bets on the enterprise side with Google Cloud. We just saw news today. And then crazy stuff like Waymo that we don't talk about. So Alphabet. What do you got? Quanta Services. Growth of electrical infrastructure. And it's not just data centers. All right. That does it for us. A closing bell special. The next wave in a couple hours. I'll see you then.

You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern, only on CNBC.

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The CNBC Disruptor 50 list revealed. Meet the innovative companies shattering boundaries, shaking up industries, and changing the game for good. See the complete list at cnbc.com slash disruptor50.