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I'm Scott Wapner, and you're listening to CNBC's Halftime Report, the podcast, the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in.
Carl, thank you very much. Welcome to the Halftime Report. I'm Scott Wapner, front and center this hour as trade talks with China are finally set. Is it time now to be more bullish on stocks? We will discuss and debate with the Investment Committee. The Fed decision is looming and several key names are moving on their earnings. Joining me for the hour today, Josh Brown, Joe Terranova, Shannon Sikosha.
And Jim Labenthal. We'll check the markets here. NASDAQ is red. And we're going to get to that big story in a minute. Everything else is green and hanging in as we focus on those talks with China. We've got Bitcoin on the move, too, approaching 100K. Bond yields, they are down the 10-year at 428. But the story of the day, and I know you've heard a lot about it already and for good reason.
Google, Alphabet shares down substantially, a move that you just don't see all that often. Those shares were down 7 percent, and it's really because of those comments that Apple's Eddie Cue made that searches in their browser fell for the first time in April. It is a significant moment in the whole anthology of where AI and search is going.
Jim, you own the stock, Alphabet. Now, Apple has implications here, too. And that stock is lower. And we can get to that in a minute. But this seems to be focused solely or primarily, probably better said, on Alphabet, a stock that you own. What do you think? Well, you know, it's obviously very new news. So I want to be careful about knee jerking one way or the other. My inclination is to hold
through this, particularly after the damage that's gone on in the last couple of hours. What I will note is that this drop, and you mentioned it doesn't happen that often, but it has happened before. And I'm thinking, Scott, to two years ago, roughly two years ago, when there was a problem with Gemini, the search engine. Do you remember this? They misidentified in some trial run, they misidentified a celestial object. Stock got absolutely clobbered. And it was the death knell, supposedly, for Google
and its AI search, et cetera, et cetera. We've been talking ever since then about competitive threats, which so far have not impacted the financials of Google. Maybe someday they will. I want to go back to where I started. I'm not going to knee-jerk positive. I'm not going to knee-jerk negative. The stock is obviously down quite a bit. The valuation was cheap to begin with. My inclination right now is to stick with the shares. But obviously, I want to parse this a little bit more. You're really speaking to what I think is a bit of a
different incident, one that caused or needed a tweak, perhaps, versus one that brings up the existential threat and crisis around
There are two different stories altogether. This is the big worry from day one, is it not? It is. But I just, with what you said, when that happened, and it actually happened another time as well with, I forget if it was Gemini or BART or whatever, when that happened, it was absolutely categorized as an existential threat, that Google was going to lose its search business when it happened. Absolutely. Stock was down to something in the mid-90s.
had big drops when it happened. And, you know, we see where it is today, even after the drop that we're seeing today in the 150s. All I'm saying, again, not knee-jerking one way or the other, just saying this has happened before in the last couple of years. I have a different perspective. You sold it recently in the rebalance. Yeah, the strategy sold out of it. Okay, it looks really good today. But I think this is a big deal. This is the cash cow.
This is their primary business. This is how they're generating their cash. This is the primary business they're in. And the concern over the last several years has been, number one, they're not moving fast enough to fend off the competition. And now here we are where there's actual evidence being suggested in this testimony today that whether it's chat GBT, whether it's grok, whether it's perplexity,
that there actually is a capture of market share. And that is a really big deal fundamentally. So, Josh, you recently sold it April 15th. You got out of Alphabet. The significance of this moment in the big story here is what in your mind?
It's extremely significant. Joe is right. I think Jim will eventually come around to this point of view. It's not that Google now disappears. Google has a steady business that will consistently be a good business. It's that the duopoly that we've become accustomed to over the last 10 years of Meta and Google being 70, 80% of online ads, that is now what's in question. And
to act like this isn't a watershed moment I think is to ignore the how powerful Google has been since even before it came public so just and and you could play back my comments from last two weeks I've been saying this on for the first time Google finds itself competing in core search it never had to compete before it came public in 2004
after the first wave of search engines all disappeared and it was effectively yahoo and msn left on the board and so google came public twenty one years ago they had uh... dominant market share and they never lost it we've never seen google really fight for you know they've been fighting on on
on other battlefields like Cloud. They've been fighting on workplace productivity with the G Suite. So it's not that they can't compete. They never had, this was in the bag.
basically, Google could go into any business that they wanted to go into because they had a money printing machine in the basement and it was never in question. And now what we're seeing is the Gen Z's are going to chat GPT first. They don't want a list of blue links, which is basically a treasure hunt. Here, go find the answer. They just want the answer. And it's not that Gemini is not delivering that on
on the top of their search query results it's that Gemini is not doing that by themselves there are other competitors that have gained a meaningful amount of mind share market share search share inquiry share however you want to phrase it and it's the first time that we've ever had to worry about the money printing machine in Google's basement being 95 percent market share so they don't compete on traditional search this is important
There's a company called DuckDuckGo and then there's Microsoft's Bing. Those are not the competitors. The true competitors are the standalone
AI services and they are growing increasingly complex and their results are getting better and they're easier for people to use and the younger generation are defaulting to going directly there. So that's what we're talking about here. It reminds me of PayPal, but on a much bigger scale.
Like PayPal's fine. The service works. People still use it. It's still built into millions of websites. It's not going away. But it's a stock that sells at 12 times earnings ever since Apple purchased it.
Apple Pay and Shop Pay and Square and all of these other services came along that compete with it. There was a time when PayPal had dominant market share as the shopping cart payment solution for every e-commerce site, and that time has now passed. I think the way that you want to think about Google, value tech, Jim and I had this debate last week on the air, that's the way that we need to start thinking about it. And it's not the end of the world, but it's a very different dynamic.
Let's bring in Steve Kovach, who covers all of this, certainly follows everything big in tech. Existential worst fears, are those too strong of comments?
when thinking about this issue, Steve? Not at all. And I hate to pile on Farmer Jim over there, but I do agree with Josh and Joe on this. It's, look, because look where we're getting this testimony from. It's coming from Eddie Q, in charge of services at Apple. Outside of Google, no one has a better insight into how Google searches are performing up or down, week by week, month by month, quarter over quarter, than this man. He sees how people are typing into the Safari browser on their iPhones, how
often that's happening. And he said it dropped in April. And he specifically said a lot of that is due to artificial intelligence, that artificial intelligence search engines, like ones they're considering integrating into iOS, he testified. Perplexity, Anthropic, ChatGPT, all of those that we talk about so often.
are eating into this share. And now we're seeing at least a little bit of evidence from someone outside of Apple who does have great, outside of Google rather, who does have great visibility into the search ecosystem to say this. And by the way, Scott, this is not just an ad
alphabet problem. This is also an Apple problem because the reason why Eddie Q is there testifying on this is because one of the remedies under consideration in this antitrust trial that Google lost to the Department of Justice is getting rid of this agreement the two companies have where every time they have this revenue share of searches on
the default search engine within Safari. So every time you and I go into Safari, type in a query, there's a revenue share going on between Apple and Google. And Apple basically gets free money from Alphabet for this. They tested, Eddy Cue testified in this trial earlier that it's up to $20 billion a year. That would be a fifth
of services revenue and services is becoming a worry point here now for Apple because they did not give guidance for the current June quarter, which they have been. It's been growing by double digit percentage points. It's picking up a lot of the slack from these sluggish iPhone sales. And so much of that is attributable to this agreement that might get blown up by the government from Google. So that is another thing that we have to look at here is
Apple potentially partnering with one of these other up-and-coming AI search engines in order to take over this Google relationship or at least provide another or better or different option than what they're getting right now through Google. To Josh's point... It's $50 billion...
Go ahead, Josh. It's $50 billion too. Yeah. The money Google has paid Apple all these years to be the default search engine on iOS, it's so much money. We throw around billions like it doesn't matter anymore. It's so much revenue. And
and the judge says it's non-competitive if this is the remedy it's a huge story for both apple and for google and it's the end of an era one of the reasons google has been able to hang on to the degree of relevance that it has is that it's built right in as the default search right so if that's changing think about how many of the searches you do just anecdotally not even data that you do on your app on your iphone during the course of the day is it twenty
is it 30 multiply that times hundreds of millions of people a billion there's a billion iphone users on the planet josh doing this every day and so again when you have eddie q up there saying those searches fell that's less money for apple that's less money for google and it just plays into this disaster scenario that folks have been worrying about this is different than google search getting or google's ai search rather getting an answer wrong about what planet it's identifying or whatever that was that happened two years ago
This is usage falling. And that is where we're seeing the reaction in the stock right now is because people are using what you just described, Josh, less, according to Eddie Q. And instead, they're going to these other services. Eddie Q also said this is going to change the Apple business. He also testified, just saw a headline cross from this testimony, that in 10 years, we might not even need an iPhone because AI is going to be able to handle
so many of the tasks that we needed to screen and poke around apps for. So, I mean, this is really an inflection point. This is not, we're seeing search, traditional search drop in favor of these AI services. And hearing this from Eddie Q carries so much weight for both of these companies, guys. - Yeah, it's really great insight and perspective. I want you to stay with me and I'm gonna give Jim a chance to respond to all this, but Shan, we haven't heard from you and how you're thinking about this as well.
Well, I think it's important. I don't know if the viewers all know that it's 57% of Alphabet's revenue is search, right? And so, if you're buying the stock from a growth perspective, you're looking at YouTube and you're looking at the opportunity to grow YouTube in cloud, those are de minimis compared to what search is. So, I think the challenge here is if you're hanging on here and looking at this as the potential for growth, it's not just what Joe and Josh were saying. It's not just the revenue that's being accreted by
the search, it's that they're not going to be able to invest in anything else except defending this business. And so, you know, the upside here could become quite limited. And Jim, I mean, I hate to pile on as well, but like...
I don't feel piled on. I really want to repeat the statement and let me just put some context to this. This news broke an hour and a half ago. All right. I was in the subway, came here, got my makeup on. This news to me is about 25 minutes old. And all I'm saying is I am still parsing through it. Josh said I may come around to it. I may come around to this position. I'm not set in stone on this at all. All I'm saying is there have this is not the first time this threat.
has been raised. And it's not the first time. I don't think I'm misremembering this, that when it happened twice, that Google's AI search engine did poorly and it was listed as existential. This is, I will underscore what Steve Kovacs said. The issue is, I think he so very well laid it out. This is the first time that we have had a definitive usage drop
The metric that matters most, not only to Alphabet, but as Steve also laid out, to Apple and the revenue that it gets. That's a separate story. The headline story is the fact that usage of search for Alphabet has dropped for the first time in April, according to Eddie Q.
You don't want to come off respectfully, too. I mean, you don't want to come off as flippant to the issue here by suggesting in any way that what you're saying the issue was before is...
in really in any way equated to what this issue is. We're talking about usage versus an issue, a problem, a momentary problem. I hear you and I don't want to get lost in that discussion because the main point that I am trying to say is as an investor, I don't need jerk reaction to anything. And if that's a mistake, if that hurts my results in the long term, I will take it because in my opinion, relative to the style of investing that I do,
thoughtfully thinking through next actions matters more than just knee-jerking out of it. That's my main position. Hold on one second. Let's also just flip this forward because, I mean, the alphabet reaction speaks for itself. The stock's down 8%. A big move. You just don't ordinarily see something like that.
outside of a time of greater market upset like we had post-April 2nd, obviously. The Apple angle here is significant, too. I want to get the take. I'll give you, Jim, the first crack on this side of the story, because if you're going to be talking about
a services business that is you know already um you know in the current environment i think there's a little bit of concern there as steve was suggesting as well what this means for a company whose services business would make the company a fortune 50 by itself yeah um
Look, I've had some difficulty recently digesting the multiple on Apple. I did add to it not that long ago at $189. That addition is in the money right now. But I didn't like what Mr. Q said about, hey, maybe we're not going to need iPhones in a little while. That has my attention perked up.
And honestly, to me, I'm more worried about Apple in this news than I am about Alphabet. I mean, look, obviously, and as is usual, I'm in the minority over here, but that's where my concern is. You want to take the iPhone away? Whoa, okay. See what happens to services then. I don't know. That might be a little bit of an extreme. I think it's right to be concerned about both. And, you know, full disclosure, Joe T. added Apple the other day, and it's obviously been awful. And I had some questions surrounding the fundamentals when it did that.
But I just think in the case of Alphabet, Josh threw out PayPal as an example. I don't know, maybe in a worst-case scenario, this is more like Motorola. Think about Motorola and what Apple and what Samsung did to it and eventually where it got to the place where it had to be split up. And that's the point I want to emphasize. Maybe the best thing ultimately is that Alphabet didn't.
is split up. That might be the best outcome for you as a shareholder. It is interesting, don't you think, Steve, that it's been nearly a year since the judge ruled that Google had acted illegally to maintain a monopoly in the search engine market, and here we find ourselves in a wholly different environment. It just raises some serious questions about not only the outcome
of that decision, but whatever remedies are going to be thought about. Yeah, and Scott, this has been on the table since Google lost the case and we heard from the DOJ some of their proposed remedies that this relationship was going to split apart. Again, Eddie Q in the original trial before the verdict came in was testifying there to protect
these massive profits they're collecting from Google. And then let's talk about the services business. Let's broaden this out just a little bit because last week we learned of another existential threat after the judge in California ruled that Apple had to start linking or allow apps rather to link out to alternative payments outside of the Apple store, which means Apple can't get that 30% rate it takes to fall.
It takes off all those app transactions, sometimes at 15%, depending on what's going on. And so you have two things going on right now in the United States. You have the DOJ saying on one side that we might bust up this relationship that is just massively profitable for Apple, and they're going to have to find alternatives that we heard Eddie Cue talking about, saying it literally keeps him up at night because this relationship might go away.
And then you have the App Store model on the other side that is under threat. Right now, Apple, for the very first time, is fully complying with the court's order as it goes through this appeals process. We've already seen companies that have been the biggest agitators of the Apple ecosystem, App Store model, come out. Spotify put out their update last week.
You can now go into the Spotify app, skirt Apple's payment system and subscribe just like that. That's something Spotify has always wanted. This all came from the Epic Games case and Tim Sweeney, the CEO over there. Fortnite is going to come back to the App Store this week, he says. They're going to go around the App Store payments and if they can get a sort of
critical mass of these apps and developers who find a way to get around those payments that they've been paying to Apple. That is yet another existential threat. Forget about what we're seeing in Europe. U.S. is where much more money is spent, especially in gaming, on the App Store. So you have the Google side and you have the App Store side, two huge mega threats to Eddie Q's business. And we see him on the stand today just speaking some truth about how tough this is going to be in the coming years, Scott. Yeah. Josh,
You know, someone we work with is texting me, I think, a good thought that they're likening this to when Disney first said in 2015, when they first mentioned cord cutting.
And that stock has not been the same since. If you look at the returns of that stock versus the S&P, for example, it's a pretty telling story. Wondering whether we could be in for a similar outcome in this instance.
That is a fantastic example. I don't know, who was that, Becky Quick? Whoever texted you that, perfect. Perfect analogy. Because the cable business for companies like Disney was an incredible business with, I wouldn't say monopoly, but let's maybe say like...
almost oligopolistic tendencies where the cable subscriber was gonna pay a hundred and ten dollars no matter what they watched Disney was gonna get its chunk of that 110 dollars the highest ticket item in the cable bundle was ESPN you could watch a hundred hours of ESPN in a month or zero you were paying for it anyway and what an incredible business that was for Disney they had a hundred million people
uh... basically paying for this service whether or not they use date that so that's
That's a great analogy because it's not that Disney went away. It's not that people don't watch ESPN. It's that that cash cow of the automatic, the guarantee is what's went away. Now you have 50 million, maybe 40 million cable subscribers. And the one thing you can guarantee alongside death and taxes is that with every passing year, that number is going lower. We'll never go into reverse.
Disney is still competing. And in fact, this morning had an upside surprise in the amount of people buying a streaming subscription. But again, that's back to 2015. It's 10 years later and they're still locked in this battle that they never had to worry about. To your point with the alphabet situation, it was a delayed reaction. But now we're here to your point. It wasn't Becky, by the way. It wasn't. I'm not going to reveal my skepticism. It was back. I know. We love you back.
On Disney, by the way, shares are flat versus 10 years ago. To just give you an idea of what that stock has done versus an S&P, which is up more than 200% over that same period of time. Well, look, and first of all, when I said Motorola is an extreme scenario, obviously I'm joking about that. But I do think the company might be better off being broken up. And I think to what Josh is suggesting,
Alphabet has to recreate themselves now if they're actually going to lose that cash cow business. It has to be something that they're going to evolve, they're going to innovate over the course of time. I think the company's in a good enough place that they're actually going to do that. I'm also sitting here wondering, conceptually, what does this do to the investment philosophy surrounding the MAG7?
because it seems as though the mag 7 is just beginning to really deteriorate whether it's tesla which is broken down significantly or it's now apple breaking down um or it's alphabet as well breaking down i think you know you're literally looking at okay i've got meta i've i've got nvidia maybe amazon wants to come along for the ride but other than that
I don't think it's as strong as we thought it would be. I don't know. Microsoft's only like 7% off if it's 52 and high. Yeah, but Microsoft spent the entire year last year on the performance. Can I throw one thing in here? Can I throw one more thing in here? You can in a minute. Hang on. Irony here, though, Scott, is that this is actually representation of AI working for consumers, that consumers are adopting AI as an alternative, and yet we're questioning the Mag 7 who has spent years
a significant amount of money on AI and yet they're still behind potentially. I'm not questioning the business model, I'm questioning just the investment philosophy. But I am. I'm telling you I'm questioning if there are going to be other ways to monetize AI, which we've been talking about as a threat to the Mag7 for the last 18 months.
One underappreciated thing about just the fall in search in general that may become a bigger story away from AI, or maybe AI is playing some role in this, people forget one of the things that has helped Google destroy multiple earnings calls, just have these huge upside beats on search revenue over the last few years in the post-pandemic is travel-related search.
Travel is such a huge category. Think about every trip you've ever taken, whether it's business, pleasure, whatever it is,
There are some analysts saying that search revenue, as much as 13% has been made up by travel-related searches, one of the things that we keep hearing is that travel overall is down, partially because of the state of the economy and the more uncertain consumer, and partially because of all the trade war stuff. That's now a Google search problem.
They may not have that travel boost to help them exceed earnings in the coming quarters, even if you didn't also have this layer of the AI market share threat.
Steve Kovac, I'm going to give you the last word, and I guess we can look ahead to what is almost a month away from today, and that's WWDC, when you and me are going to be out in Cupertino. And this is now an overhang on that event that we'll want some answers to. It's an overhang on the Google Developers Conference, too, which is coming a couple weeks before that. So from the Google I.O. event, I'm going to be looking for any questions.
indications that they're redesigning the Google search experience to really take advantage in a better way, in a monetizable way around this Gemini search. Right now it just kind of parks at the top of your search results and doesn't do much else. And you still, to Josh's earlier point, have to scroll through and do a treasure hunt
to find what you're actually looking for. What are they doing to make that core search experience better? And then on the Apple front, we know how they've whiffed on artificial intelligence. There's immediately gonna be a much more skepticism around what they show because what they showed last year, much of it did not materialize. At least the most important part was Siri's update.
didn't materialize. So how do they kind of steer that ship around and really tell a story and a provable story that they have their hands around this artificial intelligence moment, whether that's partnering with like any QTs or perplexity or another AI company or building it in-house, which they still haven't proven they have to do. So a lot more to watch in the next month or so, Scott. Yeah, good stuff. Really surrounding this big story today. Well, guys, thank you, Steve. Thanks to you.
We'll certainly hear more from you as this day progresses. We'll watch those shares of Alphabet as well. Lows of the day. We're going to take a break. Coming up, we do have more earnings to discuss. There is Disney to talk about. There's Uber. Josh has also a sell in terms of a committee move. Jim has a couple of buys. We'll do that all next.
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All right, welcome back. Our chart of the day today is Disney. It's up 10.5%. As you see, earnings beat. They did raise their guidance. They did see a surprising uptick in their streaming subs. Not very important there. They announced a new theme park plan for Abu Dhabi. So there's a lot to consider. You saw enough. You bought more of this stock. Yeah, and not being sarcastic at all,
but I'm going to stay in the moment. 10 years is 10 years, all right? In the moment, I see a lot that I like here. I see that the experience as business is hanging in there despite a tough environment for the consumer. What I heard on the call today is they don't see weakness in the consumer. That's good.
Also, what matters to me a lot, and I've said this for a while, is the streaming business, which granted the profitability at around 350 million for the quarter is small relative to the overall company profitability, but the growth rate is very large. It's much better than expected.
We know about cord cutting. Streaming is rapidly replacing cord cutting. I like the idea of the Abu Dhabi experience that they're going to be building out. I like that we're going to get some news next week. You don't have to wait too long on ESPN streaming, what that flagship product is going to be, what it's going to cost. I like what I see here at this price. Guess what, Jimmy? I absolutely agree with you. I think this is a fundamental inflection point for this company. Are we all laughing at that setup? I agree with you, for sure. Listen.
You had streaming, the subs on streaming was strong. We understand that. Here's the best thing about this is that sentiment and positioning has been depressed and been depressed for so long. And that allows for the opportunity where you begin to get the reversal, you begin to get the build. In a lot of portfolio manager portfolios, you'll see this name being acquired. I like what I see here. All right. There are two stocks that I want to talk about next.
are linked because they just made your best stocks list. Best stocks in the market right now, Josh. Uber and CrowdStrike. So CrowdStrike reaffirmed their guidance. They say they're going to cut about 5% of their workforce to stock down about 2%. So there's that. And then there is Uber, which their revenues did miss.
And the comments from the CEO, Dara Khashoggi, about autonomous, calling it the single greatest opportunity ahead for Uber, needs to be discussed as well. What about these two stocks? Why did you add them to this group? Well, these are two long-term holdings of mine. I've been in both of them for years and years, and they happen to have hit the list quantitatively. But let's talk about CrowdStrike first.
So this is one of the best performing stocks of the year already, not just tech stocks, but throughout the entire S&P 500. They had a lot of ground to make up for, and they have. This stock basically got right back to where it was prior to the outage, the IT outage,
last summer. So now it's like that's never happened. They just reported a 23% increase in the only number that matters, which is ARR, annually reoccurring revenue. That's how these stocks are valued. They're now at $4.24 billion in ARR as a run rate, and it was a 31% increase in subscription revenue. The stock is 26% above its 200-day. So firmly in a long-term uptrend,
even with the small drop today. I think if you want to risk manage the position as a trader, you'd look at that 390 level. But again, this is an investment for me. Another unbelievable quarter for one of the greatest companies in tech. I'm staying with it. You want to do Uber or you want to...
Where do you want to go? I want to go to Deirdre Bosa because we thought the Dara comment set up a good conversation about the race to autonomous, really, between Uber and Tesla, which, Dee, you're thinking a lot about if there's going to be a winner, if there needs to be a winner, and who it might be.
Right. And is this a winner-take-all market, which it are across Russia? He talked about. But first, let me get to the different strategies, because Uber and Tesla are betting on AVs in very different ways. Elon Musk, of course, he wants to own the entire stack, the cars, the technology, the robo-taxi network. Uber, on the other hand, remember, it sold off its AV unit years ago. So now it's positioning itself as the platform
platform for the robo taxi industry. In other words, the middleman that connects users to whichever app that they want. That narrative certainly has been working this year. It was more of a threat last year. Uber shares are up nearly 40%, but, but
Here is the risk, and it has less to do with Tesla, more about the biggest, most advanced player right now. That is Alphabet's Waymo. And Uber's relationship with Waymo is limited. So they're partnering in just a few markets like Austin and soon Atlanta. Everywhere else, Waymo is either going direct through its own app or working with other partners, proving just how replaceable a ride share platform like Uber can be. Even the biggest ride share platform in the world. That brings us back to Tesla or Alphabet.
or another competitor like Amazon Zoox, for that matter, which is expanding rapidly. They can and they are building their own ride sharing apps, giving up less margin. And even as I know Josh believes that Uber can deliver things like fleet management that AV native players don't want to do themselves, there's a number of upstarts here to choose from, which Waymo already is choosing from. So put another way, Uber's embracing a robotaxi future. Yes, that's positive. That sounds good to investors.
That might just be talking up its own disruption, too. You look at those comments from Dara Khosrowshahi this morning saying that, you know, the Waymos are outperforming human drivers. You don't think that's happening in places like here in San Francisco or L.A. where Uber is not a partner? Mm-hmm. Mm-hmm. Good points. Of course, Josh, comment?
i've been saying this since the 40s i said it when the cybertaxi announcement first happened last april and dropped uber into the 50s i said it again in october when that insane cybertaxi event
took place. I still don't quite understand what we saw. And I'll continue to say it because it's the most obvious thing in the world to me. And I don't understand why it's taken the market so long to figure this out. The market is starting to figure it out. That's why the stock went into the earnings report up 42% year to date. But whatever, it took a while. Consumers are not going to have...
well that's what i want to talk about consumers are not going to want to have 10 different mobility apps so what what i what i think the market is realizing now is that the only thing the consumer cares about is price convenience and speed and so they'll have the waymo app they might also have the cyber cab app but the uber app is going to be the hub
gets them the driver fastest. They don't care at a certain point. Is it autonomous or a human? It doesn't matter. Just get me the car for the right price right now. And that's the strategy that Dara is pursuing. He was the CEO of Expedia.
People didn't want to go to 10 different hotel websites. They wanted to see all the prices in one place. Dara understands that, and he's going to be the one that helps all of these upstarts reach profitability faster because all of their cars are going to be available through the Uber app. D, real quick, and I've got to bounce.
I would just say, I mean, if you think that there's going to be 10 different AV, robo-taxi apps, but, you know, the way that it's trending is you have to be extremely well capitalized. You have to have a safety record. There's really only one right now, and that's Waymo. Amazon, Zoox, maybe Tesla starting very, very small. But if Waymo is able to scale and expand the way that they have been planning and releasing over the last few months and weeks,
then I think that could be a significant threat. All right, good stuff. Dee, thank you very much. That's George Abosa joining us. So we're going to take a break. We'll come back. I'm going to tell you about the name that Josh Brown just sold, a name or two that Jim Labenthal has added. Plus, we think we found what might be a catalyst for stocks. We'll tell you what it is next. We'll get the headlines now with Courtney Reagan.
Hi, Scott. Russian state media reporting Chinese President Xi Jinping has arrived in Russia for his 11th visit. The Chinese leader is set to hold talks with Russian President Vladimir Putin Thursday and join 28 other world leaders for a parade to celebrate the 80th anniversary of the Soviet and Allied victory in World War II. The Kremlin has highlighted Xi's presence as a sign of Russia's growing global influence.
Meanwhile, Vice President J.D. Vance said Russia is, quote, asking for too much in negotiations to end the war in Ukraine. At an international security policy event this morning, the vice president said the U.S. would like to see Russia and Ukraine have direct talks, adding he believed it would be, quote, impossible for the U.S. to mediate talks.
And Moderna's combined COVID and flu mRNA shot outperformed existing standalone vaccines for both viruses in a phase three clinical trial published today in the Journal of American Medical Association. The trial, which was funded by Moderna, showed those who got the combo shot reduced more antibodies by 20 to 40 percent than those who took the current shots. Halftime report. We'll be right back. CNBC News Update is sponsored by Morgan Stanley, where old school hard work means bold new thinking.
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- All right, let's do a move from Josh Brown. Wow, you sold Reddit. Tell our viewers why. - The stock bounced with the rest of the high growth tech names throughout the course of April after obviously selling off with tech starting in February. And I just looked at it and I said, you know what? It was a good earnings report. Actually, it was a great earnings report. There wasn't a crazy reaction to it. And if I'm bearish on Google search trends,
You know, the fact that Reddit has been so highly placed atop Google Search over the last couple of years is really one of the most bullish things to happen for the company. So it's hard to, like there's a little cognitive dissonance there to be bearish on Google Search trends but bullish on Reddit getting an increasing amount of revenue from appearing highly ranked in Google searches. So it was just a little bit messy for me mentally. I took it off the table into the rally.
I did okay. I should have done better. But it's not off my radar. I'm still going to follow the name, and I might come back to it in the future. All right. On your radar is Vertex, Jimmy. You bought more.
Yep. I've owned it for a little while now. Stock had a very disappointing reaction to earnings yesterday. Now they missed. And when a company misses, you have to ask yourself, what happened? Is there something systemic wrong here? And I don't think so at all. There were some copycat drugs in Russia that illegally cannibalized some sales of their main cystic fibrosis drug. Their existing franchise in cystic fibrosis is very strong. The new pain medication is getting picked up.
quickly. And they've got a lot of shots on goal coming with new medications for things like diabetes and kidney disease. This is one I'm very comfortable holding for the long run. All right. Thank you. Down three and a third percent today. We'll take a break. We'll come back. We'll tell you why buybacks are booming and what it might mean for this market from here. We'll name names next.
I've been asking the question, what's a catalyst for stocks? How about buybacks? Because they are booming. The FT says U.S. companies plot $500 billion in share buyback spree. The April estimate of $234 billion was the second highest on record. Is this a place to look now that earnings season is coming to an end? The window is open, so to speak?
Yeah, I think it's important to look at buybacks. You can think about, you know, prior to the pandemic and the stranglehold that the MAG-7 essentially built on the S&P 500. That was on the back of buybacks. And so there's a lot of opportunity here. What you really need to look for, though, is you need to look for a combination, in our view anyway, of strong free cash flow and a light tariff touch. Because we haven't talked about tariffs all day, Scott.
But they are the rationale for many of these companies that have pared back or canceled their buybacks over the last couple of weeks. Look at the announced buybacks already. We made a wall to show you the big name companies that have done so. Apple, Wells, Visa, Delta, 3M, Shell, Lilly, Chipotle, Arista. Joe?
You follow this pretty closely? I do. Over the last five years, the S&P buyback index, which measures the top 100 companies in the S&P that the highest buyback ratio has outperformed the S&P by about 10%. I think the environment we're in right now benefits
buying back shares because the CFO who's looking at the environment says to themselves, well, okay, originally I thought I was going to be able to execute some M&A. Really not going to be able to do that right now. Let's go in. Let's buy back some shares, maybe return capital to shareholders as well. So I think it's really more a casualty of the environment. All right. We'll take a quick break. We come back to talk once again about Berkshire's next chapter. We'll talk to forever shareholder Josh Brown. He'll weigh in on what he thinks it means.
for a stock he has owned, as he says, forever. Next. All right, Josh Brown, we never got your take on the GOAT making the announcement that he did this prior weekend, saying that he's going to step down as CEO at the end of the year. You own the stock, have for a long time, and I think are pledging to be a forever shareholder. What do you say? Yeah, I remember distinctly conversations 15 years ago, people saying, well, they're in their 70s. They're not going to live forever forever.
So this has been an overhang over the stock for a long time, but it hasn't really mattered because it's one of the best performing names of the last one year, three years, five years, 10 years. And I think for people like myself, the only thing that's worth saying at this point is this is as good of a transition of a succession plan as I have ever seen executed anywhere at any company. And it wasn't sudden and it's not an illness, thank God.
It was something that they painstakingly did over the course of 10 years, introducing the concept, who the people would be, bringing in portfolio managers, making sure Ajit Jain is there, now letting Greg on stage for the last couple of years. And they pulled it off. The stock made an all-time record high.
and it's hanging high still. And as a forever shareholder, could not be happier. My hat is off to the GOAT. I would say he's on Mount Rushmore, but there's nobody else that would belong on there with him. He's a one of one. We all know it. And that's where we are. All right. Good stuff. We'll take a quick break. We'll come back with finals next.
All right, how's this for an afternoon? Fed decision coming up, then the news conference, then Jeffrey Gundlach right here at Post 9 in person for our exclusive get-together on Fed Day. We'll obviously track where Google's going, Alphabet, where's it going to close? We will find out. Josh Brown, your final trade is what? SHAC reported last week they'll open 40 to 50 new company-operated stores this year. I'm bullish, I'm long-term.
Farmer Jim. Wynn Resorts. The international expansion is making this company a growth stock. Jen. Financials. Lack of new regulation is a driver here. And Joe T. Spotify. Another all-time high. All right. Big afternoon coming up. I'll see you on the bell. The exchange is now. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern, only on CNBC.
Thank you.
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