The Fate of the Momentum Trade 2/26/25
50:00 Share

What if your limited inventory had unlimited potential? What if your biggest risk was not taking one?

What if you could make every move matter? Bank of America's business solutions can help bring your biggest what-ifs within reach. Find out how our digital tools, cutting-edge insights, and trusted expertise can work for your business. What would you like the power to do? Visit bankofamerica.com slash banking for business to learn more. Bank of America is proud to be the official bank sponsor of FIFA World Cup 2026.

Hello, I'm Ben Rizzuto, Wealth Strategist at Janus Henderson Investors. Is a brighter future possible? At Janus Henderson, we think it is. We've worked to help clients achieve superior financial outcomes and fulfill our purpose of investing in a brighter future together. We never forget that this means our thinking and our investments are helping to shape millions of futures. At Janus Henderson, we're committed to helping you invest in a brighter future. To learn more, go to JanusHenderson.com.

You're listening to Halftime Report in progress. 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.

People can't believe when I read them. 20 million here, 30 million here for, you know, a little educational costs on something. Circumcision, right? Circumcision. 20 million dollars to inform the people of such and such a country on this.

other things and other things other than that. So, yeah, those people are right now we're trying to find out who those people are that haven't responded. Now there'll be some agencies like Marco has people within state that are right now doing very classified, very confidential work and we understand that and we've talked and you know we're being a little more surgical.

And Marco's doing a lot of things himself. And some of the secretaries, we're going to be going to them. We're going to be talking about it today. We're going to ask them to do their own doge. In other words, they'll look in their group and who? I spoke with Lee Zeldin, and he thinks he's going to be cutting 65 or so percent of the people from environmental. And we're going to speed up the process, too, at the same time.

You had a lot of people that weren't doing their job. They were just obstructionists and a lot of people that didn't exist, I guess, Lee, too. You found a lot of empty spots that the people weren't there. They didn't exist.

And I think education is going to be one of those. You go around Washington, you see all these buildings for the Department of Education. We want to move education back to the states where it belongs. Iowa should have education. Indiana should run their own education. You're going to see education go way up. Right now, we're ranked at the very bottom of the list, but we're at the top of the list in one thing: the cost per pupil. We spend more money per pupil than any other country in the world.

And yet it's Denmark and Norway, Sweden. And I hate to say this, and you know, we're going to get along very well with China.

But it's a competitor. They're at the top of the list. They're among the top 10, usually. And they're a very big country. So we can't use that as an excuse, right? Because we're a very big country, too. But we were ranked last time under Biden. We're ranked 40 out of 40. They do the 40 certain nations that they've done for a long time. It seems to be 40 for whatever reason.

And we were ranked number 40. A year ago, we were 38. Then we were 39. We hit 40. And so we're last in that. And we're first in cost per pupil. So I would say that's unacceptable. Lawrence, you have something? So, Mr. President, I know you like competition. And I know it's early. So which department are you most impressed with? And then to Mr. President.

That's the first one. Mr. Musk, which department have you received the most resistance from? Mr. President, you first. Well, I think both of those questions are a little bit, well, you're a pretty controversial guy. Look, it's very early. Right now, I think I'm impressed with everybody. So far, everybody. If I wasn't in the first month, and some of them just got here. They just got approved two days ago, right?

But I think I'm very impressed with everybody. So far, I'm very happy with all of the choices. I think that Elon has done incredibly with some groups, and some groups are much easier than others. It is true. State is a, you know, very difficult situation. We're right now negotiating very successfully, I think, with Russia and with Ukraine. And we have a lot of countries involved, and we have to be a little bit careful what we do and who we're terminating.

But Marco is doing that very -- I think he's going to be very precise. It's going to be -- we're cutting down government. We're cutting down the size of government. We have to. We're bloated. We're sloppy. We have a lot of people that aren't doing their job. We have a lot of people that don't exist.

You look at Social Security as an example. I mean, you have so many people in Social Security where, if you believe it, they're 200 years old. And what we're doing is finding out are checks going out for that? And is somebody cashing those checks?

who's maybe 35 years old, okay? So there's a lot of dishonesty. There's a lot of fraud. But I think at this moment -- I'll take Elon off the spot. I think that he's impressed. He said it very well. Better than I can say it, that he's impressed with the people in this room. Very impressed. And I am too. And it's too early to say. But I think everybody's on board. They all know. We want to balance a budget. We want to have a balanced budget within

a reasonably short period of time, meaning maybe by next year or the year after, but maybe even sooner than that. The Press: Mr. President, your number one issue was the border. We just got new information that they're doxing our federal agents. They're putting their personal information out there, these activists, and they're disrupting the operations. So you've got Trinidad and Agua running all across the country. The President: Well, we have activists, that's true. And a lot of those -- The Press: So what are we going to do about the activists? The President: Yeah, a lot of those activists are acting illegally.

and we'll give that to our Attorney General and she'll take a look at that very strongly. But we're also having tremendous support from Border Patrol, from ICE. The ICE agents have been unbelievable. Border Patrol, their leadership at Border Patrol has been incredible.

And they're working very well. And as you know, and I saw you reporting it this morning, actually, we set records on the least number of illegal aliens coming in, migrants coming into our country that we've had in more than 50 years. And we did this all within a period of weeks because we took over a mess.

The world was pouring in. And remember, they were coming in from jails and prisons and mental institutions and insane asylums. And there were gang members and drug dealers. Anybody wanted to come in. And from not just South America, from all over the world.

So it's amazing what they've done. And Christie and Tom Holman, the job they've done has been absolutely amazing. We set records for and we want people to come into our country, by the way, but they want to come in. They have to come in legally. I want that to be really understood. We want people in our country, but they have to come in legally. Can I follow on that, Mr. President, about the Trump gold card idea that you unveiled yesterday? I'll be like that.

I await more information, but the question is, does this reflect a view on your part that the American immigration system has never been properly monetized as you feel it should be?

Well, not so much monetize. It hasn't been properly run. I get calls from, as an example, companies where they want to hire the number one student at a school. A person comes from India, China, Japan, lots of different places, and they go to Harvard, the Wharton School of Finance. They go to Yale. They go to all great schools. And they graduate number one in their class.

and they made job offers, but the offer is immediately rescinded because you have no idea whether or not that person can stay in the country. I want to be able to have that person stay in the country. These companies can go and buy a gold card.

And they can use it as a matter of recruitment. At the same time, the company is using that money to pay down debt. We're going to pay down a lot of debt with that. And I think the gold card is going to be used by -- not only for that. I mean, they'll be used by companies. I mean, I could see Apple -- I've spoken with Tim Cook. And by the way, he's going to make a $500 billion investment in the country only because of the results of the election.

And I think because of tariffs. He's going to want to be in the country because of tariffs. Because if you're in the country, there is no tariff. If you're out of the country, you've got to pay tariffs. And that's going to be a great investment, I think, that he's making. I know it's going to be a great investment.

We have to be able to get people in the country, and we want people that are productive people. And I will tell you, the people that can pay $5 million, they're going to create jobs. They're going to spend a lot of money on jobs. They're going to have to pay taxes on that, too. So they're going to be hiring people. They're going to be bringing people in and companies in.

And I don't know, maybe it will sell like crazy. I happen to think it's gonna sell like crazy. It's a bargain. But we'll know fairly soon. I think Howard and Scott, a few of you really are responsible for it. Howard, if you wanna discuss that for a couple of minutes, I think I'd like to have you. I think it's gonna be a very successful program. This is Commerce.

So the EB-5 program, which has been around for many years, had investment of a million dollars into projects in America. And those projects were often suspect. They didn't really work out. There wasn't any oversight of it. And so for a million dollar investment, you got

Visa and then you came into the country and ended up with a green card. So it was poorly overseen Poorly executed then you had our border open where millions of people came through so the idea is We will have a proper business. We will modify the eb-5 Agreement Kristi and I are working on it together for five million dollars. They'll get a license and

from the Department of Commerce. Then they'll make a proper investment on the EB-5.

Right? And we think Scott and I will design the EB-5 investment model because Scott and I are the best people together to do that. So this is joint. This is exactly the Trump administration. We all work together. We work it out to be the best. And if we sell, just remember, 200,000. There's a line for EB-5 of 250,000 right now. 200,000 of these gold green cards is $1 trillion.

to pay down our debt. And that's why the president is doing it, because we are going to balance this budget and we are gonna pay off the debt under President Trump. - And to qualify, do you have to promise and make commitments to create a certain number of jobs here in the US? - No, no, because not all these people are gonna be job builders. There'll be successful people or there'll be people that were hired from colleges, sort of like paying an athlete a bonus.

Apple or one of the companies will go out and they'll spend five, they'll buy five of them and they're going to get five people. Look, I've had the complaint where I've had the complaint from a lot of companies where they go out to hire people and they can't hire them out of colleges. And you know what they do? They go back to India or they go back to the country where they came and they open up

company and they they become billionaires they become and they're employing thousands and there are a lot of examples there are some really big examples where they were forced out of the country our they graduated top in their class at a great school and

and they weren't able to stay. This is all the time you hear it. And the biggest complaint I get from companies, other than over-regulation, which we took care of, but we're gonna have to take care of it here because a lot of that was put back on by Biden. But the biggest complaint is the fact that they can't have any longevity with people. This way, they have pretty much unlimited longevity. Also, with the 5 million, you know, that's a path to citizenship. So that's gonna be -- it's sort of a green card plus.

And it's a path to citizenship. We're going to call it the gold card. And I think it's going to be very treasured. I think it's going to do very well. And we're going to start selling, hopefully, in about two weeks. Now, just so you understand, if we sell a million, right, a million,

That's $5 trillion. Howard was using a different number, but that's $5 trillion. If we sell 10 million, which is possible, 10 million highly productive people coming in, or people that we're going to make productive, they'll be young, but they're talented, like a talented athlete. That's $50 trillion. That means our debt is totally paid off, and we have $15 trillion above that.

And now I don't know that we're going to sell that many. Maybe we won't sell many at all, but I think we're going to sell a lot because I think there really is a thirst. No other country can do this because people don't want to go to other countries. They want to come here. Everybody wants to come here, especially since November 5th. All these people will be vetted. Okay. Can you talk a little bit about what type of security guarantees you're willing to make?

Well, I'm not going to make security guarantees beyond very much. We're going to have Europe do that because it's in, you know, we're talking about Europe is their next door neighbor. But we're going to make sure everything goes well. And as you know, we'll be making a, we'll be really partnering with Ukraine in terms of rare earth. We very much need rare earth. They have great rare earth. We'll be working with Secretary Burgum.

and with Chris, you'll be working on that together. And we're going to be able to have tremendous -- I mean, this gives us -- because we don't have that much of it here. We have some, but we don't have that much, and we need a lot more.

to really propel us to the next level of, to lead in every way. We're leading right now with AI, we're leading with everything right now, but we have to, we need resources. We have to double our electric capacity, we have to do many things. We have to really triple, if you think of it, the electric capacity from what we have right now, if you can believe it. So, I just said this, so the deal we're making gets us, it brings us great wealth,

We get back the money that we spent, and we hope that we're going to be able to settle this up. We want to settle it. We want to stop. I tell you what, I'm doing it for two reasons. But the number one reason by far is to watch all these people being killed. I see pictures every week from, I assume, satellite pictures mostly, but there's some pictures on site

of thousands of soldiers that are being killed, they're being decimated because equipment today, military equipment is so powerful and so devastating. And number one, I want to see people stop. And they're not from here, they're from primarily two other countries. And then by the way, let's talk about the Middle East. We got to solve that problem too. And that's come a long way. We're doing very well in that also. A lot of things are happening on that. But I'm watching soldiers being killed, Ukrainian and Russian soldiers being killed.

My number one thing is to get that stuff. My number two thing is I don't want to have to pay any more money because we've Biden has spent $350 billion without any chance of getting it back. Now we're going to be getting all of that money back plus a lot more. And we provided a great thing. I mean, we provided something very important and we'll be working with Ukraine and because we'll be taking that we're going to be taking what we're entitled to take. Now,

They spent $350 billion and Europe spent $100 billion. Now, does anybody really think that's fair? But then we find out a little while ago, not so long ago, a few months ago, I found out that the money they spent, they get back. But the money we spent, we don't get back. They said, well, we're going to get it back.

and we'll be able to make a deal. And again, President Zelensky is coming to sign the deal. And it's a great thing. It's a great deal for Ukraine, too, because they get us over there and we're going to be working over there. We'll be on the land. And, you know, in that way, it's this sort of automatic security because nobody's going to be messing around with our people when we're there. And so we'll be there in that way. But Europe will be watching it very closely. I know that UK has said and France has said that they want to put, they volunteered to put

So-called peacekeepers on the site and I think that's a good thing Cost of eggs and we've seen consumer confidence this week have a sharp drop from last month the biggest dip in I believe three years Why is that your assessment? Why is that the case and is there anything consumer confidence if you look at confidence in the nation? It had the biggest increase in the history of the chart it went up 42 points

in a period of like days after the election, since the election. So since the election, the confidence in our nation, including right track, wrong track, the first time it's ever happened where we were on the right track, because this country has been on the wrong track for a long time.

So the confidence in business, confidence in the country has reached an all-time high. We have never reached levels like we are right now. Okay. -Mr. President, you've been very clear in saying that as long as you're president, Iran will never get a nuclear weapon. -That's true. -Is it also your policy that as long as you're president, China will never take Taiwan by force? -I never comment on that. I don't comment on anything because I don't want to ever put myself in that position.

And if I said it, I certainly wouldn't be saying it to you. I'd be saying it to other people, maybe people around this table, very specific people around this table. So I don't want to put myself in that position. But I can tell you what, I have a

I have a great relationship with President Xi. I've had a great relationship with him. We want them to come in and invest. I see so many things saying that we don't want China in this country. That's not right. We want them to invest in the United States. That's good. That's a lot of money coming in, and we'll invest in China. We'll do things with China. The relationship we'll have with China will be a very good one. I see all of these phony reports that we don't want them in money, we don't want anything to do with them. That's wrong. We're going to have a good relationship with China.

but they won't be able to take advantage of us. What they did to Biden was, he didn't know what was happening. He didn't know what he was doing. The administration didn't know what they were doing. It was very sad to watch. But we're going to have a good relationship with China and Russia and Ukraine and the Middle East.

We're doing things that, look, when I left, we had no wars. We had defeated ISIS totally. We had no inflation. We didn't have the Afghanistan withdrawal, the worst withdrawal anybody's ever seen. I think that's one of the reasons that President Putin looked at that. He said, wow, these guys are a paper tiger. Look, we're no paper tiger. Don't forget, we got rid of ISIS in three weeks. People said it would take five years. We did it because when I came in,

I let them do what they had to do. And the man that headed that operation is now going to be your chairman, right? Chairman of the Joint Chiefs. And Raisin Cane. I liked him right from the beginning. As soon as I heard his name, I said, that's my guy. Okay. Any other questions?

The Press: Decreases in crossings at the border for you to continue the pause on tariffs against Mexico and Canada? And if not -- The President: No, I'm not stopping the tariffs. No. Millions of people have died because of the fentanyl that comes over the border. The Press: Even with the 90 percent drop in border crossings, though, this is less compared to about a year ago? The President: Yeah, they've been good, but that's also due to us -- mostly due to us.

It's very hard. It's right now very hard to come through the border. But the damage has been done. We've lost millions of people due to fentanyl. It comes mostly from China, but it comes through Mexico and it comes through Canada. And I have to tell you that, you know, on April 2nd, I was going to do it on April 1st, but I'm a little bit superstitious. I made it April 2nd. The tariffs go on.

Not all of them, but a lot of them. And I think you're going to see something that's going to be amazing. We've been taken advantage of as a country for a long period of time. We've been tariffed, but we didn't tariff. Now, I did. When I was here, I tariffed. We took in $700 billion from China. $700 billion. Not one president in the history of our country took in 10 cents from China.

At the same time, China respected us. Now, when COVID came in, that was a different deal. I used to call it the China virus. I guess I could call it the China virus again. But, you know, it's an accurate term. But I won't do that out of respect to China. On Gaza, I just wondered if there's any progress towards a second phase of the ceasefire.

Well, I'm very disappointed when I see four bodies came in today. These are young people. Young people don't die, okay? Young people don't die. These are young people. Four bodies came in today. They think they're doing us a favor by sending us bodies. So, look, that's a decision that has to be made by Israel, by Bibi.

But Israel has to make that decision. We got a lot of hostages back, but it's very sad what happened to those people. I mean, you had a young lady with her hand practically blown off. You know why it blew up? Because she put up her hand to try and stop a bullet that was coming her way. And it hit her hand and blew off her fingers, big part of her hand. This is a vicious group of people. And Israel is going to have to decide what they're doing. Phase one is going to be ending.

Think of it, today they sent in four bodies. -Bodies. -And I will say one thing, though. I've spoken to a lot of the parents and a lot of the people involved. They want those bodies almost as much and maybe even just as much as they wanted their son or their daughter.

Amazing. Please, sir. Please. My son is dead, but they have his body. Please, can you get it for us? It's the biggest thing. It's incredible the level -- they want the bodies of these people. They're dead. They're dead.

And, you know, when I saw the ones that came in two weeks ago, they looked like they just got out of a concentration camp. Then the following week, the group came in and they weren't as bad and as bad as Shay. But Israel's going to have to make a decision. You're right. Phase one and now phase two has started. And today we got some, you know, very, very -- we knew they were dead, by the way. We knew there were going to be bodies as opposed to people that were living.

But a very sad situation. At some point, somebody's going to say, we've got to do something about this. Mr. President, you were just talking about Afghanistan and the BOTS withdrawal. Have all the generals or command staff that were involved with the withdrawal been fired or relieved of duty? Well, that's a great idea. I'm not going to tell this man what to do, but I will say that.

If I had his place, I'd fire every single one of them. That's a very good question. Well, it's a question we thought a lot about. We're doing a complete review of every single aspect of what happened with the botched withdrawal of Afghanistan and plan to have full accountability. It's one of the first things we announced at the Defense Department for that reason, sir. Certainly,

General Raisin Cane, who's on his way in, was not a part of that. Instead, he was a part of leading the effort against ISIS by untying the hands of warfighters and finishing the job properly and then bringing our troops home. So we're taking a very different view, obviously, than the previous administration, and there will be full accountability. I don't see big promotions in that group. I think they're going to be largely gone. I know the man on my left. I think they're going to be largely gone. That was a horrible...

And, you know, I've dealt with the parents and the family of the 13 that were killed. But, you know, nobody ever talks about the 40 that were so badly hurt with the arms and the legs and the face and the whole thing, the missing arms and legs.

It was so terrible the way that was handled and it should all right I want to welcome you to the Halftime Report. I'm Scott Watner, of course the New York Stock Exchange You've been watching the president's very first cabinet meeting where he touched obviously on on Ukraine and the minerals deal He did discuss tariffs as well to which he said I'm not stopping the tariffs That's what the president said and an extraordinary moment of course when Elon Musk stood up in front of the room and

and spoke at the cabinet meeting, not a cabinet secretary, obviously, but he has been facing a number of pressure points relating to the cuts from Doge. Eamon Javers joins us now with more. That was probably the highlight moment. You know, we expected that the president was going to address tariffs. We expected that he was going to address the issue in Ukraine and the war with Russia. But seeing Mr. Musk himself in front of the whole cabinet

uh... essentially defending the actions of doge was pretty extraordinary yeah a whole lot of palace intrigue scott going into this in terms of where would you on must be sitting would he be at the table with the cabinet sectors would be in the back in the end he was in the back off to the left uh... just outside the area where the cabinet secretaries generally said uh... but must i thought

Scott was awfully solicitous of the other cabinet secretaries there in the room, saying how impressed he is by them, thanking them for helping him with Doge, portraying himself as a simple member of tech support for this administration. That comes in the wake of reports that some cabinet secretaries were frustrated with Elon Musk's email to their employees demanding to know what they had been doing over the past week. A lot of cabinet secretaries want to be the

official who controls the staff that report to them they don't want an outside person sending emails to their employees asking them what they've been doing so that ruffling of feathers might explain why you saw a very solicitous Elon Musk in the cabinet meeting just now. I'd also say that this is the first

uh... we've had an opportunity to hear from president trump expand upon his idea of a trump gold card for immigration and laying out the idea explicitly that american companies would be able to buy one of these in the way he envisions it not that that's necessarily going to be what comes to pass but in this idea that he's floating that and an american company could

pay $5 million in order to get an employee in on one of these gold cards. That's something, he says, might raise a lot of money. And we also saw Howard Lutnick there, the commerce secretary, saying that all the people who apply for that program will be properly vetted. So, some new details there. Otherwise, Scott, you're hearing the president hit a lot of the points that he's been hitting in appearances over the past couple of days.

Yeah, Eamon, we'll monitor that, of course. I know you will. And if there's anything else we need to know about impacting these markets, you'll, of course, join us once again. That's Eamon Javers on the North Lawn of the White House. We do have a very busy day in these markets, as all of you know. NVIDIA's Moment of Truth comes this afternoon. There's been a lot of questions about these closely watched momentum stocks. We're going to discuss all of that with our investment committee today. Joining me for the hour, Joe Terranova, Liz Young-Thomas, Jim Labenthal and Jason Snipe. We are green.

today as we look ahead to what takes place this afternoon but I think most importantly to start is the bounce that we've gotten in these momentum names on even though the Nasdaq is on track to break its three-month winning streak

Palantir, CrowdStrike, Vertiv, Vistra, the MTUM is trying to break its five-day losing streak. It has been ugly. Momentum down 4.4% in one week. The JOTI down 4% in one week. I mean, the factor of momentum has really dominated the conversation within this market. Well, and what it's done is it's stripped away the market leadership because that factor had been leading the market over the last three months.

You are getting a little bit of a modest bounce today. That does not confirm the return of leadership for momentum. Generally, when leadership is lost, it evolves into a sideways consolidation pattern. That is exactly what I expect to occur here for all of the names that you are mentioning.

Applovin down significantly today, bouncing somewhat a little bit. But I don't think you could look at today and say, okay, we are restoring momentum as the leader in the market. And I think that's critically important. - Let me ask you this real quick. So Applovin's in the Jyoti. - Yes. - So your hands are tied. - Yes, it is. - What's it like having your hands tied

while watching a stock crater like this one has. It's down 20% week to date. It's been outside of a Palantir and maybe some other names, really at the forefront of the momentum unwind.

So I think you have to take a step back. You have to say to yourself, look, what is the journey been in your ownership of this stock? And for what we have done with Jyoti, our ownership is somewhere around 75 or 76 dollars since last summer.

Obviously not happy about seeing the decline that we've seen from five and a quarter. To me, that was a parabolic high for sure. Classic example of good news, bad price action. You release earnings on February 12th, February 13th, you make a new high in reverse. I said last week,

Matt Lovin was the one name that I was ultimately concerned about. And I said on Monday, I didn't think that we were seeing the institutional liquidation just yet. You're seeing that over the last couple of days. Volume is increasing. That might lead to some form of a near-term bottom, but that doesn't mean you're going back to five and a quarter. If anything, you get sideways trade. Because a lot of the retail money, Liz, that has been around these names seems to be running for the exits. That's what some of the notes have depicted here.

this week. Wells Fargo's Chris Harvey calls what's been taking place in this factor a mopocalypse because it's been what he describes as a perfect storm against those stocks, suggesting that he thinks it's about to end. And until it does end, you can have a hard time believing that the market's going to be able to stabilize, certainly as it relates to the Nasdaq. That's why the Nasdaq's winning streak is on thin ice.

Right. Well, and to Joe's point, I mean, this is a tiny little recovery today, but it's certainly not going to make up for what's happened over the last couple of weeks and particularly the last five days or so. When you look at retail traders, a lot of this momentum trade and a lot of the sentiment based trade is based on feelings. And it ends up being multiple expansion, which is not focused as much on fundamentals. And when you look at the fundamentals, the underlying

scares that we heard about yesterday, growth scares that are going around the economy, the fundamentals are still strong. Coming into this, momentum had stretched the market, particularly in technology stocks, consumer discretionary stocks, all of the usual suspects.

The fundamentals of the economy haven't really changed. Now, do we expect a little bit of a slowdown in growth compared to the last couple of years? Yes, but we don't expect a contraction. We don't expect zero growth. So we need to right-size some of these PEs and some of the momentum factor to get back to a place where we're reflecting the fundamentals of what's actually going on under the surface. Earnings are still strong. We have been hearing about this rotation for such a long time.

Hopefully hearing about that rotation has led some retail investors into other parts of the market so they have a more diversified portfolio. All right. So Broadcom reiterated a buy today. CrowdStrike, Target, Raise, those are two stocks that have been within the cohort that has been highly upset of late. But now let's spin it forward because we've lost some of our program today, obviously, for that first cabinet meeting down at the White House. That was important that we listen in there. But NVIDIA. OK, let's talk NVIDIA. Jason Snipe.

Basically been dead money for eight months. There's a lot riding on it for it and the group of the hyperscalers who, by the way, have been largely in correction. In case you haven't noticed, NVIDIA is down 13% from its high. Microsoft 14, Alphabet 15, Amazon 11, Meta slightly less than that.

After its 20-day win streak, Meta's sort of reversed a bit. It's down 8% from its high. Escalator up, elevator down. And that's what's happened to some of these names. But what are you thinking about for NVIDIA today? Moment of truth. Yeah, no, it's definitely the moment of truth, Scott. There's a lot riding on the print today. You know, when we heard about the deep seek news several weeks ago, 17% drawdown, almost $600 billion in market cap lost. Obviously, that had an impact on the stock.

Now we're hearing again about export controls and what that looks like. But what I can say, what has been reiterated from the hyperscalers is CapEx spend has not changed whatsoever. This deep-seek news had no real impact on those numbers. We are hearing from Microsoft $80 billion. We're hearing from Meta $60 to $65 billion. We're hearing from Amazon $100 billion.

plus dollars in CapEx. So what we need to hear, Scott, is $38 billion of revenue. We need to hear a guide of $2 to $3 billion over and above. So that would put us at $42 billion for the quarter. We need to also hear about insatiable demand. That, I think, is what we need to hear today. And I think they will do what they need to do. And I think the print will be really strong. OK. Let's bring in Christina Partsenevelos now to tell us whether NVIDIA can, in fact, meet this moment, the moment of truth.

because the goalposts may have moved as it relates to the deep seek day. That really sort of changed the conversation in some respects towards NVIDIA. The company has, I think you would agree, sort of found itself a bit on the defensive side

since then. So today's even more important. Yeah, they've definitely been on the defensive, seeing that they're still more relevant in the inference stage. But the stock price has retraced about two thirds of its value since that drop in January. If anything, what we're seeing is NVIDIA coming closer to its fundamentals. Liz pointed it out that it needs to go back to the fundamentals, right size, the valuation, which is what, 33x right now, still below its five year average.

for Nvidia, Jason spoke about it, it's the $42 billion buy side number for the guide that we're really looking for. And I bring up the buy side because it's the first time in two years where those buy side expectations have actually dropped to fall in line with consensus. So

everybody is a little bit more tempered going into this. You have the deep seek, you have the U.S. export controls, you have the air pocket that's going from demand, going from Hopper over to Blackwell, and then the next iteration of Blackwell, which would be the Blackwell Ultra out later this year, the B300. So those are

Three factors. You have gross margins that are coming down to about 72.5 percent. We knew this. Management warned of it, but still, nonetheless, it's there. So these are several factors that are weighing on the stock. But I think really the major thing is going to be that guide and demand momentum for Blackwell into the next four quarters.

Yeah, Christina, thanks for setting that up perfectly. You've got a busy day and I'll see you throughout the day, obviously. All right, Jim. Goldman today says options are pricing in a plus or minus more than 10 percent move. OK, either way, over the next two days, based on what happens, there are others who have sort of suggested that this is a really important moment for the market as a whole.

I think it is very important for the market. I'll take the 10%. I think that's going to go to the upside, Scott. I look at the valuation. I look at the business metrics. Jason, what you were saying, you know, it's hard to see demand falling off. I think that's what Christina was saying as well. So let's look at the numbers. The stock trades at 30%.

That's at 30 times forward earnings for a stock that's about to show net income growth and earnings per share growth of greater than 100% year over year. For the forward year, that's projected to 50%. Five zero percent versus a 30 times forward multiple is a very attractive multiple. Now, stocks can always go down, all right? And we know, Josh talked about this yesterday, that for the last several quarters, when earnings have been announced by Nvidia, they've been fabulous, the guidance has been fabulous, and the stock has gone down.

So how the stock trades tomorrow or Friday is immaterial. At this valuation, given what looks to be insatiable demand, I forget if that was you, Jason, or Christina who said it, and the growth rate and earnings per share, I'll take that 10% to the higher, Scott.

Are you thinking about this? It kind of feels to me like NVIDIA is running in place. Well, it has been. It has been running. It's been dead money for a while. So it's up 5% since August 28th's earnings report. Here's what's interesting. I went and looked at some of the things that I'm utilizing in the momentum strategy itself. And this will be the first earnings report for NVIDIA since the middle of 2022, where if you look at the return for the stock,

versus where it was on the last earnings report, it's negative.

It's actually down since the last earnings report. That has not been the formula for Nvidia for the better part of the last several years. I also looked into the options market and interestingly enough, it seems as though you're getting more of a premium that's being paid for the puts versus the calls. Again, that's interesting information. Collectively, you put that all together and you say that there seems to be more of an openness. There seems to be more of a willingness

to push up against what has been a really really strong bull market for NVIDIA for the better part of the last 18 months. I don't know necessarily that that's the right play. I think that where NVIDIA is right now is really in a process where it's going to be consolidating. You could utilize 115 up to 145 and I think you're just going to be basically see it ping pong back and forth in that range. I mean Rick Reeder was on with me yesterday at BlackRock who's still a believer, a big believer in the

the trends around AI and the stocks that are at the forefront. We talked about risk in the market. Bitcoin, by the way, is holding below 90,000, which is a key level to continue to watch. Alibaba has been trading. I'm trying to sort of point out places in the market that have shown where risk has been taken and where some of it has come out. By the way, Reader still is optimistic about what this year is going to bring. Listen to what he said.

We've got to create a little bit of clarity around growth, inflation, tariff, geopolitical resides. But I think when they finally do the tally, I think you'll have a pretty decent year. Double digit returns. That's what BlackRock's reader said. Liz, I mean, it's been a lot of noise, which he thinks is just that noise. Get through it, maybe a chop in the first half, and then you can settle in, focus somewhat on what the president was talking about.

in the room with his cabinet today, and that is going to lead to a better market in the second half where you can achieve those kinds of returns. Double digits. I think that's fair, honestly. And the volatility we've seen that's now being baked into the market, the minute that we get clarity on some of what's driving this, we'll have a relief rally. And some of those relief rallies, especially the stuff that's really taken momentum down, those relief rallies probably go back to, again, the usual suspects.

What's important to remember through all of this, and I would say this for maybe November until now, is you have to be watching what's driving the moves in the market. And particularly, you want to watch yields. So late 2024 up until about mid-January, what was driving a lot of that yield move was inflation fears. And now we've shifted over to worrying about, OK, well, tariffs pressure growth.

Will some of these other policies pressure growth? We don't know the answers to that yet. That's been pressuring yields now, both of which have been bringing stocks down. So once we have clarity on that growth stuff, I think we will have positivity in the market. Let me take a quick break. Bounce for a couple of minutes, come back with some committee stocks on the move. We have some calls that we want to get through as well after this quick break.

This is a message from sponsor Intuit TurboTax. Taxes was getting frustrated by your forms. Now Taxes is uploading your forms with a snap and a TurboTax expert will do your taxes for you. One who's backed by the latest tech, which cross-checks millions of data points for absolute accuracy. All of which makes it easy for you to get the most money back guaranteed.

There she is. High five. Dave can't stop celebrating big savings with the Comcast Business 5-Year Price Lock Guarantee. It's 5 years of gig-speed internet and advanced security at a great rate that won't change, only for a limited time. Comcast Business. Ask a question.

Learn more at capella.edu.

We got some committee stocks on the move that we need to discuss today on this desk. Lowe's, they beat, said sales could see modest growth in the year ahead. There's a lot of questions right now, Jay, about what's going on in the housing market. For sure.

For sure. For sure. But it was a beat on the top and the bottom, and it was a good read-through from, obviously, HD. You know, positive surprise on same-store sales, which we have seen consecutive quarters of negative comps there. So I was happy to see that. I also was happy to see the pro segment continues to grow. I think they're creating margins there, which is good to see because they're typically a do-it-yourself player. So

I like this print and we'll see how it goes into a strong seasonal period. All right, Joe, TJX. I had Matt Boss, JPM on closing bell the other day. This is one of the names he likes, says it's in the sweet spot. They beat, their guidance was weak.

There's the stock, though. It seems to be in the right place at the right time. Conservative guidance. And I think that's what you heard from this company. And I would expect that they will beat that guidance. This was an excellent earnings report. This is a company that, yes, in fact, is in the sweet spot. Off price is doing phenomenally well. You're talking about a company here, $140 billion market cap. We always like to focus on target. To me, this has really replaced target when you're thinking about exposure to retail in the consumer discretionary sector.

Let's talk Lilly for a moment. They announced plans to build four new manufacturing sites in the United States, totaling at least $27 billion. J.P. Morgan puts the positive catalyst watch on that stock as well. Joe, you own that, and Jason, you own the biotech ETF, the IBB. Liz, I know you're watching this space because of the two spaces that have been working while momentum has been unwinding. It's been staples in healthcare, healthcare,

Joe, you first on Lilly. Jason, you next on the IBB. Liz, then you on healthcare in general. Just like TJX, which is a momentum name, the momentum is not unwinding in Lilly. The stock is going to be pushing towards new all-time highs. It's on a streak right now that we haven't seen for the better part of the last two years, seven consecutive positive days.

IBB, I like Big Pharma. Obviously, App-V is our favorite name in this space. I think pipelines are starting to fill. I think directionally, if rates continue to hold lower, R&D gets cheaper, and I think these stocks can continue to work. All right.

Healthcare was actually one of my calls for all of 2025. I maintain that view. And if you look at what's been leading healthcare, it is pharma and biotech. It works both as a defensive in the large cap space, but more so as a growth driver in the large cap space for people trying to get out of tech and into something that's more attractively valued. Jimmy, it's the best performing sector year to date.

You're an AbbVie guy too. You have some other names, right? Yep. AbbVie, AstraZeneca, Vertex, UnitedHealth, we talk about a lot. But overweight healthcare and very much within healthcare, overweight pharma and biopharma. A couple of things at work here. Yes, there is a little bit of a reversal.

reversion to the mean after a devastating election year. That's always the case. First year of a presidential administration, you get the relief when the policies are not as dire as expected. These stocks have tremendously good valuations, dividend yields, etc. And the growth is there. We have an aging demographic in the developed world, and that's going to promote use of these drugs, demand for these drugs.

Good dividend yields. There's a lot to like here. We'll come back after this. We still have our calls of the day, plus more than just NVIDIA after the bell, which is why we have the setup on Salesforce coming up after this break. Is it time to reimagine your future?

Hey, guys.

Have you heard of Goldbelly? It's this amazing site where they ship the most iconic, famous foods from restaurants across the country, anywhere, nationwide. I've never found a more perfect gift than food. They ship Chicago deep dish pizza, New York bagels, Maine lobster rolls, and even Ina Garten's famous cakes. So if you're looking for a gift for the food lover in your life, head to goldbelly.com and get 20% off your first order with promo code GIFT.

Airlines have been in focus a lot, Jimmy, lately, Delta included, reiterated by the day at Redburn. They say they believe the U.S. airline industry is entering a, quote, Goldilocks period. I mean, I think it's a good description, Scott. Fuel prices are low. There's no big labor contracts up for negotiation and demand is high.

Add to that that the stocks have kind of fallen off recently on this growth scare that we've been talking about. Makes the valuation attractive. Delta, you know, is my preferred stock to own in the space. They're going to earn probably $7.50 this year, maybe $8.50 next year.

I don't think it's unreasonable to put a 10 times multiple on that. That's a nice return from here. Joe, you got PayPal, you got Zoom, you got Coupang, all either upgraded or reiterated with positive mentions today across the street. Pick one that you want to talk about out of the three. I could lump it all together here. PayPal, Zoom, and you could throw Block in there as well.

Awful momentum. These are recent trades that have been added to the JOTI ETF. They do not look good. Coupang is the clear winner. Obvious 20% revenue growth in a very competitive marketplace. It's going to approach an all-time high. Okay. We'll watch those. I mean, the stocks are up, obviously, on those upgrades or reiterations that were positive today. We'll come back next with the setup.

A big reminder for you about a very big interview that is coming up tonight after NVIDIA's earnings. John Ford sitting down and speaking with NVIDIA CEO Jensen Wong. You can catch that CNBC special report 7 o'clock Eastern tonight. Do not miss it. It is not the only game in town. NVIDIA is not today. Salesforce reports. Jason Snipe.

Jim Labenthal, IGV is down five days in a row. What do we think? Who's in Salesforce over there? I sold it a long time ago. I mean, I've watched it admirably as it goes up. You're in it? Yeah, you're in it. You're in it. My bad. This is going to be all about agent force. Agent force was introduced in October. What has the adoption been of this AI tool that basically

takes customer support away from humans, puts it towards artificial intelligence. The guidance for the year looking somewhere around 9.2%. Let's see if we're able to hit those metrics. Your service now. Yes. Right? Yeah. I know you were giving me that look when I said sales. I'm like, yeah, it ain't me.

That was my bad. ServiceNow is close to a 20% drawdown in the last three weeks, right? So I think it's part of the AI destruction over the last couple of weeks that's bouncing back a little bit today. So for me, 21% revenue growth, 18% EPS growth. They are continuing to monetize their new AI tools. So I continue to like this name here. Watch the negative correlation trade. I keep talking about it over the last six months.

IGV software up 15%, semis flat. Now what's happened over the last month? Yeah, IGV in five days is down five in a row. Now here we go. We've got the IGV in the last month down 5% and you've got semis up 1%. So guess what? Here we go. You got NVIDIA reporting tonight. You have Salesforce reporting tonight. Does that unwind further? Yes, Autodesk reporting as well. That's tomorrow after the bell. That's yours. Yes, and there we need to hear that the U.S. construction recovery report

is well underway. If in fact that happens, that should benefit Autodesk. - EOG is tomorrow too. - It's gonna be a little bit of a complicated earnings report.

Prices in the fourth quarter were on the decline. That's obviously going to affect free cash flow. Production levels are going to be very strong. I expect EOG to take down their CapEx for the full year. The street might like that. - Liz, where do you come down on energy these days, which is not great, not horrible. It's up 3% as a sector year to date.

It's showing a little life as a sector, though, recently. And it would be considered a contrarian trade. We've got, obviously, oil prices that have come down. Right. But I still like it for the full year. Falls into that cyclicals camp, I think, in a relief rally. And if a rotation takes hold again, I think energy can benefit from that. Were you saying you wanted to say something? No, I just don't like it. You're looking like you did. Yeah, I'm looking at the market. There seems to be less life as the show is progressing from where we began. Yeah. I mean, you still have...

You have a lot of the mega cap names that are hanging in. NVIDIA is the leader by far. It's up 4%. Ratchet's up. The pressure a bit going into the number this afternoon. Meta is positive by near 3. Apple's down a couple of percentage points worth noting. Tesla. Again. Tesla's down 27% in a month.

That's down again. At least the banks are bouncing. I mean, that's a plus sign. They haven't traded all that well lately at all. And you still continue to get a bounce back in the names of like CrowdStrike, Palo Alto, Zscaler, Fortinet, and Palantir, too, which has been at the center of the whole thing. We'll do finals next.

I hope you join me closing bell three o'clock Eastern Adam Parker Marathon's Bruce Richards with us. Morgan Stanley's Chris Toomey, Stacey Raskin, Bryn Talkington, Aya Yoshioka. And I hope you'll be here as well. This is Liz Young Thomas's last halftime for a while. We wish you well. We'll be thinking a lot about you. You keep us in the loop. Thank you. What's your final trade? My final trade today is software IGV. I think it recovers these losses. I like it for the year. I like it even more at these prices. Okay. Thank you. Jason Snyder.

Buy, serve. Clover continues to deliver. Jimmy. Cisco continues to perform. Joe T. I like interactive brokers. See you on the bell. 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.

as an expression of an opinion. Such opinions are based upon information the Halftime Report participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com forward slash Halftime Report disclaimer.

At Capella University, learning the right skills could make a difference. That's why our business programs teach you relevant skills you can take from the course room to the workplace. A different future is closer than you think with Capella University. Learn more at capella.edu.