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All right, Carl, thanks very much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, tariff turmoil sending GDP into the red, stocks selling off a bit as the president's trade war now leading to big questions about where this economy is heading. We debate it with the Investment Committee, as always. Joining me for the hour today, Joe Terranova, Kerry Firestone, Steve Weiss, Jim Labenthal. We will check the markets. We're red across the board. We are off the worst levels.
But, Joe, we are looking at the first negative read on GDP since '22. PCE was higher. ADP was the lowest since July. Chicago PMI was the weakest since January. And the word of the day once again appears to be stagflation.
that's what we're worried about that's part of the backdrop the other part of the backdrop is s_ and peace but up for six straight days and you still have teases of trade deals very delicate environment so we want to do in that delicate environment well what you want to do in that delicate environment you want to look at your equity holdings anyone i'm sure that you own companies that have strong balance sheet that could buy back their stocks that are qualitative in their nature i still think you want to focus first and foremost
on the bond market. The problem, as I see it with the economy, is growth is the concern. I'm less concerned about inflation because I see it as a one-time price sticker shock. I think there is elasticity between that sticker shock and what consumers ultimately going to do. I think a lot of people were looking at the report today and saying, well, personal consumption was up 1.8%.
that's a good thing. Well, what about the fact that they probably, that consumer spending, were trying to get ahead of the tariffs, just like we saw the surge in the imports. So the overall environment is one in which I still think it's delicate at best, and it warrants really looking at the fixed income market, because I think that's your opportunity in the near term. You know, Kerr, we have talk of potential deals. People are
We all know that the economy is soft and it's softening, but you also have the prospect of deals and it's still been a pretty resilient economy in the face of everything. The consumers remain resilient in the face of all that. Even some companies have too. We've probably gotten more guidance than we expected to this point.
I think we expected fog leads to no guidance, and we've actually been surprised a bit to the upside. So then it comes back to where the stock market's currently trading. We've retraced 50 percent from high to low post-liberation day. The question is, are stocks attractive now in the backdrop that I painted for you? I asked Rick Reeder of BlackRock that very question. He said stocks are still too expensive. Listen.
The fair value of the equity market strikes me today. It's still below today's levels. I would argue 5% to 10% below today's levels. Once you get through the uncertainty, then I think you've got upside. But I don't know. I think multiple today is a bit high, and I think the earnings growth that we're seeing today that's priced into the market is a bit elevated.
Short-term tricky, longer-term positive. That's distilling Reader down from what he told me. I heard that interview yesterday, and I feel that to some extent, Rick is absolutely correct that there is potentially more downside. But when the market was down 20% at its lowest point, what you had in there, we felt, was about half of that related to
equity markets being somewhat overvalued. We ended the year at high multiples, the max sevens really were up to 34.5% of the S&P. You really saw a market that was priced
I would say to perfection. So we lost that premium, but we also then had a discount for tariffs, recession, earnings coming down when we were at the lows at the beginning of April. So now we've retraced half of that. So now we're back to where we were
meaning we're at a point where the market is not as expensive as it was, but there's nothing in it for a deeper recession or a deeper sort of unwinding of earnings potential. Is that too much? He said we'd probably get a recession. I mean, I think it's a base case. We're kind of in a recession. But it could be pretty short and pretty shallow. So if I told you that was going to be the case, would you say, oh, well, OK, maybe stocks are a little bit
overvalued still but i'm not going to time this thing anyway that's right i mean that is our feeling it's exactly there when the market was way down we were buying i think i was one of the only people on the desk buying and we've made some more purchases i won't mention them now okay we'll get into this point we're kind of in that range where the some of the market is very attractive and some of it has come back less attractive but it's not
very overvalued in our opinion. Let's do one of your moves now, because I think it's apropos to what's been in the zeitgeist of
Where is all the positivity that people came into this year and this administration thinking about? It's going to be in the banks and private equity and all these places because deregulation and tax cuts, which we still expect to get, by the way, maybe they were just pushed and it hasn't manifested itself in the stock prices. Correct. Apollo, perfect example, right? Right. Private equity stocks, I don't think, have performed to anybody's expectations from the beginning of the year until now. But you bought it. Why? Yeah.
We bought Apollo, but we already own Blackstone. And Apollo is one of the premier private equity companies with a focus on fixed income. It has an insurance business, a hybrid model insurance plus private deals. It has sourcing, one of the best in the world. It has great management. And it was down 30 percent. It's a stock we've been watching for the last couple of years. And we thought, at this price, this was the time to make our entrance. You know, maybe there's a little more downside.
we really thought it was attractive here on a multiple basis and free cash flow, etc. And deals will come. It isn't as if we expected, oh my God, a switch is going to go off and all of a sudden there's going to be rampant deals everywhere. We just thought the market has been weak for two years and this is a time on the private equity side to start to pick up
the pace and the private credit market as we know has been very strong and they're you know they're very strong there and also their credit their credit is not weak credit they have strong credit all right weiss you take everything into consideration all the comments into context and you come out with what today i come out with it's time to protect capital look these uh
Perspective is important. And Joe spends a lot of time looking at all the inputs, macro inputs. He mentions credit market. I know he looks at currencies, everything. But most people here, right, every people, everybody sitting here is not the asset allocator. Nothing wrong with that. They are investing equity. So they're always going to look to put
equity in the market. Nobody's giving it to them and saying, "Put it in bonds, put it in currencies." So that's an important bias to note. Here's what I'd say. This time is not like other times. Times do get different. And in terms of resilient consumer, consumers are always resilient. But what's the time period? The consumer right now is not resilient. The consumer right now is scared and stockpiling goods because they see major price increases coming.
So this is what the beginning of stagflation looks like. We've got CEOs that are saying of so many companies, I've never seen so many companies do this, where they say, "We don't have visibility." So how arrogant is it to say, "I've got visibility as an investor," without all their tools, without all their balance sheet looks, without the credit markets. - We never have visibility. - Well, your visibility cues off what the company's visibility is. Otherwise, why do you need an active manager, right?
Right? Just buy an indices if you don't have any visibility. You do your work, you have it. So what I'd say is the following. I'd say that you protect capital, you can't time markets, that's for sure. But what you can look at is you can look at where the risk is. And you have to have a base case. My base case...
is that the market goes lower. I think Rick Reeder, who I agree directionally, but I think he's underestimating the potential to climb. Because there's no reason in the world why this environment should have a PE, a forward PE, substantially higher than what we've seen over the last 25 years. No, but that's why he suggested that
In the near term, you could go 5% to 10% lower from here. And my target would be lower, depending. Now, that's my intermediate target, because I'm convinced we're going to recession. Near term?
I don't have the short position I had before. I haven't really been adding. I mentioned a couple of things the other day. But near term, you get a deal with India, you'll see the market pop. You get some other true social headline, you'll see the market pop. Until the market gets exhausted by that and starts seeing real data, then you'll get those pops and you get the sell-offs. Krinsky today, risk-reward favors downside. Goldman expecting renewed declines in equities. Wolf,
Stay defensive and sell rips. So, I mean, there's a lot of people in the Weiss camp at this point, and maybe for good reason. But you tell me. There are certainly more potential negatives than positives that are in front of your face currently. The challenge is having the wherewithal to try and look through the fog.
and see what might be on the other side. It's very foggy. There's always fog. Kerry, I agree with you. There's always fog. This is dense. This is dense. I said it's very foggy. You say it's dense. I agree. My point on this is it does come down to one thing, in my opinion, and that's trade deals. And regardless of whether they're superficial or not, that's what the market's keying into. Steve, I think you just said that. You know, if a deal with India were announced, it would pop the market.
Because the market is willing and it's showing in this 10 percentage point rise off of the lows. It's showing a willingness to look through a recession that becomes more and more probable with each given day as long as that recession is short and sweet.
And the only way a recession is going to be short and sweet is if there are trade deals and if those reciprocal tariffs, which are currently on pause, are, frankly, permanently done away with. The universal tariff of 10 percent, the world can get around it. The reciprocal tariffs are simply too much for the global economy, the U.S. economy, S&P 500 profits, and the stock market to take. So it comes down to a binary situation with those reciprocal tariffs as far as where we
we go in the short term, Scott? I don't know. It really depends on these trade deals and whether they are announced. As for whether they're substantive or not, at best, they're going to be memorandums of understanding. At best. It's going to take years to actually codify and ratify them. By the way, be careful with the trade deals. I think the market actually is priced in the fact we're going to get deals. Agreed. That's why we bounced. We're priced at it. We know we're going to get deals. So it's going to be short-lived.
You sold your S&P futures this morning. Yeah, I got stopped out of those. I made money on them, so let's be clear, I had a nice, I rode the market higher. Playing for a bounce. Playing for a bounce. Nothing else than that, just playing, being tactical. But Steve's right. Most of the people that are watching the show, most people are looking in the universe in terms of allocating to equities. But I look
in the other areas of the market to kind of tell me what the personality is. And you can't ignore what you're seeing right now as it relates to the economy. If we could, can we throw up a three-year chart of the two-year? Look at where the two-year is today at 3.63 right now. You're basically going back and challenging where we were on April 7th at 3.43. And if you, in fact, take out that level, you're talking about a two-year that potentially is sub-3%. That is not indicative of
of an environment that is a good one as it relates to growth. That is clearly an environment that telling you is growth is a concern. You have oil at $58. You have copper on the retreat over the last week. The biggest concern that we have in front of us is what has happened to the economy. And I say, what has happened, Scott? Because I think the effect of all of this is already happened. I don't think it's avoidable in the future. Well, if I told you that part of the move in the two years, you know,
trying to game out the fed you know the gun lock perspective right the fed follows the two-year that's what he's always said yeah and i can i respond so i'm going to tell you i think next week when when the fed meets i think they end qt and i know that's probably something that's not consensus but i think that's going to be the first strike from the federal reserve and actually easier monetary policy i think they end qt you know so
Gunlock's a pretty smart dude. We've had him on the show. He's really wired, great thinker. But I'm going to disagree. I think that they're trying to get maybe in front of an easing, and I don't see the easing cycle happening. Now, the feds come out and said, look, if it's transitory, meaning that we get one big hike,
And then we can see our way to cutting, possibly. But it's not going to be this quarter. No, but if you get on Friday, if you get an ugly jobs number or even a negative jobs number, you don't think that the probabilities that Leisman's going to come on and tell you, hey, guys, look at the probabilities for a June cut. And it's going to be a bar that looks like this. Woo!
Right. And we'll be back to where we were, where there was a 75, 80 percent chance of a June cut a few months ago, six months ago. It's not there. So it's tough to play what the flavor of the moment is. But here's what I'd say. Companies are in a very unusual position coming out of COVID where they cut people, they cut headcount and then they couldn't replace them. So labor costs went up significantly. They're not doing it this time. So they don't have any visibility to earnings. They've said that.
You've got traffic. You have gotten a little more guidance, though, in fairness, than I think you or anybody else expected. I know there are horror stories of guidance, but you've gotten guidance in many cases where you didn't think you would. On balance,
You've gotten much less guidance because so many companies have pulled their guidance. There's no other period of time that's hurt. You've gotten less guidance than you normally get. You've gotten more than I think people thought that you would. That's got to go into the median when you do the calculation. You won't come out anywhere near the more guidance. But one more point. So...
Los Angeles, poor traffic, down 35% of the goods. So companies' margins are going to get hurt. So I don't think you'll see the major layoffs and the major employment. Plus, we're still in record employment, so there's a long way to go. We'll see. I mean, there's some companies that think they have pricing power. A lot of companies are talking about raising prices, whether it's Adidas or whoever else we mentioned. And we showed you yesterday that whether I think it was Abercrombie or even Amazon and some of their products, prices are going up. They think that they have...
the power. Speaking of guidance and speaking of earnings, Meta and Microsoft tonight and OT. Julia Boorstin's with us right now in Los Angeles with what we should watch out for most of all. Let's take it from that perspective. Most of all tonight for Meta is what?
Well, here's the thing with META. Shares are up 26% in the past year, but down 27% from its all-time high in February. And so revenue growth is expected to slow to 13.5%, slower than the 21% revenue growth in the fourth quarter, while earnings per share are expected to grow 12%. But
Even more important than this quarter's numbers is what insight Meta gives about its future, especially with all this uncertainty. Investors are watching the broader ad market, whether Meta is seeing signs of weakness amid so much uncertainty. And Chinese ad spending is in focus in particular. Moffitt Nathanson estimated that Meta could lose $7 billion in ad revenue from China alone. Another key focus will be on A.I.,
Yesterday, the company hosting its first AI developer event and announcing a new standalone Meta AI app. William Blair saying, quote, we believe in the longer term that the stock will at least grow in line with the top line and that longer term AI benefits are still not fully appreciated by investors. Investors are sure to press Meta on how much the company will invest in AI and expectations for when those investments will pay off. Scott.
You didn't mention regulatory. Does that mean that the street thinks that all of these issues are just much bigger in the current time than trying to game out how all that's going to play out?
Look, you are right. The FTC trial continues to drag on in Washington. And we heard from Javier Oliva, who's one of the senior executives at Meta recently. But while that continues, I think the key question here is what's going on at Meta in terms of the ad market. Advertising is its bread and butter, and they
and analysts and investors want to know how much is going to be impacted by all this geopolitical uncertainty and tariffs. And then there's this question of where Meta is spending all of its money, which is investing in AI. How much of that is already starting to pay off in terms of boosting that ad revenue? And then long term, can they make this new app that they just unveiled yesterday a new standalone app and a real revenue driver the way their other apps are?
Yeah, great perspective. Julia, thank you. Julia Boorstin setting the table for us for a highly anticipated earnings report. Carrie and Joe, you own the stock. I want to hear from you both. Carrie, you first. Sorry, Joe. So, Meta is down 10%.
25% or more since its peak. And it had a great two-year run starting in November of 2021 when the stock got just totally trashed. So if you look at what's happened over the past few years, a lot of people who didn't like the
the stock and really resisted have come into it and so it's become a very very popular name for good reason because they beat expectations time and time again over the past couple of years
So now we're down a lot because there's concerns about ad spending. There's concerns about what's happening with AI spend. What are they doing with giving things away free, not for free? How are they competing within their segment? What we would say is the stock has been
in its own bear market recently. It's 18 times next year's earnings. They still dominate in many of the categories where they exist, and they continue to grow users. Would we sell the stock here? Not at this price. Would we buy it? Let's see what happens, because perhaps there is another downshift. 27% down from its 52-week high is the name. Yeah, that's a lot. 640 is the new price target at B of A today. That's reasonable upside, obviously, from here. Joe?
Relative performance is very important when you're looking at the MAG-7, arguably more important than any other sector or strategy within the market. And you've had relative outperformance year to date for Meta and for Microsoft. So that means maybe the bar is slightly higher. I think the impact of what China revenue, which is 11% over all of their total revenue, is going to be important. I think a lot of people are really not understanding the significant loss of revenue that is going to come from China.
I do think they'll be able to buffer most of that in the similar capacity that Alphabet did, which is what? Buybacks. $70 billion buyback plan from Alphabet. I would expect to hear strong numbers from Meta tonight. And I also think that the entirety of all these Mag7 with over $500 billion to spend on buybacks, I think they're actually going to be doing that.
That's probably a reflection, whether it's accurate or not, that Meta feels comfortable in the environment that we're in. They're not saying, okay, let's hoard the capital. Okay. Weiss, Microsoft shares are on pace to snap a four-month losing streak. Yep. Yep. They were kind of the first ones in to the sell-off, and they look to maybe be the first ones out. We're certainly one of the better. They're up five of the past six. It's the best MAG7 names year-to-date, to our point. What
what's your expectation um my expectation i have none i'm concerned with the quarter there i'm concerned about the quarter with with with meta just don't know you know i mean microsoft performed so well recently because it performed so poorly before that it got thrown out you know with the software assault on software stocks and uh i have
I don't feel good about it. However, you know, as I constantly say with Meta, with Microsoft, they're permanent compounders and they have great management teams. They're not always going to be perfect and be able to navigate through the dark winds and the dark times that we see, but they will be there. So I choose not to pay taxes. I periodically do sell calls, but that's such minimal protection to do that, that I'm just sticking with the positions and
If they took major hits down in a volatile market where a stock can be down 25%, then I would think about stepping up, even though they're both core positions. I don't have a lot of room. I've got more room since they've traded down, though, in the portfolio. Jimmy. Yeah. So I had a small position in this for several years, and a month ago I added to it and brought it up pretty much close to a market cap weight.
That was at a price of around $379. What my thesis is here is we all know it's a great company. The question is what to do with the multiple, which for many years was hanging out in the mid to low 30s and now is in the mid 20s. Is that low enough? I don't know, but I'll tell you what would make me happy is just to see continual earnings surprises so that the multiple organically gets cheaper.
Is this a company that should sell in the low 20s as far as a multiple? I don't think so. I will say one thing about the stock, though. For many years, it had that mid-30s multiple because it was intellectual property. It was asset light. Now we know with these data centers, it's becoming a little bit more asset heavy. That will bring the multiple down. Again, to summarize what I'm saying, mid-20s multiple like that right now, I
I'd like to see earnings outperform it so that the multiple automatically comes down and then can re-rate a little higher. Probably fixate as we always do on Azure growth. Just one quick thing on Microsoft. We feel as if it's become, as Apple was, the safe haven. It's the defensive name. It has an enormous amount of cash, subscription model, not a lot of manufacturing, not a lot of tariffs.
threat for Microsoft? Well, they actually do because the massive build-out that they're going through and the servers, those are all hit by tariffs. And you're seeing with SCMI freezing. But relative. Yeah, right. Relative, absolutely. It's not like an auto company.
Relative to Apple? They do have big hits. Real quick, I want to get one more in. 29% on Azure growth is the critical number. And I think you have to ask yourself, why in the environment where they should be a port of safety, are the Mag 7, thank you, are the Mag 7 underperforming the S&P? Because that's very interesting. And it's certainly unique to what we saw in previous years. Let's squeeze one more in. Jimmy, earnings, Qualcomm.
that's also tonight correct it is not a lot of uh... pub right it's all met a microsoft but you own this name yeah i got a few thoughts here one the multiple is so insanely cheap twelve and a half times this year's earnings that i think it has priced in a pretty big earnings disappointment if you ask me uh... the questions that i'm looking for are not the smartphone i'm not a believer that we are in or imminently going to be in some upgrade cycle some super upgrade cycle but the question is
How are they doing with the automotive business? How are they doing with Internet of Things? In short, how are they doing with diversifying their product stream? That's what I'm looking for. All right. Up next, we do have more committee stocks in the news and our committee making moves today. A big winning streak for one name having its best month in some two years. We will tell you what it is and we'll trade it. We'll do that in two.
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Many committee stocks on the move today. We hit Visa first. Take a look at the action in that name today. Everybody but Weiss on this desk. Oh, look at that action. Unbelievable action today. I used to and regret not. He owns up 0.03%. Hold on to your hats. What's going on here?
The revenue, speaking of keeping their outlook, they kept theirs. EPS beat, nice $30 billion buyback. Again, that's going to be the financial engineering, the buyback. Why is the reaction muted? If they did what many are doing. You said it because basically everyone's in the stock.
people are you know it's worse than that it's that people if you're never recession consumptions going down the consumption number in the GDP report was not good I don't care for was positive so look I know he's a traitor is a visa trades at a premium multiple on that relax I like it alright but here's the thing here's the thing if you're gonna get a recession in can a real recession and layoffs in consumption going down then these businesses gonna be impacted no matter what guidance they're giving today I'll you know said the consumer remains resilient
and they kept their outlook, their revenue's up. What the heck more do you want in the current environment? Positioning. I respectfully disagree with Jimmy. I think that's way too complex of an explanation. I just think people, everyone's long the name. It's on the VIP list on Wall Street. And when everyone's long the name, you really have to blow out the quarter to get a significant appreciation. Okay. Yeah, new buyers are coming. It's too crowded. Nobody goes there. That's what Joe said. That's what Joe said.
big respect to yogi um booking holdings q1 beat estimates international travel offsetting weakness in the u.s carry that's your stock yeah sales were up eight percent bookings up ten percent very strong gave good numbers a little softness now right because we understand people aren't coming into the united states as frequently it's a short-term problem and we would think that
The reason the market is holding it up and it really didn't drop, there was an expectation that the stock would fall because they're pulling back some of the guidance. That didn't happen. And it's because people know this is the top in the field, best technology, and this will be temporary and then people will travel more. Quick, Jimmy, the most offensive stock in the market right now is what? Quick. Five, four, three, no.
No. Joe, three, two, one. No. Weiss, Netflix. Netflix. That would be my answer. Joe owns Netflix, by the way. Oh, yeah, sure. Seven-day win streak. It's going for eight, up 20% in April, on pace for its best month since May of 23. Pricing power. People will cut back on other streaming services. They're the best one out there. It's my favorite stock. Sprinkle in a little momentum. Yeah.
I'll sprinkle a lot of it and I want more. It's had a lot of momentum. That's our, but look at that chart. And they performed great quarter. Sure did. Really? All right, JetBlue. So they have a partnership they negotiated with United. You own that one? I do. I don't know if there's a market moving. Yeah, I mean, I'm not sure about that. I don't own JetBlue, thankfully.
But we do have UAL. We do have Delta in the portfolio. I see trouble ahead fundamentally for the airlines, a lot of friction. And this partnership originally, I think Jeff Blue was talking about American Airlines. American originally, and that ended. Now they're on to UAL. I'm not excited about the airlines, even though we have holdings of it. All right. First Solar, ADP, Garmin, you had earnings on all. First Solar missed. They did cut their guidance. ADP beat. Garmin missed. Their revenues did beat.
Why don't you take that one? Why don't you take first solar since it's down a bunch? First quick and then another one that you want. Looks awful. Momentum is completely annihilated. Downgraded by two places. Just too underweight at KeyBank to perform at Oppie. Which one did we just show up there that was up? Was that ADP? Yep. What about ADP? ADP looked good. New CFO. Talked today about the ability to navigate through the tariff environment.
And this is a stock that has been accumulated over the last six months as we've gotten a little bit more diversification within the market. OK, let's get the headlines now with Courtney Reagan. Hey, Court. Hi, Scott. Well, a Columbia University student and legal resident detained in Vermont after being arrested during his naturalization interview was released from federal immigration custody today.
after a judge ruled that he'd be freed while he challenges the Trump administration's efforts to deport him. Outside the federal courthouse, Musha Madawi struck a defiant tone, saying, quote, to President Trump and his cabinet, I am not afraid of you.
Israel said today it carried out a warning strike in defense of the Druze community in Syria, which it has vowed to protect. Israeli Prime Minister Benjamin Netanyahu said the strike targeted an extremist group that was preparing to attack the community south of Damascus. The strike is Israel's latest in Syria, where it views the Sunni Islamists in power as a threat.
And Waymo and Toyota are partnering to explore bringing robo-taxi technology to personally owned vehicles. The company said Tuesday they hope to quickly develop driver assistance and autonomous vehicle technologies for personal vehicles. And the Google-owned Waymo said that it could integrate Toyota's vehicles into its fleet. Scott, back over to you. All right, Courtney Reagan, thank you very much for that. Coming up, calls of the day. We've got a price target hike for one of this week's biggest earnings movers. Joe's in the name. You might be too. We debate it next.
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All right. We got another carry move I want to tell you about. You made a big deal about being a buyer. Bought a lot of stuff. You sold EPAM. EPAM Systems. Why? So EPAM is a consulting company specializing in technology, software, and AI integration. The stock came way down in the 22 and 23 kind of...
disruption of software businesses and much of their business was also in Ukraine, meaning the consultants had to move them out of Ukraine. We bought the stock down 50% from its high. We thought that business was starting to get better last year. Now the tariff slash geopolitical problems have put all business and consulting software AI on hold. And we just thought time to step away from it. Okay. Let's talk about some calls of the day. Joe, there was a period of time, probably...
two, three months ago, where we talked about a stock like Applovin' almost every day.
Because it was the epitome at that time of the momentum trade in the market. Yes. Up huge almost every day. Yes. And then when those stocks and that factor really fell back to earth, that was sort of one of those that was leading the charge. Well, today it was reiterated outperform at Wedbush. They say they expect the phenomenal growth to continue and believe the company is motivated to prove the naysayers wrong. Probably a big short interest in this name, I would imagine. We can look that up if we can. But what do you say now?
So you're right about that. The interesting thing is when you study momentum and you observe it over different time frames, this still has a very strong momentum signal over a 12-month period. You're talking about a stock that's still upgraded than 250% during that time. So point of entry is always important. I know people say, no, it's not. Tell me where you go from here. I'll do that in a second. But let's remember, we entered this stock last July at $76. So we have a lot of room for error. That being said...
The fact that the options market is implying that on May 7th, after earnings, you get a 20% move, I don't like the viewers, if you don't have a position, owning that type of extended volatility. That's just way too much volatility to incur. And the other thing that I see as we look forward
is this has been, and one of the reasons why we've owned it besides momentum, has been the revenue growth. It's been growing 35%, 40% revenue growth on a quarterly basis. Well, guess what? That's going to begin to cliff. You're going to see the deceleration as you move through 2025. Your numbers are going to look like 30%, 22%. And ultimately, as you get down to the last quarter, you're talking about untapped.
single digit revenue growth so that's not a good outlook so yes we have the position and we have the position because we prioritize different time frames of momentum in 12 month momentum is really important but for the viewers if you don't own the stock there's too much volatility there's too much friction in what might be coming fundamentally I would just sit back and
see what happens after earnings. I did a quick look. It's a 5% short interest. So it's like massive, but it's like, you know, it gives you an idea, though, about how people are thinking about a name like this, which has had unbelievable growth in the market. Doesn't really represent itself on the chart because it's a different story year to date than it was last year. But you get the point, I think. CoStar, market performance citizens today. That's a year stock, Carrie. Yes. So CoStar is...
has been moving forward in a positive way on the commercial real estate business where they have the best website and best sort of information platform for commercial real estate in the world. And its bottom commercial real estate is starting to improve. Their apartments.com is doing better, but homes.com where they're spending a lot of money is struggling. And that's what's weighing on the stock.
There are signs that things are beginning to improve, but that's what's happening today. We're just seeing fear about mortgages during a recession, if there is going to be one. And so we think CoStar stock is really being hit too hard, and we think it's attractive at this price. Yeah, the housing market is a freeze right now. Chenier, Jimmy, downgraded, peer-performed, Wolf.
Shares are up 45% in one year. Stock's been just a home run, I mean, actually for far longer than one year. So if you're going to downgrade it, I can only assume it's on price. It does trade on 19 times this year's earnings. I wouldn't sell it. I'm not going to sell it. Here's why. This is all about exports of LNG, liquefied natural gas. The rest of the world wants it.
The U.S. has it regardless of what happens with trade deals. We're going to be exporting it and Chenier is going to be benefiting from it. What's the year to date? Give me a year to date. Year to date is up 6.2%. All right. So overall markets, I was going to say, you'll take that in a down tape, big time. I'll take it. I'll take it in an absolute tape over four months. Exactly. You need it. I need it. We all need it. Spotify, Joe. So this was a name that Baruch bought.
a few days ago, then they had earnings, the stock went down a bunch. It's rebounding now, it's up 4.3%, the price target goes at JP Morgan to 670 today. - Well, it's the analyst community that's saving the stock today and that's why you're seeing the dramatic rebound. I think the 12 month price target is 656. A lot of people coming out and emphasizing an overweight on it. The question here is do you ultimately believe this has the same recession resiliency that Netflix does? A lot of people have said, well, okay,
This potentially is the Netflix of the music industry. They certainly are delivering. There certainly seems to be a consumer that wants to continue to utilize the product, and we are maintaining our position. Ray J got downgraded to neutral at B of A. That's yours, too. Slowing organic growth.
You think asset management community, obviously, struggling in an environment where you have this mercurial nature surrounding the tariffs, elevated volatility, and really a rollercoaster ride in the equity markets that ends up to nowhere. Okay. We'll come back right after this break. Santoli on the other side with his midday work.
Senior markets commentator Mike Santoli is here with his midday word. Mike, I feel like even with today's GDP report, the negative is still kind of too soon. It's too soon to truly tell what the impact of this trade war and these tariffs are really going to be on the economy.
Right, Scott. I think we're caught in between on multiple fronts, definitely caught in between the kind of hard versus soft data dynamic. We're waiting to see if the economy kind of hangs in there for long enough to get maybe some relief on tariffs. And then we can sort of say, you know, no permanent harm done. We're also operating kind of in the borderlands of bull and bear market. The S&P 500 is
kind of back to where it was on April 3rd. So right in that gap. So that's another way that we're kind of trying to figure out exactly on what side this is all going to break. And, you know, I don't think it was illogical to figure that once we did rally back 15 percent, everybody was flagging this area as potential tactical resistance.
And so I think the question then becomes, you know, do the mega cap stocks maybe start to act as offense and defense again as they have in the past? Or is it just too much of a burden of proof here that they're going to kind of regain, you know, their sort of mojo in the investor favor?
that they had before. Otherwise, it's kind of just we're chopping around until we wait for that resolution that we haven't gotten yet. I wonder who has more pressure on it tonight, Meta or Microsoft. Microsoft's already gone through some degree of pain in the market and it's trying to get out of that world. They both
kind of D rated and they've cooled off quite a bit in terms of the stocks. I do feel as if meta was more recently kind of the glamour story and basically the crowded name. So we'll see if maybe that's the one that does have more to answer for. But you know in both cases it's going to be a lot of questions
about what are you getting for all the spending. All right. I'll see you in a little bit on Closing Bell. Look forward to that. That's Mike Santoli. Mike's going to have a busy weekend, too. A programming note. Saturday, Mike and Becky Quick are going to be live in Omaha at the Berkshire Hathaway Annual Shareholder Meeting. We're going to bring you the entire meeting right here on CNBC and streaming on CNBC.com and CNBC+. It all gets going at 8.30 a.m. Eastern, and we hope you will watch. We'll do the setup next.
All right, let's do the setup. Allstate is today as well. Joe, after the bell. A lot of good news has been priced out from some of the earnings reports already, whether that be Chubb, Travels or Progressive. If you're focusing on these stocks, there's pricing power as it relates to auto insurance. I think Progressive is probably the best name to own. Allstate is good to own as well, just not as strong as Progressive. What about Lilly?
I feel like there's a battle over this name like we haven't seen in quite some time. Well, it's the excitement surrounding the possibility for an obesity pill versus what we have currently with Ozempic. So we'll learn more about how that is ultimately progressing, but clearly there's very strong momentum in play as it relates to this thing. Okay. Amgen. Kerry?
That's tomorrow after the bell. What do you think? Yeah, I think Amgen's in a good position. The stock got hit with all of the fear about tariffs and drugs. Now the stock's recovering. It sells for 14 times earnings. It's 3% yield. They had good results from one of their drugs, an immunomodulator for eczema. I think they're going to
continuation of more good news and maritime which is their obesity drug once a month and they're working on an oral is in phase three in the once a month now. All right. Live Nation. Joe T. That's tomorrow. Stocks up 47 percent over the last 52 weeks. The concern that you're going to have is that there's clearly consumer demand weakening for live entertainment.
And it's reflected in the expectation that revenue growth is going to be down 7% in this quarter. That will be three consecutive quarters that they are experiencing negative revenue growth. I'm not sure how much further that is sustainable. Jimmy, Exxon's on Friday before the bell. Joe talked about crude oil.
has been going pretty much in one direction. It has, and yet ExxonMobil has actually hung in there. It's only down about 1.4% year-to-date, which is easily made up for by the dividend. Frankly, it has held in there at these low oil prices. I'm not expecting fireworks, just expecting a solid middle-of-the-road quarter. The main advantage of ExxonMobil is its size. Economies of scale are going to matter more and more with energy prices as low as they are. All right, good stuff. We'll take a quick break. More trades on the other side.
I want to show you some of the best performers in the S&P 500 this month. Why are we showing you this? Because Palantir, number one, up 37%. That's a Joe T stock. So is CrowdStrike, G.E. Vranova, Stephanie Link, Netflix we've already discussed, and then of course their service now at the bottom up. We will round up to 19%. Joe?
First of all, ServiceNow has defied the entire performance of the software industry. Beyond that, Palantir has made this staggering recovery. It was $68 just four weeks ago. It's now pressing back as I look towards its all-time high at $125. They are going to report earnings on Monday.
i'm not a believer in you buy stocks ahead of earnings but i am telling you on the other side of that earnings report be very careful if you're thinking about shorting this name because it could significantly break out above 125. it is so well positioned with the administration with everything the administration why has service now defied the software softness diversification i think more than anything else i think they've diversified the model
Very well. And it's those sunglasses he wears all the time. You've got to love the CEO. All right. Bill McDermott. All right. Final trade's next. Three o'clock. We're going to take you right up to Meta and Microsoft today. Greenhouse, Mahaney on Meta, Link, Talkington, and the CEO of the Texas Capital Bank, Rob Holmes. I hope you join me then. Finals. Farmer. Berkshire Hathaway. Let's see how much cash they've built up when they report on Saturday. Yep. We've got the annual meeting, as we said. We'll be there.
Mike Santoli and Becky Quick will be. Weiss. Vertex. It's been acting well. Gervin X from all the reports is really doing quite well in the launch. S&B Global had a good quarter. Stocks moving high. Like that name, CME. Anything trading related. All right. I'll see you for the last hour 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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