Title: Markets after Nvidia and Warsh: Your Next Move 8/31/26 Show: CNBC Halftime Report (podcast of the live noon ET show) Host: Scott Wapner + Investment Committee — Joe Terranova, Shannon Saccocia, Jenny Harrington, Bryn Talkington Guest: CNBC's Mackenzie Sigalos (Apple leadership handoff); Oliver Renick (Options Action, from Cboe Global Markets, Chicago); Frank Holland (CNBC News Update); Dominic Chu with Brian Lake of Goldman Sachs Asset Management (ETF Edge) Date: 2026-08-31 (Monday) URL: https://open.spotify.com/episode/6EYiSqK54VetVs1FMc4AYY Length: 47:04 Note: Spotify auto-generated transcript (accuracy may vary); this is an AUDIO podcast — the Spotify panel carries NO (mm:ss) cues, so there are no timestamps anywhere in this file and the analysis page's "At" cells are plain "listen" links to the episode. MERGED FROM TWO CAPTURES: Spotify's transcript panel is virtualized and each scrape dropped a different stretch, so this file splices capture-a and capture-b — capture-a supplied the cold open through Joe Terranova's "But you tell me you're much on your mind," then capture-b supplied the whole momentum / WSJ-stats / positioning / Broadcom block, then capture-a supplied everything from the Apple CEO handoff to the close; capture-b supplied the final disclaimer line. Repeated Spotify page chrome (title / Description / Transcript / Chapters / "This transcript was generated automatically") and the capture-restart markers were stripped, and the overlapping passages (the Tesla-options → Merger-Monday → final-trades run, which both captures held) were de-duplicated. NOTHING WAS INVENTED to bridge a seam. TWO SUSPECTED REMAINING GAPS, both marked inline as [[ GAP … ]]: (1) between Joe Terranova's opening momentum remark and Scott Wapner's "Too, because that didn't do anything either" — neither capture held Joe's first answer or the opening of Scott's read of the Wall Street Journal piece (est. 1–3 minutes); (2) a short seam at the tail of the Jenny Harrington / Scott Wapner Broadcom exchange, just before Scott cuts to the Apple segment (est. well under a minute). Everything else is continuous. Speaker diarization was numeric only ("Speaker N"), so speakers were inferred from context and relabelled: 1 = Scott Wapner, 2 = Joe Terranova, 3 = Shannon Saccocia, 4 = Jenny Harrington, 5 = Bryn Talkington, 6 = Mackenzie Sigalos, 7 = Dominic Chu. Spotify reuses "Speaker 2" for the remote guests, so the ETF Edge block is relabelled [Brian Lake — Goldman Sachs Asset Management] and the options block [Oliver Renick]; Frank Holland's news update carried no label at all and was labelled from context. Where the flow does not make the speaker clear, no name is asserted. Spotify chapter headings are kept as == section == markers. Fillers ("you know") and stutters removed; obvious ASR name mangles corrected (Turnus/Turners->Ternus, Shannon Scotia->Shannon Saccocia, "for in talking"->Bryn Talkington, Sagalos/Sagales->Sigalos, Phil Sherwood->Phil Schiller, Jensen Wong->Jensen Huang, Rennick->Renick, SIBO->Cboe, cow-she/Kaushi->Kalshi, "the war speech"->the Warsh speech, Octa->Okta, "Paulo I'll so"->Palo Alto, "the Kesh Aurora"->Nikesh Arora, "app lovin"->AppLovin, "GE for Nova"->GE Vernova, "Dana Setters"->data centers, "1 oak"/"one O but"->ONEOK, "GPI Q"->GPIQ, "nutrient"->Nutrien, "bag exposure"->ag exposure, clod->Claude, Eddie Q->Eddy Cue, Chew->Chu, Wolf->Wolfe, Optimist->Optimus, Quant->Quanta, "Frank Collin"->Frank Holland, Banerjee->Banerji, "committee trains"->committee trades, "its pies"->its highs); genuinely ambiguous garbles are left as spoken. Wording otherwise verbatim. == Nvidia's Impact on Momentum and Market Outlook == I'm Scott Wapner, and you're listening to CNBC Halftime Report, the podcast, the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in. David, thanks so much. Welcome to the halftime Report. I'm Scott Wapner front and center This hour, the next move for stocks as a traditionally tough month looms. We'll discuss and debate all of that with the investment committee. Joining me for the hour today, Joe Terranova, Shannon Saccocia, Jenny Harrington, Bryn Talkington to take you to the markets, we'll show you what we're doing. 12 noon in the East red across the board. Rates are up, oils up, and thus stocks are down. Iran and the US trading military strikes. So that's got a little bit of unease in the market. And as we said, September, historically the worst month for returns for stocks that's looming large. I thought we'd start with what is our take away from what happened last week was which was such a consequential week going in NVIDIA, what did they do? They validated the AI story as much as they had to and where demand is currently sitting and the Warsh speech. He was definitely hawkish, but I mean, that doesn't mean September's a shoo in, in any by any means for a rate hike. So what now? Where does that leave us as we have September looming? Oh. [Joe Terranova] I still think we're stumbling a little bit as we go into September, specifically related to the momentum. [Scott Wapner] Oh, I know you're going to go there. You. [Joe Terranova] You knew I was going. [Scott Wapner] I'm glad you did. So tell me more and then I'll bring in, something to add to that conversation cause the Wall Street Journal was writing about that today. And the some of the stats that they have are pretty staggering. [Joe Terranova] But you tell me you're much on your mind. [[ GAP — neither capture covered this stretch: Joe Terranova's opening answer on momentum/positioning and the first part of Scott Wapner's read of the Wall Street Journal momentum piece. Estimated 1-3 minutes of audio. Resumes mid-exchange below. ]] [Scott Wapner] Too, because that didn't do anything either. [Joe Terranova] It didn't. So we kind of had this inability to do that. I think that leaves us in a position where focusing on positioning, as you move into September and October, momentum funds like myself, they're kind of getting more confirmation of moving away, moving away from that high beta AI exposure into your healthcare, into your energy, and by the way, into commodities. We're going to talk a little bit about this as the show evolves, but I will tell you, agriculture prices right now are on fire. The momentum is clearly intense. [Scott Wapner] I think strategists are speaking to exactly what you're talking about. As for Momentum, and I mentioned this piece in the journal by Greg Zuckerman and Gunjan Banerji, I thought it was interesting. The Momentum index has tumbled more than 9% since July 1st, lagging behind the S&P's 2.8% gain. The index is on track for the biggest quarterly underperformance in 25 years. July was the second worst month for the momentum trade in around 40 years. That's according to Bank of America estimates that they cite. The only month that was worse was April of '09 when we were right in the midst of the financial crisis. So if you needed more evidence of just how tough it's been, Shan for momentum, say no more than that because that paints it pretty clearly. Wolfe points out on Marvell, the rallies come to a screeching halt. If that trade has come to a halt, is it a problem or not? [Shannon Saccocia] Well, I think if you look at the proportion of the names that have essentially LED this momentum rally over the last year or so, then I think that if you look at the index itself, that is a challenge and you're looking for some form of catalyst that can drive semis and other AI related momentum plays higher in this environment. And the challenge is, is that just as you and Joe said Scott, NVIDIA didn't do it. And I think that, again, you're looking for some sort of use case or tangible change in terms of demand that's going to drive these names higher over the course of the next 6 to 8 weeks. [Scott Wapner] I'm not even sure what do you need a change in demand? I mean, demand is off the charts. [Shannon Saccocia] I think what you need is I think you need a new, I think you need a new narrative. I think you need somebody. This has been essentially priced in, in my view in terms of what is that demand look like we're not at risk. I don't think the AI narrative is at risk. But I think in terms of that next step function higher in terms of some of these names, I do think it's challenging right now to just look at those as being the market leader. The other thing that's happened is that the sectors that have been performing better over the course of the last couple of months, the challenges is that they don't make up enough of the index to really move the needle. [Scott Wapner] I'll tell you what's interesting, since you use the word narrative. The narrative, if anything, has been negative lately. Nothing around demand. Jensen Huang told you as much. But the narrative has been negative around data centers to the point where, Gavin Baker wrote a long piece on Twitter, Jensen Huang quote tweeted that making his own case for the benefits of data centers. The president this morning on Truth Social, Truth Social with a post on data centers. So the narrative has gotten decidedly negative around data centers. The polling says as much. Maybe that is the narrative that needs to change for this trade to improve over anything else, because the fundamentals are as solid as you could ever imagine them to be. [Shannon Saccocia] Demand's not going to matter if you can't deliver on it. And I think that's where we're hitting at this inflection point politically over the next couple of months, we are going to see data centers and other forms of AI where the benefits of those tech of that investment is accreting to big businesses. I think those are going to be assailed in the press as a result of the elections. And I think that the other challenge here is that there's a lot of parts of this trade that are tied up with data centers and with the assumption that this delivery can actually be achieved that speaks to some of this shorter term weakness. We haven't talked a lot about the election, Scott. The minute we turn the calendar page after Labor Day, that is all we're going to be talking about in the two months up to midterms because there are some political hot button issues that actually impact the from the perspective of investors, whether we can deliver on the promise of AI over the course of the next two. [Scott Wapner] Years. The problem is that you know politicians are going to politic and they're going to do their thing leading into the midterms. Whether as both Baker and Jensen Huang point out, that all of the virtues and the good things that data centers bring to communities in terms of jobs and a whole host of other things, and that if you don't take them, somebody else will gladly do it. And to the president's point as well, China's more than happy to have this social issue, unrest being debated because they just feel like they get a, a leg up from it. This issue, I feel like is central to why these stocks haven't worked lately. Polling is terrible. If you look at the Journal had a piece last week, everybody's talking about it to the point where Baker has to post this long thing about the virtues of them. Jensen Huang doesn't have to say anything but does, and he sort of adds on top of that. So there is a fight back in Silicon Valley about this very issue. [Jenny Harrington] Yeah. And I see it a little bit differently where I think, I think we had a huge move into this part of the year. The market's up 13 1/2 percent following three years of near 20% and 20% plus returns. So I look at it more like the first six to eight months just pulled that positive narrow narrative forward. And it's OK right now to consolidate and it's OK to digest. And with respect to the political narrative, it's definitely going to be ugly. What we know is the economics always Trump's politics. So if the money is there to be made in data centers, which I think we all believe it is, and if money is there to be made in AI, that's going to win out. And so I don't see between now and the election, I don't see whatever noise and it is going to be deafening. I don't see that noise disrupting the AI trade, right? I just see you. [Scott Wapner] Don't think it already has. [Jenny Harrington] I don't really think it has. Here's the thing. I don't think that's what's. I don't think that's what's caused it. What do you? [Scott Wapner] Think has. [Jenny Harrington] I think literally, Scott, that it's already up 13, that the market's already up 13 1/2 percent on the year, and that there's already, you and I were talking about this a couple weeks ago and we were talking about Cisco, right? And you're like, well, if it's had such great earnings, why isn't it still flying? And I'm like, it's already up 50% on the year. It's already trading at 25 times earnings. That's richer than it's ever been. I think we're just at a pause and a consolidation, like maybe the political noise is an excuse. Maybe the societal pushback is an excuse, but it's OK to pause. I don't think it's anything more than that. And I think they're kind of two separate things. I just, I don't see however ugly the political noise around data centers gets. If the money is there, investment dollars are going to follow and they'll run. But it's some of the valuations and some of the confusion that there's been. It's OK to just digest this. And I've been, I've just been thinking too about like, Salesforce and Adobe, those are impossible to me at least those are impossible to put a valuation on right now because the AI disruption is so overwhelming. I think when you think about Caterpillar and GE Vernova, even those are kind of hard. You have these huge cues for the gas turbines. What if they slow a little? What if they don't? It's just making it hard. And I think that difficulty, that's the reason we're pausing. But we're, but it's not off track, it's just consolidated. [Scott Wapner] I don't know. I think you know GE Vernova over the last months down 10%. [Jenny Harrington] OK, but what's it up here today? [Scott Wapner] Vistra Vistra is down 7%, Quanta is down more than 9 1/2. Eaton is red, to your Caterpillar is red. I think there's a little more at play than oh, the stocks were just up a lot. So now they're consolidated because if you get, if you get what NVIDIA had to say, there's no reason why you would think that trade should be doing what it's doing if you didn't have the whole data center debate on the front pages. [Jenny Harrington] Percent. Do you even know if it's still up 36% in a year where the market's up 13? So it's up nearly three times the market down 10% is just a rounding errors. Things just pause. [Scott Wapner] 10%'s a little more than a rounding error, but Bryn, what's your what's your take? == Political Noise and Positioning in the AI Trade == I think we have this confluence of events with the data centers. I think it's really important last week, X or Twitter found a bot swarm of 200,000 Chinese bots, having misinformation about data centers and energy. And I think unfortunately the politicians on both sides are just eating it up. I mean, I know that CenterPoint here in Texas just announced $5 billion initiative to pay back to residents in large part from the data center build out. PG&E out in California just announced the same thing. And so I do think I agree with you, Scott. I think the data center is real because not only do we need this build out to go, but also outside of data centers getting pushback from people from Abbott all the way to Newsom, we also have that, 60% of the planned data centers that have been approved to come online in 2027 haven't even broken ground. So I think this comes this air pocket that we're seeing whether it's GE Vernova down 10, NVIDIA should have rallied but didn't. I do think you have to like ask the hard questions, why aren't these stocks rallying? Do you even know there should be over 1000, but it's not. So I think that we are setting up right now, especially going into midterms going back to the 60's, the data is really clear from September to November, we typically get about a 10% drawdown in most years. I don't think this year will be any different. That being said, on the other side of that, after midterms, returns are very, very positive. But I do think investors need to like ask the questions. going back to what Joe said on NVIDIA, I did not like that 60% of their revenues this last quarter were account receivables. Like why is that? Why can't these people just pay their bills? Why, why does that need to be such a big number? And so I'm trying to look, look through the tea leaves and just take from the market what it's telling me and say, is there something bigger coming on here that's going to call the bigger draw down? I don't know the answer at this point, but I think you can't just be Pollyanna about all of this and you need to be pragmatic as an investor. [Scott Wapner] It's interesting. I mean, you get calls on NVIDIA today, Melius, the argument for NVIDIA to go higher has strengthened. I don't think anybody necessarily takes issue with that because if you obviously look at the results and listen to the guidance, what was it they guided to like 70% revenue growth right now. They looked out till 28, which they never look out as far as they decided to this time. And the street was at 44. So they're like, wow, that's an incredible number of now you have the buyback hanging out there. That's sort of the thing that Melius is, is talking about today. I'm not sure if that's been right to us or not because I don't have his name in front of me, but it, it may very well be Wolfe, NVIDIA can finally break out. We'll see. We'll see. [Joe Terranova] Yeah. So in, in an odd way, I think the effect of what we heard last week from NVIDIA is going to place managers like myself in a difficult position because you potentially lose this narrative about the market broadening out and finding this suite of opportunities. In fact, the opposite over the last several days is actually happening. The markets get it going back to being more concentrated. Why? Because NVIDIA is stepping forward into leadership and you're seeing some of the other Mag 7 names participate in that regard. So that kind of that creates a little bit of a difficult environment as you move forward. I think positioning is a really big question right now. And Jenny highlighted some of the software names. Well, the software names, they're benefiting because capital is going away from the momentum names. [Scott Wapner] We'll talk about that later on, but talk about, let me, let me give you something. Hold on. I'll just hold on a second. I want to just get more into the positioning thing for a moment, if you don't mind, because there are so many different notes out today on that very topic, which you brought up at the at the very top. UBS is still bullish, but they say diversify discretionary financials, healthcare, to your point, industrials, utilities, they like Citi today. Yep, 881 hundreds come in, but it's going to be a broader path take more cyclical components contributing there. Savita Subramanian, she has the lowest target on the street for a major strategist and is talking about oil, gas, consumables, metals, mining, banks, leisure products, insurance, consumer finance. So there's a lot of focus on areas away from tech and away from momentum. These people see the writing on the wall also. [Joe Terranova] So the people see that the alpha generation opportunity might be pausing in high beta AI momentum. There's a limit to the places that you could look to generate alpha elsewhere. There's the obvious, OK, financials, healthcare. I'm not sure we want to go to industrials because that's part of that AI universe. So it's financials and healthcare that gives you a significant weighting. You could do intra-sector rotations, which is what I highlighted before. We won't dig deeper into that, but I think the challenge in that regard we're. [Scott Wapner] Going to dig deeper into it, but if you read the document today, you'd know that we're going to so. [Joe Terranova] Let me, let me finish. Let me finish my thought because this is. [Scott Wapner] Nonetheless. [Joe Terranova] Let me finish my thought because I think this is important. If you tell me that you are going to move away from NVIDIA, move away from Apple, to your point where Scott, I know I have a buyback right underneath the market and I want to go and I want to generate the alpha and take significant stakes in my energy, in my healthcare, in my consumer discretionary. I ask all of you a really important question. How confident are you that the high earnings expectations that we have over the next four quarters that area of the market can meet it? Because if you rely on history, you're going to be disappointed. It's only specifically been in the mega caps in the technology names, the financials, the healthcare. They have disappointed you when you have anticipated 4 quarters out very high earnings expectations. [Scott Wapner] I feel like the next two weeks, 2 1/2 weeks, are going to be dominated by geopolitical and yields before the Fed meets mid month. And then we actually get to see whether hawkish talk in Jackson Hole becomes hawkish action. I'd be surprised, let's put you that way. If the Fed raises rates in September for a variety of reasons, but now that earnings are basically passed, now you're going to have a 2 1/2 week kind of air pocket thinking about, well, September is historically a bad month. Yields are elevated, oils elevated. Iran and US are firing at each other again. And what is to change the narrative from those driving stories? What, what's out there? Well, I got the data center issue on top of all that. Where? Where's the positive catalyst? [Shannon Saccocia] There likely over the next few weeks, there's not a lot of positive catalyst because one, you're pointing out a period where without earnings and where we're reliant on large macro and geopolitical themes, there's much less dispersion in the market. And so I don't actually argue with Joe's belief that this we're going to see some continued consolidation over the next few weeks because frankly, that's what happens when you see large macro themes moving the market. The other catalyst though, Scott, is just what you said. if you're looking at the Fed and you're anticipating that they're going to hike once or they're not going to hike at all, whatever it is, there's three interest rate hikes priced into the market right now. And so I would argue with you that areas like financials that small caps, you might see pressure in those areas anticipating 3 interest rate hikes, particularly after the. [Scott Wapner] That's right, that's right as the Russell's down more than everything else today and lately. [Shannon Saccocia] But if you don't think that's going to happen, which we don't, we don't think there's going to be a three interest rate hikes, then I would argue with you that the catalyst could be a rotation into those names on anticipation that the markets, the bond market in particular has come too far too fast in terms of. [Scott Wapner] Maybe Broadcom's going to be a catalyst this week for something, right? It reports on Wednesday. After NVIDIA and after Marvell, maybe this becomes the next most important thing as it gets reiterated today. Sector perform at RBC with 400 bucks you own it I do what do you. [Jenny Harrington] No, no. I was just going to say, if NVIDIA couldn't be a catalyst, why would Broadcom be, and just one counterpoint or 1 addition to Shannon. If Shannon doesn't think there's any positive catalyst coming in the next couple weeks, I don't think there's any negative ones coming either. [Scott Wapner] Well, I think there's a how much does Broadcom raise its guidance? I mean, those things, I think we felt like we knew we already checked all the NVIDIA boxes before they even reported. I don't think this is as cut and dry on that. [Jenny Harrington] I just, I also don't think it's as broad reaching. I just think we were so reliant on NVIDIA to say exactly what they did and let that trickle through, and that was there. Maybe you're right, but I just think it's such a. [[ GAP — short splice seam: the tail of the Broadcom exchange between Jenny Harrington and Scott Wapner. Estimated well under a minute. Resumes mid-exchange below. ]] I just want to clarify. [Jenny Harrington] It might be and can I Can I add on to that one too? No. [Scott Wapner] No, you can't actually, because I'm moving on. == Tim Cook Hands Helm to John Ternus at Apple == It's Tim Cook's last day as CEO. I mean, you asked, so I give the answer. [Shannon Saccocia] Can't please. [Scott Wapner] Can't can't please everybody all the. [Jenny Harrington] Time see, I'm just I'm listening to you and I'm I'm so. [Scott Wapner] Mackenzie Sigalos, we're going Mac. Hi, Mac. This is Tim Cook's last day and he just wrote a nice memo to the team at Apple as well, which I think you have your hands on and you'll bring us a highlight or two from. But this is a momentous day, obviously, not only for Mr. Cook and that company, but John Ternus, who officially becomes CEO now. [Mackenzie Sigalos] So we just heard from CEO Tim Cook in that goodbye note to employees this morning obtained by Bloomberg. And in it, Cook says what he's most proud of is what an annual report could never capture writing. The culture triumphs over everything. He also gives his successor, John Ternus, a huge endorsement, saying that few people understand how to build products that change the world the way that John does. But he's inheriting. John Ternus is inheriting some big challenges from day one. Now on costs. Apple's already raised Mac and iPad prices by 20%, and it's signaling that iPhone hikes are next. That puts Ternus in a tough spot, protecting margins without choking off demand. He is also facing soaring memory costs and decelerating growth in Apple's highly profitable services segment, as regulators and courts keep chipping away at App Store economics. And then on AI, Siri is still the obvious consumer test, but there is a significant hardware opportunity emerging around the Mac, its fastest growing segment last quarter as AI labs buy high end Mac minis and Mac studios to run models and agents locally. And then there's the all important iPhone. The Apple leaks and supply chain checks point to the foldable debuting next Wednesday at Apple Park, the biggest iPhone form factor change in 20 years. But Ternus will have to prove that it's compelling enough to keep people upgrading at a much higher price point. Scott. [Scott Wapner] Mac, thank you very much for that. Look, another piece of this note that Tim Cook has written to the staff. I'll misleading you and being with you for every step even as I take enormous comfort in handing the helm to someone as brilliant and wonderful and capable as John. Speaking of John Ternus, of course, few people understand what it takes to build products that change the world the way John does and I could not be more excited for his leadership. Bryn, I tossed it to you on that note because at the end of the day, the products that Apple makes are the bread and butter because of the installed base that it has. And that will be among the challenges that John Ternus has in front of him, keeping an iPhone upgrade cycle robust, along with all of the things that Mackenzie mentioned in her reporting. [Bryn Talkington] I think that they are locked in on their hardware. I mean, androids had a foldable phone forever and no one's switching because we're so embedded and it's such a great product. Ternus is a product guy. And so I think someone like Tim Cook is a Unicorn. Satya Nadella, Larry Culp, there's a few of these non founder CEOs that are Unicorn. So I don't think you can replace Tim Cook. You just want to have Ternus' feel to shepherd and the next the next 15 years. But I do think from the product side, if they can incrementally, it does not have to be like exponential incrementally continue to get, Gemini inside of the Siri where we can like just ask questions and it pulls up all of our apps. We trust Apple, Apple's going to continue to do very well as a company. And so I don't think anything's existential. No one's switching to an Android, no one's switching to any other device. We don't want to open AI device, we want the Apple device. And so I think he will be, the right person at the right time. And Tim Cook is still there, right? He's going to be obviously, chairman and do great things I think in China, et cetera. So it's definitely a big day and I'm definitely long and not even thinking about selling it. [Scott Wapner] Yeah, Joe. [Joe Terranova] So I think this comes at a perfect time in the near term that entrenched base that you're speaking towards, they need to deliver on Siri AI. That's that's the first step they have to take. But now you're looking at the setup and leadership as follows. You're talking about John Ternus, who has been the chief hardware engineer. Every product that we have been blessed with from Apple across the board. I don't have to cite them all. John's fingerprints are on them. Next, Tim Cook is not going away. He is remaining as the executive chairman. He has already indicated that he is going to manage the relationship as it relates to the president and relationship with the Chinese. Isn't that the perfect setup? Who better than Tim Cook to manage the relationships while John is dealing with delivering future products AI oriented? I don't think anyone should have any concern about where this leadership is going for the. [Scott Wapner] Company, OK, so we'll take a quick break and we'll come back and we'll finally get to the segment that Joe wanted us to get to minutes earlier, but we made him wait. == Cybersecurity and Software Earnings: Palo Alto, DocuSign == You're going to get a number of software earning reports this week. You got ones last week. They knocked the cover off the ball and the sector took off even more. So we'll talk about that coming up. right, welcome back Here. It is software, Joe. [Joe Terranova] Let's do it. [Scott Wapner] Mea culpa during the break, by the way, from Joe, which we appreciate. So last week CrowdStrike and Okta knocked the cover off the ball, the stocks. It was like a clean sweep. I think that's, I love the way that our producers wrote that in the dock last week. A clean sweep for what we got last week. Are we going to get a clean sweep this week? Palo Alto's tomorrow. Do you get a tell from what you already got in cyber along with some reporting that Nikesh Arora had considered doing some deals in that arena? Dell. Bryn, I'm going to come to you in a minute. That's tomorrow. Snowflake is on Wednesday. That's been key because it's bucked the trend when software was going through a malaise to say the least, Snowflake wasn't stocks up almost 30% in three months. HPE is Wednesday, DocuSign is Thursday. Jenny, I'm going to get you on that in a minute. Zscaler is on Thursday, but Joe, what about Palo Alto tomorrow? [Joe Terranova] So I think Palo Alto continues the trend that we are seeing. We saw it last week with CrowdStrike. We see it with Okta as well. Keep in mind with Okta, I think that's a little bit more than just a story about cybersecurity. I think the street really believes given the size of this company that ultimately they are a take out target cybersecurity. The trend is, is resilient. The positioning there is being rewarded for staying anchored. If you move away, which in past years I have done you are you are punished for that aggressively very difficult to get back in again. So I would expect Palo Alto to deliver if in fact they don't, I think the buyers show up aggressively on any correction. [Scott Wapner] OK. Dell. Bryn, is tomorrow. As we said, you have that name. [Bryn Talkington] Yeah. So I mean, the numbers are going to be great. Earnings are supposed to be up 112, revenues up 48%. But with NVIDIA trading down, Marvell trading down, who knows what the stock will do. But clearly with their servers, they're in the epicenters because they do have a big CPU business. I'm sure memory will come up, but the stock's just been a complete beast and has re rated. So who knows what we'll do tomorrow. But it's still the epicenter of the AI build out. Let. [Scott Wapner] Me have a look at the IGV guys, if you could like just let me see where that's at as we as we think about this, because Wolfe has a note that the IGV is well positioned over the near term to midterm to retest its highs and that was 118. I don't know if people realize that it's not that far away from its highs. The. [Joe Terranova] Signature of that move is palantir. [Scott Wapner] Yeah. Well, for sure, which by the way got a call today to reiterated by Loop Capital 220 is the price target there. So Bryn, I'll give, I'll come back to you on that if you have a comment on Palantir's robust rebound has meant everything for this space too, as Joe, as Joe points out. [Bryn Talkington] I think a lot of people mistakenly shorted the stock. This has been the original AI software application company. They are AI neutral. They execute for the government. They pivoted their business two years ago to go to the corporate side. They're growing earnings and revenues like exponentially. And so I think this is still a great name to own. And so be careful what you short, because these this name continues to go the opposite of where the shorts have wanted it to go. [Scott Wapner] Yeah, Snowflake, as I said, has also been a nice helper in the in the comeback of this trade too. It's up more than 11% in a month. So now Wednesday, HPE, that's Joe, Jenny DocuSign on Thursday. What do we think about that? [Jenny Harrington] Well, I think that what we've seen so far is that the software stocks are really differentiating themselves and you know being punished or rewarded individually. So it down 6% on the year with a 13 times multiple and a 10% free cash flow yield and double digit earnings growth ahead. I think DocuSign is totally de risked and I think we really need to pay attention to different kinds of software. So earlier I picked on Adobe just to give you an example. A couple 2 weekends ago I had a personal pet project and I used ChatGPT to help me do it. It's whatever creating this calendar. But The thing is to created the calendar that I created, I would have needed Adobe and some serious graphic design and Adobe skills. I can do that easily with ChatGPT. What I cannot do with ChatGPT is recreate DocuSign, which we use in the office all day, every day to sign out, to send things out. So Docusign's unique. They have, they have networks in place, security in place, pipelines in place to get things in and out. That is not easily replicable. And I think we're going to start to see that in the Thursday earnings report. Meanwhile, again, like 10% free cash value of 13 times. Thank you, buy it now. [Scott Wapner] Did you have after you went through that personal exercise, which we're really thrilled to have heard all. [Jenny Harrington] About. [Scott Wapner] Did you have an intervention with Farmer Jim about his Adobe position? [Jenny Harrington] If we're being serious about that, I've tried throughout the year. It hasn't been like well received. [Scott Wapner] Why is why is DocuSign? Why has DocuSign look at the chart? [Jenny Harrington] Again, no, it's terrible. Like I said, down 6% on the year still. [Scott Wapner] No, no. But it's not terrible lately. That's my point. [Jenny Harrington] OK, but that's just part of that. Like, I. [Scott Wapner] Mean it's up 24% in three months. [Jenny Harrington] But that's just bigger at the end of June you everything you've seen the semi stocks plunged since the end of June and the software stocks recovered broadly. So there is some of that systemic trade in there and I think that's all that it is. But it's still you know not great for the year. I think you need to take a bigger picture. [Scott Wapner] Did your project turn out well? [Shannon Saccocia] It's awesome. [Jenny Harrington] Yeah. [Joe Terranova] Thanks Hewlett Packard Enterprises on Wednesday. This company has not grown at the pace their revenue of 30 plus percent since the Great Financial Crisis. What does that do? That indicates you have to prove yourself. Two other software names AppLovin it's at a 52 week low. Why in early August the earnings didn't show up. Zoom Communications take a look at that. That stock reported because of positioning a little bit of a pullback. Take the other side. You want to be long there because of the Anthropic relationship. [Scott Wapner] OK, Frank Holland has a CNBC NEWS UPDATE for us. == Market News and ETF Income Generation Strategies == Hi Frank. [Frank Holland] Hey, good afternoon Scott. Prediction market Kalshi just handed out its first ever lifetime ban to former Congressman George Santos. In July, federal regulators settled with Santos over allegations he profited by placing bets on whether he would attend the State of the Union address. Kalshi also imposed a more than $70,000 penalty. CNBC and Kalshi have a commercial relationship. LIV Golf could reportedly file for bankruptcy protection as soon as this week in an effort to restructure the tour. That's according to the Financial Times. Earlier this month, CEO Scott O'Neill said he had secured financing for a new lead investor to keep the tour going beyond this season. And soccer's superstar Lionel Messi is retiring from Argentina's national team. He made that announcement on social media today, saying now is the right time. Argentina lost this year's World Cup final to Spain. Messi played in six World Cups, winning it all in 2022, and scored 21 goals, one shy of record holder holder Kylian Mbappe's 22 goals. Back. Over to you. OK, Frank. Thank you. Frank Holland. Up next, ETF Edge with Dom [Chu]. What's coming up? [Dominic Chu] All right. So Scott, as markets and investors get more complex and sophisticated, so are the products they're using to get those outcomes. The ETF business is seeing even more innovation and we're going to speak with one ETF issuer who's pushing deeper and deeper into derivatives based funds. That story's coming up on ETF Edge on the halftime report, so keep it right here. All right, we're back on the halftime report. I'm Dominic Chu with today's ETF Edge. Income generation products have gone from niche to more mainstream, so much so that one old line bank, if you want to call it that, is buying up one of the newest innovators in that space. This is another story we've done again Brian Lake, Goldman Sachs Asset Management Chief Transformation Officer there and Co head of third Party Wealth. Let's talk about NEOS. Goldman Sachs Asset Management goes out and buys another ETF issuer complex. This time it's NEOS. Before it was Innovator Capital. There's a common theme developing here. What exactly is Goldman Sachs Asset Management looking for when it comes to ETF's? [Brian Lake — Goldman Sachs Asset Management] Yeah. No, you nailed it down. When we think about Goldman Sachs Asset Management, we are trying to deliver solutions to investors. And when we do that, we're seeing that they want the ETF wrapper and they're looking for something differentiated in the ETF wrapper. Innovator, obviously the leader they invented the defined outcome space. NEOS has obviously come onto the scene in an incredible way, a very client first culture with an incredible range of income products that fits perfectly next to the innovator brand. [Dominic Chu] So we're showing this NEOS NASDAQ 100 high income fund. In essence, what you're doing is you're taking the NASDAQ 100 in its performance and putting derivative instruments around that core or position to do an like a defined outcome. What exactly is the purpose of this particular vehicle and how does it fit into your overall scheme? [Brian Lake — Goldman Sachs Asset Management] Yeah. So people want to know the companies that they own and obviously you recognize a bunch of the names in the QQQ, but investors also really want income. This derivative income category has been growing at 80% a year for the last five years. Investors are looking for ways to get income. Doing that in an ETF with a covered call strategy like QQQI allows them to get that income while keeping that exposure in their portfolio. [Dominic Chu] All right. It's a big topic for sure. A lot of growth in active ETFs because of this type of product. We're going to continue this conversation over at etfedge.cnbc.com. Brian's going to be joined by Pedro Palandrani, who is the Global X Head of Product Research and Development. So a big conversation on the future, Scott of the ETF business. I'll send things back over to you. [Scott Wapner] All right, Dom. Thanks. That's Dom Chu. Take a look at Apple shares as we do have more news moving related to this name. == Phil Schiller's Exit and App Store Regulatory Heat == Mackenzie Sigalos is going to join us now with what is actually happening. [Mackenzie Sigalos] So, Scott, Phil Schiller, this was the person in charge of the App Store, a major executive at the company under both Steve Jobs and then Tim Cook is going to be moving out of that role into more of this Apple fellow position. It of course, comes on the same day that Tim Cook is transitioning into this executive chairman role. Shares taking a bit of a hit on this, seen as a very significant figure internally, who from his executive chair was also weighing in on certain product decisions around the iPhone and other major product series, including the iPod and Mac models. So a bit of a knock of confidence. Of course, this comes amid a larger exit of talent from the C-Suite. In particular, we saw a turnover not just in the CEO role, but the CFO, the COO. So we are seeing this changing of the guard, a lot of change at once. Perhaps that's why we're seeing those shares take a bit of a dip, Scott. [Scott Wapner] Yeah, but this is a big deal. There's no two ways about it, by by, I guess my understanding of, if nothing else, that's the biggest name beyond Tim Cook himself to transition out of a current role, either by leaving altogether or, as obviously Mr. Cook is doing, into executive chairman. But this is a big deal. [Mackenzie Sigalos] And it comes at a significant time, not just for the App Store, but also for the Services business more broadly, taking a lot of heat in terms of regulators around the world, a lot of people pushing back on that 30% App Store fee that was able to provide them such robust margins for such a long time. Now we still have Eddy Cue in charge of the services business. There's been a question as to whether or for how much longer he will stay in that role. Services segment was soft last quarter and that's really important to their business, especially as they're facing this margin pressure from memory prices as well. And so losing the person in charge of the App Store when you've got regulators around the world pushing back, they've you already had to make concessions in China bringing that 30% App Store fee down to 25%. That's not when you want to see a significant leader internally move into this more figurehead type of position. I will say this, Apple, I'm out to them. They're not weighing in on the record. [Scott Wapner] I'm glad you brought that up. The fact that services revenues in the most recent earnings period missed the Street expectations in what. I think you can say if you know the most important part of their business right now just relative to where the whole AI rollout is, is going and the services that are going to augment whatever ends up being the finished product. [Mackenzie Sigalos] Exactly because at this point, the only sort of only sort of model that we've seen them float in terms of making money from a Siri AI product is in the cloud business potentially having these different tiers based upon your usage or using some of the more advanced models. You'd have to pay for that in the context of the cloud business. But there have also been questions around whether you might have the this special AI part of the App Store. So, creating this consumer tollbooth. If you want to use Claude in the context of Siri AI or some of these other plug in your own bot situations, there might be a way for Apple to monetize that. But you again, this is the person who has been just such a product engineer and visionary within the App Store. So to lose them at this moment when you really have to figure out how to monetize AI because at the same time that you want this to be popular, you don't have the compute to back it up necessarily. So you've got to find another way where you're paying for expense of compute and then making up for it in the services side of the AI business. [Scott Wapner] Yeah, great perspective, Mac, Appreciate you jumping on with that news. That's Mackenzie Sigalos. You got to comment on this as the owner of these shares. I mean, it's again it's you, you have a gentleman deemed to be a product guy taking over as CEO. As this gentleman Phil Schiller steps down. Running product events in the past, but also as you see the App Store. [Joe Terranova] So the first question is the shareholder. Do you ask yourself, do you believe the company has a strong succession planning in place? And I think Apple does because I think Apple understands that there is going to be a hand off from a group of veterans that have stewarded this company for multiple decades, 3 decades in the case. Obviously, Phil Schiller is a great example of that to a younger generation that holds only been there several decades. And I think that succession planning is something that I'm confident in. But I think Apple has to deal with that and navigate through it a lot of veteran leadership. [Scott Wapner] Moving to the side. And also, look, it hardly feels like a coincidence that we're having this move announced today as John Ternus officially takes over as CEO tomorrow. We'll continue to follow, but we'll have more on closing bell, I can assure you of that at 3:00. Up next, options action. We're playing it with Oliver Renick. When we come back, we're going to play some options action now. == Tesla Options Trading and Cyber Cab Launch Event == Oliver Renick joins us from the Cboe Global Markets in Chicago. What are you looking at? [Oliver Renick] Hey Scott, Tesla shares are ripping this morning ahead of the company's cyber cab launch event on Thursday. Options trading is 60% above the 30 day average right now, with just about a billion dollars in premium exchanged and roughly 70% of it tied to calls. Most of it looks like buying of calls, which outnumber buyers of puts by almost double. It's also interesting that the strike with the most open interest is the 400 strike, which is still 10% higher from here. This could be a big moment for the stock. It's down about 20% on the year, but has almost completely recovered losses since its gap down last earnings. One trader this morning bought 700 contracts of both the 300 strike puts and 600 strike calls, a more than $5,000,000 trade. Betting on a return to those lows after earnings or a huge rally by mid January 2028. Scott. [Scott Wapner] Oliver, thank you. I will see you as well at 3:00. I look forward to that. It's so timely because Bryn, you just made a move in Tesla. Did you tell us what that was? [Bryn Talkington] Yeah, I added to my position, which I haven't added quite a while. I added about three at 360. So the semi event is more ceremonial on the 24th. So it's a ceremonial event. But what I see is that the robo taxis are everywhere in Dallas, everywhere in Dal, in Austin, The cyber cab, which are still being driven by the engineer are also everywhere like they're on every other street in Dallas. So that is ramping up. I haven't touched my steering wheel in like weeks. And so FSD is getting better and better. And so I feel like there's this confluence of events and then we're going to have towards the end of next year, Optimus, as the Fremont factories being built out, we're going to just start hearing more and more. We're not hearing much about Optimus today. And so as Oliver was saying, it's recovered so nicely. I like the stock above 360 since its earnings decline. So I just took that opportunity to add. But I ultimately do think those multiple catalysts will drive the stock price higher over the next 12 months. [Scott Wapner] Interesting. The timing, certainly, Bryn. Thanks. == Four Big Deals and Investment Committee's Final Picks == Coming up, Merger Monday. We have 4 big deals on four committee names, which means we have 4 committee trades coming up. We'll call it Merger Monday. We haven't said that in a while, but you got 4 deals. Aon buying USI Insurance Services, they buy from KKR. 17 billion in cash. Joe, you hold Aon. [Joe Terranova] I do. I think the better trade and opportunity here is the seller. It's KKR in 2017 they made this acquisition. They're now selling it. They're making about 3.3 billion. This is a big bite for Aon. [Scott Wapner] OK, Lilly making a deal today, SLB making a deal today, ONEOK making a deal today and you think there's going to be a lot more people making deals in the days ahead? [Shannon Saccocia] Yeah, absolutely. I think that there's a, a huge opportunity for consolidation in some of these industries. And I think that we're setting up for, despite the fact that rates are a little bit higher or really, a, a ramp over the next 6 to 9 months, especially against a political backdrop that's still supportive. [Jenny Harrington] Yeah, I think, I wonder if there's a scramble between mid now and midterms, because if we go purple, what does purple mean? It means gridlock, like I'll bet they are. I'll bet a lot of people are going to try and get deals in before that. [Joe Terranova] Think about where the deals are. Schlumberger, it's actually a thermal managing unit that they're buying. This is getting them into the data center build out itself. The ONEOK deal is about the Permian basin, liquefied natural gas and Eli Lilly. 20 billion in deals in 2026. Diversifying away from weight loss. [Scott Wapner] We'll take a quick break, we'll come back and we'll do finals. All right. 3:00 Eastern Time on the closing bell. Carmen Dawson, Courtney Garcia, Stephanie Guild, Keith Lerner, Alex Kantrowitz, he'll be with us as we continue to talk about this transition happening at Apple and also the data center debate. So we'll do all that. 3:00 and I hope you'll join me then. Bryn, what's your final trade? [Bryn Talkington] GPIQ, one of our favorite equity income names 10 1/2% yield. [Scott Wapner] Jenny Harrington. [Jenny Harrington] All right. GXO, the leading supply chain outsourcing company. It's trading with a 6% free cash flow yield, 14 times earnings and is down 6% this quarter after great earnings. [Scott Wapner] Shan. [Shannon Saccocia] Financials specifically, we just talked about deal making. I think that's going to be important for the alternative managers. [Scott Wapner] I thought you were going to come like software again. No, forgot that we did. [Joe Terranova] Nutrien — I want ag exposure. I will personally buy this on the close. [Scott Wapner] Right. Oh, you will. OK, good stuff. I'll see you at 3. The exchange begins right now. [Disclaimer voice-over] You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern only on CNBC. All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, Internet, or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of 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/halftime-report-disclaimer.