Title: The Momentum Reset and How to Trade it
Show: CNBC Halftime Report (podcast, audio edition)
Host: Scott Wapner
Committee: Josh Brown, Jim Lebenthal, Bryn Talkington, Jason Snipe
Phone-in guest: Stephanie Link. Also: Mike Santoli (markets commentary), Oliver Renick (options action), Kate Rooney / Angelica Peebles (news)
Date: 2026-07-09
URL: https://open.spotify.com/episode/5aSn9AiSQ1EJXF4K8qUccr
Length: ~43 min
Note: Audio podcast — NO (mm:ss) timestamps in the source. Speaker labels are from the raw transcript; mapping from
  context (Wapner introduces each speaker): Speaker 1 = Scott Wapner (host); Speaker 2 = Josh Brown (Oliver Renick's
  options segment is also mislabeled Speaker 2); Speaker 3 = Bryn Talkington (also reads the news update as
  "Angelica Peebles" in one spot); Speaker 4 = Jim Lebenthal; Speaker 5 = Jason Snipe; Speaker 6 = Stephanie Link
  (also Kate Rooney in the Anthropic news segment); Speaker 7 = Mike Santoli. Text is otherwise verbatim; only pure
  verbal fillers removed.

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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.
Welcome to the halftime report.
I'm Scott Wapner front and center This hour, the latest on the momentum trade, that space continuing to bounce, the committee doing some buying there as well.
We'll get to that in a moment.
Joining me for the hour, Josh Brown, Jim Lebenthal, Jason Sniper in Talkington show you the markets here, Green across the board do have that rebound, as Sima was just talking about in the chip space.
That's really the epicenter of the momentum trade.
But it's been mayhem in that, in that area.
That's what we're calling a few days down, few days up.
Just when you think it's collapsing, it rebounds.
Just when you think it's about to rebound further, it falls.
Mike Santoli said earlier today that you've only had a couple days in the past month or so where the semis have had less than a 2% intraday move.
That pretty much underscores it.
Micron's a good example of that.
We'll show you the one month.
I mean, you, you can see a fair level of volatility in, in that.
So what do you, what do you make of, of where we are?
It's very hard to draw conclusions on anything happening in the market these days because it's been, as I said, up, down, up, down and who knows where from here.

Speaker 2
I made the point last week that you've got, maybe it's Tuesday, I don't know.
The days are all blending together for me.
I made the point a few days ago that you've got $200 billion in leveraged ETFs.
A lot of that is in single stop 2X vehicles.
These have become mainstream.
That 200 billion is equivalent to 500 billion notional exposure.
That's half a trillion dollars.
So what that means is on any given day, if there are natural normal sellers of these stocks, the momentum players may or may not exacerbate that move and make it look even crazier than it would otherwise be.
This has changed market structure.
We all have to get accustomed to it.
The good news is no one is forcing us to actually react to it, saying if you're in these names and we own a whole bunch of these in our Porterhouse portfolio.
The thing that you have to just understand is that what comes with the territory of being an uptrending popular, great earnings growth story stock sometimes is that a lot of people are affecting buys and sells in the derivatives that don't really have a meaningful point of view.
They're just playing for all right.
It went down 7% yesterday, Maybe it'll go to up 7% today.
And that's actually what's playing out right now.
Zero 52 week highs in the SMH today, but it is bouncing.
And if you look at the average stock in the SMH, it's about 17 of that 17% of those are at 50 day highs.
So a lot of stocks have been knocked away from their highs.
But what you got is a momentum reset judge.
To answer your initial question, the SMH RSI is now back to a very healthy and cooled off 49.
The average 10 day rate of change for a stock in the SMH hit -15% during this last draw down, that means the average stock lost 15% in that 10 day window.
And if you've been on the sidelines, you haven't been in these trades, you feel like you've missed out, Well, you finally got an opportunity.
Some people won't want it anymore because they'd rather buy the stock that's green.
But that's the reality of where we sit today.

Speaker 1
Which is why, Bryn, if you like these stocks and you like this trade, your heads going to spin 10 times trying to pick the exact right moment to get in.
Jim demonstrated that by doubling his position in Micron yesterday.
It's like if I liked it last week or two weeks ago and then it's lower today, well, how can I not like it today?
I assume that's going through your mind as you buy the DRAM ETF.
So take me through that.
It was your final trade yesterday and now you follow through and actually bought it.

Speaker 3
Yeah.
So after the show is my final trade.
It was at $60.00 yesterday.
Josh did a great job walking through the insanity of the leverage ETFs, which is creating huge volatility, which is then in turn for sellers of calls like myself and Kevin, huge call premium.
And so I bought it at 60 yesterday as my final trade and I said you can sell this September 70 calls and collect $7.00.
So I have $17.00 of total upside in the next two months.
If not my $60.00, I got $7.00.
My cost basis will be about 53.
I did, I do think with Micron, Micron did touch the 50 day yesterday.
So from a technical perspective, I said this yesterday, I thought Jim's entry point, I know he uses fundamentals really lined with those fundamentals of bouncing off of that.
And I will say, as everyone is talking about earnings growth, whether it's in emerging markets or the US, Micron should be about 15 to 20% of total earnings growth in the S&P this year.
That's one name.
And then when you look at the EEM, SK and Samsung are also around 15%.
And think about that, that includes China.
That is emerging markets, inclusive of China, 2 stocks.
And then finally, SK Hynix is going to do their listing tomorrow.
From what I've heard, it's seven times oversubscribed.
So I just thought that was a good risk reward ratio.
That's why it was my final trade and that's why I bought it after after the show yesterday.

Speaker 1
Jimmy is a bottom man who knows?
Like I said at the very top, good luck trying to make that call because when you know, people have felt like, OK, the space looks like it's bottoms because it has bounced. 2 days later it's back down again and we're witnessing that this week again.
But I made the point of what you told our viewers.
How could you not if you liked it?
I'm talking about you specifically.
If I made the case that I liked Micron a week or two weeks ago and now it's maybe lower or about where it is because it's been bouncing about, what are you going to wait for?
Like, what is the signal that you're looking for, right?
You're just looking at the fundamentals and you're like, I believe in the fundamentals as much today as I did then.
So I'm willing to make a bet that if I don't catch the exact right place, I don't know, six months from now, a year from now, is it going to, I don't know if you're going to hold it that long, Is it going to be higher than it is today?
Well, I believe so.
So I'm willing to double my position.

Speaker 4
Scott, I can't overemphasize the point that you're making, which is that we cannot call bottoms, all right?
And I don't think anybody here does that.
We may say things like look like they're turning.
Yesterday I thought I saw a signal in Micron and I added to it.
But actually by the time we were talking this time yesterday, Scott, you'll remember, I thought, hey, maybe that signal was a false signal.
So to be helpful here, knowing that none of us are going to tell you where the bottom is because that's not doable, the most pertinent advice I can give anybody watching is stay true to your knitting as far as what type of an investor you are.
If you're a momentum investor, don't suddenly become a fundamental investor.
If you're a technical investor, don't suddenly become a momentum investor.
You in this rapidly rotating market.
And it's actually to me it seems, Scott, like it's every day.

Speaker 1
What do you mean aren't you defining what you are?
You're going against what you're doing.

Speaker 4
No, I'm saying that fundamentally Micron is a value stock to me.
Now this is debatable that what I just said is debatable.
I've had other value investors come to me and say, no, it's not a value stock.
You shouldn't buy a cyclical stock like this at low earnings near the top that that's usually counter cyclical.
However, I am adamantly saying that I think this is a fundamental buy here based not just on the valuation, but the strategic contract agreements they have, the fact that they're going to start turning capital to shareholders soon.
But I don't want to get lost in me personally.
What I want to say is with these rotations that are happening every day, you have to stay true to your knitting because if you think you're all of a sudden going to become a momentum investor, you're likely to get the trade wrong.
And it's interesting though, Scott, and maybe this is what you were pointing out, is that at times certain styles will intersect.
So I can be a fundamental investor, a value investor getting into Micron, and yet still it is a momentum play.
They're not mutually exclusive, but please don't start changing your cooking along the way because you think you know where the market is rotating next.

Speaker 1
Nobody knows.
Marvell, Intel, AMD, they're all bouncing pretty hard today.
We can cycle through those.
As I said, there it is pretty good example of what we're talking about as I sent it to to Jason.
Yeah.
How do you see this trade?

Speaker 5
Yeah, so I think there's a lot to say here.
I think one of the things that I've been considering as I'm kind of evaluating what's happened over the last couple weeks is, is this really a rotation or is this a rebalancing because of the price action has been somewhat orderly on July 1st.
You're starting to see obviously what has gotten us here pull back.
We've seen obviously healthcare and financial services really start to move forward and then we're seeing a lot of this push and pull over the last few days.
So I think to Bryn's point, what she said earlier about Micron representing 15% of the earnings growth in the entire complex is a significant story.
I think muscle memory does come back and a lot of what got us here will continue to pull us forward.
And I just think we're just in this period where we're trying to find from a positioning standpoint where we need to be in the second-half.
But I continue to believe in as, as Jimmy is mentioning, A Micron which is obviously up a ton this year. 257% it's trading at 7 times earnings.

Speaker 1
Do you think it's a value stock?

Speaker 5
So I think it could be both, right?
I think at this point, because of their earnings picture going forward, this is a story where value investors are interested in plays like this, but at the same time, the momentum is there as well.
So I think that's why it's kind of playing in this interesting sandbox where it's getting the price movement that it has.

Speaker 1
I mean, maybe NVIDIA falls into that category too, just given where its valuation has gone.
It's in the MTUM ETF, it's been pretty volatile, hasn't gone much of anywhere.
If you back that out, year to date, you'll get a better look at really what Nvidia's done.
As you know, people wait for this stock to get going again.
It had that draw down in the late spring.
It had a nice pick up and now it's been back doing a little bit of nothing.
Stephanie Link joins us now because this is a big deal for her.
You bought NVIDIA, so it's nice to have you.
Thanks for joining.
Tell us why.
Tell our viewers why this was the time to do that.

Speaker 6
Yeah, I've never owned NVIDIA, regretfully, but it's the valuation that is very compelling to me for what you're getting.
This is best in breed on sale and that's what I like to do.
It's 18 times PE, it's 15 times EBITDA.
This is the cheapest the stock has been since 2019 is underperformed the growth 53% year to date in the past year it's underperformed the group by 72%.
So it's been a big laggard and I think it's going to play catch up because the fundamentals are extremely strong.
This is a company that has 97% market share in the server GPU market.
They have proprietary software platform, they've got new compute platforms that are coming they're even getting into expanding into CPUs.
So it's a company that actually grew earnings 130% year over year last quarter, revenues of 85%, gross margins in the mid 70s and it's sustainable there in my belief.
And free cash flow is going to double from this year to next year to $206 billion.
So I think the fundamentals are very strong.
I don't understand why the action has been so poor, but I think the valuation now makes so much sense to me for the long term.

Speaker 1
Josh, good move here.

Speaker 2
What do you think?
Look, anytime Stephanie and I agree on a stock, I feel way more confident than when she and I disagree.
And Stephanie and I have been talking about NVIDIA on this show for the last 15 years and she's made a ton of money in names like Broadcom that have been rallying right alongside.
But on behalf of the NVIDIA shareholders, we're thrilled to welcome her.
I would point out there's a little bit of a shareholder transition in NVIDIA taking place.
I think a lot of the action that you're seeing in Micron, those are the same people that were attending earnings release parties in Manhattan 2 summers ago for NVIDIA.
The momentum crowd has completely left the stock.
I know it's a remnant of that's still held in MTUM and some of the big momentum strategies, but it has not been a momentum stock in a long time.
I think it's better than a momentum stock.
I think now what you have is a fairly low risk to the future outlook.
I agree with what Stephanie had to say there about the proprietary platform.
That's why I've been bullish in the stock for a long time.
And you don't have to pay a 40, 50 multiple on this thing like you might have to for some other areas within semiconductors.
So I think it's great that she's in and I hope we make money together.

Speaker 1
Brynn, what do you think?

Speaker 3
So obviously glad to have you in.
I've been in it for a long time.
I had some of my position get called away at 200.
I do think it's important though.
I get that the company is cheaper today than it's been in a long time.
But I do think when I go back, I want to say in at the end of 2022, it had a market cap think of around 350 or $360 billion.
We're just shy of 5 trillion today.
So as a long time investor, I kind of asked myself, is this 4 to 5 trillion somewhat like upper Earth orbit that we can't get past because that's such a big number And that even though they continue to surprise the stock, it's cheaper.
It is a $5 trillion company.
And so that's why I'm comfortable once again, still selling calls because the stock just gets cheaper and cheaper.
Jensen saw all of this coming ahead of time.
So I think the stock should be much higher, but I'm just questioning will the market allow a 5 trillion company to go to 10 trillion?
I don't know.
It may take a long time to do that, but great ad.
But I still like selling calls against it, yeah.

Speaker 2
Hey Bryn.
Our mutual acquaintance, Adam Parker has been writing and talking about NVIDIA as though it's not just a company, it's an asset class.
And you know, some people will dispute that and they'll say there's more competition coming and they're not just going to own GPUs forever.
And that's fine.
But I do think if you look at the earnings growth since that time that you referenced, then in 2022, earnings growth is actually outpacing stock price and market cap growth, which is why it's cheaper today than it was four years ago.
And I think so long as they can continue with reasonable levels of earnings growth, there's no reason why 5 trillion has to be a hard cap.

Speaker 3
Right, right.
But I mean, earnings growth typically does outpace stock growth.
I mean, the earnings growth of Micron is threefold of the stock price over the last year.
And so that to me is normal.
Once again, I'm in NVIDIA, I love NVIDIA.
I think NVIDIA should be higher.
I'm just saying that it seems to be in the penalty box.
So when I look at it, I'm saying why is it in the penalty box?
And so this is just anecdotal.
Is it because it's just 10 or 11X over the past 3 1/2 years and it's a $5 trillion company?
It's like the biggest company in the world that the market is just like, OK, that's enough right now because it shouldn't be in the penalty box, but it clearly is.
It's negative for the year.

Speaker 1
Steph, I'll give you the last word before we go.

Speaker 6
Well, I think you've seen massive rotation out of NVIDIA, by the way, also Broadcom, these were the leaders for years and now they are the laggers.
And I think the fundamentals have only gotten better and the visibility has only gotten better and yet the valuations have pulled back.
So look, I own Marvell and that thing scares me because it goes up a lot and goes down a lot and I'm up to 100% in it.
So I own some of the momentum in semiconductors, but I think the real way I like to invest is buying low and selling high.
And this thing is in the penalty. I don't know if I would use that word.
I think it's too strong.
They've done nothing wrong and earnings revisions have gone up over the last three years and I think that's going to continue.
So eventually fundamentals matter.
And if you can get great fundamentals or even if they're good fundamentals at a discount, I'll take that any day.

Speaker 1
All right.
Good stuff, Steph.
Thanks for joining.
We'll see you back on the desk.
I'll see you this afternoon, by the way, on closing bell.
So we'll get into more of that and your broader market thoughts too.
That's our own Stephanie Link, by the way, guys.
According to Morgan Stanley Wealth Management's Global Investment Committee, the MAG 7 stocks are the cheapest in a decade by at least one measure that they look at.
The valuation premium over the other 493 of the MAG 7 is now at 10%.
That's what they suggest is the lowest in a decade.
Goldman's desk today, we like buying the dip in the hyperscalers.
So is this a moment to take a look at a lot of these names, I think.

Speaker 2
I think we're leaving a really important chunk of this conversation out.
Why is that the low? Is it at the lowest premium to the rest of 493?
Maybe it's because with one exception, they're taking over 100% of their cash flow and spending on CapEx.
And historically, the market does not give a premium to companies that do that.
In fact, very often it's some sort of an industrial conglomerate-ask discount to the overall market.
So it's not a mystery.
Nobody's scratching their head.
I think everyone understands the dynamic has changed.
These used to be companies that we celebrated for their asset light business models.
They have gone in the other direction.
I'm not saying it wasn't a good idea, not saying the earnings won't eventually come.
I'm not saying there won't be profitability from this activity, but right now we're in the building phase, not the harvesting phase of those profits.
Hence why these stocks no longer have the premium valuation they used to.

Speaker 1
It's a good debate as to whether to look at the declines of say off their 52 week highs of a Meta down 25 1/2 percent or a Microsoft 32%.
And then Amazon, Alphabet are about 13 1/2 respectively, each of those off of their 52 week highs.
Whether now is an opportunity, like some of these desks say, to buy the dip, or if it's a signal within this market, the way that the makeup has changed a little bit over the last month or so to pull back some of your exposure.
I thought Black Rock's Rick Reader, who was with me on closing bell yesterday, had a really interesting perspective on that.
He loves the mega caps.
He likes tech.
He probably likes it or has at least liked it better than most things.
And yet, here's what he said.

Speaker 4
We have rotated within that universe and I would say how do I describe it.
Some of the companies that are more directly tied to AI, we've pulled back a bit and rebalanced a bit in the some of that are less haven't been associated that necessarily with AI per se.
I mean they're all AI related, but the ones that are less acutely focused on AI.
So we've done some rebalancing within that.

Speaker 1
OK. I thought that was pretty revealing yesterday from Rick, you want to react?

Speaker 4
Well, I think this depends critically on your time frame.
If you have a time frame of one month, maybe the MAG 7 isn't for you.
However, if you have a time frame of three months or longer, these things are for the most part buys here.
You know, I could look at a Meta or an NVIDIA for that matter and say it's a value stock.
I can look at the price to earnings multiple on both of those names and say they're below the market multiple.
So by the way, is the PEG ratio, which Scott, you know, is price to earnings over the growth ratio of earnings.
And for value investors, that's a critical measure, so I do.

Speaker 1
He's not a one month investor by the way.
I'm not mean about a time frame.

Speaker 4
I was not impugning Rick Reader.
I was simply saying to those people who are asking, is it a buy? Is this sector a buy right now?
I wouldn't make that call over the next month, but past that I would.
And here's the important point going back to what Josh said, absolutely right.
These stocks, these companies are sinking all of their free cash flow into CapEx.
Think about what it's going to look like a year from now when they're reaping the reward, when that free cash flow reverses the other way, meaningfully positive.
These companies, we're going to look back on these prices and say what were we thinking not buying them here?
I don't know.

Speaker 1
Unless you think that there's been a sea change within the market, the makeup of the market.
If you truly believe that it's changed and there's more money going to go towards other areas like financials and healthcare and some of those more underperforming areas, then maybe they're not such a clear cut buy today.
I think that's what you extrapolate from Reader and how you would counter Jim's argument that how could you not like these here?
Of course, they're buys if you're a longer term investor.
Well, maybe not if you think that for the next 6 months, the makeup has truly changed.
Yeah.

Speaker 5
I think it's an interesting place.
Obviously $700 billion in CapEx this year it's only going higher.
You know the plan is 900 to a trillion next year.
And to Josh's point, I mean typically we're not giving a market premium to stocks that are spending in the way that they're spending.
However, I do think the multiples have come down enough where they become interesting to my point earlier, they are more appealing to different types of investors, not just growth investors, potentially value investors that see the opportunity in the long term and see there's maybe some visibility on profitability.
So I think that that's what makes them interesting to me at this point.

Speaker 2
This is the question.
There's only one question that matters.
Where is the value of all of this CapEx most likely to accrue in the end?
I gave you my answer.
I've been saying all year, I gave you my answer, it's Apple.
Apple is 2 1/2 billion users that I think they will serve as the gateway to consumer AI through those devices.
That's my and Apple's not spending the way that the other 6.

Speaker 1
That's only why it's only three bucks worth of its all time high.

Speaker 2
I think it's going to point an all time high right now, but look at the way it has separated itself from all of the AI CapEx spenders.
So like, who built the Internet, AT&T, Verizon, Like who built that out?
Who benefited?
Kevin Systrom sold the company with seven employees for a billion dollars called Instagram to Meta.
Like where are the profits of this build out the crew?
I really think it's going to be the companies that own the other end of it.
I'm not saying they will not make money.
And obviously some of them have the double benefit of we're also the LLM like Alphabet, right?
So Gemini will profit heavily from the expense that Alphabet, the parent company is plowing in.
But it just gets murkier.
It's harder to figure out.
So I think the market is asking this question and trying to answer it every day that it opens up.
Where will the profits of this build out accrue to?
We know a lot of them are going to the semis already.
We know the semi capital equipment names, we know the memory names, we know the electrification of the data centers.
We know that a lot of profitability is accruing there.
How much of it will be left with Microsoft for the build out and all this CapEx?
I'm not sure that the market is as confident.

Speaker 1
Right.

Speaker 3
Yeah. I think that to turn Josh's point, to think through where will they not accrue is to me an easier kind of concept to think through.
And I think from a consumer perspective, Josh is spot on.
We don't want another device.
I definitely don't want an open AI device.
OK, Apple from a consumer, I think they crush it.
We're going to spend more time.
The enterprise level though, to me, the big question and I own Microsoft is I don't know if Microsoft can execute on this, right?
Because I'm more and more feeling that their version is more like Teams and Zoom should not exist as a publicly traded company with a $28 billion market cap because there's Teams, but Teams is so mediocre.
And so I think that if you think Oracle, that's a big question, they are tied to open AI.
And so I think when you think through who are the winners, the Apple from a consumer, I think the enterprise is much more complicated.
And to me, I think Microsoft, their cloud business is fantastic, but the money they're spending, I just don't see the output because we use it.
It's odd that you're getting with the other LLMs.
So to me, that's an easier way for me to put my arms around is who are the losers, not the winners.

Speaker 1
Jason, is this the winner in the group Apple?
I mean, it's funny narrative, you know, has changed.
The stock charts changed too for a while, as everybody knows, it was they have no AI strategy.
What are they doing?
And you saw the stock kind of, you know, not give them much.
Then they get the benefit of the doubt because they're getting it together at the same time that they're doing what Josh was talking about, not spending to the level even close of what everybody else is doing.
And now I think in the long run they've been rewarded.
That's why the stock is less than 1% away from an all time high.

Speaker 5
Yeah, I think that's absolutely a good story, right.
And that has always been the narrative around Apple, right?
Kind of wait and see and evaluate what the others are doing and then we kind of seize the moment and do what we need to do from an execution standpoint.
I definitely think they're getting your market favor and not spending to the lives of what the other hyperscalers are doing.
I think there's a transition to Ternus who is a software engineer and looking at their product mix, I think it's going to be an important story going forward.
So and these multi $1,000,000 buybacks, rinse and repeat.
I think that story continues.

Speaker 2
What, $100 billion buyback now and September 1st, it's the first day of John Ternus officially taking the reins and probably the announcement, his first keynote, probably the announcement of the foldable.
And the foldable will move the needle on earnings because they're not going to be able to make enough this year.
Talking about half a million, maybe to 1,000,000 units shipped by the end of the fourth quarter.
But iPhone 18 will be 20 to 22 million units shipped.
Should be a significant improvement in Siri AI or agentic Siri.
Bring your own LLM.
Tell the consumer, OK, what do you like?
You like ChatGPT?
Great.
We'll layer right on top of your existing ChatGPT account.
We're getting paid in the App Store either way.
Oh, you don't like that?
You like Claude?
Hey, we can work with Claude too.
That's what the consumer wants to Bryn's point.
The consumer doesn't want a walnut shaped box that Sam Altman built sitting in their living room.
I don't know anybody that's looking for that.
So I think Apple by not playing the CapEx game swoops in and says, hey, great job, thank you for building all these LLMs.
We really appreciate it and thank you for building the data centers that will distribute them.
We're going to give our 2 1/2 billion devices access and we're going to get paid.
We don't really care who wins.
From my perspective, that is what the market is figuring out.
That's what this chart tells you which is not even a V shape.
It's even better than a V shaped recovery in the stock.

Speaker 1
Yeah, about to make a higher high too.
All right, that's Apple.
We'll watch it.
We'll take a break.
Calls of the day coming up to debate.
Plus Josh Brown's best stocks in the market, the one big bank he is watching ahead of earnings next week.
We're back into City's got a call on software today.
Top picks Mongo DB, Snowflake and Palantir.
Well, how do you guys feel about this space, Jason, I'll give you that.
You have Snowflake, Bryn has Palantir, but go first with this one because you have service now too.

Speaker 5
Yeah, so for me on Snowflake, you know, the early part of the year wasn't a great start to the year, but they really had a strong report last quarter.
EPS was up 68 percent, 33% revenue growth.
The North Star for them in terms of revenue growth is 30% new deal with AWS.
What I will say in terms of their consumption model, those results can be fairly inconsistent.
But this is a stock in terms of data warehousing and all the CapEx spend that we're seeing in this whole ecosystem is one that's worth owning.

Speaker 1
You wouldn't if you listened to the whole narrative and debate about software, you wouldn't think that any of these names are having a decent year.
This one's up 21% year to date.
It's been really easy just to think that all software ex cyber have been dogs.
This one has not.

Speaker 5
No, there's no doubt about it.
I think what we've seen in the early part of this year and year to date, you cannot be indiscriminate in this space.
There are certain names that are working far better than others.
Obviously ServiceNow is on the other side of this, right.
But I do think there's continued upside.
But I just think Snowflake the space that they occupy is a strong one.
So I continue to like it.

Speaker 1
I mean ServiceNow is down significantly on the year, about 30%.
Goldman's reiterates buy though.
So today you want to take that off.

Speaker 5
So I think for them as it relates to ServiceNow, they're their agentic AI tools.
They're really embracing the space.
I mean, I think what we talked about early part of the year is AI is going to replace these traditional SAS models, blah, blah, blah, blah, blah.
I don't think that's a story with these particular companies.
I think now the price action hasn't been nearly as strong, but you're starting to see some momentum over the last couple months.
It's just pulled back recently, but there is some momentum there.
And I think this one is also worthy of ownership.

Speaker 1
Talk about things that have roared back.
Cyber OK CrowdStrike's up 68% year to date.
You go through almost all of these names.
Palo Alto, Fortinet, CrowdStrike's target goes to 235 at Needham today from the anthropic news killing cyber conversation.
That feels like it lasted about 10 minutes because the stocks have come back so strong.

Speaker 2
That's right.
Jason's right.
The SAS apocalypse phase where everything just indiscriminately, if it was in the software ETF, it was being sold, some of that was people having genuine concern about certain business models and like Salesforce being the poster child or Adobe maybe.
And then some of that is just like, wrong.
You're in the wrong neighborhood at the wrong time of night and you're just getting mugged.
But I don't think we're doing that anymore because Crowd Strike's a great example.
This is a company that has effectively made the case to the street.
More AI means more cybersecurity threats.
More AI means more cyber contracts and more pricing power and more stickiness of the things that they sell to the enterprise and government customer.
And that's what's borne out.
ARR grew to 5.51 billion, up 24% year over year.
In the last quarter, they reported free cash flow hit a record 468,000,000, which is 34% of revenue.
Operating income, another record, the rule of 40 score here is 59.
It's like maybe three other companies you could point to in the public markets that have done what George Kurtz has done.
So I'm a long term shareholder.
They just did a four for one split.
I haven't sold any, will not sell any.
And I think it's a great example of how the market is getting smarter about disruption risk and stratifying the software names rather than just universally hating them all.

Speaker 3
Angelica Peebles has a CNBC NEWS UPDATE for us.
Hi there.
Hey Scott.
New York City is investigating the inspection history behind a damaged Midtown high rise, The New York Times reports.
The firm that inspected the building had previously been cited for missing problems at other sites.
The building, a former office tower being converted into apartments, was stabilized after buckling columns raised fears of a partial collapse.
No injuries were reported.
Congo's latest Ebola outbreak is spreading into new areas.
The death toll has reached 600 with over 1700 confirmed cases nationwide.
African health officials say this is now the continent's fastest growing Ebola outbreak.
China and Taiwan are bracing for Typhoon Bobby, which forecasters say could be one of the region's strongest storms in years.
Taipei officials say offices and schools will close Friday, meaning Taiwan's financial markets will also shut down.
The storm is packing winds near 124 miles per hour with heavy rain expected.
Bobby is expected to pass near Taiwan before making landfall in eastern China this weekend.
Scott, back over to you.

Speaker 1
OK, Angelica, thanks for that.
That's Angelica Peebles coming up.
Josh Brown's best stocks in the market.
We're back after this break.
All right, we're back.
Josh Brown's best stocks in the bar.

Speaker 2
What's that?
Thanks for that.
Yeah, Scott's like, All right, here's your big segment coming up.
Let me read some mean tweets to you.
Commercial break.

Speaker 1
I thought it was funny.

Speaker 2
I'm going to read some tweets to you on the next break.
All right, Citigroup, give me the ultra long term chart real quick.
This was a very, very impossible to own stock.
This was an ugly duckling coming out of the great financial crisis.
They basically spent 15 years attempting a turn around in fits and starts and then finally a few years ago, Jane Fraser is the new CEO, somebody who behind the scenes had been pulling off deal after deal after deal to streamline this bank.
Not in the CEO role.
She gets the role and all of a sudden Wall Street look at this off a cliff.
No L-shaped recovery, they call this.
Anyway, that was then, this is now.
City is up 65% over the last year through July 7th.
Congratulations to Jimmy Lebenthal who's been a believer here.
That's versus 33% for PNC, 25% for B of A, 18% for JP Morgan.
So this has been a standout name in a group that started to catch fire.
But again, the 20 year annualized return is -4% only negative number amongst the large cap banks.
So I still think there's room here.
This is a very different company.
International Services is the crown jewel.
They have doubled and tripled down on that while getting rid of businesses where they don't really perform very well.
And that's been the secret shrinking in order to grow more profitably.
The company has earnings at the end of next week.
This has not been a consistent like you want to be in before the earnings story.
You've seen it go up a lot.
We've seen it drop a lot.
So don't use that as a catalyst.
I think instead focus on 110 to 115.
You can see in this chart that's the 200 day moving average give or take.
The stock has obeyed that trend all year.
This has been on the best stocks in the market list since last August.
It's been in my Porterhouse portfolio at my firm since inception and it has not gotten anywhere near that longer term trend lines.
That's where I would manage risk from, whether a trader or an investor.
I think it'll be just fine as long as it stays above.

Speaker 4
I agree there's more to come.
There's a lot more to come.
We've got the Banamex spin out coming out sometime in the next 6 to 9 months or so.
And when Citigroup announces that it's coming out from under the thumb of the Fed and other regulators because there's various consent orders out there, I think that will move the stock higher.
It's still attractively priced.
Importantly, Josh, this is another one of those areas where different styles of investing intersect.
So this is one of your best stocks in the market.
You have the metrics by which you define that.
This is still a value stock.
For me, there was a period of time when it was a deep value stock, which is the technical term, Josh, for ugly duckling.
That's right, deep value equals ugly duckling.
But these styles of investing can intersect.
There's a lot more to come on this.
As I've said, it's still attractively priced.

Speaker 2
Yeah.
Best quarterly revenue in a decade.
Last quarter, 56% jump in earnings per share from the prior year.
You can say this is still cheap based on that kind of earnings growth and have room to say and also I respect the trend here in the momentum.
You can walk and chew gum at the same time.

Speaker 4
Really do have to give a hat tip to Jane Frazier.
She's done a fabulous job.
The first three years in the seat she was given no credit.
Finally, the last two years they've given her credit.

Speaker 1
Financials are sort of one of the top sectors this month.
We know that bank earnings kick off next week.
Is there a reason why we don't have more buying in this space on the committee?
Jason, you've got Goldman, Josh is JP Morgan and Citizens, Jimmy, you're city and JPM.
But there's a belief that what was relative to tech, obviously a lagging sector is now woken up.
Why isn't now ahead of earnings the time to get a little more exposed here?

Speaker 5
Yeah. Well, traditionally we don't just because of the potential volatility and stuff.
But I'll say this from a positioning standpoint.
Let's guess what financials were up about 3 1/2 percent last week.
Goldman is my name here.
I mean, IB revenue was up 48% last quarter, right?
And I think capital markets will continue to surge.
The stock's up 20% year to date.
There was some pullback in recent weeks, but it's starting to get back some of that momentum, just not what we do.
But I continue to like the space and IB is our favorite name in the financials.

Speaker 2
Financials are expected as a group to grow earnings by 10.7% over the next 12 months, that's not screeching hot growth, and it certainly doesn't look like the tech sector, but it's growth nonetheless.
And these it's not as though these stocks are selling at above market valuations or even above their own historical averages.
The earnings growth again has been outpacing the share price growth for a lot of the biggest components in the financial sector.

Speaker 1
All right, we're getting some news on Anthropic.
Kate Rooney has those details.
I saw a headline move, and I'm assuming that this is the news that you're going to deliver to us.

Speaker 6
Yeah. So, Scott, the latest for Anthropic.
They're adding former Fed Chair Ben Bernanke to this AI governance structure that they have.
Bernanke's been appointed to Anthropic's long term benefit trust.
So this is an independent body.
It's meant to help Anthropic, they say, align its mission of building AI responsibly.
So it's an independent body.
The company itself is a public benefit corporation, but this is sort of a separate group within that.
Bernanke, of course, led the Fed through the 08 financial crisis.
Nobel Prize winner in economics.
The company says his background is going to help the company think through how AI could affect jobs, could affect the market and then the broader economy.
Obviously a big topic and risk of AI something top of mind for a lot of CEOs.
Also a quote here in this release from Bernanke.
He says the potential of AI is enormous and so is the range of outcomes.
He says how that potential plays out will depend in part on the institutions we build around it and talks about the unique governance structure.
They also say this group has the authority to appoint board members and advise on overall risk.
Scott, back over to you.
It's an interesting development.

Speaker 1
Kate, thanks.
It's Kate Rooney.
We'll get Mike Santoli's take on this market next.
Senior markets commentator and overtime Co anchor Michael Santoli.
As you see us here at post 9 with the gang, what do you make of this man?
I mean, we started out the show. It's like this mayhem in momentum because the minute you think you know what's happening you don't.

Speaker 7
Well, and it's also kind of a force of its own.
In other words, it's not necessarily tied to the news of the morning.
Sometimes you're running away from macro like yesterday and going toward the old broken momentum stuff because it's not really connected to a lot of those inputs.
What I find funny today is you know all the trading desk everyone wants to know is the momentum unwind finished right?
We need to declare it over.
OK, we've seen this in the past.
Sometimes this is enough of a reset and Bank of America's desk said semis corrected on nothing.
Therefore they should rebound to highs as if doubling in less than three months from the March 30th low was 100%.
Getting it to just pure fair value based on fundamentals and giving up 18% off of that was somehow an outlier downside move.
Now, bull markets do act like that, right?
You got to get more than you deserve as they go along.
But I do find it interesting the idea that just because the earnings are holding up, it means a pull back from one of the most aggressive, crowded crescendos of buying in history is somehow finished.
So I think that's the debate.
If I look at how the tape responds. It's very benign, it's very encouraging, It's holding the trend.
It's all the volatility is internal, It's suppressing index level volatility that tells the kind of tactical plays you can stay in and that's what's going on.
This is a late day move yesterday.

Speaker 1
Remember when we were talking at the end of closing bell before you were getting ready to do overtime, you saw the NASDAQ go green, Yes.
And a lot of these names started to get the buyers and now they followed through and I don't know that there's a way to kind of explain it beyond the buyers showed up.

Speaker 7
People are excited about Hynix, they're marketing that deal.
Everyone's saying fine, there's no reason to take numbers down.
Meta, it's not flinching on CapEx plans.
So therefore a trillion dollars next year looks fine and all you want to buy is AI hardware.
What I find interesting is in the S&P, it's still a 0 sum game, right?
What's down today, NVIDIA, hyperscalers, the spenders.
So we'll see if that resolves somehow.
I'll see you at 3:00.

Speaker 1
That's Mike Santoli.
Options action with Oliver Renick's next.
Let's play some options action in Chicago.
Oliver Renick, What do you see?

Speaker 2
Hey Scott, it's been 5 weeks and one day since the NASDAQ made a new high.
It's been 4 weeks since it made a new low.
In other words, things went from manic to mild real fast.
But also, according to the options framework we've been using for almost 2 weeks now, that broker dealers are leaning long volatility and likely to act as a stabilizing force in the S&P 500, buying dips and selling rips.
But here's the fun part.
The biggest trade of the day in the QQQ by a long shot is a bull betting $24 million on a new high by the end of the month.
Here's how they did it.
They started with a $30 million purchase of 28,736 strike calls expiring July 31st, but then sold a 737, 740 strike call spread against it, bringing in $6 million.
The net result means they need QQQ to cross 750 by the end of this month, which is probably not coincidentally just a hair above last month's all time high.

Speaker 1
Scott, Oliver Renick, I'll see you at 3.
Thank you very much.
Finals we're doing next.
All right, we'll see you on the bell. 3:00 Eastern.
Stephanie Link, member. She bought NVIDIA.
She'll join us with more coming up.
Cameron Dawson, Gabriella Santos, Ed Yardeni, Bryn Talkington.
What's your final?

Speaker 3
CBRE, looking for 26% earnings growth at the end of the month.
Thank you very much.

Speaker 1
The Sniper.

Speaker 5
NVIDIA. 87% earnings growth.

Speaker 1
The Farmer. Citigroup. Just repeating.

Speaker 4
Earnings are coming up.

Speaker 1
JB. Live Nation.

Speaker 2
2 price target lifts today, one from Wells Fargo at 222.

Speaker 1
All right, good stuff. I'll see you at 3:00.
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