CNBC Halftime Report — The Mega-Cap Bounce Back: How to Trade it

Apple is breaking out to new highs and leading the mega-cap bounce. Bill Baruch's case is "best of both worlds": Apple both dominates the consumer's device (the way people will actually reach AI) and — unlike Microsoft, Meta and the other hyperscalers — isn't pouring cash into expensive AI data centers. Because it isn't caught in that spending arms race (the "anti-CapEx trade"), investors will pay a higher multiple for it. He sees it running toward 370, then 400, and has been buying: he added more on June 12, and it's now his #3 holding — "we're going to let this thing ride."

Rob Sechan agrees Apple is "the consumer entry into AI" (a Josh Brown idea): the everyday user gets to AI through a phone, so whoever owns the device has an edge — which is why OpenAI and Meta are scrambling to build their own hardware.

Nvidia makes the chips that train and run AI. It was down on the day, but Joe Terranova expects it to "follow" the mega-cap breakout and participate in the coming weeks after a strong afternoon the day before. Bill Baruch likes it "a lot here" while it consolidates, and highlights that its free cash flow (the cash left after running the business) is "becoming amazing relative to the other Mag Sevens" — i.e., it's throwing off more spare cash than its trillion-dollar peers.

Meta owns Facebook, Instagram and WhatsApp. Steve Weiss made it his final-trade pick — it's up 15% in a month and, while it "may be slightly ahead of itself," he still finds it "reasonably valued." Rob Sechan's insight is that Meta has been "positively complicated": for two years the worry was how Meta would ever make money from its enormous AI spending, but once it framed its giant compute buildout (33 data centers) as an asset it can earn returns on — like renting out cloud capacity — the market flipped from penalizing the spending to rewarding it.

Alphabet is Google's parent. The day's catalyst: Warren Buffett revealed that Berkshire Hathaway has bought an Alphabet stake, admitted that not buying Google years ago was "a mistake," and said the company is now "more likely to be a winner." Rob Sechan says Alphabet is his firm's "largest overweight in the mega caps." His point about opportunity: just a year ago investors feared chatbots (OpenAI, Anthropic) would destroy Google's search business — that fear knocked the stock down and created the buying opportunity in a company with huge financial resources.

CrowdStrike is a cybersecurity company. It hit a new record high the same day IBM collapsed — and that's not a coincidence. Rob Sechan's framing: companies have fixed technology budgets and are shifting money toward AI and cybersecurity and away from older software. CrowdStrike is a clear winner of that redirection, one of the "haves" in a market now separating software "haves and have-nots."

ASML (a Dutch company) makes the ultra-advanced machines that etch the tiny circuits onto computer chips — its lithography gear is essentially the only way to make a cutting-edge chip, which Rob Sechan calls "the ultimate bottleneck." He owns it. The news: ASML raised its four-year forecast by 15% (now expecting about 30% annual sales growth for years) and has "incredible pricing power" — yet the stock still fell about 2%. Sechan's read is that after a 70% run this year some investors just took profits; the report itself was good. It's a prime example of the day's theme: great numbers, but expectations were even higher.

Goldman Sachs is the investment bank most tied to deal-making (mergers and IPOs). Steve Weiss owns it and prefers it among the banks: "I prefer Goldman honestly, that's what I own." It's the most leveraged to the merger-and-acquisition cycle — and with AI labs (OpenAI, Anthropic) heading toward IPOs that then fuel more deals, that pipeline keeps building. It posted a blowout quarter and ripped to record highs, and Weiss is impressed that management stayed humble ("the battle's ahead of us… one day at a time"). Rising and volatile interest rates (a steepening yield curve "under Warsh") add another tailwind for the trading business.

JPMorgan is the largest US bank, and it's at record highs on the wave of record bank earnings. Joe Terranova got ahead of the move — he bought it back "when we were out at the US Open," betting that gloomy sentiment on the banks would rebuild into something much more positive. That's now playing out, and he thinks the buying spreads from the big banks to the regional banks too.

Morgan Stanley is a big investment bank with a large wealth-management arm. It "knocked it out of the park" — its stock-trading revenue jumped 69%, its wealth business grew 14% year-on-year, and new client money poured in (up 150% year-on-year, "blindingly impressive"). Rob Sechan added the stock to go overweight the banks, and paid for it by trimming a little Wells Fargo — he wanted Morgan Stanley's greater exposure to capital markets (trading and deal-making).

BlackRock is the world's largest asset manager, and its fees rise as the value of the assets it oversees rises. With markets strong, Joe Terranova likes it — and notes it's only up 2% this year, so it's just at "the initial stages to build momentum," the same setup he saw in JPMorgan before its run.

Blackstone is the biggest private-equity/alternative-asset manager. Joe Terranova singles it out as the one private-equity name he'd "step out and take a chance on" — it's up about 10% in July and, in his view, has "probably seen the worst" of the negative sentiment that hit the group.

Eli Lilly is the drug maker behind blockbuster weight-loss/diabetes treatments. Bill Baruch made it his final-trade pick on a chart basis: it's "back-testing" a breakout (retesting the level it just broke above, a healthy sign) and is "on the downslope of a CapEx cycle" — meaning the heavy spending phase is easing, which tends to free up cash. "Real exciting here."

Vistra is a power producer — a favored way to play surging electricity demand from AI data centers. Rob Sechan made it his final trade: the stock "has done nothing for the year but woke up this past month," and he thinks "energy can be a trade in the second half" of 2026.

T. Rowe Price is a traditional asset manager whose fees track the value of the funds it runs. Joe Terranova made it his final trade ("Joey T, Rowe Price") — a bet on the same rising-markets tailwind lifting the asset managers as financials broadly rally.

Micron makes memory chips that AI servers need in bulk — and it's the flashpoint of the day. Steve Weiss sold out of it, explaining that "we're closer to the end of the AI trade — not the fundamentals, the trade." His point: Micron's business and revenues will keep growing, but the stock trade has run its course as the market rotates away earlier than expected.

Bill Baruch takes the other side: Micron is his largest position, bought around a $70 cost basis, and he's happy to hold it. He actually wants it to cool off ("come in a little bit") rather than go into back-half earnings at its highs, because he's watched memory names post great results and then sell off. So the desk is split — one seller, one committed holder — which nets out to neutral.

United Airlines reports earnings after the close, and Joe Terranova owns it. He's watching for roughly $1.76–$1.88 in per-share profit on about $17.6 billion of revenue, plus the outlook on flight capacity and management's comments on the recent jump in fuel prices. His angle: after rival Delta's strong results got a lukewarm stock reaction — and with jet fuel and oil up double digits this month (dragging United's stock down double digits) — expectations are now reset low, which can make it easier to beat. A wait-and-see hold into the print.

Netflix splits the committee. Steve Weiss sold out of it: streaming is getting more crowded (Paramount, Warner Bros., Apple), and Netflix's moves to find new growth — chasing a Warner Bros. acquisition, Lionsgate rumors, even reselling rivals' subscriptions — signal to him that growth is slowing. It's not expensive, he says, but "the growth's not going to be there."

Rob Sechan owns it and bought the recent dip. His bull case: Netflix should generate about $15 billion in free cash flow this year and spends the least on content per subscriber, which gives it room to move into live sports for more growth; it has 300 million-plus users and genuine pricing power (it raises prices without hurting the stock). Net across the two: a neutral, one-in-one-out standoff.

IBM had its worst day ever (down about 25%) and got downgraded by Oppenheimer after a disappointing pre-announcement. Rob Sechan, who owns it, calls it "a reset": the market is questioning whether IBM can use AI to its advantage or gets disrupted by it. He links the damage to companies shifting their tech budgets toward AI and cybersecurity (which is why CrowdStrike is soaring) — a market now split into "haves and have-nots."

He's staying patient rather than selling: management admits it "stubbed their toe," but he says the other business metrics are fine and the stock is "still up 60%," so he thinks it "can get back on track." That patient-hold stance nets to neutral.

SpaceX recently went public at a fixed IPO price of $135, popped 20% on day one, and has now fallen below that $135 price for the first time. Joe Terranova's explanation: the stock's earlier rise was built on scarcity (few shares available), while the bond market was "the adult in the room" — a weak debt sale with wide spreads warned trouble before the shares collapsed. He owns no position.

Rob Sechan, who invested privately before the IPO, always told clients there'd be "an opportunity to be a better buyer" later — it just arrived faster than he expected, before more shares unlock from lock-ups. Steve Weiss is blunt: SpaceX is "a faith stock" — a tremendous business, but "you can't value it" because it spends heavily with no clear path to profits. Nobody on the desk is a buyer at this moment, so the net read is neutral.