Title: Micron's Surge and AI Trade Implications — CNBC Halftime Report Show: CNBC Halftime Report (the podcast / audio edition) Host: Scott Wapner Panel (investment committee this episode): Josh Brown (Ritholtz Wealth), Joe Terranova (Virtus / JOET), Stephanie Link (Hightower), Jim Lebenthal ("Jimmy"). Also: Mike Santoli, Mackenzie Sagalos (news update), Brian Sullivan, Oliver Renick (CBOE options). Date: 2026-JUN-25 URL: https://open.spotify.com/episode/3hpG0nmhF4e6ZDal2qWuuV Length: ~44 min (audio) Note: Audio podcast — NO (mm:ss) timestamps; the per-video page "At" cells link to the episode, not a deep-link. Verbal fillers (um/uh/"you know" interjections/false starts) removed; wording otherwise verbatim — no paraphrase, no reordering. Speaker→person mapping (labels DRIFT across segments; attributed by content): Speaker 1 = Scott Wapner (host); Speaker 2 = Josh Brown; Speaker 3 = Stephanie Link; Speaker 4 = Joe Terranova; Speaker 5 = Jim Lebenthal in the committee discussion, but Mike Santoli in the Santoli segment; the news + options segments are Mackenzie Sagalos and Oliver Renick respectively. Garbled-name check: "Jane Street" (quant/market-maker firm) is correct; no ticker invented from people's names. --- 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. Carl, thank you very much. Welcome to the Halftime Report, Scott Wapner front and center this hour. Micron's moment — that stock is surging after earnings. We will discuss and debate what all of it means for the AI trade, for the markets in general, because we do, as Carl said, have a very interesting session shaping up. Joining us for the hour: Josh Brown, Joe Terranova, Stephanie Link, Jim Lebenthal. So Micron's moment is a good one obviously for that stock, but it's really interesting this price action and some of these other names today. I'm wondering, Josh, what you make? [Josh Brown] It's a continued rotation. There's no doubt about that. But if you thought that Micron was just going to relaunch the entire AI space with their blowout quarter — not happening today. [Scott] Oh, I disagree. [Josh] Well, look at the hyperscalers. [Josh Brown] That's not the AI trade. We've been through this. The AI trade is not the hyperscalers. The hyperscalers are the people that are facilitating it with their spending. The AI trade is working really well today. Eight of the top ten S&P 500 stocks on the day today are all a huge part of the AI buildout. They're just not hyperscalers. And this is what the market's been doing all year. It's not even new. Look at our stocks today: Corning, Flex, Applied Materials, Teradyne, Caterpillar, Western Digital. The DRAM ETF is up 9% today. The XLI is up 2% today. And I promise you, the leaders in the industrials are all AI infrastructure stocks like Caterpillar, up like 4% on the day. You also have other areas that are up. You have XBI doing well, you have the homebuilders doing well. The transports are up 2% today. But the AI CapEx theme has swallowed the market this year. Unfortunately for the hyperscalers, they're in the position of being the spenders on AI equipment and they're not getting the benefit from their shareholders any longer. As a matter of fact, the MAG 7 as a group are dragging down the returns of the S&P 500 year to date. So that is the first time I've been able to say that in a very long time. Those stocks are net detractors, especially Meta and Microsoft, very big in the index and very negative on the year. So we've got the AI trend in full force, Micron made everyone feel even better than they did yesterday, we just don't have the participation of the companies who are footing the bill. [Scott] OK, that's a fair assessment. There were some out there who were thinking that this was a critical moment for the AI trade at large — that if Micron, because the mega caps have traded squarely lately, right? And you had a NASDAQ surge in the pre-market and that's all but gone for a variety of reasons. SanDisk is up — speaking of things that are winning, the power players in part to Josh's point. Steph, right here alone is a great place to look — of the stocks that are getting a big bump off of Micron. [Stephanie Link] Yeah. And the industrial companies are definitely the winners for sure. I've talked about the food chain — or if you want to talk about Jensen Huang and the Five-Layer Cake, it's the same thing. The hyperscalers are spending $800 billion this year on CapEx. They're going to spend 1.6 trillion next year. This is not going to end anytime soon. So you want to own the companies that are building out the data centers, and we know data centers take three years to build — 40 billion for one GW plant. So there's a lot that goes inside of data centers, and those are the winners too. We've talked about the grid and how old the grid is that needs to be upgraded. And then of course you also need power and we simply just don't have enough power. So the one thing that Micron said yesterday — and I'm sure Joe owns the stock, so I'm sure you're going to go through it — but they announced 14 strategic customer agreements, securing $100 billion in contracted revenue, 22 billion in cash just to secure capacity, and they're sold out until at least 2027. So this is going to go on for a long period of time. GE Vernova, Quanta Services, Vertiv — all of these names we've been talking about for three to four years. But the point being is you want to stick with them because the backlogs have never been larger. I have been covering industrials for 35 years and on average backlogs are growing, give and take, 5-10% a quarter year over year — you're on average up 35 to 40% in backlog growth and it's only going higher. And one last thing because it's really powerful, pun intended: Quanta Services, their total addressable market has gone from 960 billion between now and 2030 to $2.4 trillion. It's a very conservative management team. 70% of their customers are utility companies, and so they are benefiting and all these other companies are as well. But just listen to what the management teams are saying. You don't have to listen to any of us, but we have been investing in this theme for quite some time and I will continue to be overweight. [Section: Is Micron a Secular Growth Story or Cyclical Commodity?] [Scott] Yesterday — maybe not so much on this program, but certainly on Closing Bell — the conversations I had leading into the earnings report really centered around Micron, the fact that traditionally these have been highly cyclical businesses, chips, right? And that this time was in fact not different from the past, and that was giving people pause at the run in Micron. And I think you can make an argument today that Micron's earnings report suggests no, in fact this time is different, and that this is a more secular idea around these types of chips specifically. Investors have had a hard time getting their arms around what they know historically to be true versus what is happening now. Not that the PE on this name is exceptionally large, because it is not — maybe from a historical standpoint you could make an argument that it's a little more pricey than normal. But this to me just opens the door — what is it, almost 10 times — opens the door wide open to the conversation of this time is different as it relates to memory. It certainly feels that way. [Joe Terranova] I think yesterday there was a paradigm shift. I think there was fundamental validation that this is not a cyclical commodity moment for Micron. This is something more powerful. This is secular. This is not to be thought of as purely a commodity. This is an irreplaceable resource. Think about the difference for a second — an irreplaceable resource, the speed of AI accelerators, they basically get frozen without the memory component. If you think about a commodity for a second, which I called it yesterday — OK, and I'll share with you where I was wrong — if you think about a commodity, there's the elasticity as it relates to price, right? As price goes higher for oil, what ultimately happens is demand — people say OK, I'm going to drive less. There's price elasticity. With an irreplaceable resource there's not, and the ability to sign 16 strategic customer agreements going out to 2029 to secure pricing and your revenue — that's a very powerful force. And that's the paradigm shift. [Scott] But you said yesterday ahead of the number you wouldn't initiate a new position, you thought the stock could trade lower. I feel like you were maybe inching more into "well, we better be careful with this thing now" given the price action in the name. But I think I made the point yesterday: the biggest tell to me heading into this print had nothing to do with Micron directly, but a derivative of it — Apple, raising its prices. The report a week ago suggesting that Tim Cook suggested there was no other choice but to raise prices because of what they saw happening with memory. [Joe] You made an excellent point yesterday and you're making the same point today, which is the right one. I took the perspective yesterday from a risk-to-reward standpoint. I didn't like the setup. I didn't like technically the distance that price was from its moving averages, how much it had rallied, and I advised the viewers who didn't own it not to rush in and buy it. I would say this to those viewers today: here's what I would do to design a strategy. I would buy 25%. Let's say you're going to buy 100 shares. I'd buy 25 shares at some point this week, get it out of the way below the market. I'd put an order in for 50 shares at 9:50 and another 25 shares at 7:50. If you never get those 75 shares, at least you're participating. You have to understand there are people that are in this stock from $100, $200 — our ETF bought this stock at 2:23. It's very difficult to discuss one-day moves and I was incorrect in doing so yesterday, but this is very clear: this is a fundamental shift where they literally are controlling pricing on their own because they have — and I'll use these two words again — the irreplaceable resource. [Jim Lebenthal] That actually fits many boxes, OK, because I'm in it as of today. I initiated — not a huge position, Joe, because obviously, as you say, it has appreciated quite a bit. But I'll take the other side of the narrative that you laid out, not to be provocative, but because what I believe is this is a cyclical stock. It's just a question of where we are in the cycle. And I would say at worst, we're in middle innings. At some point a replacement will come along, at some point supply will pick up, but it's not anytime soon. And to the multiple — Scott, I think you said it was 9 times — but that is using yesterday's earnings estimates. The current earnings estimates are going to go much, much higher. We see that from the guidance that they give. Stephanie pointed out the strategic customer agreements, which again just extends this cycle. This is a stock that when the estimates come in, it's probably trading around 7 times forward earnings. So if you're a value investor like me, this checks the box, and I don't even have to get into a narrow or wide moat competition about whether this is irreplaceable. [Josh] The bear case on Micron is not about competition, because you're not going to have a competitor who's not already in this market show up and stand up. [Jim] The bear case is supply comes online. That's the — [Stephanie] Only bear case, and that's what I was going to mention. ASPs for DRAM are up 60% and NAND up 80%. This is why Apple has to raise prices. And if Apple has to raise prices, everybody else has to raise. [Scott] Why do you think that all of the mega caps are down today? Because Micron's gain is a lot of pain now. It's more acute for Apple than some of the other hyperscalers, but I do think there's a reason that they're down as a group. [Stephanie] I think it's always challenging when companies are in an investment cycle to own them, because you don't get the operating leverage, you don't get the earnings growth that you can eventually. We will. But the bear case — no, I know, wait a second Josh, but eventually we will. And Jensen has said that time and again, and all these CEOs have said it, they have to spend, but therefore you're not going to get the margin expansion. And so on the flip side, look at Micron and look what their margins were, because they have that price. [Josh] I agree with everything you guys are saying, but I have to reiterate: the thing that ultimately — I don't know if it ends the cycle or brings it to a downturn — is that ultimately Micron is achieving all of this on price, not on higher volumes. To your point, the ASPs. Nobody can replace with higher volumes because it is what it is. However, there comes a point at which the pricing power becomes so extreme that the people who use the product find workarounds and use less. We had a moment with DeepSeek where all of a sudden it's like, oh wait a minute, it turns out there are actually going to be competing models that can do this faster, cheaper. Are they cheating? Maybe they're stealing technology? Maybe. But still, at a certain point that's what ultimately gets to Micron. I'm not suggesting that's going to happen this quarter. This is now a $1.3 trillion company. It's the ninth biggest stock in the country, bigger than Lilly, Berkshire Hathaway, Walmart, JP Morgan, AMD and Visa. And they did the whole thing on raising prices. There's got to be a limit, and the customers ultimately will find a way to use less memory. And when that happens, that's how this ends. [Joe] Let me ask you to answer this. The strategic customer agreement — think about it this way. The price of oil is currently $130. You're a producer, Jimmy. You say OK, I am going to sell you oil through the next three years at $130. I don't care if the price of oil goes to 80. How is that not a good thing — controlling the price environment yourself? Why then would you be worried about some form of a cyclical commodity experience? [Jim] Well, I'm not worried about it, or else I would have not gotten in the stock. I do think it's cyclical. I think what Josh just described, with price eventually killing demand, is the part where a cycle turns down. But to the point both of you are making with the strategic customer agreements, it's a long way away. What I would say though is that the price action in Apple is more telling on a macro basis of how this may play out. Apple has to raise prices in order to account for the higher DRAM prices. [Scott] Can I just push back on another thing then? Maybe I'm off base, but how can you declare yourself a card-carrying member of the Value Investors Club when you're buying this where it is, and you're sort of doubling down on Oracle the other day? How does that work? [Jim] Well, just to go back to what I said a second ago — I will submit that in a week we're going to be looking at this price for Micron and saying this is 7 times forward earnings. That gets me to the value-investor mentality. On top of that, an important point none of us have spoken about: in coming months and quarters Micron is going to be buying back a tremendous amount of shares. Scott, you know how I feel about it, you know how central to my value-investor mentality is the return of capital to shareholders. This is different than the hyperscalers, in which they are reinvesting in their business. Micron is going to be spinning it back. To your point about Oracle — listen, in order to get outsized return, sometimes you have to take a risk. I am taking a risk in Oracle. I'm the believer that all of the things that are propelling Micron are also going to be to Oracle's benefit. Yes, there's a risk that it's negative free cash flow, that it's an indebted balance sheet. But I strongly believe based on the CapEx plans that all the hyperscalers have, and how they're saying all of this compute is profitable, that this is going to pay off in the end for Oracle. I might be a little early. [Josh] It's 200% above its 200-day moving average. I'm not suggesting that in and of itself is a reason not to buy. I just don't think if you were to do 20 trades and buy all at that level, your results a year later would be good. [Jim] Did not load the boat, absolutely right. [Joe] In general, the colloquial — the risk-to-reward setup is poor, that's without question. It was poor yesterday, it's poor today if you're purely looking at price and technicals. [Scott] I don't care if you bought $5 worth or $5,000,000 worth. You can't make an argument against that with "well, I didn't load the boat." You were willing to buy it at this price. Therein lies your investment decision. No one expected you to just sit there and buy a 5% position in a single day anyway. [Jim] Yeah. The reason I say that, Scott, is because I think about the viewers who are listening. Sometimes this happens — I'll talk about a stock and somebody will stop me on the street: "oh, I loaded the boat on this." Seriously, that happens. And I'm telling you, to the point Joe originally made, this is a time to start building your position. You can agree with Joe that maybe the setup isn't great and save some dry powder as I am, in case you buy it lower. I happen to think, Scott, to be more specific, I'm more likely to be buying more of this higher than I am lower. [Stephanie] So you weren't thinking about buying some of the derivative plays like a Vistra or a Vertiv, some of the companies that have better visibility and maybe they're not as popular — they're popular, but maybe not as popular, and they haven't run nearly as much? [Jim] Well, those are valid plays as well. I have enough between my Microsoft, my Oracle — Microsoft is doing this as well. [Josh] Nine months ago we had another version of this Micron debate — not us specifically, but the Street — and it was Palantir. Palantir had put up two quarters in a row where the earnings and revenue growth were so far ahead of what the Street expected, the stock had like an overnight re-rate, and we effectively watched a $40 stock run to — [Jim] 200. It was 200 times earnings. [Josh] Agreed, but conceptually it was like, how could you not own Palantir? It is the AI stock. The problem is, once everybody agrees this is the most-owned stock, they can continue to report great earnings reports but you're not guaranteed the same stock reaction. That stock is down a full, as of today, 50% from those levels. [Jim] I would respectfully not make this comparison. [Josh] They're not apples to apples, but the sentiment is — [Jim] No, I get you on the sentiment, but for a guy who's fundamentally oriented, who's always talking about the numbers, the numbers are completely wildly different. There's no way I could ever buy Palantir at 200 times forward earnings. What's it now, like 75 times forward earnings? It's probably up. [Josh] They're cheap now. They're cheap now. [Jim] Yeah, I mean, it could go to 30 times earnings. [Section: Beyond Mega-Caps: The Broader Market Rotation] [Joe] Beginning to look at momentum is a powerful force, Steph, as we know — it's up 3.5% again today and it's going to different places. It's going to the value trade, which is outperforming growth. So beginning to look at small-cap momentum. Here's a name — memory-oriented semiconductor equipment name, less than a triple-digit valuation, so Jimmy's not going to jump out of his chair for this one — ONTO, Onto Innovation. If you could pull that up, it's up about 121% year to date. That's a name that's participating in this AI story that Josh spoke about. [Scott] Josh made an interesting point to start the show. When I said if you were expecting all these AI plays to be higher, and I pointed to the hyperscalers, his point was: they're not any longer these pure AI plays. They're the big spenders. Is the market making a statement today and forward about where these stocks are going to go? And it's not just today — Microsoft's having its worst month since December of 2000. You've had other stocks in that — [Josh] Equal-weight the MAG 7 and they're down 8% year to date. The S&P is within 1% of an all-time high. Nobody last year who was saying "oh it's a concentrated market, the whole thing's being dragged up by the hyperscalers, it's unsustainable, when those stocks lose their footing the S&P's in trouble" — it worked in exactly the opposite way. The MAG 7 is in trouble. Three out of the seven are in outright bear markets right now and they're detracting from performance. The S&P 493 — that's the whole index ex-MAG 7 — is up 14% year to date. The MAG 7 are detracting from that performance and that could continue. And the good news is it doesn't harm investors. Investors then go out and explore and find other ways to make money, other ways to win. [Stephanie] Well, the reason we're seeing a rotation is because the economic data continues to surprise to the upside. We got a whole boatload today. Even the PCE, which was high — it's peak, because oil has peaked. Oil peaked at $112, you're under $70 for WTI now. That's positive for the consumer. That's where I think your value is in this market and that's where I've been adding to, and I feel very confident about that. They continue to spend — income was actually even better than expected today, durable goods were good, and they're actually benefiting from all of this AI. But that's why you want to own industrials, you want to own consumer, you want to own financials. They are acting very well. [Scott] Do you think the second half of the year is going to be defined by mega-cap underperformance and all the areas you said outperformance? I do — like the banks have woken up over the last month. Capital markets are killing it. They just got through the stress test. The ability to give more money back to shareholders, raise dividends, buybacks — this is one of the hottest trades in the market, the banks. [Stephanie] Yep. You know I actually sold Meta recently — half of it — after rumors that they were going to spend more and more and go to the equity markets on top of the debt markets. Free cash flow is falling. So it's now a small position. I want to hold it for the long term. I only own Amazon in the MAG 7. So those are still going to stay in the port, probably be smaller. But I do think the financials are the cheapest sector in the market right now. Some companies are trading at 1 to 1.2 times book. And you're right Scott — we have capital markets, investment banking, trading, IPOs, wealth management, and a higher market will help that business too. So there's a lot of ways you can win owning the financials. [Scott] The bank ETF hitting a record high today. Whether the second half is going to be defined by what this market looks like today — mega-cap underperformance, healthcare like biotech (you've been buying more biotech) outperforming, financials outperforming — and whether it's time to actually think about going overweight some of those areas relative to the mega caps. [Joe] So I hope my answer doesn't frustrate you, it's going to be a little different, because I think market structure has changed so much, that's why you're seeing all these rotations. The most profitable company on Wall Street is Jane Street. You have all of these algorithms and quantitative funds that are chasing where they could build positioning. Yeah, the economy is great and the stress test helped, but I think we're seeing a rebuilding of positioning right now that's momentum-oriented in financials. A lot of people questioned, "well why did you buy JP Morgan last week?" — because I believe you would see a lot of these funds come in and begin to build positioning, and momentum is becoming more and more of a powerful force as market structure is changing. So the answer to your question, I think it's TBD. I think the market is going to remain stable and good for the remainder of the year, and you're going to see this continued rotation where these quant funds can find alpha-generation opportunities in a very short period. [Scott] But even other cohorts — if you believe you've squeezed all the juice out of the mega-cap orange, then why wouldn't you go to these other places? [Josh] Give me IWC — this is iShares Micro-Cap, a billion-dollar ETF. None of the components can really take on a ton of volume. But when you look at what this is made up of — it's technology, industrials and biotech. Give me a five-year on this. This thing has literally caught fire because people are asking the question Scott just asked: OK, I understand the next 10 or 15% — call it 1000 or 1500 basis points above the benchmark — that I'm going to get is probably coming from Microsoft and Tesla. So what else can I do? You're seeing people who are small and nimble enough do things like this. I also want to show you a couple of the best stocks in the market. JP Morgan is at a new all-time high right now, $338, and the only real headline of consequence is people talking about Jamie Dimon's retirement once again for the 900th time. CVS — is anyone bullish on CVS that you've met in recent months? Anyone talking about this stock? Best stock in the market, breaking the hundo right now as we speak. This is a big enough market cap where a lot of people can make money in this. So there is a whole big market out there playing these breakouts, finding momentum in unexpected places like micro caps, like healthcare, and I think that could continue and we don't need the MAG 7. [Stephanie] That's why I mentioned — it's only 31% of the S&P 500. It's big, but there are other sectors that can offset the weakness or the underperformance in MAG 7. [Scott] We'll take a break. We'll come back with more committee moves, our top calls of the day, best stocks in the market — some new names as well. [Section: Latest Headlines from CNBC News — Mackenzie Sagalos] Rescue crews in Venezuela are continuing to search for survivors after two back-to-back powerful earthquakes rocked the country last night, killing at least 164 people and injuring nearly 1000. The 7.2 and 7.5 magnitude quakes were among the strongest in Venezuela in more than a century. The White House reportedly helped Meta CEO Mark Zuckerberg and Google CEO Sundar Pichai avoid testifying in an upcoming Senate hearing about child safety, according to Politico — after initially calling on the CEOs, Senator Chuck Grassley is now allowing the heads of Instagram and YouTube to testify instead; in exchange the White House will reportedly support a child-safety bill backed by Grassley. And the Supreme Court sided with President Trump today in a ruling that would make it harder for migrants seeking asylum to enter the US. [Section: Analyzing Netflix's 52-Week Stock Performance] [Scott] Let's talk about some names on the move. Netflix — 52-week low today, lowest close since October of '24, stock down 23% year to date. Josh, what's going on with this name? [Josh] I think losing the M&A battle to acquire Warner Brothers opened up a new conversation: wait a minute, Netflix has gone 20 years without doing deals like this, why all of a sudden did they think they needed to? So you had a little bit of doubt, and that explains the stock coming down. And then why has it not found the bottom — the narrative seems to just be lost in the shuffle about, we thought this was the most dominant streamer, now we're not so sure. [Scott] Are we not so sure? [Josh] Personally I think it still is. So I bought the stock into this downturn and I continue to hold it, and I wouldn't be opposed to adding more. But technically this thing is completely broken. There are very big sellers in this name. This is a $300 billion market cap. It doesn't casually fall from wherever the high was — it was like 120 or 130 down to 70 — without there being substantial doubt about that dominance. I don't think the company's done anything to quell those concerns, and I'm not sure what they could do quite frankly. Maybe the best course of action is to continue to execute. The good news is, if you're a shareholder, they've done nothing but execute despite the drama around M&A over the last nine months. [Scott] You sold it earlier this week — the narrative on this, to put that same chart back up: in February, March, Netflix not getting Warner Brothers Discovery was the best thing that could have happened, according to investors. [Josh] And that it wasn't the — [Scott] Stock. [Stephanie] That's one of the reasons I bought it. [Scott] Stock climbed back up. [Josh] You liked the deal? [Stephanie] I liked them NOT getting it. [Josh] The deal blowing — [Stephanie] Oh yeah, that's why I bought it. [Scott] Josh's whole point when the deal was announced was, I don't like this thing now because — he sold like half the position at the time, was like, this thing's going to be in purgatory. So then it gets out of purgatory, and at the end of February/March you see the move up on the no-deal. The Street applauds it. Investors love that they didn't get distracted, didn't spend the money. And then all that's gone. [Josh] You know what's after purgatory? Hell, I think. [Stephanie] I think it's competition. The competition has only gotten stronger and this company is going to have to continue to spend, which we want them to do, but I don't know if they have such a compelling slate like they did. [Scott] They raised prices. [Stephanie] Right. [Scott] And we declared them one of the poster stocks of consumer brands that actually have the ability to raise prices. [Stephanie] But there's so much to choose from nowadays. I can't keep up with how many ideas there are out there. [Josh] But you know what, they got football. They got football. And I think that puts to rest a lot of the concern about can they raise prices, can they keep churn down. [Stephanie] They've got to get football right. You watch a game on Netflix, it's painful. So there's a lot they have to do on that. [Joe] It's puzzling. And you talk about raising prices — Spotify did the same thing. Spotify's chart and Netflix's chart are literally identical. They both found a peak in June of '25 and they've gone straight down ever since as they raised prices. [Section: Citizens Financial and Regional Bank Breakouts — Josh Brown's "best stocks in the market"] [Scott] Best stocks in the market time, according to Josh Brown. The spotlight today is on a financial. [Josh] So we first talked about this stock here on the show, and in an hour column at CNBC Pro, in December. It's had a good run since then. I pulled the trigger on a long position for myself recently. Also want to disclose this is part of our Porterhouse portfolio for client accounts at Ritholtz. The reason it's worth talking about today is the backdrop. Can we do the KRE first? This is the regional bank index ETF — it is making a new high. And I called this the Holy Trinity setup in Citizens Financial: you have the tailwind of the sector being in favor, you've got the chart on your side, and you've got the fundamental story, all three working at once. I live for this — this is my favorite setup in the entire world. So here you have an obvious breakout taking place. We started talking about this name earlier and I think it can continue. The most important point: we're in an environment right now, to quote my partner Sean, where people are screaming about higher rates, inflation, the consumer is weak, oil prices, geopolitics — regional banks are your number one read-through to the real economy. And when the entire sector is breaking out, which is the case right now — I could give you 10 other tickers if you don't believe me — what that's telling you is that by and large things are going well. These companies have balance sheets filled with HELOCs and auto loans and credit cards and mortgages and loans to small businesses. And things look pretty good through the prism of the KRE and the charts of its components. I think Citizens is the strongest one. They have a great story about building a wealth-management division from scratch that's now growing faster than anything else they do. I would not be surprised to see this name with an eight handle. 35% earnings growth expected over the next year, stock's trading at a 10 multiple. [Scott] Perfect segue to Stephanie. Stephanie Link bought more Truist. [Stephanie] I did. And by the way, loan-growth data came out this week and it was great, up 8%, the best in three years, and that speaks to the economy and all the things we've been talking about. Truist trades at one times book — very few companies in the bank space are trading at one times book — yields 4%. It fell 4% last week because they announced a new CEO, who I actually think is very positive: Michael Lyons. He comes from Fiserv and he has been a traditional bank executive as well, so I think he's going to bring a balance to the company. So this new CEO is a positive, not a negative, but I think that was just the knee-jerk. I started adding to it last week, I bought a little bit more this week as well. The ROTCE at this company — profitability — was 12.7% last quarter; it's expected to go to 15%, maybe even 16% by 2027. That's operating leverage. So I expect a solid quarter and I'll continue to add, especially as the CEO starts and we get more of his vision. [Joe] Stay on the loan growth for a second, because there's a dynamic that's happened. Currently we have Fifth Third Bank at an all-time high. You're seeing lending shift back to the regional banks from private credit — private lending standards are automatically beginning to tighten because of the stress in the headlines so far in 2026. So you're seeing that shift, regional banks benefit, that's where you get the loan growth. [Stephanie] Deregulation at the banks. [Scott] Good segment. We'll talk about Bitcoin coming up. Oliver Renick is tracking the options action from CBOE in Chicago. [Section: Bitcoin Sell-Off and Options Market Activity — Oliver Renick] [Scott] Bitcoin today breaking below 60,000, lowest levels since September of 2024. Oliver Renick live at CBOE in Chicago with today's options action. [Oliver Renick] It's the sell-off that never ends, Scott. Michael Saylor's Strategy, MSTR, down another 7% today, extending its one-year decline to 77%. Bitcoin's down about 45% over that period. My conversations with crypto managers suggest even the Bitcoin diehards are losing patience with Saylor's equivocation on whether or not he's buying, selling, or at what point his elaborate financial structure starts to stress. Judging by his preferred-stock dividend product, STRC "Stretch," things are dicey — it's about 23% off par value right now, but for a product that's supposed to stay at 100. Options flows: in MSTR, puts are dominating two to one, with 50,000 puts bought versus 25,000 calls. In the Bitcoin ETF IBIT the skew is even bigger, with 184,000 puts versus 65,000 calls. The point for Stretch, Scott, is that if you believe Saylor, calls back towards 100 should basically be free money — but people aren't jumping on them. [Scott] Brian Sullivan is at CBOE in Chicago. (Promo: Austin Goolsbee of the Chicago Fed, the CEO of CBOE, the CEO of Northern Trust, Diane Swonk; oil is up; Micron.) [Section: Mike Santoli on Market Rotation and AI Spending] [Scott] Mike Santoli joins us now. What do you make of this market activity on the back of Micron? [Mike Santoli] As you guys have been discussing — you have a half-dozen companies handing all their free cash flow to like two or three memory makers. That's simplifying it, but that's what's going on. The market recognizes that and actually has been positioned for this. There is a bright side: more stocks are up than down again, you're still having the relatively benign rotation happening because the macro is holding up — you got decent personal-spending numbers. So there's plenty of room for catch-up for things like consumer-levered rate-sensitive, real estate and airlines. The one thing I'd bring up is that the market doesn't always owe you a really attractive place to rotate into. The news flow has to be lined up pretty well for many of those themes to offset "hey, is AI spending a net positive or not?" I keep going back to that date six weeks ago — S&P first goes above 7500, the Cerebras IPO, all of it on the same day, Cisco goes up 14% — the market recognizes most of the easy AI trades have been exploited, and now it's about figuring out winners versus losers. I don't think it's alarming market action in that context, but it's definitely a little less clear an easy argument. [Scott] It's not unreasonable to think the mega caps may very well be underperformers in the second half relative to other parts of the market, and what the implications would be on S&P performance — they're a large weighting within it. [Mike] There's certainly been some damage to the trend. If you look at the MAG 7 in aggregate, you probably need a little bit of a risk-off trade. It wouldn't be weird for people to wake up and say these stocks have been de-risked, valuations have compressed, they're less crowded than they used to be and they're somewhat defensive, and all they have to do is turn the dial a little bit on spending and all of a sudden you have a spark of a catalyst. So who knows if that's going to happen, but I don't think that would be weird. And the fact that things have moved so far so fast for the better for something like Micron is great, but it tells you we don't know anything about what's happening in six months, because we didn't know six months ago that they were going to double and triple the forward earnings forecast. [Section: Apple's Stock Drop and Final Trade Picks] [Scott] Apple shares — stock's at the lows of the day, down more than 6%, raising prices on a number of different products. Remember Micron's gain is in some respects Apple's pain, and what they have to pay for those memory chips — what this all means for their margins. Is there demand destruction by raising your prices to a certain level? I don't care if you're Apple or anybody else. [Josh] It's interesting where it seems to have stopped, at least intraday. This is pretty much the level in April where the stock finally found its low for the year. Also happens to coincide with a rising 200-day moving average at about 269. If I'm a trader, I'm standing back. If I'm an investor, I think it's a great opportunity. Apple has more pricing power than any other company I could think of. [Scott] I was thinking of Netflix in the context of that conversation — the two. [Stephanie] We don't even know what their AI strategy is. [Josh] The friends we made along the way. [Scott] They've made us wait. What's your final trade? [Josh] Qualcomm. [Stephanie] Rockwell Automation. [Joe] Favorite of the week — Simon Property Group. [Scott] Dow is still hanging on up near 200 points, but Nasdaq's off, S&P off. See you on the Bell. You've been listening to CNBC's Halftime Report.