Snowflake Surges on Q2 Earnings: The Investment Committee's Software Strategy 9/3/26

0:00It's all about the money. I want to be the person in my family that creates an irrational well. How they earn it, spend it, and make dreams come true. I'm not going to sugarcoat it. It's hard, but it's so worth it. Millennial money, on new Saturdays, three Eastern CNBC. I'm Scott Wapner and you're listening to CNBC's Half-Time Report, the podcast, the most profitable hour of the trading day. You record this live weekdays at 12 Eastern, listen in. Welcome to the Half-Time Report. I'm Scott Wapner, front and center of this hour. Rates down, stocks up. The feds Waller says he's likely a hole at this month's meeting. Snowflake, Broadcom. They're moving in opposite directions. We're training everything. With the committee today joining me for the hour, Josh Brown, Jim Labanthal, Jason Snyte, friend talking to him. Let's check the markets. Heyes the day. Dow, look at that. One and a quarter percent, better than 650. Tech is doing quite well. So Governor Waller, not as hawkish, as feared, yields down rate hike expectations down, stocks up.

1:03I mean, it's pretty simple and we needed this rate relief, didn't we? I guess it helps, Scott. I think that's a fair assessment of what stocks are keying off of today. I really never thought there was a heavy appetite for a rate hike from anyone at the fed. And I think just keeping it on the table, maybe is important, just to keep the markets a little bit in line, but this idea that there's some emergency need or something where it's going to impact the price of oil, which obviously is up for a very specific geopolitical reason. I just don't get like, what is the rate hike meant to accomplish? And if it's just one, then what is the signaling value in that? I think if and when there is a time where they look at services inflation, they look at goods inflation, they say, we got to go right this minute, they're not going to be talking about one. They're going to be talking about a new cycle. Well, I don't want one 25 basis point rate hike means whether they do it or don't do it. So this was always the side show.

2:04The main attraction has been the earnings. This is what's kept the market where it is. It's what's been feeding the rotation. And this talk about the 30 year, the 10 year, it's really just sort of in its own lane. And I think not the main thing for investors to be focused on. You know what is? Snowflake, let's look at that chart. Yeah, let's just do it right now. We will do it right now because it deserves to be done right now. Look at that, 21%. That stock is blowout earnings. That's a new 52 week high. I'll stay with you, Josh, for a moment, because you flag this in late May when it was 205, okay? In best stocks in the market in late May, the stock was trading at $200 and $5. UBS today goes to 500. Was the highest one that we saw out of the group of target increases today. This is exactly what you're talking about. And this is also playing a big role in why you see green all over the place today, especially in software, especially in the NASDAQ and tech. That's why it's got, and I don't want to downplay the magnitude of this call that I made.

3:05Because... A lot of me. I'm full disclosure, I'm long the stock. Obviously we've been talking about it, but in late May, when it came on to the best stocks in the market list, it's a very difficult thing to come on and talk about a stock that is just reported earnings and has gone up 36% in one day, which is what Snowflake did. I came to it a week or two later, and I'm talking about the name as this idea. We have all these software stocks that have been blown to smithereens. A lot of them didn't deserve it, and this was one of them. And what's even more gratifying than the fact that the stock has almost doubled is the reason why it's working is exactly what we laid out at the best stocks in the market column on CNBC Pro. Net revenue retention. 120% to 130%, that is this range of this company's in. Let me explain to you what that means. That is existing customers continuing to spend or spend more well in advance if any customers were dropping off. Nobody's dropping off.

4:05And the reason why is because it is becoming very obvious the agentic era of AI, which we're heading into, requires data governance. And this is the data governance layer. Why do we think that corporations want to move their data elsewhere, pull it onto different platforms, duplicate it when they can just carry out agentic workflows directly in the governance layer? That is what Snowflake does. They have 9,000 customers currently doing something agentic directly inside of their data lakes with Snowflake. And that is what the street is woken up to. And that's how you get a stock going from 205 to 371 in the course of a single quarter. You've been playing this game in this one too, Jason. 100% for sure. Tell me your thoughts as you see the stock do what it is doing. Again, 500 bucks at UBS. Yeah. It's been a standout for sure. Yeah, man. I mean, what an unbelievable quarter. I think the major takeaway for me is product revenue growth. Product revenue growth was in the low 20s.

5:06Over the last year, it was up 37% this year. Wow. So that's a humongous number. I think the other thing, as you think about product revenue growth, and companies like Snowflake who are investing heavily in AI, their op margins are also expanding at the same rate, similar rate to their growth rate. And to Josh's point on net reoccurring retention revenue, 126%. That just means that folks that are on the existing platform are only consuming more. Once you get in, you're just buying more products and services. That's why Snow is running like it is. It's up 50% prior to the print. It's now up 70%. The tide is lifting a lot of boats today in that space. I mean, we're in Palantir is good for 8%. Today, you got the cyber names working like CrowdStrike is up 4.5%. Salesforce, which really took off last week after its own earnings up 3%. Octa plus 3%, Oracle plus 5.5%. This is what a blowout report like this

6:08does in a space that really has been trading well of late. Trading so well. And I think these hedge funds, so many, in addition to the situation awareness, have been short these names. Let's say the software basket writ large, that is the danger here of getting too bearish on any of these technology sectors and letting the narrative take place of your price. And so all of these names have had V-shaped bounces off the bottom. And I continue to think IGV is about to make race back to its highs. And so I just think that that software narrative has somewhat died that they're all going away. And to Josh's point in Jason's like Snowflake, they are a core part of the agentech ecosystem, which is just now getting started. Yeah. I mean, what's that spot collapse? Well, is it fair to ask that at this point? Let me get from Gifurc.

7:08Yeah, I think Bringis nailed it. And I'm going to quote from Chris Verone, a friend of yours on the closing bell, who often says that the narrative follows price. And that's what happened with software stocks earlier this year. That's where the SaaS apocalypse came from. The idea that all of these companies were going to basically go to zero. The profit picture was going to go to zero. And I'm not using hyperbole here. I mean, these stocks were trading as if they were going out of business. What we've found since, and Bringis was just saying this, is that if you actually track what was causing the price to decline, if you actually looked at the cause, you would situate your awareness with huge leverage and other people piling on that bet. Now what we're seeing in the earnings report is frankly what we were seeing all along, which is that these companies were doing just fine. And this thing got so crazy that even Microsoft was caught up in this. I mean, if we can remember that, Microsoft was below $400 for a lot of the first half of this year. I think what we're seeing now is if you actually think about what's driving price i.e. the fundamentals, there's a lot of reasons to be in these spaces.

8:09If I told you now, you wouldn't have thought this may be possible by this time, the IGV year to date is now positive. It uses the move today that it's made, and because the sector itself is quite nicely as I ran through the list of individual names, we're positive year to date by a little more than 1%. I don't think people had that on their bingo cards in the mid spring when it looked like this was a disaster. So I was forced to average down into toast. I was forced to average down into service Titan. I bought into snowflake. I did my best to look for the situations where the market narrative had it backwards. And this is what I mean by that. The disconnect between Silicon Valley and actual businesses and actual people who are running business. This is assumption and the hedge funds bought into the Silicon Valley story. The Silicon Valley story was these companies are gonna obviate the need for all of these people to quote middlemen. They're gonna rip that layer out. Everyone's gonna go direct to Anthropic

9:11to do all of these workflows. And they're gonna have IT people working at Fortune 500 companies actively ripping wires out and cutting costs. It's a great story. The problem is it's not actually how the world works. Number one, I was reminded recently, one of the benefits of SaaS software is not just that it does the thing that you need it to do. It also gives you somebody to yell at and somebody potentially to sue when things go wrong. This is a very underrated part of why people wanna work with Fortune 500 software companies. The other thing is most business customers are not themselves equipped to vibe code their own solutions. And they need a hundred percent up time to run their businesses. So when I looked at Toast and I looked at Service Titan, I said, who are the verticals? One is bar and restaurant owners. Is that who we think is gonna get into the software creation process? Probably not. That's a buy. And of course Toast will be the company that sells AI to those customers.

10:12The other one, Service Titan, do we think house painters and contractors and landscapers are very excited to start creating their own software solutions? I'd say probably not. And in fact, Service Titan is now selling AI services to that customer base. This was the disconnect that the hedge funds got wrong and that Silicon Valley gets wrong. But investors know these companies and know the end markets realized this is an old brainer. Scott, yeah, good. Yeah, I just wanted to continue to cycle through Titan. See you today on that guys, please. If we're gonna debunk and I think we should debunk the SaaS Pocalypse narrative, I think there's another narrative that went hand in glove with it, KP separated from it, which is the private credit, that this was gonna be a systemic risk. Now look, you look at these stocks that were at the epicenter. Blue well, Apollo, they're up 30% as well. They have done the same thing that these software stocks have done. And all I'm pointing out here is a lot of times where people say, hey, they're smoked, they're smoked,

11:12there must be fire. If you dig a little deeper, maybe there isn't. We thought it would be worthwhile to have Seema Modi come on. She follows this space so closely as we, I don't know, tongue in cheek, what SaaS Pocalypse is it fair to bring that up? Do you think given what's happened recently? I think Scott, to your point, I mean earnings from a cohort of software names, that's proving that there are a number winners in the sector, Morgan Stanley in a note today says, Prince from the likes of Snowflake has softened the AI bear case as it's been able to reinforce how it complements the big AI labs like Open AI and Anthropic. And as they're also positive on service now, Atlassium supported by what they call Durable Moats, improving growth stories, rising agent usage, and Scott adoption of AI agents, that's been a big trend across companies like Workday into it, Crowdstrike, which you mentioned, we saw that big jump last week, following its mega beat on earnings. I would also flag Palantir, which remains one of the biggest gainers in the IGV over the past one month, up again today as Wall Street,

12:14continues to see it playing a pivotal role in helping companies use and adopt open source AI models. I would say investors note that in order to get more bullish, they still need to see a continuation and growth accelerating for these names that you've been discussing. So it still has shown me story. I would point out the IGV since the recent low hit in June. The ETF is up about 24% compared to the chip sector, which is down about 17% during that same time period, Scott. Yeah, it's been such an incredible reversal, SEMA, to watch. Thank you so much for that. Through all of those who are saying chips over software, semis over software, it's really been a stark reversal. And then that just takes us to Broadcom. How can you not go there next? Look at that stock today. It's like the earnings were bad. So the revenue guide was a little weaker than anticipated. Going in, there was a commentary around the street that Broadcom needed an Nvidia light quarter to erase the big losses that this stock has had.

13:14So 4% down today. Take a look at it over a broader stretch, though. Look at it year to date. It's been one of those names that just has not done well. That speaks volumes. It's up not even 2% on the year. I'm wondering how you think about this name now. I think we are all subject to something called the Reasonsy Bias, where we look at what's gone on in the last six months. And we can't help but over index to that, as though it's some sort of a new reality. I think the thing that a lot of people are now being reminded of is the fact that historically, software stocks have had to hire multiples than semi-conductor stocks. Two very simple reasons for that. One is margins for enterprise assets, historically, much better. And the second is very little cyclicality. If the economy is not great, I can complain about my Salesforce bill, but there's probably not a lot that I can do about it. I'm not exactly gonna sit and spend hours

14:15sitting with five other providers that aren't as good, and then going back to renegotiate every time there's a downturn, and companies just don't. So this is the reason why, historically, software stocks had a better multiple than semi's, and then that flipped this year. We had software giants selling it 16, 17 times earnings, and semi's that we know, no matter what, eventually the cycle peaks and then goes into decline. All of a sudden, we wanna buy these stocks for 25, 30 times earnings. No questions asked, because they're selling into a CapEx bill doubt. This is a little bit of a come-up in snow in the last six weeks, a little bit of a rethink. Wait a minute, what were we doing, what were we thinking? I don't think anything is wrong with what Broadcom reported. I just think the market is coming back to the longer term reality, and shaking off some of that recency bias. Yeah, Brin, so how do you see this now? Semi's versus software, just the Semi's in general. Momentum obviously plays a huge role. Broadcom's part of the MTUM, other names today, that are in the news, HPE, Sienna, NetApp,

15:17they're in there too, they had earnings, but what was a decided vote for Semi's over software feels like now it's flipped. I think that, not only Semi's, but also I own DRAM, and you would think with all of the conversation, whether it's Dell, Broadcom, Nvidia, that the microns, SK, Hinex would actually have picked up momentum, but the opposite is true. And so I do think there's this rotation underneath the Semi AI build out. I mean, Dell, as a juxtaposition, continues just to get stronger after earnings. And so I think people are picking and choosing, and I think Broadcom just didn't meet the expectations on the call. I do think that Josh's recency bias, if you go back Broadcom a little bit longer, one or two, three years, Broadcom's obviously re-rated to the higher, but I just think people are skeptical. I still say, people are skeptical about all of this AI. I think that is a wonderful thing

16:17that actually prolongs the cycle because of this skepticism that makes us stay away from that 2021 and the late 90s, like, ebulence that just gets out of control. So I like seeing these kind of names pull back. It gives to me confidence that the cycle can last longer than the other two periods where it really just kind of blew itself out. Yeah, it's a record high today for Dell, by the way, which really took off after its earnings, but it's worth highlighting, which Brin initially bought, back in November of 24. You still own it, right, Dell? I do. I had just sold half of it before it re-rated to buy sales for, like, in the 170s, so that doesn't feel so great. But glad to still have some. It's another one you highlighted, right? Best stocks and not too long ago. Was that just a week ago? It was Tuesday. Before the print. It was Tuesday, were you here? I was here. I was here. Oh, no, I was remote. That's probably why I didn't make as much of an impact on you as I should have. Yeah, no, I was watching the guitar on the wall

17:18and everything behind you. We wrote up Dell four times. So this has been a, since we started doing best stocks in the market for Pro, this has just been a perennial. Member of the list, the stock just acts incredibly well. I think people trust management and Michael Dell generally. I think people like the idea that we're back in the business of selling physical equipment. And the reality is whatever equipment is being bought in all these data centers, it doesn't have a lifespan of forever. It all has to be replaced. It's built in future demand for this company's products, the chips burn out, the servers burn out. And if you're doing training, it's like twice as bad as inference. Dell is going to feast, not just on new data center construction, but on the replacement parts and equipment needed for the total installed base that already exists, which is monumental, obviously. So they like this stock. We wrote it up for best stocks. Once again, and a new breakout, here we go.

18:19Microsoft's back too. Let's, guys, we made that chart the other day, I think, in real time of what Microsoft has done since that earnings report. And that was the sort of the mark, the line, if you will, of when the stock seemed to get a rewriting here. Let's look at that. Back that up, if you could, from that day that Microsoft reported, because it's a significant gain from there. There it is, 30%. Thank you. That really says it all. Wells Fargo today says it's going to 700. They're overweight on that. I think that speaks to the renewed optimism in what was a name that hadn't done a whole heck of a lot. They also say Microsoft does. They're going to start disclosing Azure quarterly revs as they consolidate their business units. Jason Snyte, first, then Jim. Yeah, listen, I mean, you're seeing a flurry of upgrades now. You saw a flurry of them after the print. I think they went from this AI monetization promise to proof. And I think that came as a result of the print. Q4 sales rose 18%. Azure is now top $100 billion in $100 billion business.

19:21And 30 million paid seats on co-pilot. So the other thing for me is commercial RPO jumped 84% to almost 700 billion, 678 billion to be exact. So the breadth of the business just continues to be strong outside of AI as well. Microsoft 365 commercial consumer linked in all up double digits. So I really continue to like this stock. They're going to stay cash flow positively. Obviously heard from Amy on the call. So I like this call. And I think it will continue to see momentum into year end. Jamie. Jason, you just did a good job of explaining there's multiple shots on goal with Microsoft. I think the one that matters the most is the Azure business. And I say that because I think back about two or three quarters ago that they reported Azure growth of 38% and the street was disappointed. They were looking for 41, 42% something like that. And that was a major part of the decline earlier this year. What South Canada, Della said at the time is look, this is all supply constrained. If we had more data compute, we would do more business.

20:22The market didn't believe them at the time. But since then, they've been able to bring on more data compute. And we see that the revenue growth is accelerating to the last quarter. It was over 40% just over 40%. So the market is believing that this is a business that is supply constrained. And when you've got Azure with high margins growing as, as I said, 40% plus year over year, that's something people want to buy at a low 20s multiple. Jeffrey takes a look at their top AI ideas today. They say they favor companies position to capture AI spend across compute data security and applications. We've obviously talked a lot about data security. We don't need to do that again. But bring their top picks, do include Microsoft and Amazon and Google and Oracle and CoreWeave. Yeah, well, I think that, I mean, kind of like the top holdings of the cues, at least the first three. I think that Oracle, the jury's still out, by the way, because they went all in with open AI. And I think if you look at Microsoft as a juxtaposition

21:22to Oracle, they went open model, meaning that they have Anthropic now built into co-work. And as users of co-work inside of co-pilot, it now just is so much more useful. And so I think that Microsoft, when their next quarters, earnings come out, we're going to see incredibly, incredibly strong co-pilot numbers. Really that benefit came from the benefit of putting Anthropic inside of there. So I think in the private markets, Anthropics getting stronger, companies that are lining more than Anthropic in the public side are also going to get stronger versus I think open AI is getting weaker. And those companies are susceptible, like in Oracle, that has a huge partnership obviously, or RPOs with open AI. We think about this list from Jeffries, favorite companies to capture AI spend across compute data, security, and applications. Yeah, look, it's the trade that everyone's been doing all year. I don't think it's a novel idea. Like, oh, they're building a lot of data centers. Let's figure out which companies are going to benefit.

22:22I feel like that's what we do. I continue to think though, the most underestimated part of this software combat that we were just talking about is the cyber. Because the more AI we're using, the more surface there area there is for things to go wrong and for attacks. You said underestimated? Underestimated, meaning a lot of software stocks made really big comebacks, but the cyber companies really outdid themselves. Most of them have doubled off those lows. And CrowdStrike in particular, we sort of announcement between Jensen Lang and George Kurtz this week talking about creating LLMs that are specific for cybersecurity. Multiple models using Nemotron, which is at Nvidia. Like, this is really the area where if you're worried about will the spending continue, judge? If you're worried about will the profits actually be captured by public companies? Like, this is the, in my view, this is the iron clad version of that. We know nobody in their right mind

23:24is going to invest a trillion dollars in CapEx over the next few years and not spend the appropriate amount of money to secure that infrastructure. We also know on the customer side, companies are not going to take any chances as they experiment with new technologies inside under the hood. So I feel really good about the visibility that you're going to get on a CrowdStrike and some of the data security. One of the best comebacks of the year that grew back that out again, guys from where you saw the weekend. And this thing split, this thing split for for one. This would be like an $850 stock right now. People forget that it got sold all the way down to like two or three hundred dollars a share. Well, I mean, you had the whole group for, you know, seemed for a small period of time at least caught up in that whole disruption, the clad news that came out, hit everything and then the comeback has been so incredibly severe. So, so clad came out and said, we have a model that's so dangerous. We actually have to put it in the hands of Jamie Diamond for some reason before we release, okay, fine. So they named like eight companies

24:24that they're going to work with on project Glass Wing. CrowdStrike was one of them. If that wasn't the buy signal, I don't know, I don't really know what it is. What are you paying attention to? The other news I want to hit real quick before we take a break is the financials because we need to get away from technology. It's not the only thing doing well today. The XLF hits an intraday all time high and that's notable. And many of the names in that space. Now, maybe it's related to yield curve. What yields are now doing over the last couple of days? Jimmy, you got city, BlackRock, JP Morgan. You can talk about city and JPM. Yeah, well, you know, look, they are doing well, but I'll note with city that it's kind of hit a flat spot here for the last few months. So I'm hoping that it's going to gain some traction here. It's set a new high earlier this year. There's a lot of catalyst, particularly the BANIMX spin off. But city is just one of several financials that are doing well. And JP Morgan has done very well in the last few months. Why? Because there's a lot of economic activity. Whether that's IPOs, whether that's funding data center

25:26buildouts, you mentioned BlackRock as well, Scott. And that's heavily involved in the financing for these data centers that are being built. I'm going to simplify this. There's a lot of economic activity that needs financing. That's why the banks and financials are doing well. The Robin Hood today is a 15% on a pretty big upgrade. Crypto's back. All the trading that we're seeing in markets, et cetera, et cetera. This is the type of stock that's overlooked, overlooked. And then all of a sudden becomes a darling again. Yeah, look at that. 15% for Hood. All right, we'll take a break. We're coming up, calls it a day. We also have best stocks in the market. A new version. We're going to talk about a name in there as well. And we'll do that coming up. It's all about the money. I want to be the person in my family that creates an original well. How they earn it, spend it, and make dreams come true. I'm not going to sugarcoat it. It's hard, but it's so worth it. Millennial money. All new Saturdays, three Eastern CNBC. All right, we mentioned a lot of software stocks today.

26:26And we talked about this name the other day. Maybe it was yesterday. Adobe. The target today gets raised at Barclays. And that's ahead of earnings next week. 295. Not a huge jump. Nonetheless, a jump. Maybe that's news in and of itself. So they report on the 10th. OK, so you have high hopes, medium hopes. I don't think you have to have high hopes with where this valuation is. I think you can have medium hopes. I mean, Scott and to our viewers, if I told you that over the last three years, this is a stock that's compounded revenue at 11%, compounded earnings per share at 18.5% annualized. And it's trading at 10 times for earnings, you would say, what's wrong? Well, the bears will say, OK, the 11% revenue growth is down from 13% a few years earlier. Fine. OK, others, and we had this conversation with Jenny a few days ago about she's using replacements for Adobe.

27:27Again, fine. My company just reupped with Adobe. And I ask everybody watching, how many Adobe's do you open in the given day? For me, it's probably close to 100. Well, that'd be messed up, right? If you like in this, you'd love this stock, and you keep making a case for it, and then a company cancels the deals. I've had a conversation with our technology. I've had a conversation with our technology, guys. Did they squeeze them on price? Sure. Sure they did. And that's why the stock's trading at 10 times earnings. Frankly, I think you have to have just medium to low hopes. This is a bar that can be easily cleared. Also, let's not forget that with all the pre-cashable that they've been generating, they've shrunk share count by 10% over the last just year and a half. Most of that with the stock trading at 8 to 10 times earnings. So look, it's not a slim dunk, but as I said, you don't have to have high hopes for this to work. Can I see one more question? You said that revenue growth had gone from 13 to 11. Yes. What is that outlook for the print, which is coming up as we said on the 10th? You know what the current quarter is supposed to be? No, I looked that up, and I didn't. Can I come back to you on that?

28:27I don't want to swag that up. I only asked that. Because am I to assume that that's a continuing decline that's forecast out of their revenue growth? And that's why the stock trades at what you consider to be too cheap of a multiple, but that's why it's there. Yeah, it's a fair enough point. How about if I use what to me is just a little bit more relevant, not that revenue isn't relevant. But the projected earnings per share growth over the next coming years is 14.4%. I know, but it's your revenue growth is everything. Didn't do the homework. I'd actually say earnings per share. But that's what makes a market. Earnings per share are more important than the revenue growth for these companies. For any stock. For any stock. This surprises me. Well, I'm saying if there are any declining, if there are any, if there are any, if there are any, if there are any declining revenue growth environment, how can you make? Want to bail Jimmy out? Hold on, bring real quick. But right? I mean, if you're in a declining revenue environment, how can you make an argument that the stock deserves to

29:30re-rate higher from a multiple standpoint? Like what are you paying for? Okay, so hold on. Let me get bringing on that. So Adobe is looking to grow revenue 12%. But going back to Jim's revenue versus earnings, I do think where it depends which company. I mean, Apple, Apple, which I own, we all love Apple, has gained the system because it's earnings per share. And so to me, where revenue is really important is you do want to see that top line growth because like Apple, which is just like eating all of their shares, that per share number is goosing earnings. And so I do think you have to look at both of them, but that revenue number with Adobe at 12%. I mean, I do think Adobe is a battleground stock. Not as much as Salesforce does. Salesforce was. But I do think if they have, the market has created this environment today with the Sasak of Opelix, kind of over where Adobe actually can have good numbers and actually have a really nice pop. But I do think that revenue number is incredibly important, especially if a company's buying back shares.

30:3111.8% is the projected growth this quarter over last year. Okay, thank you. Thank you. Yes, of course. You want to talk about Costco, Jason? Reiterated by at VVA. And that's post their sales beat from this month. What do you think? Yeah, it's been an interesting story from me with Costco. It's up 7% year today. And I think, if I think broadly about the retailers, Target is obviously the banger winner up almost 70% year to date and TGX and Walmart, not so much, right? Costco's obviously a value player. I think they're kind of, it's somewhat of a big bag, I would say. I think for me, the catalyst for them going forward, they obviously focus on the higher end. I want them to kind of focus on a little bit of the younger consumer from a value perspective and retention rates, a reoccurring membership rate that's always been solid. But I think that has to be a focus for them going forward. But I continue to like it. They're performing well, given the greater context

31:32and kind of what's going on from the discretion. You want to get Uber real quick? I'll perform Reiterated today, wet bush, 91 bucks, the Target there. It's the cheapest, the cheapest growth stock in the market in my opinion. This is a company where they are expected to be the growing earnings as far as the I can say. And it's got a 17 forward earnings per share multiple. The knock on the stock is obvious. Everybody thinks Waymo is just going to take over the entire business, which I don't think is realistic. I'm not even sure Waymo is going to make money, like by the end of this decade or even beyond, whereas Uber is incredibly profitable. So people think that that's in jeopardy. The other problem now for people is that Uber is making its own investments. So they are seeding other autonomous vehicle manufacturers and providers. I think it's a smart move strategically. It's no different than what Nvidia is doing, seeding the Neo clouds. And I think it'll all come out in the wash that stock will end up working. I just don't know when that sentiment cloud will lift about the competition.

32:32So here we are. Okay. Frank Holland has a CNBC News update for us. Hey there. Good afternoon, Scott. Senator Bernie Sanders is calling for a ban on what he's calling AI superintelligent. Sanders and Texas representative, Great KsR, are planning to introduce a bill calling for a pause and development of the technology until a federal regulator can establish safety rules. Sanders says the bill counts as open AI, and Throphic and Meta have all acknowledged recent instances of their AI escaping human control. The Trump administration just proposed new rules that could take away tax exempt status for schools offering financial support to minority students. If implemented, the guidelines would deny tax exempt status to secondary schools and universities that have any programs that IRS deemed to be racially discriminatory. And rare signs of potential progress when a peace agreement between Russia and Ukraine today. Russian President Vladimir Putin told the Economic Forum in Russia, there's a chance of reaching an agreement after more than four years of war. Meanwhile, Ukraine's foreign minister told reporters in key that there's now a quote, new dynamic in place with a return

33:34to an active phase of diplomatic engagement. Scott, back over to you. All right, Frank. Thanks. That's Frank Holland. Up next, we're playing options action on the topic. He's tracking the action today in two top movers. It's NFL kickoff time exclusive NFL team valuations with sports business expert Michael Ozenius. NFL is by far the most profitable league NFL team valuations now on CNBC dot com slash sport. All right, welcome back to play options action now. See vote global markets in Chicago. Oliver Renek's looking at two well known stocks today. Tell us which. Musk stocks, Scott, they are on fire. Both Tesla and SpaceX number one and number four by options volume today and the flows are notably bullish. Tesla is up 7% plus surging into its cybercab event, closing the gap on its chart from earnings and trading twice as many calls versus puts with 900 million of the roughly

34:361.3 billion in premium on Tesla tied to calls. Traders are also selling up more puts than their buying and the top five contracts are all calls with action is far up as the 400 strikes expiring tomorrow. SpaceX is also building momentum since putting in lows the first week of August when we spotted big money put selling and there's more of that again today in addition to call buying someone this morning sold $10 million of in the money 175 strike puts expiring Jan 2028. A bullish position but also possibly a bet that volatility in SpaceX which has fallen a lot could continue to subside. Scott, OK, Oliver, appreciate that. Thank you. Speaking of Tesla, Brin, you just added to this. What was it last week? Yeah, last week at 360. The stock is still below its 200 days. I think Tesla can still continue to move up, but $400 is going to be the next resistance. I think you've got 20 more bucks.

35:37You obviously have the cybercab event tonight and now the 24th you have the semi event coming out. So nothing that's going to affect fundamentals or earnings, but definitely people get excited about it. But I think 400. Let's see if it can punch through that or gets failed. OK, we'll keep our eye there. Obviously 7% near that. Interdate. All right, we'll take a break. Best stocks in the market. Josh Brown's getting ready. Tell you which one next. All right, let's do these best stocks in the market. According to Josh Brown, you say we're revisiting today an old favorite. Yeah, this is like Dell. This is the fourth time we've written up. Dear Jim, can you help me with the segment a little bit? Great. Great. Stock. Love it. All right. So you want it? Car prices. How you going? But crop prices are the issue here. Keep going. OK. We'll let you cosplay as a farmer in one second. All right. I do need you on June 5th, 2025. We came on to this segment. We called this an AI wolf in Sheeps clothing with a great entry point for investors to stop with 500.

36:39It's up about 40% since then. This is a fresh breakout happening right now. We wrote it up in July of that year. Then we wrote it up in April of this year. And now we're talking about it again, because it is a double beneficiary of AI. Not only is there equipment basically sold out for the building of data centers and the moving of earth and all of the things that like caterpillar deer in a similar lane, not exactly the same. But they're also now pointing to AI as a driver of earnings growth within their own company and inside of their own product. So this is really the key thing. You all know the data center story. I don't have to rehash that. They have an eight-ore lineable autonomous tractors. This is not Jim sitting in the cab of the tractor. It's literally driving itself. It knows where to go. It's navigating. It sits in the cab of a Japanese tractor anyway. That's right. That's right. When I saw that some of the line up, I should have taken a bet. I should have gone on Colchey. Will Scott mention that I have a Japanese tractor?

37:41I'm sorry for the... Well, this is a very imposter-jabter. All I did was mention a fact. It's self-driving. They also have things like there's a thing called C and Spray, which coincidentally was my pledge name in college. The C and Spray is a computer vision system that it can look at the difference between crops and weeds and only spray the weeds. This is AI technology built right into the products. These things are becoming must-haves for commercial farmers all over the world. So not only are they getting this data center built out, but they're utilizing AI within their products from the end of company, I think the stock can get to 800 bucks. I really do. It's really known. Look at this breakout here. So I'm not saying there won't be a full-back or a red day. It's become a tech company. I know it's an industrial, but it's basically become a technology company. People are paying them monthly subscriptions just like they do to Apple. Record high today, by the way.

38:42We should note that upgraded EverCore ISI to outperform too. Yeah, I have owned this in the past and made money, but there's a fundamental basis going on right now. We know what's going on. The crop prices have been going up because of Ukraine. Diesel prices are at almost record levels. I mean, they'll be there in a minute as I'm speaking. And that plays into crop prices as well. It also Josh plays into the need for very efficient tractors, whether it's the engines or as you're pointing out the precision farming technology. So there is a fundamental basis. I think we could have an ag cycle next year too. We could be like that. We've been. Well, there goes Joe the other day, right? Was it nutrient that he added? He loves the ag play. So I think more and more investors are in fact talking about exactly what she gentlemen are and making moves across the spectrum of that trade. You good? Yeah, cool. All right, great. All right. Mike, Tate, Toli joins us with his midday word. That's up next. Oh boy, we're back.

39:45Senior markets commentator and over time, co-anchor Mike Santoli joins us now with his midday word. Little did he know how we would lead into this segment during the break. Yeah, you guys. That's the rest of America's. It's a real bad thing. That's a real straw. Wow, that is a serious tractor. You've seen it before. That's a serious tractor. You want to be a sportsman or a man or a... Wow. Okay. Listen, he reaps what he says. That's all. That's what's happening. So do you, Mike. Tell me more about these markets. Well, I mean, obviously we got released higher. Unlike Josh, I do think it's relevant that the swing vote in the Fed is at least a little bit agnostic as to what happens in September. Didn't totally clarify the picture. He expressed an openness to kind of hold rate steady in September. Still interesting and maybe relevant that we're going to be going into a Fed meeting at 50-50. And the only reason the Fed would go is if there's probably room for two or three to answer Josh's idea of why I want. I doubt they would go one.

40:45They usually don't. Sure. So, you know, we'll see. We'll see. I think that's the right way to say it about whether that's the right medicine for what is going on in inflation right now. And also, I think there's a big camp out there and you hear people say it. They will probably hike, but probably would be a mistake. I think that's a little bit of a line of thinking that we have. So I just think that can inform how the market might digest something like that. Even if it's contingent on tomorrow's jobs, number next week's CPI and all the rest. I don't think it's make a break for the market one way or the other. What you think, don't you think the most likely outcome is like the market almost resolves higher because it's over. So they hike and people sell stocks that day. And the next day they say you see the Fed is serious about inflation. I'm bullish. No, it could be that. Well, they don't hike and the market rallies either way. I mean, look, the parts of the economy that are relevant for how equity markets behave is if anything too hot, right? So it's not as if they're worried about really upending the earning story, but it's one of the thing in the mix.

41:45And I do think it's a mistake to believe that if they hike long term yields come down. Because it's not the way long term yields have behaved as the odds have changed, not a hike. So I don't think they necessarily fly higher either. But you have to be careful about that. Even if right now rates in absolute terms are not super high. Okay, I'll see you at three. Yep. That's Mike Centoli. We'll come back with finals. Three o'clock Dan Ives, Kevin Simpson, Chris Harvey, Brian Levin. I'll see you then. We'll track this final trade. Dow's good for more than 600. Brynn. What's your final? Capital one. Next stop, 227. Thank you. Want a big day for the financials? Service now. Service now. It's me. I'll earn his growth. I like this one here. Yeah, look at that one. The software space rip in today and video. Who's got that? That's me. It's just obvious. It wants to take out a new high here soon. Why Spotify? Spotify is about to have a golden cross 50 day crossing the 200 day. This stock's been consolidating since January. I think it could break out. All right, the exchange is now.

42:46I'll see you at three. You've been listening to CNBC's Half-Time Report, The Podcast. You can always catch us live weekdays at 12 Eastern only on CNBC. All opinions expressed by the Half-Time Report participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion. Such opinions are based upon information the Half-Time Report participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries poured its completeness or accuracy and it should not be relied upon as such. To see the full Half-Time Report, please visit CNBC.com-forwards-half-time-report-disclamer.