Closing Bell 10/21/26

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0:51Scott Wapner: VectorVest provides stock analysis tools, not personalized investment advice. Terms at VectorVest.com. All right, thanks so much. Welcome to Closing Bell. I'm Scott Wapner, live from Post 9 here at the New York Stock Exchange. This make or break out begins with the first of the big tech earnings reports. As Meta gets set to reveal its results in overtime, Tesla is on tap as well. Here's a look at the majors. We are green across the board today. NASDAQ's leading the way. A lot of the AI names are higher. Most of the semis, including NVIDIA, are up. elsewhere. The industrials having a pretty good one.

1:24Scott Wapner: Another good one as well for the financials. That trade looks like it perhaps has woken up. We'll follow that and everything else right to the finish. We will begin, though, with our talk of the tape. The huge night ahead with Meta and Tesla reporting in overtime. Julia Boorstin is following Meta. Phil Lebeau is following Tesla for us. And Julia, we will begin with you. Well, Scott, well, all eyes are on Meta's AI monetization plan. It could be a messy quarter for Meta due to recent fines. The$10 billion Meta is paying as part of its state attorney's general settlement is expected to impact this quarter's earnings.

2:01And just today, a New Mexico judge ordered Meta to pay$25 billion in a penalty related to user data and misleading privacy statements, which could impact next quarter. Now, Meta shares have gained 19 % since its last earnings on optimism about its Muse AI agent. So investors are looking to learn just how many users are paying for subscriptions to that agent and any indication about the monetization roadmap for Meta's open weight model that it recently launched. Oppenheimer writing, quote, while the stock has been trading on AI vibes, investors want to understand Muse ROI. Going on to say, despite comparable performance pricing, we are skeptical Meta can scale enterprise API business unless it's priced well below its peers.

2:48We are watching to see if Meta will update its CapEx guidance for this year. Now between$130 billion and$145 billion. And also we're looking to see what it forecasts for next year's CapEx. Scott?

3:01Scott Wapner: All right. All good points, Julia. Thank you very much for that. That is Julia Borsten. Now to Phil Lebeau on Tesla. what's most important here? Well, the most important is going to be the talk about a possible merger with SpaceX. We'll talk about that in just a bit. Three metrics that people are going to be focused on when the Tesla numbers come out in about an hour. First of all, FSD subscriber growth. It's been up about 15 percent over the last couple of quarters. Cybercab production and deployment. What's the status of that in Austin and in Texas? And then there's the optimist outlook. And will we get more granularity about where they are with the development of the Optimus robot.

3:37Scott Wapner: As I mentioned, almost everybody is waiting for the conference call where Elon Musk will no doubt be asked about the comments he made yesterday during the SpaceX analyst call, where he said he thinks it's a good idea that SpaceX and Tesla merge into one company. I doubt that he'll go any further than he did yesterday, but no doubt that's what people will be focused on as you take a look at shares of Tesla. Remember, the analyst call starts at 5.30. Scott, back to you. And you'll be listening in, and we will look forward to hearing from you. Phil LeBeau, thank you very much. Now to our panel. Hightower, Stephanie Link, Requisites, Bryn Talkington, Dan Ives of Yorkville Ives.

4:15Scott Wapner: Steph and Bryn are both CNBC contributors. Welcome, one and all. Dan Ives, I'll go to you first on this. And let's take Meta first. I think, Julia, hit what's most important, right? This range of the CapEx. Is that top of mind for you? No doubt. But I think the difference is the monetization because of Muse, it's actually starting. If you go back to the last few quarters, the whole issue is they're just spending money like 1980s rock stars. You're not seeing the actual results. Now you are. And I think from an investor perspective, I think there's going to be a strong quarter in terms of advertising growth.

4:49They could up the cap X. But I think investors now are fine with that given what we believe in Muse. We could be talking about some of the parts that could add ultimately$100,$150 per share to the story as it plays out.

5:03Scott Wapner: That's the difference this quarter versus the last few quarters. It's funny you say that. I'm thinking exactly the same thing as I asked Steph. We had a conversation, you know, I don't know, a couple quarters ago when they came out with the spend and the street hated it. And now some are hoping that they hit the high end of the range. What gives? Well, I think Dan made the points really well in terms of the quarter itself. It's going to be great. I mean, 20, 25 percent growth in revenues for advertising is very impressive. But the important part is going to be monetization. That's going to be key.

5:39I think time spent has actually been accelerating, Scott, and that's the change. I think time spent in Instagram can actually get to 19 percent growth from 14 percent growth last quarter. So that acceleration is exciting to me. Ad impressions, the same thing. Last quarter, 14 percent. I think you might even see an acceleration given all the investment spend they have been doing. So the numbers, I'm not even sure we're going to get CapEx numbers for next year. They may they may give us a range. They may not give us anything. But the numbers are anywhere from this year, 130 to 145 billion in CapEx this year.

6:12Next year, it's going to be something like 206 billion. The highest number I've seen is 249. I don't know if we're going to get those kinds of numbers. But if we get those numbers, they're going to have to do a lot of explaining. But the explaining will come from Muse because that is so exciting to me. That's a game changer. They're going to leverage 4 billion users. They are going to see ROIs, but we want to learn more about that tonight and then in the future. But 11 million downloads in the first 40 days is very impressive. 2.5 million DAUs, daily active users, so far. Very impressive numbers.

6:45Now we just want to get some more meat behind the, you know, on the bone, on that sort of thing. Another question I have, though, do they make an announcement about an equity offering? because that's one of the reasons that I got frustrated with the stock way back when, when I actually sold the stock. And so we don't know if they're going to announce it. $30 billion is the rumored size. We know they need a little bit of help in terms of the cash flow. So I wouldn't be surprised. But then we have to see the monetization come to fruition.

7:10Scott Wapner: Dan, Muse is the reason why the stock just had the best month since 22, right? It's up 27 percent. But there's competition coming. Some is already here. And more is going to be coming from the frontier labs and feels like almost everybody else. So how do we deal with that? I think the difference is it's the install base. And Steph talked about, I mean, the$3.5 billion, when you look at what they have to tap into, that's their golden install base. Very similar is what Apple is doing. And to some extent, when you go back to the Dario letter and the essay, that was the best thing that ever happened to Meta and Zuckerberg because it enables them.

7:43They're going to just further, further narrow the gap. They're going to put pedal to the metal. And this is a pivotal time right now for Meta. monetization on that install base now show it after the last few quarters of being in the penalty box.

7:55Scott Wapner: You expect to get 27 numbers on the CapEx? Steph said, I don't know if we'll get it. You think we will? I think they could maybe generally talk about it. I don't think they're going to give the hard numbers, but maybe they want to sort of get the street in line to make sure there's no surprises as we go into next quarter. Is the street okay with if you don't get specifics for 27? I think the street's fine with it as long as sort of anecdotally you have some sense of where CapEx is heading. But it comes down to if you show the monetization, no different than what we've seen with Microsoft, the hyperscalers, investors actually want to see that because Muse, you want to double down in terms of the monetization.

8:31Scott Wapner: Steph, how are you thinking about these penalties,$25 billion, New Mexico, Cambridge Analytica case, that news just coming out within the last couple of hours. The stock really never seems to react to whatever the fine number is in any case that's come before Meta. I know. Well, they're going to appeal and it's just going to take a very long time and then they're going to settle. And so I think I just try to ignore that piece of it. It's very important for people and for all of us in society of what's happening. But I put it to the side. I want to focus more on the fundamentals. And if they're doing the fundamentals on the right side, I think we will get rewarded for sure.

9:08Scott Wapner: OK, let's talk Tesla. OK, we'll pivot there. Brent, I'll get you in one second. Everything, as Phil said, all roads lead to the tie-up with SpaceX. Is that all you care about tonight? Well, I think it matters fundamentally in terms of what they're showing in terms of not just the optimists, but in terms of giving some time on there. You think about CyberCab and ultimately robo-taxis to show what type of city ram that we're going to see over the coming quarters. But what Musk talked about last night, and we've talked about it at 80 % chance now, it's 90 % chance that these two ultimately get married.

9:44But it all comes down to what price would they pay? I continue to believe$500 to$550 is sort of the price that would actually most likely work from an investor perspective. But they have to show it from Optimus, from the autonomous roadmap, from the AI sort of ecosystem. That's the whole reason why SpaceX would ultimately want to merge with Tesla.

10:05Scott Wapner: It's the leading mega cap this month. It's up nearly 9 percent. Bryn, you haven't been really excited about this name in quite some time. You've been, you know, I guess your expectations have been tempered somewhat for the last many months that we've spoken on it. Why? Yeah, I mean, because the stock's down year to date. I mean, I've been selling calls right now. So, I mean, I actually closed out my calls on Friday at 370. So I'm glad I did because it's just like you have to respect the stock. right it's a great company but the stock has been stuck the stock is not up three percent today because there's expectations of great earnings it's because of what dan said is because elon and team they formed a special committee uh one of your besties brad gershner is on that committee and i think that tesla shareholders when this does happen i think dan's right you're probably going to be in the high 400s you know exactly we'll see i think rbc came out today around 480 And so that makes sense.

11:02But what's interesting right now for Tesla is last year, Scott, SpaceX bought 480 million of the megapacks. If SpaceX is going to do 10 gigawatts next year or in the next 18 months, like the energy sector, we have TerraFab coming on, like their joint venture, we'll say, with Intel. This integration between these two companies just gets very exciting. So I think that I still think Tesla has more upside right now than SpaceX, just because you still have about 20 percentage points of shares that are going to be released into the market over the next few months. So, you know, it's a win-win. But ultimately, I think Tesla has more upside over the next year just because of the potential that SpaceX would be buying Tesla, not the other way around.

11:44Scott Wapner: How do you respond to that? Oh, I mean, I think Bryn now said because, yeah, it is SpaceX buying Tesla at the end of the day. And if you think about what's gone on with the stock, they're essentially transitioning from an EV player to an AI player. And during the transition, frustration's been there, and you've seen it in the stock. But now we're finally starting to emerge in terms of showing actually some of the things the investor wants to see around Optimus, around the Autonomous, around CyberCap. And then it comes down to, like, does a five in front of the stock, is that what ultimately gets this done in terms of a deal with space?

12:17Scott Wapner: And why aren't you waving your hands around and putting out notes about Musk reemerging in politics and otherwise? Because you were not happy the way things transpired around the last election. You said as much. You wrote notes about it, said he's got to get back to being the CEO of these companies. Well, he's fully in on the Texas Senate race. And then, of course, the Wall Street Journal reporting that he ordered the Starlink slowdown relative to Ukraine. How come you're not complaining about any of that? Yeah, it's a great point. I mean, to me, it was really going back then to the difference now is that as CEO, you have them super dialed into what's happened at SpaceX and Tesla.

12:55I think a big issue back then was what he was doing on the government side where you felt like I was off the ball. The political, look, it's a tug of war here because it's a balancing act, because to some extent we come out with Starlink and you're talking about everything that we're seeing in Texas. and, of course, where they're doubling down in terms of the build-out from Tesla as well as SpaceX, this is the balancing act for Musk because you have so many good things going on in terms of SpaceX and the AI ecosystem. But the more you get into the political theater, there's danger there. There's negative ripple effects.

13:28Scott Wapner: You call it a balancing act. He doesn't seem to view it as such. He seems to view this as he's going to just do what he wants with his money, the richest person in the world. And if people don't like it, then too bad. Don't buy the stock. Don't buy the products. Yeah. And I think a lot of it comes down to when you think about some of the pushback in terms of Starlink, you're going to need buy-in. You are starting to see that. The consumer piece in terms of what we saw with Tesla, I think a good example is like Europe, huge, huge, obviously anti-Musk, anti-Tesla. But now you've seen a bounce back.

14:01The reason that is is ultimately because politically he started to get out of that sort of political theater that he was talking about. And it's Musk. He goes to be of a different drum. But right now, this will be a balancing act as he's in a position to strengthen SpaceX and Tesla.

14:15Scott Wapner: All right. I appreciate you being here in this walk up to both of these really important earnings reports. Dan Ives, thank you. We'll see you soon. Stocks are higher, as you know. Our next guest says the rally looks stronger under the surface than both the S &P 500 and NASDAQ 100 would suggest. Mark Newton is head of technical strategy at Fundstrat joins us now. It's good to have you back. Your note caught our attention, clearly. Why do you believe that? Well, look, Scott, you've seen the equal-rated S &P just in the last month rise to the highest level since early September. It's been a great comeback in the broader market at a time when technology yet again has been whipsawed and has started to pull back.

14:55Scott Wapner: You know, the percentage of stocks above their 20-day moving average has actually doubled in the last two and a half weeks. So we've gone from 20 percent to about 45 percent. That is very encouraging at a time when we still have very elevated bond yields. Crude is higher than what we want to see and or inflation and obviously two ongoing wars. You know, my thinking is the market has started to stabilize. And so now we see a little bit of backing and filling in tech. And yes, that has been what it has been. You know, we've seen a very big move in technology twice this year. And now that's been giving back.

15:29Scott Wapner: So most of us who are overexposed to technology, we certainly feel that pain. But, you know, the broader market right now is still doing very well. The S &P is less than 100 points from its all-time highs. We made new all-time highs just, what, 11 trading days ago. So markets remain resilient, and earnings have started to kick off in very good shape thus far. I just wonder to what end. And I ask you that question as there's a Reuters report that has moved about four minutes ago, which certainly took the edge off the market a little bit that says the State Department is preparing to issue an ordered departure of some personnel and family members at U.S.

16:07Scott Wapner: embassies across the Gulf. That's from U.S. officials, according to a Reuters report. It just makes me think of, yes, it has been a very resilient market. But to what end? Well, look, you know, as a technical analyst, we're taught really to ignore a lot of the exogenous events in the news. We know that headlines like that can affect stocks in the near term, headlines. But, you know, we've seen the war ongoing most of the year. The S &P is up 13.5 percent. It really pays to ignore, you know, what's happening as much as we want to concentrate on it and really concentrate on earnings, concentrate on really technical strength and really what's driving this move.

16:47Scott Wapner: And more recently, it has been health care. And, you know, technology now seems to be trying to stabilize. So that's very good. So, yeah, I'm encouraged. I think it's going to be a choppy time until we get past the midterms. I think we need to see evidence of bond yields, crude starting to peak and fall. That likely is still a little bit premature, but I'm very encouraged just with the technical structure itself with the market right now. All right, good stuff. I'm glad we had you on. We'll talk to you soon. Mark, thanks. That's Mark Newton. Now to our conversation with Payne Capital's Courtney Garcia.

17:18Scott Wapner: Steph and Brin, of course, are still with us as well. I'll ask you the first question. You're right here at Post 9. I appreciate you coming in. You see a headline like this. It's in the background always. How serious do you think we should take reports like this in the big picture of where you think the market is now? I mean, you definitely don't want to completely ignore this. But generally speaking, these geopolitical headlines don't have as much of an impact, I think, on the markets as one would lead you to believe. I think as long as it's nothing that's going to affect how the consumer is spending or companies are doing business and it's affecting their earnings, it's ultimately something that from an investment standpoint, you want to push aside.

17:51I think This is probably no exception to that. Don't ignore it, but I would just keep it in the back of your mind more than anything.

17:56Scott Wapner: Got to watch, though, Brent Oil, obviously. That continues to have an impact on stocks, at least on sentiment, to some degree as well. Correct? Correct. And it also pushes on inflation as well. And so I think as we're going into the midterms, I agree with Courtney. You know, it's always good to look through these. But I will say right now with midterms upon us, I think we're all going to be much more sensitive to this type of news because it's not a popular war. Oil's high. We have midterms right now. And so I think it's going to call, like I've been talking about, going to have a lot more chop in the market, you know, on top of the obviously huge deleveraging we've seen out of the hedge funds, especially last week.

18:38I just think we're going to just settle in and expect the chop.

18:41Scott Wapner: I mean, Steph, the most interesting note that I saw today was via Citadel Securities. And I I mentioned it on halftime. I'll mention it again for those who may not have seen it. They suggest that the AI trade resumes after the midterms. There's just so much noise right now and the deleveraging that Bryn was talking about. Quote, everyone's using the midterm elections as a level, as a clearing event for risk. And specifically, I think that's the period when AI can outperform again. The feedback we're getting from our clients is happy to buy higher, but not buy now into a major political event. What do you do with that?

19:15Oh, I don't know. I mean, I think it's really hard to time. And we have two weeks until the elections. And so if you want to wait two weeks before you buy good, strong fundamentals, that's your choice. For me, I'm trying to find stocks that are down and out and that offer really strong earnings. So, so far, we have about 17 percent of the S &P 500 have reported earnings. Very small sample set. But earnings are running up 37 percent. And revenues are running up 11 percent. And we haven't even had technology companies report in force yet. And so those numbers are likely to go higher. So I want to focus on what I'm hearing right now.

19:51And SpaceX, knock the cover off the ball. Supermicro, knock the cover off the ball. CapEx numbers are going higher, not lower. And demand is outstripping supply at this moment in time and will for the next several years. I want to be selective on semiconductors. I want to own good balance sheets. You know which ones I own, NVIDIA, Broadcom, and Micron. I want to own the industrials that have also gotten hit. They're down 30 percent. Those companies that are exposed to the data center build out, those stocks are down 30 percent. Scott, I want to buy in them now. I think I'm going to be buying it.

20:22I heard Joe Terranova talk earlier today. He wants to be buying them, too. So I'm totally agree. I'm also adding to Financials. Wells Fargo, they had a very good quarter. United Healthcare, very good quarter. So it is going to be not just AI or not just the others. It's going to be, I think, an all-in rally.

20:38Scott Wapner: Court, what do you think about that note? But AI trade resumes. Just got to wait a little bit. Yeah, I mean, I don't think the AI trade is over by any means. I do think the CapEx concerns are going to continue to come under scrutiny here. And I think that's what everybody's going to be waiting to hear as we get to these earnings reports. You mean spending too much or not spending enough? Because that's going to be front and center. Well, the return on investment. I don't think it matters as much as we're spending as when is the ROI realistically going to happen. I think Meta is first up here. Everybody's very excited about Muse and the adoption there.

21:03But what is the real ROI and the adoption story? So I think we're going to hear that. But I don't think this AI story is over. But I would say if rates do start to stabilize here and growth does continue, which if we continue to see this CapEx spending and that money going back to the economy, that likely continues. But I think your economically sensitive areas can benefit from that. So, yes, look at your industrials, look at your financials. That broadening, I think, will likely continue. And it isn't hinging on the AI trade doing well or not.

21:33Scott Wapner: Brynn, you don't own Meta, but it doesn't really matter for the context of this conversation. The fact that this report comes now, as seemingly everybody is questioning where we are in this trade, feels especially important to me this evening. Right. But I mean, you know, Mark Zuckerberg's talked about it in a podcast, I think, just last week that they were spending this money. They didn't know exactly how it was going to go. But I mean, I use Muse all the time. It's amazing. Like, why isn't Apple? Why isn't that Apple Siri? It's so good. There's so much excitement. It's just getting started. And so I think Meta is going to have so much excitement around Muse and just getting getting there.

22:13I think it's going to be a good print. And when people will excuse the CapEx because of the huge total addressable market for the for the consumer side. I think that Amazon, Microsoft and Google cloud providers are going to crush it because we saw last quarter. Guess what? Cloud growth is starting to accelerate. It's going to accelerate even more. It's a very strong correlation with AI and cloud growth. And so I think we're setting up where tech is going to remain the leader, especially these trillion dollar companies that are the top 10 holdings of both the S &P and the Q's.

22:46Scott Wapner: All right. We'll leave it there. Thanks, everybody. Talk to all of you soon. Coming up as we just get started here, three of today's biggest earnings movers, Netflix, United Airlines, Thermo Fisher. You see the stocks. We'll tell you why they're doing what they're doing when we come back.

23:16We'll be right back.

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24:37Scott Wapner: All right. Welcome back. Let's hit some of today's top earnings movers, starting with Netflix. It's sharply lower. You know it by now. Julia Boorstin tells us exactly what is going on. Hi. Well, Scott, Netflix shares are off nearly 5 % today, and this is the sixth straight quarter when Netflix shares have fallen after earnings. The stock is now down 47 % in the past year, And today's drop follows Netflix's weaker-than-expected fourth-quarter revenue outlook, as well as a lowered ad revenue expectation for this year. The company now saying it sees$2.7 billion from ads down from prior guidance of$3 billion.

25:15Co-CEO Ted Sarandos addressed engagement concerns on the call, saying they are focused on their core business, original film and series, licensed content, as well as live events, saying experiments into YouTube territory are relatively small and they are optimistic about the impact of their incoming chief content officer, Peter Rice. But Barclays, with an equal rating on the stock, warning, quote, advertising guidance may fuel the slowing momentum narrative further. And with 2027 growth visibility remaining limited, valuations may not recover through this year. Now, analysts have been debating just how long it will take for Peter Rice to improve Netflix's content slate and engagement.

25:59There are some questions of whether he could have an impact sooner than the new content held green light when he gets into that building.

26:06Scott Wapner: All right, Julia, thank you. Julia Boorstin. Now to our Phil LeBeau. He's back with us to tell us about United Airlines. What should we know here, Phil? Well, the shares are moving higher on the optimism that United, along with the other airlines, continue to see very strong demand, especially on the upper end of the market when it comes to premium travelers, they are forecasting a smaller profit for this fourth quarter compared to a year ago. And the big challenge for United and really for all the airlines, it's jet fuel. Now, jet fuel pulling back a little bit today has certainly helped out the shares at least short term.

26:40Scott Wapner: But the bottom line is this. These are jet fuel costs that are up anywhere between 60 and 65 percent, depending on the airline for United, who's up 61 percent year over year. And we talked with CEO Scott Kirby about it this morning at the company's new terminal in Houston. I think we'll stay high into 2027. You know, I don't know when or I don't know what they do. There's things that they can do to correct themselves, but they're going to have to make change. They're going to have to stop flying places to lose money. It's actually pretty simple. Running an airline and being successful is simple.

27:09Scott Wapner: Don't fly places that lose money. That's Scott Kirby talking about what other airlines may have to do if they're nowhere close to the profits that United has. And look, United and Delta are the two most profitable. It's a different story at Southwest, which is profitable. And then there's American, which originally many people thought it would be profitable this year. Will that be the case when they give their guidance for the fourth quarter? We will be talking with Bob Jordan, CEO of Southwest Airlines tomorrow, and also talking on Squawk Box with Robert Isom, CEO of American Airlines. Two interviews you do not want to miss.

27:42Scott Wapner: Scott, back to you. All right. You're a busy man, and we won't miss those. Phil, thanks. Phil LeBeau. Now to our Annika Kim Constantino. She's watching shares of Thermo Fisher. What do we need to know here? Hey, Scott. So shares are in the green today after the Life Science Company beat on the top and bottom lines for the third quarter. Thermo Fisher also raised both its adjusted earnings guidance and sales outlook for the year. And executives during the earnings call today cited improved market conditions it saw in the second quarter that continued into Q3 and specifically strength in pharma services and analytical instruments.

28:13But the company's earnings beat this quarter also got a one-time lift from tariff refunds, which contributed 15 cents per share to the 26 cents per share adjusted earnings beat. And that payout stems from a broader industry trend this year, following a landmark Supreme Court ruling in February that struck down the Trump administration's emergency tariffs imposed under a federal emergency powers law. Thermo Fisher was one of several major life science companies that were eligible to claw back these refunds from the government. And executives said they reinvested some of that benefit into AI deployment and the expansion of pharma services capacity, among other areas.

28:50Scott.

28:51Scott Wapner: All right, Annika, thanks. Up next, the big news in the world of sports and the big money venture the NFL just announced today. We have the details next.

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30:36Scott Wapner: I read you the headline of a Reuters report that State Department, the U.S. State Department, was preparing to issue an ordered departure of some personnel and family members at embassies across the Gulf. They were citing U.S. officials. a State Department spokesperson has now put out on social media that it is a departure for non-emergency U.S. government employees and their family members in Saudi Arabia only, in which they say the safety and security of department personnel and their families remains our highest priority. We will continue to take all necessary steps to protect and support them.

31:16Scott Wapner: The Saudi Arabia news is obviously interesting in and of itself. Remember, there was that big investment conference, the so-called Davos in the desert, which has been postponed as a result of what's been taking place in and around that country and in the region in general. So, again, from a State Department spokesperson, the Department of State issued an ordered departure for non-emergency U.S. government employees and their family members in Saudi Arabia only. So just wanted to keep you up to date. Maybe that's why the market had come off that moment there where it saw some losses on the original headline.

31:51Scott Wapner: We'll move to that other story we're telling you about now. The NFL launching a new investment fund in partnership with the private equity giant General Atlantic, the vehicle approved at the owners meeting here in New York. We'll look to invest in businesses in and around sports. Here is NFL Commissioner Roger Goodell. It's a relationship to look at various opportunities for us, investment opportunities that we think can benefit the league overall and make us smarter ultimately when we're doing those types of things. So we're very excited by it. All right, that is the commissioner, obviously. That's Michael Ozanian, obviously, and he's here with more.

32:31Scott Wapner: It's good to have you on. What should we think about this? Great to be with you, as always, Scott. I think this has the potential to move the needle for NFL team values tremendously over the next several years. You look at what the NFL has done over the last decade or so with 32 Equity, which is essentially the league's private equity arm. It's had very successful investments in companies like Fanatics, On Location, Hyperice. These are companies who have had licensing deals with the NFL, business relationships with the league. They pay the league a fee. The league has invested in these companies.

33:08And as these businesses have done better through their relationships with the NFL, the NFL has also captured upside appreciation on the business growth. Here, it looks like what the NFL is doing, it's going to double down and start a huge private equity fund. It's going to probably be capitalizing on the league's move to grow internationally. As you know, they're going to add more games next year. think NBA Cup. When the NBA started that mid-season tournament a few years ago, it really boosted the league sponsorship money. There's going to be more businesses interested in being partnered with the NFL.

33:46And from the NFL's perspective, these investments aren't necessarily going to be companies that have direct business ties to the NFL already. They're going to be a global portfolio. And I would imagine as a general partner, are probably split with General Atlantic, they're going to get a management fee, 2%. They're going to get a performance fee. So this is really 32 equity writ large, as I see it.

34:12Scott Wapner: But money that doesn't need to be shared with the players. Do I have that right? You sort of mentioned that low-key, Scott, but that's a very big point and a great point. This is outside of, quote-unquote, the NFL revenue that is part of that 50 % cap with players. So it's outside money. This is all the risk and all the reward goes to NFL owners. And if you look at the team's balance sheet in the league, the NFL is the one North American sport where all the teams make dough year over year, real cash profits. What have they been doing with it? We look at the Green Bay Packers. They're the only team that publishes an annual report because they're owned by shareholders.

35:00Their investments on their balance sheet has grown tremendously over the last decade or so. What are they going to do with this money? Well, this is one of the things they're going to do with the money. They're going to grow their business because the NFL is by far, by far the strongest brand. We've seen private equity firms get turned away as far as a year or so ago when they were allowed to invest in the NFL. And we just saw a private equity firm get approved to buy 10 percent of the Atlanta Falcons at a valuation of$10.6 billion, exceeding the$9.6 billion that control of the Seahawks went for a few months ago.

35:37So the desire, the demand to partner with the NFL in any way, whether it's ownership or on the business side, is tremendous.

35:47Scott Wapner: And more want in in terms of P.E. Apollo and Blackstone reportedly seeking approval to buy stakes in their own right. I mean, the commissioner even told us a couple of years ago or a year, more than a year ago, that they were likely to open the pool to more private equity firms. Yeah. And what a smart move by General Atlantic. They're saying, you know what, we'll let these other firms come in on and, you know, maybe buy 10 percent, which is the limit for one team. We're going to go in on these outside investments. We've seen what's happened with 32 equity. We've seen the tremendous success these investments have.

36:22We don't want just 10 % of a particular team. Here, we're basically partnering with the entire NFL.

36:30Scott Wapner: We'll talk to you soon, Mike. Thanks. Appreciate it. Thanks, Scott. Mike Ozanian. Up next, the biggest movers. As we head into the close, Brandon Gomez standing by with that. Hi there. Hey, Scott. AI demand drives one tech name higher while earnings and downgrade hit two others. The ticker is taking over the last minutes of trading coming up after this. All right, we're about 10 from the bell. Back to Brandon Gomez now for the stocks he's watching. What's on your list? Hey there, Scott. Yeah, first up, shares of Super Microcomputer surging after hiking its fiscal first quarter revenue outlook.

36:57Scott Wapner: The data center server raised its estimated revenue range by$4 billion, citing increased demand for AI platforms. You can see the stock up about 9 % there. Meantime, AT &T taking a tumble despite posting third quarter profit and revenue above Wall Street expectations. The telecom company also hiked its full year earnings guidance, though it reiterated capital expenditures that came in slightly above estimates. Shares there down about 6 percent. Finally, Chipotle also in the red after TD Cowan downgraded the stock to hold, citing concerns over slow October sales in a weak start to the fourth quarter.

37:29Scott Wapner: Stock down another 5 percent today and is on pace for its fourth straight negative session and its lowest close since January of 2023. Scott. Brandon, thank you very much. Brandon Gomez coming up. Results from Meta, Tesla, IBM and Las Vegas Sands all about to hit the tape. The market zones next. All right. Seems like we have a news alert almost every day on Anthropic. In fact, we have another one. Kate Rooney, what's this? Hey, Scott. Well, Anthropic just announcing its move into AI agents, taking on Meta with its own Muse agent that's gotten a lot of buzz. ChatGPT and OpenAI have gone into this arena.

38:04There's the buzzy Instinct agent that's gotten a lot of traction in Silicon Valley. Anthropic has been sort of a laggard in this space. They have not had their own version of an AI agent. So basically the version of AI that's a lot more proactive. So it can go out, shop for you, read through your emails, act almost like a personal assistant. That's how they describe it in this press release that just came out. It's called Duet. It is not widely available yet. So there's a wait list. They say that they're announcing a preview and it's going to be available eventually to pro and max subscribers.

38:36So the company kind of playing catch up here, Scott. I had heard from a source earlier, we weren't able to nail it down, but that they were working on this, which in some ways is a surprise for Anthropic, which has been a B2B enterprise company. It's now moving a bit more into consumer. And this is the answer to what Meta has done with Muse, but kind of a late mover here, but getting into the aging game, Scott.

38:58Scott Wapner: Not a surprise, though. I mean, in the big picture, I think people expected the Frontier Labs to be the competitors for Muse. and driving usage. This is how a lot of people are adapting and now using AI. The expectation has moved into this arena, so they have needed to do this. And I think you're right, Scott. The expectation is you got to have an agent to stay relevant at this point. Yeah. All right. We'll ask Mark Mahaney about that in a moment. He's going to join us, Kate, in the walk up to the earnings, which are going to hit in just a little bit. Kate Rooney, thanks very much for out in San Francisco.

39:26Scott Wapner: Let's do the market zone now because we are moments away from those critical earnings reports hitting the tape. Julia, of course, and Evercore analyst, as I mentioned, Mark Mahaney, they've got Meta. Contessa Brewer has the setup for LVS. Mike Santoli breaking down what's riding on those key reports for us as well. You want to do that first, Mike? Obviously, last night's reports, SpaceX, as well as the pre-announcement from Supermicro, did give cover for the most oversold, beaten up parts of this market to get a little bit of a lift today. And I think that's the main story. You know, NVIDIA up a couple percent, semis in general, memory participating on some scores.

40:05Scott Wapner: So it seems like we've taken the pressure off right there. I don't think it really means, you know, we have any kind of an all clear. It's some kind of escape velocity. What it has allowed is for those defensive parts of the market that have been carrying the tape, like health care and staples, to take a day off. And this is how we stay in trend. It's inconclusive, but it's definitely not negative. And you're kind of hanging in there and waiting to see if we can see our way clear through the critical mass of earnings to get things higher on a more sustained basis. How do you guys tackle it in about five minutes or so in overtime?

40:41Scott Wapner: Yeah, obviously, it's going to be a swarm of these results. So, you know, IBM, Meta in particular. So we're going to have Brent Dill from Jeffries. We're going to have voices on every side of it as they come out. All right. Good stuff. We'll look forward to you and Mel and just a little bit. LVS also reporting. Contessa, what to watch for here? Las Vegas Sands is going into the report facing widespread investor skepticism, Scott, around the gaming space. Even more about Macau in particular and the strength of the Chinese consumer. Visitation has set new records this year, but gaming revenue is lagging pre-pandemic numbers.

41:14CEO Patrick Dumont told me in Macau a couple of weeks ago, yeah, look, it's volatile, But this is cyclical. He is bullish on the future and on the wealth creation that's happening across Asia. And look, I saw firsthand how the company is spending billions in CapEx on bigger, better, more luxurious offerings in Singapore and Macau. When does that pay off? Analysts are expecting LVS to report nearly a billion and a quarter dollars in EBITDA. That's the key earnings metric in gaming, with Singapore expected to out-earn Macau. Sandstock is down more than 40 % year to date. Susquehanna just today cut the price target from 63 to 51.

41:54And those share prices are hovering around 37.50 today, down almost 2%, Scott.

41:59Scott Wapner: Okay, contested. Thank you. We'll see what happens just a little bit there as well. We'll bring in Julia and Mark together. So, Mark, I'll go to you first. This news alert that we had on Anthropic and its own agent, what do you make of it in terms of what it means for Meta? I think Meta is sort of proven with Muse that there's a lot of appetite for a consumer AI agent. I expect a lot of companies to come after the space. I want to see some companies, though, come after it from outside of the paywall. You want to compete with Muse. You can't hide behind a$10,$20,$50 a month subscription. You can't go mass market with consumers if you're going to charge that.

42:36Scott Wapner: I think that's what Meta's road to victory is. The company that can really do this is Google. And in order to do this, you really have to have a large advertising monetization behind it. And I think they have it. I mean, when I asked you not even a week ago, we were sitting next to each other out in San Francisco, which stock in this group you were most excited about right now, meta wasn't it. Not that you don't like it, but it wasn't it. Yeah, Amazon's our number one pick here. I think all of these data points show just how strong the demand is for compute, how strong the demand is for cloud.

43:13Scott Wapner: And I think Amazon's probably the most underappreciated, shockingly, way to play that right here, right now. So Amazon, and I think it's because of AWS, and particularly because of the bedrock features, the platform within AWS. So how should we view whatever spending number, you know, CapEx number that Meta comes with tonight? There's obviously a range. Some are wondering whether they hit the high end of that. How are you thinking about all of it? Because at times the markets hated the number that they've delivered. Now, I'm not sure where we are, given some of the consternation in the market around the AI story in general.

43:52Scott Wapner: I think Meta gets a little bit more. Meta did not get a pass the last couple of quarters because of its spending plans. This quarter, I think it gets a little bit of a pass, given the success of news, given the success, the early success of wonderful. So I think it's a different setup. That said, I think they're going to be guiding expenses above where the street is. So I don't think the stock, on that, I don't think the stock trades up aggressively. I expect the stock to kind of stay flat. I think it does hold on a downside 20 times earnings. So I don't think there's a lot of downside in the stock from here.

44:23Scott Wapner: If the stock were to correct a lot on an aggressive CapEx outlook, I'd be buying that. I mean, I'm just thinking what was then is different now. What upset the street before with a big number, they come out today and they confirm a big number and the street says, oh, whew, story's intact. Yeah, well, what's changed is products. You know, you need to show that something came out of all that CapEx and R &D spend, and they showed it. Muse has been phenomenally successful, most successful consumer app launch, or one of the most successful consumer app launches, with a lot of growth potential ahead.

44:56Scott Wapner: and wonderfuls come out and they brought themselves to the Frontier Lab frontier, to the frontier of compute. So, yeah, I think the investors finally saw something, some ROAI on all that cap-up spend. So they get a little bit more of a pass, not a full pass, but a little bit more of a pass than they would have gotten last quarter. Got about 20 seconds. Do you think we get anything on 27 numbers? I think we'll get some directional guide about the growth in CapEx, capital expenditures and operating expense will be similar to higher than lower than last year. I think they'll give that. It's possible they don't.

45:30Scott Wapner: What I really want, I want some data points on Muse. I want some data points on Wonderful. And I want to see this ad revenue growth staying at least mid-20s. If they do that, that's good enough. You're the best. Appreciate you joining us right to the walk-up in this earnings report. That's Mark Mahaney. They're going to ring the bell in just a moment. Ring it out green, too, where we pretty much have been throughout the day. NASDAQ is a nice winner today, They have better than 1%, but now, so much is on the line. You've got Meta, you've got Tesla, you've got the other reason, of course, to keep it in overtime with Mel and Mike.

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