New Month, Better Tech Trade? 11/2/26

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1:09Scott Wapner: We record this live weekdays at 12 Eastern. Listen in. Carl, thank you. Welcome to the Halftime Report. I'm Scott Wapner, front and center this hour. New month, same questions. What is the state of the tech trade? After the worst month in a year and a half, we will trade the biggest movers today. Of course, we'll get to set up our Apple and Palantir earnings tonight as well. Joining me for the hour, Joe Terranova, Steve Weiss, Jim Labenthal, and Bryn Talkington. So we do begin with green on the screen, NASDAQ around a three-month low. And it is the question, I think, on everyone's mind, whether the AI trade is in trouble or not, whether something fundamentally has changed and the fundamentals have gotten worse.

1:52Scott Wapner: Let's make that the backdrop for Deutsche Bank making a big call today. The spring is coiled again. They upgrade tech to overweight. Three weeks ago, we downgraded tech tactically from overweight to neutral as the risk reward seemed unfavorable with performance positioning and the perception of growth all asymmetric. Well, tech underperformed sharply since then, taking it to the bottom of its decade long relative trend channel. and investor positioning in tech has also dropped sharply in line with a significant deceleration in earnings growth. Risk reward now in favor of tech again, and we upgrade it back to overweight.

2:31Scott Wapner: So that's where we're starting with a new month. What do you think? I think it's on its heels for sure. We saw that at the end of last week. I don't think you have any confirmation today that you have an all clear signal just because you have a bounce in the market. Let's be clear. Today is about the price of oil being 7 % lower, yields falling further to levels we haven't seen in the last 45 days. You disagree with this call? And therefore, it's a cyclical consumer discretionary trade. You know that I don't disagree with it because I've said over and over for the last several weeks that I think we get a return of optimism that is catalyzed by the momentum factor and by the AI trade.

3:09However, at this moment, sitting here today on November 2nd, I don't have the evidence in front of me to suggest that I'm correct in what my expectations are.

3:19Scott Wapner: What's the catalyst for being as positive as this says? You need to see a universal, all-clear signal on a day like today. I don't like that if you could show Micron, Micron's down, AMD's down, Oracle's down. Yes, it's on the$20 billion deal. Intel is down. You need to see broad-based universal recovery in the AI and the tech adjacent trade to get the confidence. But the hardest thing to do is to make the call before all that happens. Not after it happens. No. And there's a middle process. But that's what they're doing here. That's what they're doing here. I'm looking at it from the perspective of allocating capital in the market.

4:00I'm sitting here. I'm saying, OK, I want to put money behind this trade. When am I doing it? Am I doing it before I have proper evidence or am I doing it as I begin to see the evidence drip slowly in my favor? That's what I'm ultimately going to do. I'm not going to look back on it and do it afterwards. There are signals that I'm going to look for. They're going to say, OK, I'm going to step forward. Right now, I'm on my heels after last week for sure. I was exuberant about the market moving higher. And then I had Twilio smack me in the face down 20%.

4:30Scott Wapner: But if I told you that, and we've talked about this, that positioning is cleaner. We had a lot of deleveraging. Yes. A lot of funds sold tech. Mutual funds on Friday. Pretty rough October for hedge funds. I don't think anybody's shocked by that. A lot of concentration was in tech. A lot of wipeout was in tech. Jeffrey's trading desk today on flows. October, the largest net sell month for tech in more than five years. As a result, the largest monthly outperformance for the equal weight S &P versus the market cap weighted S &P since April of 2009. So positioning's cleaner. A lot of stocks got waxed.

5:05Scott Wapner: You look at the chip since you went to the chips, you're talking about 25 plus percent declines in the month of October alone for several of the chip names. And in some respects, it was much worse than that. So that's two things. Earnings were pretty good. Price action wasn't good. But if you had deleveraging, you had pretty good earnings and you had pretty big declines and you're positive. What more evidence do you need? Well, I mean, I'm positioned in the direction of this return of optimism. the AI trade, the momentum trade working. But I'm acknowledging sitting here over the last several days, something feels as though we are not getting the momentum signal that I want to carry us forward.

5:46We're just not. So if you're asking if short term tech is oversold, yeah, probably. However, how short term is that going to be? We've got the elections coming up pretty soon, like tomorrow, right? If we get a big socialist wave, that won't be good for the market, because then you'll start worrying about 28 and who's going to be in the White House. And then you've got the Iran war that's still going on, and oil's trading down because supposedly their diplomatic channels go on. We've heard that probably 100 times. Right.

6:21Scott Wapner: So that sort of makes a good point. All right. So we know all that. Do you think Do you think anything's fundamentally changed in the AI trade? Yes, absolutely, without a doubt. Without a doubt. They used to be able to raise money whenever they wanted, whatever they wanted, at any valuation they wanted. And now we're seeing that some funds are saying, and Sovereign's saying, you know what? We're full. We're too full. We don't need any more. Number one. Number two, so we see OpenAI cut back. By$10 billion. Right. A third. And$20 billion may be aspirational. They say$15 to$20 billion. I know funds that have cut back their orders.

7:02I know others that have pulled out of orders and others that are coming to market. So there's picking and choosing, as there should be at this point, right? So I think you'll see a lot of the names that we all talk about. Of course, they're going to survive. But without the private market valuation umbrella, without reading into that, I think it's going to be tough going for a lot of the others. So when you see the others go by the wayside who can't raise capital at all, that obviously informs valuation of all of them. So we see what Musk said about Gronk, about its unsustainably high cost. So I think the AI trade is definitely on pause.

7:40And this is very typical at the peak of a cycle.

7:43Scott Wapner: I think we saw the peak. He's channeling. Ben writes this very much of Mellius today, who has an interesting note. This is, quote, AI trade facing its toughest moment. Funding CapEx is everything. And he's cut price targets on a number of names. NVIDIA, Marvell, AMD, Dell, Broadcom. OK, he cuts the targets there and he says, quote, we have at least five trillion dollar plus companies, soon to be seven, obviously Anthropic and OpenAI, that have to issue hundreds of billions in securities, stocks, bonds, et cetera. The amount of paper so large it has become the primary risk to the AI trade, more than power, chip supply, memory, and even political bottlenecks.

8:20Scott Wapner: Multiples could remain under pressure as the build-out is going to feature more backstops throughout 2028. How about that? This is the game changer that Weiss identifies. That's what's fundamentally changed. I agree with Steve that financing is the challenge right now in the markets, and financing is the reason that we're going back and forth with a negative tone here. I mean, And these numbers are pretty outstanding when we think about SpaceX a week and a half ago,$40 billion of debt. Microsoft a week ago,$25 billion. Last week, I think it was last week,$37.5 billion from Meta. Now we've got Oracle coming out with$20 billion.

8:55These are real numbers that when you add them up, the money has to come from somewhere. Now, Scott, before we were talking about financing, you were talking about deleveraging and positioning. That's actually a positive. We've been doing that for weeks. But what I take away as the biggest positive of all of this, which will swamp the funding, but I'll come back to that in a second, is the CapEx plans. Last week, what we saw from Alphabet and Amazon was that they're not backing off on the CapEx. We saw a slight decrease from Microsoft, basically based on supply chain. It was very slight. I'm not going to worry about that.

9:26The CapEx plans are still very much intact. And for those three companies that I mentioned, the capital markets are open. Yes, pricing is a little bit more difficult. And even for Oracle, the capital markets are open, albeit with a little bit more difficulty in the cost of capital. But the point being is that the biggest spenders out there still have access. I think the key tell here and what will keep the market going back and forth until this market clearing event happens is the Anthropic IPO. One quick note on that. I don't think Anthropic or its bankers would have brought that unless their soft road show.

9:59And Scott, I think you were out there in San Francisco when they did that soft road show was pretty well received and we got reports and so did you that it was very well received.

10:09Scott Wapner: Obviously demand for it's going to be great. You say obvious. I'm not sure it's obvious. I agree. I think there's pretty obvious that demand is going to be great. The question is, you know, is it a two trillion, is it one and a half trillion, whatever it is, demand is going to be great. I think we can make an educated statement and suggest that. But I wonder if it's time to watch what the companies do and not what they say. Of course, everybody's going to stick to their spending plans. Anthropic, as we learned today from the amended S-1, has spending commitments based 20 years out. That's not worth the paper that it's written on, is it?

10:47Scott Wapner: I've got good news for you. We'll see what's going to happen over the course of time. So let's see what really comes to fruition in terms of the hyperscaler spending plans. They're raising money not just to sit on it and invest it in T-bills. They're raising money with a purpose. Maybe the direction of yields matters most. Well, that's why Mellius, by the way, cuts these targets. NVIDIA from$420 to$315. That's a pretty sizable retool. Well, NVIDIA is the financing arm. I mean, NVIDIA, you know, there's no way they can live up to all those financing. I know, but these aren't like chump cuts here, right?

11:21Scott Wapner: No, it's a huge cut. Marvell goes from$445 to$300. AMD from$660 to$600. Dell from$735 to$590. Broadcom from$610 to$450. $330 would be on NVIDIA. One heck of a price rise from here. Maybe the$420 was just a little bit too far out there. As an analyst, maybe you're looking at that and saying, I've got to bring this into something that's still aggressive but not unreasonable. But it matches Weiss's temperament around the whole trade. You've taken the other side, by and large, of that. In terms of financing, we'll continue, but selectively. In terms of optimism. I am optimistic. I am. Look, two things.

12:05I don't think last week Amazon would have come out, and I forget the exact number. I want to say$195 billion for next year. I don't think Alphabet would have come out with those numbers unless they believe them. And again, besides that, you've got SpaceX raising$40 billion. These companies are raising money to do something with it. And if you're NVIDIA, you are a beneficiary. Same with Broadcom, same with AMD. Bryn? Yep. So first of all, let's talk about Mellius and analysts. I've been in this business since the early 90s. Analysts follow price, not the other way around. And these prices have come down.

12:44And so the analysts are following suit. As the prices were going to go up, they're like, OK, well, yeah, another 20%, another 20 % higher. So they're just reading the room of the market. I think as long as the hyperscaler goes, specifically with Google, Amazon and Microsoft, you know, Medica, Meta and Oracle, I think, are different from that. Microsoft is the only one that's reading the room. And so I think that this debt issuance does have a rubber band it's pushing on, because while technically, theoretically, the debt markets are open for these companies. companies, I'm not sure just the math equation of how much the debt market can absorb at a time.

13:25And so these are just historic numbers that these pristine balance sheet companies are issuing, but the corporate debt market can only absorb so much at a time. And so rightfully so, yields are going higher, I think, for these companies wanting to issue debt. I think I'm right in the middle of Steve and Jim. I think that we're in this settling point. The midterms are a clearing event. They always have been. They're a clearing event. I will say from like 1942 to last midterms, 21 out of 20 times, 21 out of 21 times, the S &P is positive. And the average return is around 16 percent. So maybe this is the first time it's negative.

14:03But if I'm going to Vegas, say bet on red or black and that red is that statistic, I'm going to put it all on red. So I would caution people to get too bearish. The last thing I'll say is last month was a clear signal. The rotation out of tech is in earnest. Nine of the 11 sectors were up, four were up double digits. You would think you would get follow through this month because there has been technical damage to the tech names. So I think, like, look at the companies individually sell calls. Don't run away from tech because I still think these companies will deliver writ large. But you do need to see the NVIDIAs, the Dells, the DRAM companies start moving higher because they're still getting me all the money.

14:42And that, to me, is what's most concerning, is where the money is going. Those stocks are also not doing well.

14:48Scott Wapner: Well, Goldman's Tony Pasquarello says the bull trend is intact. You got the calendar as your friend. Yes. Right? September and October are historically bad. So we get through the gauntlet of that. It was painful at times. And obviously, the last month did not end well, to say the least, as it relates to the tech trade. UBS's trading desk, from a seasonality standpoint, it doesn't get any better than November. 1.9 % on average since 1950, best month of the year for equities in over the last 10 years. Only been one negative instance for November, and that was in 2021. Yardenny, 7 ,900. He's sticking with that.

15:26Scott Wapner: Mike Wilson says, correction, the end of it, final. Final phase is close. We're getting near. Said you could train down the 7 ,100, 7 ,300, but he's staying with 8 ,000 for the S &P. You know, I really don't think that we focus enough on what's a realistic black swan event. And that's sort of definitely inaccurate. But if we do go after Iran after the election and Iran does retaliate against all the oil assets, you'll see oil at a high level, not as spiked as we typically see in other Mideast conflicts, but one that's extremely high that upends all of this. But, you know, when analysts talk about a separate point, when analysts talk about how historically cheap, pick your tech name, it's inaccurate to compare it to historical times because they've always had fortress balance sheets, always had positive cash flow, positive free cash flow.

16:25And now they don't. So should it get the same valuation metrics as it got before? And I'd say no. What the discount is, I don't know. but it shouldn't be trading back to the highs with those commitments. NVIDIA should definitely...

16:40Scott Wapner: What if the growth levels accelerate enough that that in and of itself justifies the valuations that they're trading at? Well, these have always been fast growers, but you sort of got your answer with Amazon. Cloud grew very nicely. I mean, it grew well. You know, cloud grew at Alphabet. It grew nicely in Microsoft. but it didn't get paid for it because the other parts of the business aren't doing so well except Microsoft. So I just think you need a different calculus when you're looking at these stocks. And we don't see that ebbing anytime soon. Right. So that's the issue. Now, I'm not saying they're not cheap.

17:19I think Alphabet is still very, very cheap, you know, and that but I'm full on it.

17:24Scott Wapner: I have no interest in buying more. No, but I mean, the stocks have re-rated a bit. Like Alphabet was off 17 % over the last month. Meta, 16%. NVIDIA, 11%. Yeah. Alphabet's the most troubling because that stock had not participated. But if you take a look at how far off their high, if you go back to Meta, it was trading over 800. Significant re-rating. Is Alphabet more attractive today than it was 30 days ago or no? No, it's not. Even with the decline that I said? Even with the decline you said. Why? Because their ad model, which drives everything, is now suspect, right? You see them losing share.

18:02You see search maintaining, but you've got to be able to generate revenue from it. So the bet you have to make now, and I'm making that bet, they'll figure it out. They've really been low-key in terms of their AI, you know, products. This is one of those cases where the stock and the company are different, and you have to use different adjectives to speak of them. The stock is dead money, I think, for a while. Obviously, Scott, we talked about that. Steve, Joe, you know, trimmed it. The company, when we talk about what happened last week, let's not lose sight of the fact that its search business was, what, 12 % year over year on a business that's approaching$100 billion in a quarter.

18:37So, you know, let's not damn the company, but let's be realistic about the stock. Let's also be realistic about the stock in saying that a year and a half ago this was a$160 stock. Now it's$280 even after coming off. But where I go at with this is, you know, have your toehold position. I don't think this is a point in time where you need to add to it meaningfully because the narrative isn't going to change anytime soon, even though I think the numbers weren't that bad.

19:02Scott Wapner: Is Meta more attractive today than it was 30 days ago? Yes. Yes. Why? What's the difference? Down almost the same. 16. Do you want to handle it? Go ahead. They picked up Share and Ad. They've been innovating. And you've also got, you know, I believe they'll start a cloud business. Why not? Right. They've got their own needs so they can cut their cloud costs by having their own cloud business more so. But I think it's it's more attractive because they've shown I've said this time and time again. You've got a CEO who thinks like, you know, I've got to get up and win tomorrow. I've got to reinvent tomorrow.

19:42Scott Wapner: I mean, but after the initial, you know, euphoria over Muse, it's not like the stock has traded all that well since, Bryn. Right. I mean, that that's one of the things. And the market woke up to the fact that, oh, all these other competitors are coming out with their own personalized agents to do same, more similar. Yeah. So so people have said I mean, Steve said it about maybe they'll start a cloud business. One just doesn't start a cloud business. If you go back and look at the history of Google Cloud, they lost money for years, years and years, and spent a huge amount of CapEx. So I think if you think that they're going to start a cloud business on top of all the CapEx they're doing now, that doesn't make any sense.

20:30Maybe they'll sell their extra compute like SpaceX is doing, and that could plug the hole, say, of the compute they're not using. I mean, I do think that unlike Google, where Meta has been great, Muse is free right now. They could monetize that. If Siri and Google can't get their act together or Apple and Google can't get their app together with an app, they can monetize. I think people will pay for it. Instagram, they're doing a great job of selling through. But ultimately, ultimately, for Meta, the risk is spending all of this money just to sell us more stuff. That's where, to me, I think the risk in the name is, because I think it's very unlikely they have the balance sheet to even start a hyper-competitive front against Amazon, Google, and Microsoft in the cloud business.

21:17Scott Wapner: Well, speaking of Siri, we get Apple tonight. That's going to be a biggie. So it did return to the most valuable company in the market on Friday. Keys, like it always is, iPhone growth, demand for the 18. Duo hasn't been around long enough to really get any great read on that. What's the services growth number? That obviously matters, given what's been happening with Siri. There's also a fair amount of skepticism, I think it's fair to say, going in. Dan Niles says the stock's been a beneficiary of investors looking to avoid AI companies with huge free cash flow burns. However, I'd be wary into earnings that are likely to provide lower than expected guidance for the December quarter.

21:59Scott Wapner: Barclays reiterates that stock as underweight. They're cautious given iPhone uncertainties in this cycle. Limited monetization of AI, right? We're kind of pre-monetization, if you will. We don't even have, you know, Siri's been in beta form. And renewed fears on the App Store as well. Oppenheimer basically says, given where the valuation is, leaves little room for error. Yeah, I don't remember where the stock is today. What is it, 30 times, 32 times, something like that? 36. 36 times. All right, so that's a historically very rich place for this name to be. You've been on this more than most. What do you think?

22:36I think skepticism is a remarkably powerful force. I think the whole conversation we're having, this AI momentum trade, it's lost leadership, and now we're building the skepticism. The skepticism has been in place for Apple for the entire year. Tell me why. Valuation. Everyone sees 36 times. That's the richest valuation it's had since 2008. It puts us in the 99th percentile. On the other side of it, they're going to have the best revenue growth year since 2021 at 15%.

23:06Scott Wapner: You said skepticism has been in place since the beginning of the year? Absolutely, it has. The stock's up dramatically. All right, we have a graphic. Can we please show the graphic? Let's look at the MAG-7. These angry folks. Let's look at the... No, I'm very happy. Let's look at the 12-month implied return for the MAG-7. You tell me if this isn't skepticism. 30 % higher for Amazon. 21 % higher for Microsoft. 2 % lower for Apple. If we could go to the next slide, please. Can we look at year-to-date? Meta, 39 % upside. Isn't it the fact that Apple's already had the big move? Apple's up like 25 % year-to-date.

23:43Scott Wapner: The high on the stock, the all-time high is 351. Correct. Is it 338? And we're now looking forward to where it can go. If we were optimistic, we would be looking at a price target like we see in Meta or like we see in NVIDIA. But the street doesn't believe the move. They're skeptical in the move for Aftal. Joseph, I'm skeptical. First of all, I'm thinking of selling before earnings come out because the valuation is just nosebleed. I got some time, three and a half hours. But, you know, I can't argue that I can't agree with you that the market is skeptical. when you're trading at near all-time high PEs.

24:24It's$250 and all the way up. Everyone, all of you have said to me, the valuation is too rich. It's going to pull back. I own it, Joe.

24:32Scott Wapner: No, but everybody has made that argument. It is too rich. It doesn't mean it won't keep going. That's why you don't short stocks on valuation. Quickest way to grow. It's probably the biggest point of it. I'm not saying shorter. I'm saying it's why valuation doesn't matter in terms of the way a stock moves. With a 36 times forward multiple, You can't be having discussions about what gross margins on a product are going to be. Now, Joe, if I'm wrong, but I think, you know, what we're seeing with chips and pricing, that's going to put pressure on their pricing, on their margins. If I'm wrong, you're going to be right, unquestionably.

25:05But you can't have a 36 times multiple and be worried about manufacturing margins. Everybody already knows the margin story. Oh, I don't think so. At 36 times? I don't think so. It's a safe haven. The free cash flow continues to build. The free cash flow is up 40 % this year,$141 billion in an environment where you have negative free cash flow for some of the other hyperscalers. That's the attraction to the stock. If it's going to trade in an elevated valuation, OK, fine. There's a reason for that. You know what I'm saying? It's a fabulous thing. What? We're going to be on tomorrow, you and I.

25:38OK, so? We're going to debate it. So tomorrow's the referendum. That's right. No, you can't do that. You can't tell me if the stock falls tomorrow 10%, then OK, we're right. Joe, maybe this is a long term hold. Maybe, my brother, I'm actually hoping that you're going to be right. I do own it. I own it significantly under the market weight. But I'm not sitting here hating on it. I actually want you to be right. I just don't think. And the reason I sold half of the position about four months ago. Did you flinch? Did you flinch there, too? What? Are you going to flinch? It's been right. Let's do a practical trade.

26:12Both of you guys own it, right? Yeah. And both of you guys are skeptical today. And then we're going to go to Bryn, so lay out the trade. Tell me exactly how this plays out. Are you selling it today and you're buying it 5 % lower, 10 % lower, 20 % lower? He wants to go to Bryn.

26:25Scott Wapner: No, I want you to answer the question. It's got to be 20 % lower for me to add the position in. And what I've got right now is a$15 cost basis. 20 % lower. Oh, yeah. Yeah, I'd buy it. That'd still be like a 30 times forward multiple. 20 % lower. That would be. Bryn? Bryn? Yeah, so I think it's important for the viewers, like this whole conversation, I've owned Apple for a long time, agree with a lot of the comments. Everything that we're talking about is already known. The free cash flow, the revenue, I think it's 10 % they're looking to grow. Everything is already known. So to me, I do respect long-term looking at multiples, just like Costco, just like Walmart.

27:02When they got, I think, around 40 times their previous, it just hit a ceiling. And so I don't think this quarter is going to be anything riveting. I think it's going to be a really solid quarter. The revenue growth, to Joe's point, is really important. That's very exciting. I think the stock is probably like up plus or minus two. This is not going to be the quarter. I think Q1 of next year will be a really important quarter to see Christmas sales come in. But I think this is plus or minus two. This company, I'm sure, is the other side of pair trades. For a lot of the names that hedge funds are short, they're long this.

27:36And so it's like, this is a name, as Jim says, you know, own it, don't trade it. And I think until that changes, it's just a wonderful company like a Costco and a Walmart. But I do think you have to be aware of a lot is priced in at this 337. Let me give you real quick, real specific. My cost basis is 276. OK, I believe it hits 400 before I get stopped out at 274.

28:00Scott Wapner: OK, we'll take a break. Joe's got other moves to tell you about two. In fact, we'll do that. We've got committee stocks on the move. We have calls of the day. Got a lot ahead. We'll do it next. Legacy credit scores only look at a brief snapshot in time, and that limited view often leaves millions of qualified credit seekers out of the picture. Vantage Score is changing that by modernizing credit scoring. Vantage Score uses 400 % more credit and alternative data to create a fuller picture of financial behavior, including trended credit data, rental payments, and timely utility payments. VantageScore safely broadens access to the credit economy and brings 5 million mortgage-ready borrowers into the market.

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29:57Scott Wapner: Let's talk some stock moves from Joe Terranova. So the CBOE, best day on Friday since May 1st. So you saw enough that said buy more personally. Yes, absolutely. Back in June, I purchased this at 263. Stock had a significant pullback. I felt that was a tremendous opportunity. This is what I do. when price action proves you correct, you add to the position. This is a business that is seeing exponential growth. If you think about options volume on a daily basis in the United States, 80 % of the daily volume has an expiration of four o 'clock this afternoon. I'm not asking you to decide whether you think that's a good or a bad thing.

30:41I'm just telling you the dramatic growth of the options market is clearly benefiting SIBO. They're seeing 20 % revenue growth. And now they have the wind behind them and price is advancing. And I think it's going to take out

30:55Scott Wapner: that 371 high from earlier in May. That's what's called cred on buying high, selling higher. That's the definition of that. Look, that's what I'm doing in Apple. Is that book out in paperback yet? That book is out in paperback. Is the audio out? Did you read it? Yes, except you can't read audio. Is it an audio? Are you the narrator? Are you the narrator, Joe? I should be the narrator. That's what I meant. Yeah, good. Good. That's what I want. And you can get it in different languages as well. You didn't know that that's what I meant? Of course. We mind meld all the time. When you have a winning trade, you add to it and you buy more.

31:36How long does zero expiration options go on? Is there a point where people realize they're losing money on this and it starts to fall off? I don't know, Jimmy. I don't know the answer to that. I don't either. I just know the effect on earnings and revenue. Don't take it as a barb. I'm asking, like, seriously. Honestly, I don't know the answer to that. All right. You sold Nutrien. I did. Lousy position. Bought that at the beginning of September. Buy high, sell lower? Yeah, exactly. In this case, good one. Yeah, thanks. But that's what it was. it's buy high and then it's sell to protect the downside so it doesn't continue to move lower is that out in paperback yet that is not out in paperback and it will be in audio either so if

32:18Scott Wapner: it's in audio you can't read it yeah okay all right good stuff did you get everything out there you wanted to on nutrient what was the what remind our viewers why you bought it it was an ag trade okay it was clearly an ag trade i did well with cf on uh the the challenges that we have in the trade of Hormuz. CF was a good trade. I thought this inflationary effect would extend into some of the agricultural stocks. And ultimately, it hasn't bought nutrient a little bit. Look, even CF has pulled back. Ag stocks are not cooperating. All right. Let's talk about some stocks on the move. Apollo launching an$11 billion private credit platform.

32:58Scott Wapner: It's backed by Abu Dhabi. We first broke the news, of course, a week or so ago. Apollo buying that near 10 % stake in the Abu Dhabi-backed Wubadala capital. They have earnings tomorrow before the bell. You're in the name. Yeah. And I think this is going to go higher over time. I have no particular opinion on the quarter. I would simply point out, remember everybody, seven odd months ago, how everybody was thinking that private credit was the next systemic risk, the next Minsky moment. Let's be careful about using labels like that. It didn't turn out to be the case. Most privately traded private credit funds have done pretty well this year, a little bit below historical average, but still nicely positive.

33:37So this asset class is not the disaster people thought it was. And Apollo has more benefit to come in its share price from people recognizing that.

33:45Scott Wapner: OK, so Uber, Bryn reports Wednesday, eighth negative week out of nine and gets the price target trimmed by four bucks today at UBS. They still like it, but they go to 106. They were at 110. Yeah, so I'm in and out of this stock. I'm not a fundamental bull on this stock. I like to buy it in the low 70s, high 60s, sell it at like 85 or 90. I hate how the stock has been trading. And ultimately, it's like people don't care about this name right now. And so we're going to need to see a catalyst to even get it sniffing 80, much less 106. I do think, I mean, in Texas here, I see the cyber calves. I see Waymo everywhere.

34:28And I know Uber has some deals with maybe Waymo, etc. But I just I think we are all seeing these driverless vehicles just like flooding the road. So hopefully that analysis right. But I'm definitely frustrated with the name because it feels like there's more sellers and buyers and you can't get higher unless that reverts.

34:46Scott Wapner: OK, Frank Holland has our news update today. Hey, Frank. Good afternoon to you, Scott. The Trump administration is asking the Supreme Court to weigh in on a dispute over 20 ,000 mail-in ballots in California. The Department of Justice claims those voters are likely non-citizens and filed an emergency request for the high court to intervene after a federal appeals court refused its request to temporarily block the ballots until they can be verified. California says the move could disenfranchise thousands of legal voters. New York City Mayor Zoran Mamdani is threatening legal action against ICE, accusing federal agents of using city parking lots to stage operations.

35:22Mamdani says that violates an executive order he issued earlier this year, which bars ICE from using those lots without a judicial warrant or an agreement with the city. And outgoing California Governor Gavin Newsom is calling for the state to increase its film and tax TV credit to$1 billion. The expansion comes after Governor Newsom raised annual credit from$330 million to$750 million last year. His office says another increase would help California remain attractive as a global competitor for productions.

35:50Scott Wapner: Scott, back over to you. All right, Frankie, thank you. That's Frank Holland. We have headlines crossing on Snap. Our Julia Boorstin follows that company joins us now. What do we know? Well, Snap has settled ahead of a lawsuit that was expected to start in this Los Angeles trial about social media harms for teens. So we just received news just now that Snap has settled and has resolved the claims currently pending before the court. This comes just a couple of days after Meta settled. So now because both of those companies have settled, now we will not have a trial that is starting in Los Angeles this week about these social media issues.

36:26There are other trials pending in this ongoing set of social media lawsuits about the harms towards teens in particular. And in this settlement, they say that while these claims have been resolved, the next bellwether trials are scheduled to begin on March 2027. We see snap shares are now up over 5 % intraday.

36:50Scott Wapner: I mean, a lot of these companies have clearly seen the writing on the courthouse wall, so to speak. Right. I mean, it's kind of obvious where these things seem to be moving. There have been so many different trials, consolidated trials, individual trials. There are lawsuits that have been filed by school districts. The state attorneys general have been involved in this. And I think that we are seeing some settlements and there are just so many different types of lawsuits involved that I think when these companies think they have an easier opportunity to get out with a settlement rather than having their principals come testify, I think they opt for the settlement.

37:26Scott Wapner: Okay, good stuff. Appreciate that reporting. Julia, thank you. Julia Forston. ETF Edge coming up next. Domino has that as always. What do you have coming up? All right, Judge, some of the biggest college endowments in America have had banner years. And for many of them, those returns have been driven in large part by traditional stock exposure versus complex investment strategies. We'll speak with an advisor who specializes in endowments for the types of trends and investments educational institutions are making. That story is coming up. ETF Edge on the Halftime Report. Keep it right here.

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39:20Try YouTube Premium for two months free at youtube.com slash premium. Trial eligibility varies. Terms apply. Cancel anytime. I'm Dominic Chitt with today's ETF Edge. Could ETFs change the landscape for college endowments? State Street launched an ETF that tracks the stock and bond allocation for the University of California system. Our next guest specializes in endowments and is here to share his thoughts on the future of higher ed investing. Joining me now is Mike Vogelzang, the CIO over at CapTrust. Much of these returns, we saw the returns from Harvard, Yale, banner years for them. What exactly is driving that outperformance for these big college endowments?

39:57It's pretty easy, mostly traditional U.S. equities. We've had value equities do really well so far this year, in fact, actually better than large growth. And, you know, the private equity and private credit, private real estate and so on have been doing OK. But the real drivers the last few years, particularly the last three, have been sort of just traditional, simple, low-cost U.S. investments. And how exactly can investors, Mike, mimic some of those types of strategies? Well, the new ETF that came out with the University of California for a sleeve of their endowment is 90 % S &P 500. It's 10 % short-term investment-grade bonds and pretty inexpensive at about six basis points.

40:41You could probably do that yourself at 90-10 with a couple of appropriate ETFs that are a little bit less expensive. But my worry is that, you know, that index, that benchmark ETF has now come out and it's, you know, it's got some got some interesting noise to it. But the reason is because U.S. large cap equity defined by the S &P 500 has done so well over the last 10 years. It's kind of been hard to beat. And so, you know, I'd be careful about projecting that 10 years into the future. All right. Our thanks to Mike Vogelzang at CapTrust. We're going to continue this conversation over at ETFEdge.CNBC.com.

41:19Mike is going to be joined by State Street's chief business officer, Anna Paglia, to dig deeper into that college endowment strategy and the added tools, Scott, that retail investors now have to mimic them. I'll send things back over to you.

41:30Scott Wapner: Good stuff, Domino. Thank you, Dom Chu. Coming up next, Marvell's big deal. Shares are lower. We have the setup on Palantir. We have ownership on the desk as well. So we will trade all of that coming up. All right, welcome back. NASDAQ's a teeter right there on the flat line. Had dipped negative, I think, for just a second, but it's barely hanging on. Marvell is one of the obvious weak points today. A lot of the chip names are down significantly, but Marvell's down 10%. of finally doing this deal that was talked about, Lumentum,$80 billion. You own Marvell. I do. You don't like this at all? I don't like the deal, Scott.

42:09Scott Wapner: Okay. They are thriving in optical networking. They've developed strong relationships with companies like NVIDIA. I don't like utilizing your stock, which is clearly at a very high valuation, to buy another company. They're chasing Broadcom, in my opinion here. Broadcom, basically offers you the entire optical networking structure. They unfortunately don't have that. They have got kind of gaps. They're filling the gaps here with this purchase of Lumentum. But I'm just concerned this is taking us back to a prior cycle in the market where we're utilizing all stock to buy other companies at really high valuations.

42:55Scott Wapner: By the way, this was, I think, like a September focus of best stocks in the market for Josh. And the deal closes in 2028. And Steve and I were just talking about that. Steve didn't like that, the fact that it closes in 28 timing with the election. Well, you've got some political risk, right? Why is it down 16 %? Why is that down? Because it's a stock deal. So you've got shareholders that thought it was going to be a cash deal. So they went into it. Now it's a stock deal. And now they don't get the stock until then. Plus, it's also trading off what Marvell's trading off of. Yeah, but a lot of times, yeah, the buyer trades slower.

43:32Scott Wapner: Absolutely. The acquired trades up. Yeah. But that's not the case here. The acquired trades up. The acquirer trades up. Sorry. But the acquirer acquired also will trade down if the stock's trading down, if the acquirer, because it reflects what the value will be getting, right, in some ways. I don't know what the collars are, and I don't know if it's a share count or if it's a value count. I think it's probably a value count. But the point is, it's not closing for almost two years. Yeah, well, the other week, I mean, AMD's down almost five. Micron's down more than four. This one being Marvell.

44:06Scott Wapner: Oracle's down six. Fortinet's down four. A lot of the software names, Okta, Snowflake, CoralWeave's down another 5%. So we'll follow all of that. It's clearly driving what's happening in some respects at the moment with the Nasdaq. Mike Santoli's market memos next. There he is right at the desk, right at the end. How are you? I'm all right. That's what happens. I take the wide shot. I just go to you right here. What are your thoughts? Yeah, I mean, look, a lot of the ingredients for a decent bounce were in place at Friday's close. I think some of them are actually manifesting here. You definitely had, first of all, month end.

44:42Let's remember, March 30 and July 29 were very important trading bottoms for the overall market and the tech trade. You saw some signs of capitulation. I do obviously think everyone's on board with the seasonal idea. It's not getting full traction. And I think largely the inability of semis to rally. Part of it's the Marvell story, but it's not just Marvell. I think that maybe is giving a little hesitation to people who thought we could do that. I still think that you held some important levels last week, 7 ,500-ish on the S &P 500. And the equal weight's up another 1%. So you still have this buying panic in the non-MAG7, non-semi stock.

45:21Scott Wapner: On any other day, I would feel like Apple, which returns to the most valuable company in the market, reporting earnings would be undoubtedly the top story. Yeah, right. And today, relative to where we are, it feels like a sideshow. It does. I mean, I don't think, you know, you have too much in terms of suspense about what they're going to say. And I think because the stock has so much traded as anti-AI, as a proxy, as opposed to for its own corporate fundamentals. I think maybe that's muting it. By the way, a lot of the correlations are all scrambled here. Usually, semis down means Apple up. And also, what oil is doing right now, you'd normally expect Treasury yields to be crashing.

46:01They're not because Treasury yields have been trading with the AI capex sentiment. So I think that also keeps people a little bit apprehensive in terms of what we're supposed to actually pin our relationships to.

46:11Scott Wapner: Yeah. Well, I mean, we'll see what happens tonight. We'll build on the lead up into that a little bit later. We'll see you there. Sounds good. That's Mike Santoli. We'll do finals next.

46:22I do. Listen, revenues are going to be up 85. Earnings will almost double. You have to appreciate the authenticity of not only Alex Karp, but the execution, execution, execution of the team. They are the original AI software stack. So I think the stock long term goes higher.

46:38Scott Wapner: What's your final trade? RSP on the other side, RSP. What goes higher, as Joe said, continues to go higher. It looks great. OK. Farmer Jim was worked up during the break. Sure was. The viewers didn't get a chance to see that. But to my considerable number of doubters, I suggest you look at the forward curve for Steele, Cleveland Cliffs. United Health, it's down. Days shouldn't be. Regeneron continues to move higher. All right. I'll see you in a couple hours' time on Closing Bell. The Exchange is now. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern, only on CNBC.

47:19All opinions expressed by the Halftime 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 Halftime Report participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such.

47:47To view the full Halftime Report disclaimer, please visit cnbc.com forward slash Halftime Report disclaimer. It's the early mornings, the long shifts, packing two days into one, helping your kids with homework and finishing your own before bed. Where others see obstacles, you see opportunity. Collecting wins even when no one's watching. This is what hustle looks like. Capella University keeps up with the way you move, letting you do work in life and learn in between. So go chase that degree and let your hustle make it happen. Capella University.

48:20Scott Wapner: What can't you do? Visit capella.edu to learn more.