NVIDIA Fallout, Anthropic IPO and Hot CPI Hit Markets

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0:58Scott Wapner: Carl, thank you. Welcome to the Halftime Report. I'm Scott Wapner, front and center this hour, this busy day in the market. CPI comes in hot, more anthropic IPO details hit, and video fallout continues with shares lower yet again today. We'll trade all of it with the committee. Joining me for the hour, Josh Brown, Joe Terranova, and Rob Seichen. So we are lower. CPI was hotter. December hike odds, 100%. Yields, take a look at the 10-year. We're showing you the 10. Take a look at the two, because that was another move higher today. Fed Governor Waller opened the door to possible 50 basis points in December.

1:36Scott Wapner: Logan, hawkish as well. So can we show the two-year two, please, guys? Thanks. Anthropics IPO prospectus is out, and NVIDIA is down, as I said, hanging around$4 trillion in market cap. You just heard Carl say that Microsoft is now overtaking NVIDIA in market cap for the first time in a good while. So I thought we would start, obviously, with the fallout around NVIDIA because we hadn't heard from prominent shareholder Josh Brown. We haven't heard from Rob yet. Joe obviously was on yesterday. Get more of his comments first. But we want to hear from you on what you're thinking about all this as it relates to the stock.

2:14So I think sometimes we forget that behind these ticker symbols are human beings, people, and people make mistakes. In this case, it's a huge mistake. The guy is obviously completely out of control. We don't know everything that's going to come out. We know there'll be more. We know that this will end up in front of Congress. There'll be investigations. Then there'll be investigations of the investigations. It'll get political. And you see people just de-risking and coming out of the name because they're saying to themselves, like, what do I need to deal with this for? If you have no sense of whether or not there's some sort of all clear coming anytime soon, you have to look at your portfolio and you have to make a business decision.

2:54It's not a decision of, oh, I forgive Jensen or it's nothing to do with that. This is just about how much money can you make your investors? You run a portfolio between now and the end of the year. You see that calculation being made. What amplifies it, of course, is all the leverage that's both long and short technology stocks, all the programmatic trading. So that'll always take a 4 % move and turn it into 7%. As far as the conduct itself, I mean, the guy is running around, injecting liquidity, training models. He's at conferences. He's meeting with people. He's trying to influence the debate about how much money is going to go into or how many chips he can sell into China.

3:37Then he's dealing with intermediaries who they might be secretly shipping product to China. It's going to be an absolute mess. I don't think it gets better anytime soon. That being said, I'm a 12-year shareholder in this situation. I've been through 70 % drawdowns along the way. I don't think, unless some gigantic bombshell comes out, that he was knowingly doing things with other countries that he wasn't supposed to. I don't think the move is to get rid of him for the board of directors. If that changes, I'll change my mind. But right now, I think he'll make it through. It's going to be disgusting and ugly.

4:14But I'm a shareholder here, and I want to see a positive resolution at some point in the future.

4:19Scott Wapner: Rob Behrens today says, unless NVIDIA removes Jensen-Wong, the stock is worth holding. Jim Cramer saying last evening, investors have to consider owning shares in a Jensen-less NVIDIA. I mean, you have to consider it. Dan Ives says if he's removed, NVIDIA is worth a lot less, 25 to 30 percent less as a stock. How are you thinking about it? I mean, if you ask the question, is NVIDIA worth less without Jensen, the answer has to be probably. He's one of the most important figures in the industry. He's been at the helm of this ship since its founding. He's been right more times than just about anybody.

4:58You can replace the CEO, though, and other companies have done it. I'm not suggesting that that's what should happen here. You look at Apple's made significant changes. Microsoft's made significant changes. Alphabet's made significant changes. And all those companies have been massively successful. But what you can't replace is CUDA, which is their development architecture. And that is simply the AI operating system. Every developer learned on it. Every model was built on it. and it only runs on NVIDIA chips. So that doesn't walk out the door if the CEO leaves, in fact. And look at what the market did Monday.

5:41It didn't sell AI. It sold this stock. It sold one ticker and bought the entire rest of the menu.

5:50Scott Wapner: Right now, it is sort of treating it as its own idiosyncratic thing. Now, the stock is at the lows of the session now. It's down almost 11 % over the last two days. And 11 % on me. I bought it last night for my personal account. We own it in size. You bought it last night personally. What did you think? That that was the worst of the reaction? It was overdone? Which is interesting because, as Josh has said and others have as well, there's a lot we just don't know. 100%. And this is right at the beginning of the investigating. It's early. In a lot of scandals, though, they fire the CEO. It's like a clearing event and the stock recovers.

6:34I think it would be the opposite in this case. Like, I think a lot of people can say two things at the same time. They could say, OK, that's obviously horrible judgment. I really wish he hadn't done that. And yet I hope he survives because he's like part of the maybe the main part of the bull case for NVIDIA, the company's future. So let me tell you how I thought about it. Again, for me personally, we're slightly underweight in our portfolios right now, NVIDIA, but I wanted to top that up. Personally, we're thinking about it more broadly, okay, because where the valuation is, and I think we want a little more information on this.

7:15But this is a governance discount. It is not a demand discount. We are not seeing any changes in demand, as is evidence. It may even be beneficial to the rest of the AI ecosystem from a pricing standpoint. So I think this could be something that balances the deck a little bit. You're going to have more pricing power potentially from the other parts of the AI ecosystem as a result of, you know, they're not changing the fact that they get 50 cents on every AI dollar spent.

7:50Scott Wapner: No, but it does in some ways, you know, Dan Ives, for example, is the one who calls Jensen Wong the godfather of AI. OK, if you want to continue with that and suggest, you know, if the godfather's got some problems for a while, it opens the door to other families in a power vacuum. Put up AMD, put up Broadcom, put up Amazon for that matter. Let me finish with its TPUs. The market is obviously, AMD's taking a big leg lower, too, and even Amazon. We'll look for some news to see if anything has come out in the last couple of minutes that has caused a drawdown in some of the stocks that were up a bunch, including NVIDIA.

8:39Scott Wapner: But the market is trying to assess whether the competitors are going to have an advantage or at least be able to make up some space while NVIDIA is embroiled in this investigation and it perceives Jensen Wong to be certainly under fire, if nothing else, through this whole episode. As a company goes through its evolution, I'm going to say the founder and most important shareholders are central in early success, and in this case, in success on an ongoing basis. But we have not seen a bench takeover here. And the reality of it is I don't suspect it's going to happen unless there's some news, some more shoes to drop, which are going to take Jensen out.

9:28I don't think that's going to happen personally. But let me tell you something. There is depth in all these organizations, all of them. Another layer down, you look at Steve Jobs and Cook taking over. You look at any of these companies, there is depth there. These are not one company people. They are driven by that entrepreneurial spirit, that enthusiasm that pushes the business forward, that vision. But it takes execution as well. And I think there's depth at that company.

9:59Scott Wapner: I mean, Ben writes, as of Melia, says, suddenly NVIDIA must prove it's more than a one-man show. While it may be awkward to address it now, NVIDIA management and its board do need to find a creative way to trot these folks out and shed more light on how it executes and makes critical decisions beyond the man in the leather jacket. It's essentially what you're going as far as to say they have this person, and all of this conversation could be premature anyway. But nonetheless, people don't know who this person is. And people also have talked, including there have been news articles written about the lack of a succession plan that's credible.

10:34Scott Wapner: Seaport today says sell. $180 is their price target. We think there's a non-zero risk that the political climate forces Jensen from his role. Citi cuts the target to$285. Wells goes to$300. That's a cut there as well. B of A removes NVIDIA from its U.S. one list. They still like buy. Citi likes to buy. Wells likes to buy. But everybody sort of tempers, Joe, their expectations of what's going to happen, at least in the near term to medium term, because of the overhang that undoubtedly is going to exist. So I had the benefit of being here yesterday and to share my comments, and it's good to hear Rob's perspective and Josh's perspective.

11:08You cited what the analyst community did, and I think the comments from Josh and Rob and what I said to you at the top of the show yesterday are indicative of how discretionary capital looks at NVIDIA. It's indicative of how retail looks at NVIDIA and the analyst community. Yeah, there was some minor tweaks as it relates to price targets for NVIDIA. But if you look at yesterday, coming into the day, 78 % of the analyst community had a buy rating on NVIDIA. Today, we're still at 78%. The 12-month price target yesterday was$324. Today, it's$320. So the question is, and you want to put this into context, who was actually the aggressive seller of NVIDIA yesterday?

11:49I had several conversations, one of which was with a very large high-frequency trader, not Virtu Financial. I'm not going to reveal the source. and I can tell you that they don't look at the fundamentals. They look at the pure price action, which looks awful. We are very close to a 52-week low at 164.27. You break below that low, you're going to see a lot more of that quant, non-discretionary capital move to the sidelines. And I think that, in fact, over the last 24 hours, is what the majority of selling actually is.

12:21Scott Wapner: Let's get the real-time market cap on this too, guys, if we can get a chart up on that, because it was barely above$4 trillion. And we mentioned Carl did about, you know, Microsoft topping NVIDIA for the first time in an awfully long time as well. So let me finish this thought because I want you to react to it, both of you. In the conversation that I had, they said, well, we heard you on CNBC essay say it's not a momentum stock. Well, it's the momentum stock. It's a momentum stock. Well, not anymore. It was. Well, hold on. It's a momentum stock to the entire financial services industry because it is so critical in being a catalyst for AI.

12:57And because I think you called Jensen Wang the Federal Reserve chairman of AI. OK, but yet in reality, purely looking at price, it's not a momentum stock. No, the stock over the last six months is down like 20 percent. If you go back to July 15th of 2025, the stock is basically unchanged. So I think it's important to put into context and for all the viewers to understand. I don't know what the outcome here is ultimately going to be, but I'll tell you this. Retail, long-term capital, discretionary capital, the wealth management industry, they're sitting with their positioning. It really was systematic, quant-driven trading that we've seen over the last 24 hours.

13:35Scott Wapner: I'm surprised you haven't bought more. You tell me you bought more Broadcom, to be honest with you. Like instead of instead of trying to, you know, wade into this mess, as we said at the top, you might hear that later in the show. No, but did you do that? We it's our final trades. What does that mean? You can do your final trade now. Does that mean that you did something with the stock? So, no. What I will tell you on Broadcom is I think this is a company that is going to be a beneficiary from any woes in NVIDIA because of the custom chips that they make. Look at the week to date. The stock is up 11 percent.

14:12Scott Wapner: AMD is up 14. The market's trying to make some kind of bet. Yeah. And it's it's the custom chips. It's a data center networking software. They're just all throughout the build out as well. It's just that NVIDIA sits at the top at the top of the stack. So I think they are they are playing both sides. Their custom hyperscaler chips, data center networking software, their exposure to the AI buildout is as strong as anybody's. And there was a referendum on that yesterday, which said we emphatically believe that this is still OK, even if NVIDIA is not. I think the good news is that, you know, we listen to a lot of people make the statement that AI is all one trade.

14:58The Mag 7 is all one trade. Nothing right in this moment could be further from the truth. The AI mega caps are not one trade. If you actually look year to date, NVIDIA is down substantially. Microsoft is sitting on a 12 % gain. Alphabet, 8%. Amazon up 17%. Meta down 2%. Broadcom down 5%. Tesla down 16%. On what planet is that all one trade? Investors are making rational decisions. is not being driven by flows into the triple Qs or other ETFs.

15:32Scott Wapner: I think maybe part of the point, though, is not so literal as an actual trade, but more so it's been the heartbeat of the story itself for the very point of the circular nature of the deals. The tentacles are all over the place. It has been the heart. But just even taking that back a step, there's only one sector that's down on the year. It's communication services. I think we all understand why. Meta is a really big part of that, of course. Netflix is in there, right? There's money being made. 69 % of S &P 500 stocks are above their 50-day. That's two-thirds of the market in a pretty good short-term trend.

16:16And then when you look at energy being the best sector this year, up 37%, and my best stocks in the market list littered with energy stocks. Like people are making money elsewhere. The world is the sun does not rise and set based on what's happening at NVIDIA or any other gigantic A.I. company. And I think for investors, that's really the takeaway from this. A really bad thing, unforeseen by most, could happen at any one company, even the largest company in the index. And it doesn't disrupt an entire portfolio if you're invested correctly.

16:57Scott Wapner: I mean, you'll wait for other things in the area. What about my Amazoners? What about thinking about that? I don't know. Are people done making fun of me because I liked it for the earnings? Because now the stock is up 32 points off its low. And it's the best of the hyperscalers on the year. I don't know. Could somebody there be sleeping with a Chinese spot? You know what I mean? Bad things can happen to any one individual stock. But I think people that are invested in the AI theme, they own Microsoft, they own Amazon, they own other names. It's not just only NVIDIA, and you have to live or die based on that.

17:35I think, though, what has happened since the end of June is that the investor community has traded up into a higher quality for the AI trade. 100%. And that's why the Amazons are benefiting in some of the names that you're cited. I mean, you look underneath the hood. The neoclouds are trading awful. Scott, I know you probably want it. The SoftBank news last night was not good.

17:54Scott Wapner: Well, the GE Vernova is what you're alluding to, is they made some comments related to a large gas turbine order. Take a look at Vernova. It's a big time drag today, down 7 percent. Maybe some of the other names in the space are down in sympathy as well. SoftBank making a statement, quote, we've revised certain power generation equipment procurement strategy. As a result, we recorded a loss related to non-refundable advanced payment and modifications to the signed contracts. It's directly impacting GE Vinova, which is already substantially off of its highs. A procurement problem is not a power problem.

18:32An unpowered data center is just a warehouse. I mean, worrying about how you get the power is totally different than there being a problem with that ecosystem. Well, isn't there already a problem with the ecosystem? There's two separate things there. First of all, you're 100 % correct. As it relates specifically to GE Vernova, 80 % of their slots are sold through 2032. to. And you would have to tell me that if there's cancellations, that the hyperscaler is going to step in and say, OK, we're going to buy those slots. I think the bigger issue is you look at SoftBank and they take a$3.7 billion right down.

19:13And I think they are indicative about of how sovereign wealth funds are invested in the U.S., in the data center story build out, in a lot of the AI trades when the valuations are beginning to come down. So that's a little bit discouraging to here. And I think it's indicative of an overall environment that says, wait a second, temper the enthusiasm surrounding what AI looks like in 27.

19:36Scott Wapner: Well, I mean, don't don't you mean, the calculus has kind of changed a little bit already with the result of the midterm, don't you think? Yes. Well, you can see we talked about you could see that in SanDisk. You can see that in Seagate and Western Digital. But they didn't believe it. They went into the midterms already in big drawdowns with massive multiple compressions. Some of these are selling and PE ratios under five. The market never believed that the pace of 24 and 25 would be kept up in 27 and 28. Micron is still up 150 % on the year. Tells you how far that stock went. Dell is still up 163 % on the year.

20:13SanDisk is still up 250 % on the year. But right before our eyes, we're seeing the best trade of 2026 being unwound. And I think that speaks to what Scott is talking about. just this idea that we thought these stocks might have been bargains in October. Maybe we don't think so anymore because the political calculus is going to change the trajectory of how much actually gets built next year. It's going to change the timing. It is not going to change final demand. You're looking at the amount of compute that's needed. Those that are going to benefit from it are going to be the stronger ones because they're able to finance it.

20:55They have the political connectivity. They have everything they need to do it. Those that are going to struggle are going to be the core weaves of the world. Those that are worried about getting financing from NVIDIA. It's a have and have not market, just as Josh said. And I think it's made the have stronger. It's made the pie, as you said last week, much narrow. I don't think it's made it as narrow as you said, because there's a lot of businesses that are financially healthy, and can secure financing. You look at even on the power space, these companies are incredible. EBITDA for Vistra is up 50 % year on year.

21:35It trades at 13 times earnings. They're buying back stock. They're paying dividends. When you're that financially healthy, you can do a lot of things to drive value to shareholders.

21:45Scott Wapner: Well, speaking of companies that are healthy, financially, Anthropic. We got the updated prospectus for the IPO, which is going to begin trading next week. Leslie Picker has more on everything we need to know and the numbers that do matter most. Hey, Scott. Yeah, Anthropic is launching what could be a record-breaking IPO here. Based on the terms this company set this morning, Anthropic said It plans to market its stock between$70 and$78 per share for a total of about$64.4 billion. Additionally, the company has signed up a whole host of strategics, including AMD, Broadcom, Google, Micron, Microsoft, NVIDIA, and TSMC to invest another$26 billion in a private placement.

22:34So if you include the green shoe at the high end of the range, the total offering size would be about$100 billion. Now, today's terms imply a fully diluted valuation of$1.4 trillion at that high end of the range. And on a pro forma basis, post-IPO, Anthropic would have about$210 billion in cash. I'm told that speaks to what you were just talking about, solidifying it as having the third largest cash trove in America. In chatting with a few sources this morning, it sounds like they've already covered the book from an institutional investors at the$70 to$78 range. So they're technically oversubscribed before even beginning to market this offering.

23:17And I'm told that demand is actually stronger than SpaceX was at the same point in the process. Both conducted many of these so-called testing the waters meetings in the months leading up to their respective roadshows. And I'm told that the goal here is to have about 20 % of the market offering go to retail investors, including those from abroad, as well as U.S.-based brokerages. Anthropic will spend the next seven days marketing the offering, kicking things off today in New York. Here's some exclusive footage we were able to get of Morgan Stanley, which reportedly hosted CFO Krishna Rao at their offices.

23:53Anthropic is planning to price Wednesday night, next Wednesday night, and begin trading on Thursday with a listing on the NASDAQ, Scott.

24:00Scott Wapner: All right, Les, thank you. That's Leslie Picker. So I said this last week and people got mad, but I still think it's true. The purpose of the offering, I think, is to be the quote unquote safe AI LLM, you know, frontier lab. Like get there before open AI, have there be liquidity for long term shareholders. They started the company 10 minutes ago, but fine. Long term employees who've been working there, they're watching the value of their equity go up on paper. I talk to these people. I know that they not that they want to sell all their stock, but just seeing that public ticker, knowing that liquidity is coming.

24:38That's super important for people who have worked so hard to build this company. So that's going to happen. And then you have people say first evaluation was one point five to two trillion. Now they're zeroing it on one point three. And they think like, oh, it's a victory for the people that have been bearish on it. No, it's not. Guess who? Guess who sets the price? It's the investment banks communicating to the company. This is the price we're willing to buy it for on the IPO. The investors who are going to buy in the secondary market are setting that price through their mouthpieces in the syndicate on the investment banking teams.

25:15It's a very positive thing if the price comes down. It's not better if it comes out at$2 trillion and then proceeds to drop 40%. It's better if it comes out at$1.2,$1.3, and then it can pop in the aftermarket. The employees win. The venture capitalists win. The executives win. The underwriters win. The secondary market buyers, the retail, everybody wins if the price is at$1.3. Nobody wants to see$2. So I think it's very positive this can happen. I'm not telling you it puts a floor under Nebius or CoreWeave. I'm just saying we want to see this happen. But it is obviously the best barometer for the AI trade.

25:58At the moment. The state of the AI trade. This is a generational company, just like SpaceX was. $10 billion in new run rate in one month. While$1.4 trillion may seem like a lot, that run rate's tough to ignore. Right? And underwriting the contracts and not the dream is what this is about. Let me give you a statistic on this. 75 % is enterprise revenue. Nearly 12 ,000 customers spending$100 ,000 a month. And a 900 % net revenue retention. What that means is on average, those customers are spending nine times more one year later. That is a ridiculous statistic. I know we are big customers of Anthropik and Plot.

26:49So you're going to buy it on the IPO? I think I would, yeah. I think I would.

26:55Scott Wapner: Well, you're lucky you answered it like that, because if you made that whole case and then you said I wouldn't. I think I would, too, but I don't know where it opens. This thing could open up 50%. I'm just saying, man. There will be some incoming. I'm a fan. In the 70s, there's decent value based on, to your point, the annual recurring revenue and the growth of the recovering revenue up to$81 billion. Read the Goldman Sachs report. Yeah. 2030, free cash flow positive. That's pretty fast. All right. Well, we've got calls of the day coming up. Josh Brown's best stocks in the market ahead as well after this.

27:32Oh, look You just got added to a meeting About coordinating another meeting To prepare for the pre-meeting Ahead of the follow-up meeting Which will, of course, require a recap meeting And then another meeting Hit your booking point Book with Southwest and enter airplane mode.

28:24Wherever you get your podcasts.

28:31Scott Wapner: Let's do some calls of the day. Carlisle got downgraded today to neutral, was by target 47 from 60. That's at UBS. Our confidence in Carlisle Group's growth profile and path to its 2028 financial objectives has diminished. You're on the stock. Yeah, I've been in the stock for a very long time. I actually agree with the call. I think it's going to be a difficult environment. It is that way for all private equity and private credit firms. I think the wealth management avenue for growth is obviously materially slowed as people ask second and third questions. Do I really want to do this? Do I want to do this in size?

29:11And then I think rates are a challenge for privately held companies and companies making investments in those markets. So I'm remaining a shareholder, but I don't think there's any race to buy the stock right here. Okay.

29:22Scott Wapner: Ross Stores got initiated today overweight. Cantor Pettitolo, TJX did as well. They go neutral on that one. 276 on Ross. 139 on TJX. Joe T owns both. A little bit of a different story for each of these names. I think the better opportunity sits in Ross Stores. They seem to be capturing significant market share for off price. TJX, which has been a favorite name of mine over the last several years, It's been struggling over the last six months. I think it's probably seeded a little bit of the equity flows to Target, which has had this revival in 2026. So I think the story right now, if you analyze the three names, really, it's Ross and Target.

30:06Scott Wapner: All right. MasterCard. City's bullish. Reiterates their buy. They raise the target. Eight hundred bucks was 675. Let's see MasterCard, MA, please. So that's a 22 % upside. Again, 800 from 675. We agree 100%. We increased our exposure back in May. The stock is up 33 % since that addition. I think this is all about being the beneficiary of a resilient consumer. And they have 90 % of car transactions outside of China. It's a great toll booth for global spending. Sneaky inflation hedge, too. As the cost of everything goes up, that's a higher interchange fee on those higher dollar amounts. I know this won't be popular with a lot of people, but these credit card stocks have looked really good as a result of that.

30:59Scott Wapner: Give me Delta, guys, please. Reiterated buy today, Rothschild. Oil coming down, obviously good for the airlines, and they like it anyway because of its diversified business model. Again, they own a refinery, as all of you know. They say it's best place to weather any continued volatility in jet fuel, probably as a result of that. I think Q4, they're going to shoot the lights out. Give me a three-year chart on Delta. We have a pending potential breakout here. 92, 93 has been resistance multiple times. I don't think that they can hold the stock back below this level for very much longer. The oil thing is obviously going to be the wild card.

31:35if there's some sort of conflagration restarting in the Gulf of Hormulis. They'll knock all these airlines down, but it'll probably be temporary. Delta's business is in great shape. I believe in the strategy of catering to the upper end of the K, and I think this will be a triple-digit name. I am long, personally. Joe? Yeah, I agree with that. I think Delta is the clear winner. They've captured significant market share domestically and international, and when you look at the airline carriers, it's the one name that you want to own has the momentum. Give me something on Walmart.

32:05Scott Wapner: Mizuho today goes to 135, 10 bucks up from 125. Hit the target, obviously. Exceeded it. They bump it up by 10. Reiterated, outperform. Yeah, it's really Walmart, Costco that have come back aggressively here since Labor Day. They've come back, number one, benefiting from some relief as it relates to tariffs, but also really coming back in taking advantage of the significant market share that they have. overwhelming market share relative to the rest of the retail space. Strong economy going into the holiday season. Walmart looks pretty good to make a new high. All right, we'll take a break. Josh Brown's best stocks in the market coming up.

32:44Scott Wapner: He's watching three names today during this recent market volatility. Tell you what they are next.

32:56Oh, look, you just got added to a meeting. about coordinating another meeting to prepare for the pre-meeting ahead of the follow-up meeting, which will, of course, require a recap meeting, and then another meeting. Hit your booking point, book with Southwest, and enter airplane mode. Which NHL teams are scoring big off the ice? CNBC Sports' Michael Ozanian has the numbers. If a dot margin in the NHL is right there with the NBA. Official NHL team valuations revealed Friday in Squawk Box on CNBC.

33:41We're back on Halftime. I'm Contessa Brewer with the CNBC News Update. The House Oversight Committee is calling on the Justice Department to interview key witnesses in the investigation into the late sex offender Jeffrey Epstein. The Republican-led panel released a scathing report today saying the government failed survivors. Democratic committee member Robert Garcia criticized the report, saying it was based on an incomplete investigation and zero public hearings on Epstein. The Trump administration proposed a new policy today to restrict the number of people eligible for food stamps. The new rule targets the more than 40 states that allow participation in SNAP to households that receive aid from certain other assistance programs.

34:23The Agriculture Department estimates the change would affect more than six million people. And progressive Democrat Ro Khanna just posted on X that sport prediction markets are sports betting disguised as financial trading and that Congress must ban them. Khanna argues the prediction markets disregard state and tribal gaming laws, siphon off state tax revenue and fuel addiction. and he's not the only notable Democrat to signal intensifying scrutiny for those prediction markets here, Scott.

34:54Scott Wapner: Okay, Contessa, appreciate that. Thank you. That's Contessa Brewer. Let's do best stocks in the market. Three stocks. Yeah, so these are three names. One of them is still on the list hanging by a thread. The other two got wiped out. And we talked about the two that got wiped out relatively recently. So I wanted to close the loop for people. Palantir is down 20%. since the October 15th write-up. We've seen the stock fall from 200 to 160. We were talking about a stop at 185. You would have been out of the trade almost instantly, unfortunately. It was just one of those situations where the market started to fall apart.

35:31This is a very high beta name. So what we do, the best stocks in the market list, when we talk about a setup, we tell you where we're going to be wrong, where the market has changed its mind. And that would have worked out okay with Palantir. Okta's the other. This one was worse, down 24 % from the day we wrote it up and came on the show, which was October 29th. That one happened almost overnight. This name is now 28 % below. It's a$235 share breakout high. This is going to be a while before it gets back onto the list, in my opinion. It could end up being wrong, but we're taking a lot of the signal here from price.

36:08The interesting thing on both Okta and Palantir, earnings had nothing to do with it. They both have incredible fundamentals. They both had blowout earnings reports. So what this is really about is the market reacting and sentiment being more important than fundamentals in the short term. And this is why the stops are so important when you're trading a setup, different from investing. The last name is HPE. This one we brought to viewers back in September of 25. I think the stock tripled. It was a home run. But the message here, what we wrote about, is the way in which things change and the necessity to be vigilant with stops and continue to raise them, trail the price, even when you're way right, which we were.

36:54Don't want to see a winner turn into a loser. We wrote this up at 22. It's back here at 46. Had traded as high as into the 70s. And this is why we preach. You're talking about trading in distinction from being an investor. You absolutely cannot be in these situations naked because look how much could change with sentiment with no concomitant change in fundamentals whatsoever, Judge.

37:16Scott Wapner: So you got Palantir and Okta and HPE. Rob, you just have HPE. So you got all of them. The three of these are also, you know, in the technology bucket. So it's not just idiosyncratic stories. It's about technology selling off as well. In the case of Okta, it also reacted to Fortinet's horrible earnings. You're now coming into the earnings season. You're going to hear from Palo Alto, CrowdStrike, and Okta on December 1st. Maybe that acts as a catalyst. Long term, I think there was nothing wrong. I agree with Josh on Palantir's earnings. HPE, the jury's still out. It's losing its status as a momentum stock.

37:51You know, on HPE, I think it's a fantastic business. It's doubled this year and still trades at 10 times earnings. It fell 30 % from the October peak. I think it gives you an opportunity to take a look at it. It's the plumbing for the entire enterprise AI. This is not a neocloud borrowing to build. This is servers, storage and networking business. They run their own AI data centers. Hyperscalers was the first wave. Enterprise is next, and it's barely begun. I like this company.

38:22Scott Wapner: Sometimes you just become a victim. I think you were alluding to this, and maybe you two were, Joe, as well. Just bad price action, bad time. Bad time to, you know, your earnings. There were so many companies through this season tech-wise that reported really great earnings and had really lousy price action just because the market just didn't want to hear it at that moment. So, you know, it's so funny. A lot of people, they try to write about quality companies and they try to write about these are the good companies or this is great management or this is the best product. We go in the reverse direction.

38:56We start with price and then we look at the quality and we look at the other aspects of these companies and try to figure out why the price is acting so well. It's that when I when I explain it to people, it sounds so intuitive. Almost nobody does this. Really? Yeah. So no one looks at momentum and then looks at quality? Well, one person I know. OK. Most people, they're like, well, what's the best?

39:21Scott Wapner: Weird, though. What's the best company? Then I'll try to, like, figure out, well, what's the price doing? So I, there's another way to time out. Palantir's earnings, I think the earnings are 100 percent or revenues are 100 percent. There's no better. There's no better fundamental story than that. The problem is people go the opposite direction. And I think what we want to do here is we want to say the market is going to be very indecisive at different periods of time throughout the course of the year. So you have to have protection, regardless of how much you fall in love with any one ticker. There is.

39:54I got it. I got to go. Make it real quick. Just make it. There's another way to do that. It's to it's to look at the fundamentals and then see if the price action supports it.

40:01Scott Wapner: All right. We've got some news from Anthropic that's dragging Microsoft lower. Dom Chu has that for us. What do you see? All right. So here's the reason why, Scott, because Anthropics Clawed, the ever popular chatbot, has just announced that they are going to unveil a new set of office productivity tools, something called Claude Sheets, which helps build spreadsheets, Claude Whiteboards, which is a digital whiteboard that your team can use to lay out and organize ideas and meetings, and Claude Data, which connects things like Salesforce and Snowflakes so you can make better kind of data visualization type stories.

40:37Many of these items are seen as direct competitors to office productivity tools currently offered by Microsoft and to Alphabet and Google, right, Google Docs and their suite of office productivity products. They are also saying that they are going to be unveiling at some point down the line, Claude Meetings, which could be a competitor to a company like Zoom Communications, which is the reason why you're seeing Microsoft, Alphabet, and Zoom Communications all responding negatively in just the last few moments or so to these headlines coming out. But again, it's the reason why is because Claude is unveiling these competitors, or likely maybe competitors, to other offerings currently on the market from Microsoft, Alphabet, and Zoom.

41:17We'll continue to monitor some of these headlines, but you're seeing, Scott, an immediate market reaction in some of these mega cap names. I'll send things back over to you.

41:24Scott Wapner: Dom, thank you so much for that, Dom Chu. I mean, Anthropic and Open, they're just coming for everybody with everything. They're going to become SaaS companies. I'm just thinking they're like enterprise supermarkets. And they're trying to bring you every conceivable product that you could wheel your cart down the aisle in need of. What's interesting is that the software names got some relief in the wake of the midterm election because the belief was less spending. The disruption doesn't have happen as fast as the street anticipated. I take the other side. I've been on the other side of the software trade all along.

41:56I still think there's a lot of headwinds in front of them. And this is just another example.

42:02Scott Wapner: I mean, to make you start, look, we've had these moments too. I mean, you know, but they've proved a little bit fleeting. I just always remember the cyber moment. You know, what was that, six months ago, 10 months ago at this point, where all the cyber names, if you throw up the cyber ETF, it probably is a good representation of anything over, not an intraday, over a year to date. And, you know, you had that dip when, you know, Claude's going to do something cyber related and the stocks all go down. and then you finally realize, all right, I think there's enough room for everybody to play in the sandbox here.

42:40Scott Wapner: And then the stocks recovered dramatically. Or combinations of some of these businesses. Some of these software companies are so endemic in the things that we do every day. It's kind of tough to re-engineer the plumbing on top of those things. I think the combination thing is right, because we saw Salesforce make a huge deal with with Anthropic, like you're going to see more of that. And maybe that's a prelude to Anthropic basically eventually swallowing people up. That's the call. There'll be some survivors, but, and I'm not saying that these companies go to zero, but you can't tell me that Adobe or Intuit, the all clear has happened for those companies.

43:22You cannot tell me that an Anthropic Salesforce combination wouldn't be one of the most powerful businesses in the world. I'm okay with that.

43:30Scott Wapner: Take a break. We'll do Mike Santoli's market memo next. Senior markets commentator and overtime co-anchor Mike Santoli has his market memo headlined with what? I mean, the tests keep coming. You know, I thought yesterday, finally, you got a response. It was pretty assertive to, you know, oversold conditions, washout. A lot of people pointing to last Thursday as maybe pretty consequential in terms of a cleaning out. But I think, you know, there was a little bit of a forced rotation into the non-NVIDIA semis yesterday. And so that's wobbled this morning. And then we got this little macro jolt. The two-year yield is like up 20 basis points.

44:10And so all of a sudden, you have this other offset out there. It's sort of like, is the Fed going to be pushing against the AI theme as well? So far, I don't think there's any reason to say that, you know, yesterday was just a blip. Half the decline in the S &P right now is NVIDIA still. But the tension between NVIDIA and like the equal weighted semis, I just wonder how wide that can get that gap in performance before it all, you know, kind of comes together.

44:37Scott Wapner: Yeah, I mean, you've just got to continue to watch this slide in NVIDIA, which is now 6.5 % down again. And just think about how long the market can in some ways continue to distance itself from that or once it starts to sort of bleed into other areas. This market in recent months has proven it's really had an incredible ability to just sort of put a fire break around certain areas. But I really think last Thursday could have been like the low in correlation and the high in that rotational mechanics. I don't know if that's for sure to happen. But you had your first 80 percent down day. Yesterday was almost an 80 percent update.

45:15So maybe stuff's a little bit more correlated than it was. Also, you know, NVIDIA presumably in the buyback blackout before earnings. So they can't get in there and protect the stock.

45:25Scott Wapner: Yeah. And also, I mean, it's funny you mentioned the blackout because earnings are on the 17th. It limits the ability of Jensen Wong to speak publicly as you lead up to that. So it's a vacuum, which is the last thing you want in a time of corporate crisis to have a total vacuum from arguably the most important person and the most important company in what we're talking about every day. Yeah. It just adds to the uncertainty that exists. Offsetting that, I do think Anthropic, its plans, its timing, the numbers are net positive. They should be reassuring to the market and the AI trade, I think. Yeah.

46:02Scott Wapner: All right. I'll see you later this afternoon. Mike Santoli. Oliver is next. Options action.

46:09All right.

46:09Scott Wapner: To Chicago we go. Options action with Oliver Rennick from the SIBO Global Markets. What do you see today? Hey, Scott. The options reaction to today's bond market sell-off is really interesting. The first thing that stands out is hugely one-sided action in long-term treasury ETF TLT that is bullish. Of the 300 ,000 options traded on TLT, 170 ,000 were calls, 130 ,000 puts. But of the 170 ,000 calls, 100 traded on the ask or above, which means it looks like they were likely initiated by buyers. One-third of all options trading on the ask for any ticker is very lopsided and bullish. The biggest buying happened at the 82 strike, which is where TLT was yesterday.

46:53But if we turn to credit, it's a very different story. LQD and HYG are both doing heavy volume, twice the usual in LQD. And here it is almost all puts of 116 ,000 contracts traded on LQD. 114 were puts, the most popular contract, the 101 strike in May, which is about the one year low. and in HYG, it's also bearish and also worth noting. Small caps in the mix, too, often implicated by rates. Scott, there's twice as many puts trading as calls in IWM today.

47:27Scott Wapner: All right, Oliver, appreciate you. Thank you, Oliver Rennick. We'll do finals after this break.

47:33Scott Wapner: We'll track the market over the final stretch. Sherry Paul, Chris Harvey, Jeff DeGraff. I hope you'll join me as well. Three o 'clock Eastern time on the bell. Robert, now you got to change your final, don't you? You could pick either. Oh, you're still doing it. I'm still doing it. Okay. Broadcom, semis are trading one of their widest discounts to the S &P in two decades. Just to reiterate, you bought it personally? I bought NVIDIA personally. Oh, and personally, right. Okay, my bad. You'll tell us when you do this one. Joe. EQT, natural gas. This guy who, right, this is our momentum quality guy.

48:07Scott Wapner: Forget, Joe? I'll never forget. What do you got? I think Amazon's going to make a run at this 275 high, possibly breakthrough. I like it. Kelly, take it away.

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