Will the AI Trade Resume? The Investment Committee Weighs in 10/21/26

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0:54Scott Wapner: I'm Scott Wapner, and you're listening to CNBC's Halftime Report, the podcast, the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in. Carl, thank you. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, why one well-known market strategist says the much-debated AI trade will shortly resume. We'll discuss and debate that call with the Investment Committee. Joining me for the hour, Joe Terranova, Kerry Firestone, Jenny Harrington, Steve Weiss. Check the markets. We're green across the board. Yes, SpaceX is a help. So Supermicro and the guide that we got.

1:33Scott Wapner: Ben writes us of Mellius with a positive note on what the optimism there means for other names. It's all adding up to a pretty good day thus far. It is Scott Rubner of Citadel Securities who says, quote, everyone is using the midterm elections as a level that is a clearing event for risk. And specifically, I think that's the period when AI can outperform again. And the feedback we're getting from our clients is, quote, happy to buy higher, but not buy now into a major political event. That really matches what you've been talking about as you look at me incredulously. Like, where's the pat on my back, Scott?

2:09Scott Wapner: Yes, you should have seen the look. I mean, it was incredulous. As I said, one well-known strategist. And he's like. So am I popping on closing bell or halftime tomorrow? Please go ahead. I'm going to add a semi-equipment name. Please, go ahead. Because I think tomorrow I'm going to be adding a semi-equipment name. So, Kevin, I'll let you know and I'll be jumping on. I want the AI trade. I want the AI trade because everyone has run for cover. They have run for cover and the positioning is incredibly light. It is the hedge fund community. It is the portfolio manager community that is engaged in mutual funds.

2:47They've run for cover. And what we're witnessing is that the earnings growth is going to be there And they are going to have to quickly rebuild positioning as we move through the early part of November. And you see the optimism return once again as we close out 2026 in a very strong way. I want the A.I. trade. I want the momentum factor.

3:09Scott Wapner: What about you, Kerr? I mean, do you see it the way that Terranova and Rubner do? Clearing event for risk midterm right back to the A.I. trade? Well, I don't know that I see it as great as our fantastic market strategist just described it. I would think that we've had a little bit of a pullback. It's a sort of retest whether we have good enough earnings, which we're going to start with tonight with Meta over the next week to show whether they deserve the trust of the investors in a large scale. Remember, we're talking about, you know,$30 trillion of market cap in the top 10 names of the S &P. And you move that by 10 percent by a lot of money going into the market.

3:54It's not as if you've got a couple of funds trading stocks. We have to have big market moves. A lot of people also adding to the 401ks, feeling good about what they've heard. Are we going to hear good news? We're going to find out tonight. Probably we're going to hear that Muse has done a great job for meta and boosting interest. I'm not sure if that translates into earnings growth. We're going to hear about CapEx, which is the big factor that has held back some of the trade because they're spending so much. And that's using up all the cash flow. But the PEs have come down. The only one with a three in the PE is Apple of the big names.

4:34You know, NVIDIA is in the teens. Google is in the low 20s. They've all traded down to peas, which are reasonable in this market if we hear good numbers over the next 10 days.

4:48Scott Wapner: You know, Weiss, you've been the one who's gotten a little more cautious, I think, on, I mean, not I think, you said as much the other day when you were on. You've lightened up pretty much across the board with your AI-related positions. Did you disagree with Joe and Rubner at Citadel Securities? I do, because I don't think it's that simple. It's never that simple. So with all due respect to Oz Perlman over here looking into the future, you know, the future I looked into showed a decline in ownership. However, to say as a generalization, everybody's run from the trade is just flat incorrect. And I know you didn't mean to put that, you know, with a fine point on it.

5:25That's what's happening. I think there's been a rationalization of positions in terms of the size, the concentration. I also think there's been rationalization in terms of the quality of the names that you put in your portfolio. So do you want a core weave or do you want an NVIDIA that's selling at 10 times next year's numbers, January 28th? So I think that's what's going on. I don't think that you're going to see a clearing event with the elections because you're going to want to see how Anthropic does on their IPO. You're going to want to see what happens with rates and the funding that's going on, the circular funding, and where the weaknesses are there.

6:01And that's not going to play out with the election. The election, if you look at Kalshi and the others, it's already a fait accompli that the Democrats are going to take over both the House and the Senate. And you see it playing out in defense stocks. So the point is, look, I continue to say this. I'm not saying the AI trade is done. I'm just saying it's a time where the tide is not lifting all ships. And you've got to be careful what you go to. So I'd rather be in companies such as, you know, Meta, such as Alphabet. No, I know.

6:35Scott Wapner: But even in that regard, you said the other day that even with the stocks that you like, that you've lightened up all of virtually all of those positions. Didn't you? That's what you said. I didn't say I said I lightened up on the trade. So I sold Vertiv. I sold some others. But Meta, no, I said it's still one of my largest positions. It remains a Taiwan Semi, aside from shaving it like six months ago, which turned out to be a mistake. You know, it's not all that far from here. It is my largest position. So I'm still there. I'm just focused on the companies where valuation supports what they're doing.

7:08And they are on the other side of the CapEx cycle with products. So, look, I prefer to see cash flow. So I look at an EBITDA multiple. I'm looking at the EBITDA multiple of NVIDIA right here, which is 10 times next year. You don't have an EBITDA multiple on CoreWeave. You don't have one on Anthropic. You don't have one on OpenAI. What you do have is Anthropic saying, we're going to need$750 billion just over the next few years to fund. So I'm avoiding those. I'm not saying they're not going to go up. I'd just rather miss the high, high momentum hype and stick with what's going to endure over a long term, multiple cycles.

7:51Scott Wapner: I'll get you in a second, Jenny. Do you want to just rebut anything on that? because, I mean, it sounded like a shot at your point of view. Vertiv, Qantaservices, GE, Vernova. I'm going to be real specific. I don't think they're high beta, Steve, as it relates to the AI trade. KLA Corp, Lamb Research, Marvell, Corning, Micron. I don't think they're high beta as it relates to the AI trade. It's not beta. You said high beta. Well, I'm saying that's one of the qualifications. The other is. Can I finish? Yeah, sure. Okay, so I want to tactically and surgically allocate in the direction where there has been clear underperformance, in the case of the three industrial names that I mentioned, to a degree of 10 % to 12 % over the last quarter.

8:37You have seen a lightning of positioning from retail and from institutions geared towards those large cap names. I don't want Corweave. I agree with you. I don't want Corweave. I don't want the high beta names because I think there's going to be a narrowing out, which actually is going to advance my thesis even more as we move through the end of the year. What the market is doing right now is it's saying exactly what you're saying. We believe in the AI thesis. We believe investing in AI is the right thing to do. We are going to narrow towards quality. Right now, narrowing towards quality means a defensively oriented MAG-7.

9:18That's exactly what I said. That expands as we move through the remainder of the year. It expands. You see the positioning grow. It goes to other large cap areas of the AI trade that have performed but cannot be defined as high beta because they have the earnings growth. It's the three industrial names that I mentioned. It's semi-equipment names. It's memory and it's optimism. The AM reports tonight, doesn't it? It does. Beta is just one of the points. I don't throw something out of the portfolio because of beta. That's for sure. Otherwise, I wouldn't own Moderna here, which has more than doubled since I bought it.

9:54I wouldn't own I wouldn't have owned Vertiv from 45 to 240. You know, so that doesn't scare me. But when I see the end of the cycle in terms of growth in spending in CapEx, and I see that a year out, right, the appetite for it is going to wane for these companies that just have to spend and spend and spend. And eventually, that allocation of capital from sovereigns, which has been one of the primary lenders to it and investors, is going to dry up. They, too, have position limits. Jenny, I apologize. I'm going to be quiet in a second. I just want you to focus one second on Vertiv. And I know you, Steve.

10:35You will be back in Vertiv very quickly the minute you see it turn higher, which is going to turn higher as we move into November. No, I won't be back in it when it turns higher. Joe, I buy these when they turn lower. So then why don't you buy them now? Because I just made my money. Because they're not low enough. I think that's why, right? Exactly. They're not low enough. Take a look at the valuation. This is a company when I bought it, it was 15 times earnings. I don't know what it is now, 40? But it doesn't matter because I think the hard part of this is earnings growth. And you mentioned earnings growth, Joe, and we need to see it.

11:09And that's where there's so much skepticism. So that's why a micron's up 220 % on the year, yet trading at under 10 times earnings. Because there's so much skepticism about if they can really sustain the earnings growth. And so even when we talk about valuations, like valuations you can't really latch onto right now. You can't really say, well, micron's only whatever it is, six times or seven times right now. We don't really know. What's interesting about Vertiv is there's no volatility in the revenue growth. So I'm looking. Hold on, let me give you the number. It's a fine company benefiting from a cycle.

11:40So it's not just a cycle. It's a three year period. The revenue growth over the last three years. Let me finish. The revenue growth over the last three years, 21.67 percent. The revenue growth over the last two years, 26 percent over the last year, 30 percent last quarter, 24 percent. It's not like there's extreme volatility that actually happens. It's a cycle. It's very consistent. It's a long cycle. Three years. It's a cycle. Do you think three years? Let me ask you now. Do you think microns are a cycle? Not in the weird world we're in right now. We're in a weird world. Why is it a weird world?

12:11Why is it a weird world? Because we've never had a technology like AI. So why does it have to be weird? Why can't that be really beneficial? Because we don't have a period in history where we can look to and say, hey, this technology came on at this speed. Does that mean it's bad? I'm not saying it's bad. No one is. But I think actually by you choosing Vertiv, you're proving Steve's point. Because I think what Steve's point is that you can't make the statement, I'm in on the AI trade. What Steve's saying, sorry to woman's plane for you, Steve, but what Steve's saying is like you have to add nuance, right?

12:42Because what's happened in this year, which is really interesting to see, is that discretion and discernment entered the investors' take on AI, which is why you have like a Palantir and an NVIDIA only up 14 % on the year, why you have a Micron again up 200, and why you have an Oracle down 30. Discernment came in. And so there's real things there and there's real skepticism about earnings. And I think we're all sitting here like there's a reason the S &P right now is trading below its 10 year average multiple. And it's because there's so much skepticism about not just Vertiv's earnings, but everyone's earnings.

13:15It's not skepticism. It's skepticism. It's everyone's skeptical. It's skepticism. Number one, it was the political headlines, the belief that there would be a slowdown in the data center build. That was the biggest challenge. And therefore, the underperformance, you saw a lot of momentum players move to the sidelines. It doesn't mean we're not going to still need power generation and cooling equipment for data centers as we move forward. And there's nothing in earnings. It's a completely different thing. But there's nothing in the earnings to support what you're both saying in this moment in time.

13:44Here's the generalization you're making. The generalization you're making is that we believe all the spending is going to come to a complete halt. That's not it at all. It will peak. Like every other cycle, it peaks. Do you think Micron's in a cycle, or is that just going to grow to the sky? I think Micron's in a more elongated cycle than history would tell us. So the point is it's a cycle. Cycle's defined by the beginning and then the peak. What I'm saying is when the cap back starts to slow, it's never going to go away. Vertiv's not going to go out of business if you stop building gains. No, no one's saying that.

14:19Right. But my point is once it peaks, the valuations peak, and they come back down to earth. That's been true since the market opened, right? Going back under the button, which I guess our disagreement is you believe that we have peaked as it relates to earnings. I believe we peak a year out and markets historically discount a year before. Yeah, he's not saying it's peaked. And that's the difference in our books, Joe. Your book is buy high, buy higher. Mine is learning from the most steps of legendary investors.

14:49Scott Wapner: I'm saying buy high, sell higher, just for the record. Well, no, he's saying buy high, buy higher now. I'm giving you a sequel. No, in reality, what I'm doing here is I'm recognizing you're getting a correction opportunity in the AI trade that I want to take advantage. This is hardly a correction. I think 15 % for a company like Verti was a correction. Not when they're up 300%, not when Verti was up 500%, coming down 13 % is a correction. Right. Absolutely. It's not a slap. I just got in an argument on Twitter this morning with this guy who's like, oh, you said that when the AI trade gets slapped, energy should trade off.

15:23and I said to him back, I'm like, how naive and young are you and thin-skinned to think that that was a slap? You know, like many of these docs. I don't understand what that means. It means it's not enough. Like what happened over the last week is not a slap to the AI trade. It's not, there's not enough discount. I mean, you're basically doing, you're doing the same thing I'm doing. I'm speculating that we are at the end of this modest correction, Steve. You're speculating that it's an inflection point and it's over. I'm saying we haven't seen anything yet. I'm sorry? I'm saying we haven't seen anything yet for like when.

15:56And I think we all have this sensation and all that can be is a sensation. We all have this sensation that we're somewhere around a peak, that we've been somewhere around a peak, right? Who's we all?

16:06Scott Wapner: It feels like all of us like have a sensation. And then there's like how much people who are bearish. I think that we're saying that the market isn't moving. If you look at the S &P, it really hasn't done anything for months now. And the big drivers of the S &P are the hyperscalers and those companies that are part of this trade. The market is waiting. It's waiting for something, but it's battling the people who believe that there's going to be sort of a day of reckoning because we've had too much spend too fast, earnings growth and stock price growth too fast. And the people who think it goes down 20%, that means it's a time to buy.

16:45That's why we don't move.

16:46Scott Wapner: Maybe you get some clarity then, I'm going to move it off of where you guys were going. Well, not where you were going, where you already went, because I was about to leave. Meta, okay? Meta's earnings tonight. Maybe you get some clarity from Meta tonight on, Jenny, where we stand. I mean, you sound pretty negative overall on the trade. So you must have low expectations going into Meta, huh? No, actually, and that's the whole point, is that I don't think that you can look at the AI trade, right? I think you need to look at company by company. And if we think about Meta in particular, I don't think that there's a single company out there that's using AI better because they're, you know, and yes, they have huge operating cash flow.

17:30They're using it to build up data centers and all of that, but it's still, it is a very profitable company. They should grow their earnings at 24 % this quarter. So I'm looking for that. I'm sure they're going to say something positive on Muse because why would they not say, you know, why would they say anything not positive? But I think that you can get behind Meta because it's trading at, hold on, what's it at? It's at 21 times earnings right now. It's got double-digit earnings worth ahead. And that earnings growth, to me, is more reliable than other AI trade earnings growth. So you like the fundamental story surrounding Meta.

18:01What do you think of AMD? I think you can get behind AMD probably. But the point goes back to it needs to be nuanced. You can't say the AI trade. That sweeps too much into it. So tonight, if we hear a good report from Meta, you know what the trade is? AMD. Okay, fine. Five and a half percent of their revenue is attributable to Meta. They are the ones that are powering the AI agents with their CPU. Like, then you need to assume, right, what's the valuation? Who are there? If it's only 5%, who else is there and there? What's the valuation? Sorry, you need to look at the valuation. You need to figure out who's the other 95 % because it might just be Meta who's doing well.

18:36What happens, right? What happens if like if if anthropic and open AI like what happens if when they file, you really see the slowdown that we started to see in that spending? And what if that has an impact? There's a lot of what ifs. So, you know, theoretical. All theoretical. And that's why this moment is hard. And that's why valuations are a little suppressed compared to what they were, because there's skepticism. Well, what we're saying is confirmation that the market is worried and excited. We're saying it's what are they saying?

19:07Scott Wapner: It's both. And it's fine to have a market do this. You know, Joe wants to buy some. Good. I hope that works. But don't assume anything's going to sort of zoom ahead in the near term. Real money, real debate. A lot of talk, I guess. Weiss, Metta. Let's go. So you just never know what's what's driven in the past has not been earnings. It's not been revenue. It's been what their CapEx budget is. And I expect them to, I wouldn't be surprised, let me put it this way, if they increase their CapEx budget. I would expect the narrative around how the business is doing to be very, very good. And Meta is a perfect example of what I believe a correction is.

19:53Stock was trading over$800. I had a core position. I loaded up more, doubled the position at$550, and then traded out of that. Now, that's a real correction, right? Because the stock did something but not tremendous like the others. So Meta is one that I'm going to stick with, continue to stick with, continue to trade around an excess position, not touch the core position. And I think, to your point, that they are showing that AI can increase their revenue, can increase their capital.

20:25Scott Wapner: Why such an interest in trading around a position you have rather than just keeping it? If you if you so believe in the company like you do and you've said only glowing things about Zuckerberg as the founder, who's still there. Why are you trading around? Why are you trading around it? As I said, I'm not trading around the core position. I mean, core position, this position, that position. I understand, but you're still trading. What's the other position? The other position is the market presents opportunities and you've got an S &P that's basically flat. And I admit, I like to make money, and I'm one of those investors that looks at absolute performance, not relative performance, not happy.

21:05If the market goes down 10 and I only go down 5, that's not my game. So if I see an opportunity of a company that I know exceptionally well, like Meta, and I'm very educated on it, then I'm willing to trade around it. It's a gift. You know, you're not going to be right 100 % of the time, but it's a gift. And this is where we're different. Kerry and I just hold it, right? We just hold it.

21:26Scott Wapner: What do you guys think about Alphabet? As Mizuho today says, they favor it for the near term. It's one of their, it's their favorite internet pick in the near term. Truist goes to 420 on that, heading into earnings. Everybody owns it, Joe. What do you say? Been a little bit of a weak link relative to the rest of the MAG-7. I think that for the long term, for Jenny's holding period, I think that Alphabet is a very strong play because of the diversification of the model. You also are able to justify spending when you're looking at what the results are for the Google cloud business. Gemini 3 is a fantastic product.

22:05It's very competitive to what we see from Anthropics Claude. I just think for the better part of this year, you're looking at a stock that has slowly begun to underperform because it had the relative outperformance in the prior 9 to 12 months. I think a catch-up phase is in front of us in 2027.

22:23Scott Wapner: All right, let's take a look at Netflix. Shares are the lowest level now since August of 24, and basically flat over the past five years following earnings. Guide was weak, lowest revenue growth in some three years. That's why the stock looks like that. But if you back it out, the stock has looked like that for the better part of at least six, eight, nine months at this point. Can we get a year-to-date, please? There you go. That shows it, right? And Julia Boorstin has more on what's going on with this, Julia. Well, Scott, this is the sixth straight quarter that Netflix shares have fallen on earnings, with the stock now down 47 percent in the past year.

23:06Today's drop on a weaker than expected fourth quarter revenue outlook. And Netflix also lowered its ad revenue expectations for the year, now$2.7 billion down from prior guidance of$3 billion. Co-CEO Ted Sarandos addressing engagement concerns on the call last night, saying they are focused on their core business, original film and series, licensed content and live events, saying experiments into YouTube's territory are relatively small and they are optimistic about the impact of incoming chief content officer Peter Rice. But Wells Fargo with an underweight rating on the stock raising concerns, writing, quote, we believe that if engagement doesn't improve, then eventually members will go from less time spent to fewer logins to finally canceling.

23:49Going on to say we can't shake the notion that the CCO changes the canary in the coal mine. Scott?

23:55Scott Wapner: Yeah, Julia, thank you for that look. That's our Julia Boorstin. The stock's broken. Yeah, but the valuation is 18 or 19, so everyone who loves a cheap valuation, go buy it, have fun. This is what happens. That's not cheap. That's not cheap enough for Netflix. Not for that. For Netflix. Not for that, Ernie's direction. This was the The premier growth story in online streaming. It was the only growth story. Great point. Only growth story. Because it used to be hard to compete. You can't compare historical valuation without comparing historical growth. And they're not going to grow. They're going the other way.

24:31A hundred percent. Right. That's why I sold it in the 80s. And I think every one of the streamers, including Disney, I think you avoid all of them because I think they have significant challenges in front of them related to content and related to costs. I would say as a person who followed the entertainment industry for many years, it's become a broadcaster. It isn't a broadcast in the traditional sense, but that's what it's doing. And they need a lot of eyeballs. They need subscription. Look, they don't have advertising, really. It's not a tough slog because they've got so much market share. Well, I mean, they have an ad.

25:06Scott Wapner: They do have an ad model. Yeah, I get it. but it's not where they're going to make a lot of money. Ed revenue wasn't good. Yeah. They're not growing it enough. And they're in a real tough squeeze because their costs are growing. They're finding it harder to produce their own product. They're not paying enough to the people who say they're the best. You should pay me for my content. The ad model is even more dependent upon content. Of course. All right. We will take a break. Calls of the day are just ahead.

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27:37Scott Wapner: All right, let's do calls of the day. Joe, you're all over both of these. Exxon target to 181 neutral, though, at B of A. Valero to 471 neutral at B of A. So very limited upside for both of these names. What's your take there? Well, first of all, Valero is the one I think that we should be focusing on most importantly. Exxon is more a byproduct of where spot crude oil and Brent crude oil will go. More importantly, you're going to hear from Valero tomorrow. They're going to report earnings. And it really has been all about refining margins. It's the reason why I've stayed anchored to this trade as it moved higher.

28:17I've said on multiple occasions, My gut, my inclination is to sell some, but I don't want to sell any because I see in front of me this overwhelming evidence that's saying there are significant supply challenges as it relates to diesel and as a result of that to gasoline as well. So if you're valuation-oriented, this is a high-teens valuation. If you're looking at the balance sheet, they're throwing off historic cash flow, and you're going to hear from them about a historic quarter in front of you. My guidance to the viewers is if you are in this name, stay with this name and gradually trail a stop as it continues to move higher, and I don't think it's unreasonable to expect$500 to be in play for Valero.

29:02Scott Wapner: Morgan Stanley continues to like Marriott. Jenny, 403 is the new target with Outperform. Yeah, I love that new target when the stock's trading at 405. So it's kind of funny. You know, this is a tough one for me because we've owned it since our discipline growth strategy started in 2013. We've had this unbelievable compounded return, but it's trading at 31 times earnings right now. And the free cash flow yield, which is a huge hurdle for us, is down to 2.5%. But you've got a company that grows like double digits, mid-teens consistently. So again, I always say, you know, Steve always has a permanent compounder.

29:37It is a permanent compounder. And so we're sticking with it. But it's not like we would throw new money into it right now. And that certainly isn't much of an earnings price target.

29:47Scott Wapner: You've got Northrop also outperform at Baird$675. Right. Is that target? So this one's more meaningful. And also, I think you have more of an opportunity here. So this one's trading at 18 times earnings with a nearly 5 percent pre-cash flow yield, down 5 percent on the year. Also, not double-digit earnings growth, but like high single-digit earnings growth ahead. And the really cool thing here is they have, and they actually just raised it in their earnings call, they have a$110 billion pipeline. So that's one where you can really think, when I'm thinking about the earnings for the next five years, they're highly reliable.

30:20Scott Wapner: All right, Oppenheimer, upgrade Zoom today, Joe, to outperform. Yeah, we've talked about this, and we're getting close. $130 is a price target. Yeah, we're getting close to the moment, I think, where you're going to have to, if you are long Zoom, kind of move to the sidelines. A lot of the reasons behind why people are allocated towards Zoom, a software company in an environment in 2026 where software is incredibly challenged. I don't know. Why is the stock up 16 %? I'm getting to it. In 2023. Let's speed it up. All right. In 2023, they made an investment. They made an investment in 2023 in Anthropic.

30:55They put about$50 million into the company. That stake now is into the multiple billions. They're going to realize the profit on that when Anthropic goes public. Okay.

31:05Scott Wapner: Frank Collin has our news update today. Hey, man. Good afternoon, Scott. U.S. Special Envoy Steve Witkoff is facing some criticism today after he called Russian President Vladimir Putin a humanitarian. Putin has been charged with war crimes by the International Criminal Court for the forced deportation of Ukrainian children to Russia. Wyckoff made the comment after Russia freed an American teacher who had been detained for four years. He was in Russia to hold talks about ending Russia's war with Ukraine. Saudi Arabia reopened King Khalid International Airport in Riyadh today for domestic flights.

31:36It follows multiple Houthi strikes on the Saudi capital this month. They shut down the airport just over 10 days ago. The Houthis claim, without evidence, that Saudi Arabia provided military equipment to government forces through that facility. And a chemical tank explosion in Toledo, Ohio, forced hundreds of people to evacuate their homes today. Officials are concerned about potential exposure to toxic gases and the possibility of another explosion. The cause of the Tuesday night blast remains unknown. Scott, back over to you.

32:03Scott Wapner: All right, Frank. Thank you, Frank Holland. Up next, a halftime exclusive. Arcema Modi sitting down with the CEO of Circle today to talk all things crypto, AI, much more next.

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34:26Scott Wapner: all right welcome back shares of circle are higher as you see today near six percent following a price target hike at needham let's get to seama modi at the paley centers international council summit with that company ceo hi seama Hey, Scott, and it's great timing. We are sitting down with the CEO of Circle, Jeremy Allaire. Thank you for your time. Just this morning, the OCC advancing a ruling to implement the Genius Act, which is so critical to the financial technology sector. Tell us about the implications. Well, this is something that we have been excited about and working on for almost half a decade, which is establishing federal laws for how digital dollars get issued, distributed and made available, not just in the United States, but all around the world.

35:09And so with these final rules coming in from the OCC, it has huge implications for our business. We have always sort of held ourselves to these high regulatory standards, but now with Genius Act going into effect in January and with these new OCC rules, it creates a very clear model for how these can become trusted, safe, useful digital dollars in the global economic system. And I think it's a it's a very strong body of work that will cement the role of these in the economic system. Are you worried about midterms, Democrats winning the House majority and how they could unpeel some of the legislation that has been helpful to your industry?

35:48Well, I think the important thing is that the Genius Act is actually really the only major piece of bipartisan legislation that made its way through Congress in the past two years. It had huge support in the House from Democrats, 70 votes in the Senate. So very bipartisan. I think everyone understands we need to strengthen the dollar, make it competitive technologically. And so these are federal statutes. These are part of effectively the new prudential banking regulatory code. And so we don't view that as something that's at risk of being reversed or whatnot. I think this is a bipartisan issue and will carry forward.

36:23There may be other areas of crypto that have questions. But I think digital dollars and the role that these play for the United States is going to be something that is important to everybody here. People tend to conflate stablecoins with crypto. But what is your take, Jeremy, on the underperformance of Bitcoin this year? If this is the future, why is the market struggling to prove it? Well, look, I don't pay much attention specifically to these sort of specific digital commodities, how they're trading, etc. I'm much more focused on obviously what we do, which is digital dollars, which are not speculative.

36:57These are instruments used for payments, for capital markets, for trading, investing, lending, the fundamentals of financial services. And then also to the technology. And so the technology, you know, platforms and infrastructures that sit underneath all of this, the blockchains, platforms like ARK, which we recently launched. That technology is becoming much more widely useful. And so we see that in the numbers. The amount of transactions and activity that are happening on these networks continues to grow very significantly. And more and more use cases that are being brought in. Many of the traditional financial sector all coming in and getting involved.

37:33Do you agree with OpenAI CEO Sam Altman, who says the banks need to do a better job at providing the guardrail safety to financial transactions? And does that actually push more customers to stablecoin? Well, I think this upgrade of the entire economy into kind of machine and software and intermediated activity, which is being driven both by AI and by blockchain, creates a huge opportunity to improve the guardrails, to actually have better observability, better auditability, better verifiability, to build better systems of trust and verification, which is critical in the age of AI. What opportunity does this present for Circle?

38:08If you're seeing clients like JP Morgan, BlackRock, and Visa, use your platform increasingly so in this age of agentic AI. Yeah, I mean, look, I think the transformation that's underway, what we kind of think of as the agentic economy, which more and more work, more and more activity in the economy done by AI, creates a huge amount of demand for infrastructure that is designed and purpose-built for machines. And so, you know, machine-intermediated economic activity, financial activity needs digital dollars. It also needs these economic operating systems as we think of them, these blockchain networks like ARK.

38:44And so our view is this transition creates fundamental demand for the infrastructure that we build. Yeah, and it seems like the transition is happening real time. Jeremy, we'll leave it there. Thank you for your time. Jeremy Allaire, CEO of Circle. Scott, I will send it back to you.

38:58Scott Wapner: All right, Seema, appreciate that very much. Thank you, Seema Modi. Up next, we're going global for today's Options Action. Oliver Rennick flagging some big bullish bets in one international market. He'll tell you where next.

39:28Scott Wapner: All right, let's play some options action. Go to Chicago for that. Oliver Rennick is at the CBO Global Markets. Where are we playing it today? China, Scott. Some interesting action in the K-Web ETF despite a 2.5 % sell-off to near one-year lows. There's mostly bullish dip buying in the options action. Traders bought almost 24 ,000 calls this morning compared to under 4 ,000 puts. And that's on trading volume. That's two and a half times the average today. The most commonly bought contract was the 24-strike call expiring mid-December, which is just out of the money and gives the buyer a lot of time to get the almost 6 % bounce the contract needs to break even.

40:08Right behind that in popularity was the 28 strike call, which only costs 14 cents, but needs an 18 % comeback. Two caveats here. First is that we've seen call buying almost all the way down in this ETF this year. But the second caveat is that last time we covered unusual call buying, it was July 1st, right before a big rally. But this volume today is a good bit smaller than what we saw then. To me, this looks more like trading on some hope for support at one-year lows rather than some reversal in trend.

40:39Scott Wapner: OK, Oliver, thank you. I'll see you this afternoon. Oliver Rennie, got a comment on that? I don't have any exposure to China. I think if you're looking for exposure internationally in the emerging markets, you have to turn to South Korea. The COSPI, that's been the place to be. But understand, that's extremely volatile. And the requirement is here. you need to see semiconductors bottom first. You've had names like Baba, right? I have. You still? I have. Well, you know, Taiwan may be a China play, but nobody wants that. What about Baba? Do you still have that? No, I don't. I got rid of it. Basically, the Chinese economy is not doing well, hasn't been doing well for a while.

41:15So it's difficult to play on that. So it's just better to stay away. Okay.

41:20Scott Wapner: We'll take a break. We'll come back. It's a very big day for our Jenny Harrington. We have some major investment wisdom coming your way. Thanks.

41:42All right.

41:43Scott Wapner: Welcome back. Our very own Jenny Harrington has co-authored a new book with Rebecca Patterson with the goal of helping people become better investors. Investment wisdom for our friends and loved ones. Timeless lessons from today's top finance experts is out November 17th. It has several contributors, including committee members Bryn, Shannon, Carrie, Liz and Stephanie. Of course, you see Liz and Shan there. All right. Here's a book, by the way. Can't wait. Congratulations to you, Rebecca, and everybody who contributed. What's the message you want people to take from this? I don't know that there's one message because it's really like 25 chapters.

42:21So Rebecca and I each wrote a chapter. We reached out to 23 friends and we asked them, what do you tell your friends and loved ones when they ask you about investing? Whether they're saying, I just need to get started or I'm at a pivot point in my life. Where do I go from here? And so we said, how do you answer that question? And actually, just in the break, Joe asked me, you know, so who is it for? And I said, you can be very sophisticated and read this or you can be just starting and read this. And everyone's going to get something from it. And the chapters are very straightforward. They're authentic.

42:52they're accessible um they're they're they're actionable so you can actually do something is

42:58Scott Wapner: it is it uh a book by women for women or for everybody because it's exclusively yeah female authors right exclusively female authors which is cool um and it is for everyone and you'll see in the book one of um one of the women kate faddis writes to her twin children one girl one boy nana adai at jp morgan writes clearly to her nephews um some people are writing to their granddaughters. Some people are writing to their friends and they're not all like dear such and such. Some just happen to do that. And some people are writing to our contemporaries and some are writing to older and some are writing to younger.

43:31Scott Wapner: Such a great idea. Carrie, your chapter is sensible risk taking rules for new investors. The message you're trying to impart on people's way. Yeah, I think it's for anybody who's beginning the process of thinking about investing. If they've got a job and they're going to put some money into a retirement plan, you have to think sensibly. And not everybody considers the risk, such as, you know, let's not invest more than we can afford to lose type of thing. But it's fun. I'm sorry. Shan, three reasons why you should invest. You want to I know you want people to read the book. You want to spill the beans here.

44:04Scott Wapner: Give us one or two of those three. Sure. I mean, listen, it's at any point in your life cycle, you should be investing for your future. You can invest because you put the money aside. And I think most importantly, you know, investing in things that you care about. And many of us have aligned our personal interests with things that we invest in. And as you get older, that's not only a luxury, but it's a necessity to keep engaged with the markets. And Liz, divide and conquer asset allocation. What's your message? Well, look, asset allocation is one of the biggest questions that we have to answer as investors.

44:40And it can be really overwhelming for people. So I tried to write the chapter to break it down into more manageable bites so that everybody can understand what are the big objectives that we're trying to achieve. Things like preservation, income, growth, and then really who are you as an investor and how do you answer those questions and create a portfolio that you can live with. Because that's honestly the most important thing is having a portfolio that you can live with, that you will live alone and allow to compound for you and do the work as it sits.

45:11Scott Wapner: Karen Finerman also wrote a chapter. Our own Melissa Lee did as well. Lizanne Saunders. So great. Katie Stockton. Yep. Many familiar. Is this Kate Rooney? Yeah. Awesome. Yeah. Catherine Rooney. No, sorry. Catherine Rooney Vera. Oh. Not Kate Rooney. Yeah. Katie Stockton wrote a chapter. So a lot of friendly faces to CNBC. Scott, I need to say something. As we were thinking about the show and bringing it up, it occurred to me that I owe you a huge thanks, too. because without this show and without you bringing us together, I wouldn't have these friendships. And I think it's something that we talk about behind the scenes is how close our friendships have become.

45:48And they're very genuine. And we owe that to you. And you've brought us together. And so I think without it, the book wouldn't have happened. So thank you.

45:55Scott Wapner: Well, Mary Duffy deserves a lot of credit for that, too. Because there's a lot. We spent a lot of time and effort. She's kind of the patron saint of the book, too. Bringing all of you to our show, which has made our show a lot better. And well-dressed. Congrats. Seriously, congrats to you, Rebecca Patterson. Congrats. All of you ladies who've written a chapter for this book. Two, this is really important. All of the author profits are being donated to the Council for Economic Education and the Boys and Girls Flubs of America. Oh, good. So if you buy it, you know, please don't think you're lining our pockets.

46:23You're actually doing something good for your friends as well as for society.

46:26Scott Wapner: All right. Good stuff. Congrats again. Thank you. All right. We'll back with the finals next. All right. Meta Reports in overtime. We'll take you right up to that with Stephanie Link, owns a stock. Dr. Brent Talkington, Dan Ives, Mark Mahaney, Courtney Garcia, and I hope you'll join me at 3 o 'clock Eastern time to do just that and see if this market can stay green for the duration. NASDAQ's leading up 1.25 % right now. We'll certainly see how it finishes. Mr. Weiss. FTAI Aviation. McCreary came out today, initiated the stock. They see it doubling in a year. That's pretty impressive. I agree it's going to go up quite a bit.

47:02Scott Wapner: All right. I sold Portris at 50, so he just uses it to make me jealous. 5.1 % yield, super cheap. A couple of good things happening that could give it a little boost. Okay, Karen. Nextera, it's a great utility. And if we get a change in the house, bring back the word sustainability, which would help Nextera. Joe T. What we didn't have in Q3 was active trading volumes. You're going to see that return in Q4 that takes you to interactive brokers. All right, good stuff. I'll see everybody at 3 o 'clock. The exchange begins right 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.

48:07But neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com forward slash Halftime Report disclaimer. Some of the most important design choices are the ones that go unnoticed. The details that together make an experience feel intuitive, comfortable, and above all, exhilarating. At Acura, that means looking closely at how every detail could make your experience behind the wheel more rewarding. Every lesson learned and every idea refined becomes part of what comes next, and it lives inside every MDX, ADX, and Integra.

48:40That's precision-crafted performance. That's Acura.