Anthropic Investor Day, CoreWeave Shares Sink, Media Stock Roundup 10/14/26

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1:06Welcome to Power Lunch, everybody. I'm Kelly Evans. Brian Sullivan is off today, and Steve Leesman will join me shortly. Take a quick look at the markets under pressure this hour as investors react to a hotter than expected inflation report. The Nasdaq 100 is leaving us lower, down about 2 % of these session lows. And the tech trade is in the red. Broadly, it's the worst performing sector today. Corwee taking a hit as investors scrutinize the cost of financing the AI build-out, yields on its bonds have climbed towards 15 percent, reviving questions about how much debt this infrastructure race can support.

1:39Seema Modi has new reporting on that, and we'll talk to her in just a moment. Plus, noted investor Bradley Tusk is here to help navigate the state of tech, artificial intelligence, and more. And in media, Disney is trying to extend its winning streak. While Netflix is cutting about 1 ,000 jobs, LightShed's Rich Greenfield joins us with his take on what comes next for the industry. Let's start this hour with venture capitalist Bradley Tusk. He is the founder and CEO of Tusk Ventures. Bradley, it's great to have you on. And kind of with these top-level thoughts, everyone's saying, yeah, we're going from buy anything AI-related, literally turn smart birds into all birds in anything AI-related, to, wait a minute, this capital has to have a return.

2:21This comes, by the way, as we're getting ready for some big IPOs. We can talk about that a little bit later on. The market's message seems pretty clear here, does it not? So where does the value go next? Yeah. Yeah. I mean, look, you and I have talked about this a lot. And ultimately, it's very easy to get excited about something, especially technology as transformational as AI. But at the end of the day, P has to be greater than L. And you have to have revenue and you have to have EBITDA. And even having fast-growing revenue, if it is dwarfed by your debt and your CapEx and everything else doesn't work at the end of the day.

2:55And so I think the market is finally starting to wake up to it. But that's after a lot of companies have already taken on a tremendous amount of debt. And that's why the yields are moving up so fast. And that makes it really hard for companies like CoreWeave, where they've got$35 billion that they need to do in CapEx. That's really tough. And then layer on top of that, beyond interest rates and inflation going up again and everything else. For CoreWeave especially, data center construction is taking a really long time because there is so much political opposition to it. And any project that you are underwriting, if, you know, speed to market the clients materially because you can't get through the regulatory process, that makes everything even more expensive.

3:39Right. And, you know, debt is expensive. The equity is falling. You think, oh, it's panic time, except if you looked at the Dow, which until a couple of hours ago was green on the day. In other words, Bradley, this is kind of a narrow and specific problem in some ways. I don't know if we should think that it's going to spread. I mean, sure, whoever's financing, like the next financing layer seems vulnerable. That's what Chamath was talking about. Watch private credit and so forth. But right now you can be in a lot of other companies and a lot of other sectors and industries and just point to this and say, hey, these look like a couple of names that got overextended?

4:17Yeah, you can say that. And that might be true. But at the same time, fundamentally, the way that I look at it on the early stage venture side and the way that I would look at if I were a retail investor in the market is what are the companies that have the ability to reach the market and generate significant revenue that could exceed the cost of generating that revenue? I know this is economics 101, but still at the end of the day, a lot of our investments, for example, are in applications of AI as opposed to the underlying frontier models, simply because if you can charge money for a service that they can't get otherwise and you're not responsible for building data centers and buying GPUs and everything else, that's a much better business.

5:00Or for us, for example, we've been investing in startups that can do alternate forms of compute that can make the energy needs for data centers a lot lower and make the compute a lot more efficient, which really makes both the political process better and then ultimately the cost of operating the data center better. So there are plenty of ways to make money in AI. But I think the sort of magical thinking of, oh, I don't really understand it, but everyone says it's great, so I'll just throw as much money as I can at it and see what happens, that never works. Quickly, you mentioned the application layer.

5:32And again, we all think of this as kind of the Uber or Airbnb moment for the iPhone and for the app store. Can you give us some sense of the kinds of companies you're excited about now? Yeah, sure. I mean, Doctronic is a great example. So Doctronic is an AI medical advisor. So let's say your finger hurts and you don't want to have to deal with going to urgent care, trying to track down your doctor or something else. You go with Doctronic, my finger hurts. Why? And then they walk you through a solution. The solution might be it's probably broken. Go to the ER. It might be we'll connect your doctor via telemedicine.

6:04It might be that you have a prescription for something and they're able to now in the state of Utah actually renew prescriptions via AI. That's something we're now working on across the country. But this is a company that is able to, through its expertise, through its use of AI to get into the pharmacy world and through its ability to work through telemedicine and doctors, generate real revenue. you and it is growing incredibly fast as a result. Yeah. And they don't, like you said, have to worry about the data center build out or financing the chips. No, none of that is our responsibility or our problem.

6:36And look, and I know we'll get into this more in the next segment, but fundamentally, I just think that a lot of the underlying assumptions that were made that led to the plans for this many data centers, this much compute need, this much everything else, really might not have been that economically sound in the first place. And so, you know, Ultimately, if you think about it, Dario Modi is really the one that's credited with coming through the scale concept for AI, right? If we have more compute and more data centers and more energy and more everything, we can build more and more sophisticated models and solve bigger and bigger problems.

7:10And he is an incredible data scientist, and he's not wrong, but that's what he is. And fundamentally, if the cost of being able to do that is so much greater than the revenue that you're going to generate to sell that, or if it turns out that you are selling a Ferrari and most people are perfectly fine with a Honda, then you might be in trouble. I mean, for example, if you want to use Cloud or OpenAI, you're using a subscription model paying typically$20 to$200 a month. You can go on Meta and use Llama for free. You can get a lot of tools from you for free, pay for some others. And for 99 % of consumers and businesses, that more than covers what you need.

7:54And so I think when you had people who were incredible computer scientists then building multi-trillion dollar companies predicated on what they think would be cool, that may not correlate with how economics work. And stay right there, Bradley, because let's talk more. We've got SEMA standing by with the latest on this core weave issue. SEMA, break it down for us. They're not the only what's called a neocloud under pressure, but they are down 50 percent or more from their highs. their negative year to date now. What can you tell us? And Kelly, it's prompting CEOs to send messaging to their employees.

8:30We have comments here from CoreWeave CEO Mike Intrater in a memo obtained by Bloomberg who calls the stock drop irrational. And he says the IPO delays is bleeding into the company's narrative. Remember, CoreWeave has raised billions in debt to finance the purchase of GPUs that have been leases to the frontier labs and hyperscalers. And in an article earlier this morning, published by the FTACOR, we've signaled its desire to resort to insurance companies to back its data center expansion plans. Those comments come as yields on its bonds, as you've been discussing, surging to about 15 percent, levels we haven't seen before.

9:02And it's prompting Silicon Valley voices to weigh in as well. Investor Chamat Palpatia calling it out. SpaceX CEO Elon Musk then responding to his post saying, quote, yikes. The problem is costs are not going down. NVIDIA CEO Jensen Wang has previously said that a one gigawatt data center should cost$50 to$60 billion and that GPUs comprise about 70 % of that. Well, it's worth noting components, other additional components are going up in price as well. Just today, a key semiconductor supplier, ASML, suggesting prices of its lithography machines are likely headed higher, reinforcing the need to finance the AI infrastructure build out.

9:40Just as Gartner released a new report today flagging that cost pressures could put the neoclouds in a more challenging situation should these assets tied to the AI buildout depreciate, Kelly. So that's one of the big concerns here. And Seema, did the company address this yet or no? So from this letter that was obtained by Bloomberg, we have the CEO of CoreWeave apparently sending this message to employees internally about, one, its financing measures and saying that it's got the backlog to support the investments it's making in the AI buildout, whether it's a purchase of GPUs that it then leases out to the hyperscalers and the frontier labs, all the investments it's making in data centers.

10:22But it really, at the heart of this whole experiment, comes down to how do you measure the value of graphic processing units, these chips? You know, when I speak to sources in the private equity world, they would say that the residual value is expected to be between 7 to 10 years because there's a scarcity issue. And how that scarcity issue, in a way, reinforces the value. The question is, does that timetable change over time? Right, right. Seema, really appreciate it. Thank you. Seema Modi reporting there. Bradley Tusk, any kind of updated thoughts when you hear her run through the situation?

10:57Yeah, I mean, I just think that fundamentally, this all is still predicated on the basic notion that we need the most sophisticated GPUs, the most computing power possible. And that's how all of AI has to work. And that is the bet that Anthropic made, that OpenAI made. But it's not the bet that DeepSeek made in China. It is not the bet that Meta has made. I think we still don't really know which way Google is going to go with this. And, you know, yes, if the only way to make AI work is what Dario Modi thought it would be, then everything else sort of the logic kind of follows. But even then, I mean, if you look at assuming that Anthropics, you know, IPO next month does happen, it's a pretty questionable bet, right?

11:38So at a$74 billion run rate with a$2 trillion valuation and$500 billion in current CapEx commitments, it's a 34x multiple on revenue. That's a triple of Meta or Google or Alphabet or, sorry, Apple. So it's a really high multiple for a company that is facing lots of competition. Token prices are falling, which compresses margins. Building data centers is harder and harder because of the politics around it. Interest rates are going up. And as I mentioned, with inflation going up, that's not going to change. You have competition from other models that are a lot cheaper. So I just think that these guys are in a really tough spot.

12:21And then fundamentally, if you're a Modi and your number one issue that you talk about constantly is safety, how is subjecting yourself to the pressures of the public markets where you have to deliver a report to analysts every three months in any way a good way to say, hey, we're going to prioritize safety and not just put models out there that, you know, might be exciting but fundamentally create even more risk. Right. Well said, Bradley. We'll check back in with you in just a couple of minutes. We'll talk the Anthropic IPO and a few other related things. Let's get to Steve Leisman, though, with the headlines from the Beige Book.

12:51Steve, what can you tell us? Kelly, a little heads up. This is a sort of a stagflationary Beige Book. One, not talking about a lot of growth, but a lot of inflationary pressures. Headline number or headline comment, growth is reported as moderate to slight. And there's a lot of dispersion on this. Three districts reported no change in economic growth, but manufacturing was described as moderate to robust, especially in the Dallas area where it was robust. Five districts reported no manufacturing growth at all. And there was little growth overall in other sectors. I don't ever remember reading a line like that outside of recession in the base book.

13:26Little to no change in consumer spending either. Auto sales flat to moderately lower in five of the six districts that reported. Half of the districts said consumer spending was driven mostly by high-income households. They saw lower-income households watching their pennies, so to speak. There was a decline noted in three districts of tourism, by the way, from Canada, Boston, Minneapolis, among them. Firms were maintaining a positive economic outlook, however. Now, when we get to employment and prices, the keys that I think the Fed calls from this survey. Little to no change reported in employment.

13:59Labor supply, however, was generally seen as adequate to meet the demand for labor. There were shortages that we've talked about for a very long time in specialized, technical, and skilled trades. Several districts on the inflation story said that inflation has spawned additional wage pressures, including employees asking for bigger cost of living increases. Three districts said price growth was, quote, robust. Eight districts said price growth was moderate. it. Some said the inflationary pressures were intensifying. Four districts said the pace of price increases picked up since the last report.

14:34Firms noted there were higher oil and diesel prices and fuel surcharges, but that wasn't it. Multiple districts said price pressures continued from other commodities as well, including tariffs and insurance. Companies noted tighter profit margins as a result. They were trying to right size their products for the inflation that was out there. And firms expected prices to increase further in the coming months. So, Kelly, this is not a wonderful report if you're the Federal Reserve and looking to this for anecdotes about what's happening with price pressures in this economy. For sure. And Steve, we'll see you in just a second.

15:07I would dig more into it. Watch the market fall out, Steve Leisman. And we're just getting started here this hour. After the break, the chip trip continuing today as that sector tracks for more losses. Is its growth story fading? The stocks down 4%, plus Netflix announcing layoffs this morning as they try to figure out how to get back in investors' favor. The shares are still down 25 % this year. But first, will Anthropic actually go public? And more importantly, should it? That's next.

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17:13Welcome back. We have Steve Leisman joining us for the rest of the hour. We're keeping a close eye on one of the most anticipated IPOs of the year, which, of course, is Anthropic. I mean, other than SpaceX, and maybe that's the only one left at this point, they're expected to reveal their latest financials any moment now. Kate Rooney has those details. Kate? Hey, Kelly. Well, sources are telling us that any moment, at some time today, at least, Anthropic does plan to disclose its third quarter financials. It's going to be at an investor day going on in San Francisco. This is according to two people familiar with the matter.

17:45It does come as the AI giant keeps plowing ahead on what could be the largest IPO in history. It has been holding meetings with institutional investors out here in the Bay Area. Anthropics revenue growth is going to be closely watched, especially given just how much of the growth of private AI companies has mattered lately to the broader markets. OpenAI and Anthropics are some of the largest customers of a lot of the chip names, think of NVIDIA, for example, and some of the major cloud providers. Many of the MAG7 names are also big investors in Anthropik. Last week, there was some confusion about accounting in a report detailing OpenAI's revenue.

18:21There was a change in accounting. That caused this knee-jerk reaction in markets. You saw what it did to some of the semi-stocks in the broader Nasdaq. So that was a reminder of just how important the revenue numbers for these private companies really are. Anthropik, as a reminder, has filed confidentially with the SEC. That was earlier this year. It has not made that S-1 public. The company will reportedly list in November, guys. I would also just add that, yes, we know these numbers are coming. We know investors are going to get these. This company has been quite strict on what they will share with investors.

18:51Both Leslie Picker, who is our go-to IPO reporter on a lot of this, has heard that in terms of what they tell, you know, bankers, investors, it's been quite different than some of the other companies. They're sort of clamping down a little bit based on some of the information that's gotten out there, and that's the latest that we're hearing. Hey, Kate, I know you're out there in California, a.k.a. La La Land, and you were just talking about revenue growth. And I have a stupid question. I think people are going to throw things at me from La La Land if they could. Do we know is Anthropic, and will we learn if Anthropic is profitable or will be at any point in time?

19:29Is that just a really dumb question? What is profitable? Profitable? No, I'm kidding. Profit. No, it's a great question. Thank you. It's pronounced profit. No, no, no, no. It's it is a very good question. Not only are they unprofitable, that is I mean, that's the biggest question. How deep are the losses? I would say Anthropic actually from some of our reporting has been I mean, you have to take it with a grain of salt because it's adjusted from what we're hearing. And we don't know what those adjustments include. But at least in Q2, I had heard that Anthropic was profitable and it was a back to back quarter of profitability.

20:02So they have tried to sort of toe that line, whereas you compare that to OpenAI, they have been the much bigger spender in terms of compute. They would argue that that's actually a good thing. It's been a way for them to keep costs down. And they have said that the revenue is generated by compute and that there's this flywheel. So you compare those two, I'd say, Anthropic, at least if you're putting those two next to each other, seems like the more disciplined one. But any sort of Wall Street investor not in La La Land, as you mentioned, would look at those numbers and say that's not necessarily a path to profitability.

20:33That'll be one of the bigger questions. I think also the difference, Steve, as these companies go from private markets where you have names, at least in open AI, like SoftBank, some of the investors, venture investors that have traditionally been willing to forgive and look past deep unprofitability for growth. And it's unclear, especially as rates go up right now and so much of the AI infrastructure leans on debt markets, if public market investors are going to be as willing to look past some of those unprofitable. So you spell profit out there. P-R-O-P-H-E-T is how it's spelled. Thank you, Kate.

21:07Yeah, it's with a P-H. Exactly. Thanks, Kate. Let's bring back Bradley Tusk, who says Anthropic shouldn't go public. Bradley, make your case. Dario Modi is the number one proponent for AI safety. He is literally the guy that constantly says AI may kill us all. His own S1 talks about his company's existential risk to humanity. I've never seen that before in an S1 or anything else. And if you were that worried about it, why would you add on the pressure of the public markets on top of all the pressure you already face? We saw Modi a week ago at the White House with a bunch of his peers. And we know that Modi supports government regulation, and yet he signed on to Trump's self-regulatory pledge instead because he wasn't going to stand up in the Oval Office and tell the leader of the free world that he's wrong because that's not what you do.

21:58And while being on a quarterly earnings call may be quite as scary as dealing with Trump, when the public markets have expectations of revenue and EBITDA and all of a sudden you're not meeting them, then you're failing. And he's not going to want to fail them, which means pushing out more and more sophisticated models. And that just creates the exact kind of existential risk that he talks about. So it's somewhat of a binary choice here between prioritizing safety and prioritizing capital. All right, Bradley, thanks very much. Bradley Tusk. Thank you, guys. Still waiting. Maybe that IPO comes before Thanksgiving, despite everything.

22:35We'll see. Coming up, the hot inflation report from this morning, scaring stocks today. Is it just a blip or is there more to come?

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24:30Tech and chips taking another hit today. The Sox Semiconductor ETF down more than 4 % and on track for a seven straight session of losses. Its longest losing streak since May of last year. That's as the AI-led bull market just turned four years old. But our next guest says history suggests there could still be plenty of runway over the past 50 years. Five other bull markets that reached year four all made it into year five with an average run of eight years. Going back to 1949, the average run was 67 months, about five and a half years. So can history repeat? Joining us now for more, Ryan Dietrich, chief market strategist at the Carson Group, and a CNBC contributor also here with us, Annika Treon, ING's Global Head of Private Banking, Wealth Management, and Investments.

25:17Ryan, I couldn't help thinking about the bull becoming hamburger when you kept talking about this idea. Tell us where we are. And one thing I noticed from your chart, this is a young bull market relative to others, that the fours go to five. But this one was really hot coming out of the gate. Does that affect, you think, the potential longevity? Yeah, it was hot. Let's hope it's filet mignon, I guess, if we're going to eat it. The reality, though, again, thanks for having me back. We've talked about this concept for a while at Carson Group, that bull markets, they usually age a lot more than you think.

25:50They're like a cruise ship. Once they get moving, Steve, they're hard to slow down and really hard to turn around. Again, like you just mentioned, go back 50 years. If a bull market gets to this point, they've got to the fifth year every time. Now, we understand there's a lot, and what you just mentioned, you know, on a price return basis, we're up about 120 percent this bull market. There were only two that were up more, the 1980s bull market on its fourth birthday and the 2010s bull market right now. And I understand this is a small sample size, but it's all the sample sizes we have. The fifth year those times was up 36 percent year five in the 80s, up over 22 percent in 2010.

26:25So there's a lot more to it, I'm fully aware. But I would say this, I know that today's rough, we're getting into the weeds of it. This bull market probably has a lot more life left to it because that AI spending and trade is not over yet, in our opinion. Annika, your thoughts on this idea about the longevity of the bull market and potential longevity? Look, the bull market is hanging upon one thing and one thing only, and that's earnings growth. And we're yet to see what happens in Q3. We've had our first snippets of it. But if Q3 earnings turns out to be as strong as analysts expect, this would be the third quarter in a row of earnings growth north of 25 percent.

27:00This is an earnings bonanza. If earnings continue, and they are broad earnings across all sectors, if they continue, the bull market certainly has legs, according to us. Would you say it's still kind of AI and tech that's driving it? Because one of the things, the debates that goes on is, do you rotate or do you stick with what's working? And on a day like today, people might think, oh my gosh, the AI infrastructure names are down. Well, that doesn't mean that tech broadly or, can you kind of just get into that a little bit? broad exposure or would you get more tactical here? Yeah. Look, so we're excited about broad exposure.

27:37And obviously, if you open the hood and you look at individual companies and you see that the market is not carried by all names, you see there's just really exciting opportunities. There's exciting opportunities in tech, in energy, but also in industrials. So we are really leaning into the opportunities you see, as I said, very much backed by earnings growth, Because from a multiple perspective, we have to keep reminding ourselves, despite being around all-time highs, markets have significantly derated this year. Meaning the price to earnings multiple is actually lower. It's actually lower. It's significantly lower.

28:11And that's something that we keep forgetting, of course, because we keep seeing markets around all-time highs amidst geopolitical uncertainty, energy price crisis, yields moving around. But that's the fact that we need to keep reminding ourselves. Ryan, pick up on that. There's two ways for this bull to ride, so to speak. You can ride it on what Annika said, which is simply the earnings growth. But there's also the multiple expansion. Have we been there, done that, or is there still room to grow just from that? That's the ultimate question. I mean, great conversation. So year to date, S &P 500 earnings are up 29%, all right?

28:48But earnings multiples are down 15%. That's ballpark why we're up where we are right now, 14, 15%, Steve. Now, the reality is if yields keep going high, people say, oh, my goodness, how can we be near all-time highs with yields up? The market doesn't care. Look at multiples. Historically, yields go up, multiples go down. So, honestly, if you'd have told me at the start of the year multiples would be down 15 percent, I don't think the S &P would be up this high. But it is because of the earnings that continue to come in. So let's imagine earnings continue to be strong. We think they will. This is still a pretty solid economy in our take.

29:18And historically, what happens at the end of bull markets, people get excited. People are not excited. You tend to get higher multiples. I mean, there have been some years where earnings growth were flat, but the S &P 500 gained 10, 15 percent. How that happened? Because multiples went up. So that's an interesting dichotomy we're seeing without a lot of excitement and no multiples going higher. Yeah. So the more people hate it, the more it could last. Annika, give us some ideas, Annika, of where you think there's still really good value in the market here. Yeah. So, look, we I mean, even going back to what you meant, what he was mentioning earlier.

29:50So even if you just look at the S &P 500, right, and you look at the multiples, the PE multiples, we're around, if you take the last decade, the multiples that we're on are around norms, decade norms. So within the S &P, we're excited. Just a point of information, forward 12-month earnings. Forward 12-month earnings I'm talking about. Then you look at emerging markets and you see, wait a minute, from a multiple perspective, emerging markets are actually cheap. Then you look at the earnings growth estimates and also what we are being seen delivered in earnings growth. It's very exciting. If we look at Europe, look, Europe is more challenging.

30:25The energy situation in Europe is much more heavy. There's much more energy dependency. If it's going to be a cold winter, it's going to be a harsh winter. However, again, you go under the hood, look at certain companies. I mean, take, for example, an energy company in Europe and compare that price to what you'd be paying in the US. it's almost 50 % cheaper. So again, there are opportunities. We're excited about opportunities. Kelly, I'm going to take the opportunity to do some reporting on a story I'm working on in my notebook. Love that. Following along the process. So one of the things that's happening is corporate profits are doing very well, in part because the taxation is down.

31:04So Ryan, can you factor in some political risk here that there is some form of change that they come around and say, You know what? We've had a 17 percent decline in corporate tax revenue. We don't have the full numbers. We'll get those, by the way, on Friday. I think during this show, by the way, we'll get the fiscal deficit numbers. And they say, wait a second, we can't run the railroad like this. We're going to have to turn around and take more of a share from the corporate profit area. Yeah, that's very likely. I mean, if midterms potentially swing a certain way, that's possible. And I would just put it like this.

31:39You know, if it's obvious, it's obviously wrong is an old phrase. And I've done this a long time. You know, people say like when President Trump won in 2016, this is people, older people. I remember this tech was going to do horribly because he didn't like Jeff Bezos. How's tech done? You know, President Biden won. Marijuana stocks should do well. That wasn't really the case. So let's not get too worked up on that, Steve. And I know listeners do. And there is a lot of policy there. I will go like this. Nineteen midterms in a row. If you go from the day of the midterm elections and go out one year, 19 times in a row, the S &P 500 has been higher.

32:09Now, listen, I don't know if this will be 20. I think it will. There's a lot of things that go into this stuff. But the reality, we're in that bullish time frame. We don't blindly invest in just seasonals and be very clear. Love other positive. But that's something I think people should remember when this election comes and goes. Usually you're higher, you're later. And I don't think this time is going to be any different. Annika, which risks are you most focused on? Look, bond yields are the most important thing to look at right now because it feels like a very, very long time ago. but it wasn't a long time ago when we spoke about Tina.

32:40There is no alternative. Well, we've got the exact 180 degree reverse of Tina. There is an alternative. You are paid handsomely to go risk off and sit in treasuries. That doesn't mean that equities are not attractive. It doesn't mean that equities are not a good thing. What it means is the cost of capital, actually, according to us, has become more normal again. And then if you think about the jaws of cost of capital versus returns on capital, which is a very healthy dynamic, those jaws have been forgotten about in a 10-year era of extremely low cost of capital. What am I trying to say? What I'm trying to say is we need to be much more vigilant in looking at companies, looking at individual equities and saying, hey, wait a minute, what are the returns of capital on this business?

33:26Because in a new cost of capital world, we believe we're in a new world because the last 10 years was a sort of artificial world, the hurdle has gone up. So that's one thing we pay very close attention to. The other thing, it's not actually a risk, it's a big opportunity, but it's something that I think the market is not paying proper attention to. Ultimately, if you look at markets in simple terms, it's about the demand for capital, the supply of capital. The supply of capital in the last 10 years, QE, etc., shot up. The demand for capital is shooting up now. Hyperscalers, AI, data centers, etc.

34:00But there's a new level of supply of capital that I think people are not noticing, especially sitting over here. And that's in Europe. In Europe, we have 10 trillion euros lying in deposits. Badly invested. Not invested. Not invested. Not invested. That sum must be much, much greater here, no? Just the amount of money just lying in deposit? Not as a percentage. Not as a percentage. So if you look at the average European household, the average European household has less than a third of their wealth invested. In the U.S., it's more than a half. That is changing at the increments in a very fast way.

34:32And that's going to be... They're increasingly investing. They're increasingly starting to invest. Interesting. We've done a lot of work on this. We did a huge survey of tens of thousands of people. And what you find is today, 40 % of Europeans say investing is like going to the casino and gambling. That's changing at the margin. Under 35-year-olds, 80 % say, hey, I'm going to leave into investing. So that's a new phenomena that is going to make an impact on demand supply. fascinating. And we just learned in capitalism, Kelly, money's not supposed to be free. Right. And there's a thing we used to do, which is to gauge the cost of capital versus the return of capital.

35:08And that was capital that we got to go, but capital making discerning choices about where the money should go. Absolutely. Thank you for that wonderful lesson, Annika. And great discussion, Annika Trion and Ryan Dietrich. And shall we do a bond report? Oh, that's me. Time now for the bond report, as Kelly just said. The U.S. 10-year yield trading below 520. Bank of America out with a new note after the hotter-than-expected inflation data. Inflation pressures broadened across goods and services in September. And B of A now says today's CPI report keeps an October hike in play, maintains its call for another increase this year.

35:41Right now, LSEG puts the odds of an October rate hike at 39%. That was 22 % before the release of the CPI print this morning, Ms. Kelly. And the 10-year yield is now lower on the day. Yeah, that is true. Tell me whether we're actually pricing in another rate hike and hot inflation right now or not, because that's a big round trip that we just made. And we talked to Robin Brooks last night. He said he'll still bet on not a hike in October. But oil is higher. I would have said the answer is oil, but the answer is not oil. Exactly. Look at the headwinds it's facing. So is this a turning point? How about we go to break and I'll figure it out at the break?

36:17Competing for that capital coming up. This media name is on its longest winning streak since 2024. Can it keep going? We'll get to that and more with LightShed's Rich Greenfield. Don't go anywhere.

36:32Shares of Netflix are slightly lower today after the streaming giant announced it will lay off about 1 ,000 workers, 6 % of its workforce. The cuts will largely impact tech, legal, and HR. As Netflix co-CEO Ted Sarandos said last month, the company not growing as fast as he wanted. What happens next? And they report earnings next week. Joining us to answer that is Rich Greenfield. He's the co-founder and tech and media analyst at Lightshed. Great to see you, Rich. You don't have a ton of time here, so let's get right to it. We all know Netflix's problems. I guess they need more original programming that everybody wants to watch.

37:04What do you think they should do here? I mean, I think the thing that gets missed so often is if, you know, Netflix actually reports their engagement statistics, nobody else does. I think if you saw the relative price to value of Netflix versus everyone else in the sector, I think you and most investors would be shocked how little other services are used. Is Netflix happy with their engagement? No. And I think the thing that a lot of investors are missing is they're leaning very aggressively now into the creator economy, not just video podcasting, but literally going after top tier talent on YouTube.

37:39And it's caused a pretty severe reaction from the team over at Google and YouTube, you know, sort of pressuring talent not to work with Netflix. And I think that's a clear sign that what Netflix is doing is working. A lot of the deals haven't even launched yet. But I think as you look at over the next year, what Netflix is doing with talent like Salish Matters and Mark Rober, this is working. And I think is the early seeds of an improvement in engagement. Obviously, the big thing that needs to happen is they need a breakout hit. And there has not been a true zeitgeist breakout hit really for all of 2026.

38:12But to be fair, there hasn't been a breakout hit across all of TV this year, which is really interesting when you think about what's happening in the streaming ecosystem. Yeah, we've got breakouts, Steve, in micro dramas. We've got Disney randomly on an eight-day winning streak. Go ahead. I got a big popcorn and went to see Odysseus at the movies. I don't know if that's one of the competitions. Let's talk about that. And Netflix's rival Disney, that was the mystery chart. The stock is on pace to snap an eight-day win streak. It's longest since 2024. 24 is the Disney rebound for real. I mean, again, if you go back and just check the chart, I mean, Disney's sitting at the same price it was back in 2015.

38:50So, you know, being at 108 is certainly nice versus where it was at 90. But, you know, the real question is, is how does Disney break out? And I think that all comes down to growth. And I think really investors are looking for what is the growth? How is the growth strategy under Josh DeMauro going to be different than it was under Bob Iger. And is it just more of the same or is there going to be a real delineation, something that is truly different or changes? Right now, we've obviously seen a bunch of cost cutting, but we haven't seen a real change in strategy. And look, when you look at these stocks, you know, I think the bigger question is, is when you think about what's happening, whether it's at Disney or at Netflix, and then you look at like what's happening at a stock like Meta, where like Muse is becoming the conversation and Meta is all of a sudden cool again, And it is really hard to get excited about a lot of these media stocks when what's happening in AI is far more exciting.

39:41That chart looked like only half of Space Mountain, right? The down part, but not necessarily the up part. Yeah, and you look at Meta where, I mean, the stock is not expensive. You know, yes, it's bounced off the bottom from where it was back over the summer where nobody cared about AI or about what Meta was doing in AI. Everyone is now paying attention. But I think there is now a true belief that Meta has a right to win in AI. And I think if we were to say to you or even your kids, you know, is Meta a cool company? I think Muse has made Meta a cool company in the last six weeks. And you're actually starting to trust it more, giving it your credit card information, giving it access to your Google Drive or to your files or to your QuickBooks or whatever.

40:25Like, that is a really strong statement for a company that had, I think, had lost investors or lost consumer trust. But, Rich, people, apparently Dave's Hot Chicken is already back to number one on the App Store. So I just wonder if this is going to be a flash in the pan. Have you used it? I have, and it's wonderful. I have expounded its virtues, but I don't give it access to anything. So even for me. Yeah, wait till you do that, Kelly. You got to, I know that you have. We got to go, but it's amazing. this agent thing. Are you using? I'm using an agent. I'm surprised you give them access to everything.

40:59Well, I figure that whatever. You got to make some choices, you know. We got to go. But the idea that somehow AI and Muse is arbitraging Cinderella is weird to me, Jeff. Rich, I know we got to go, but it just seems like they're different things. Real quick. This is going to be the biggest stock in media over the next 12 months, hands down. Crazy. And I think there is some truth to it. The way I'm talking to Hairstyles the other day, she said, I spent all my time talking to Chet. I said, Chet GPT? It's doing a lot of things for me. It's doing appointments. It's doing scheduling. It's doing my expenses.

41:35OK, talk to me after the show. Rich, thank you. Rich Greenfield, appreciate it. Lightshed co-founder. OK, let's get over to Julia Boorstin for a CNBC news update. Steve, a federal judge extended her temporary restraining order today blocking President Trump's controversial taxpayer-funded TV ads. The block, which he initially put in place on Sunday, will now last through November 8th, several days after the November 3rd midterm elections. The ads were paid for by a$20 million Department of Homeland Security contract. The FBI says Director Cash Patel is in Virginia today for a law enforcement-related event.

42:14His presence there confirmed after our sister network MSNOW cited two unnamed sources earlier who said he had landed in Russia for a meeting. Politico reported in July that Patel was going to travel to Russia in mid-October, but the plans have never been confirmed. And the Justice Department is reportedly ordering California to review a list of alleged non-citizens it believes may have received a mail-in ballot for the upcoming November election. That's according to a letter seen by the Associated Press and CBS News. The DOJ gave state officials 48 hours to conduct the review, which were provided on a password-protected thumb drive.

42:53California officials have not commented. Kelly, back over to you. Wow, interesting. Thank you, Julia. Julia Borson. Healthcare, one of the few bright spots in today's down tape. And our Annika Kim Constantino sat down with CEO of Merck earlier today. What you need to know about the sector and the red hot stock. That's next.

43:17Welcome back. Healthcare bucking the sell-off today. Let's bring in Annika Kim-Constantino, who sat down with the Merck CEO earlier today. Hey, Steve. Rob Davis told me this facility that I'm in right now will use robotics and AI to meaningfully accelerate Merck's ability to bring drugs to patients. But we also dived into the personalized cancer vaccine that the company is developing with Moderna, which helped lift both stocks after they released promising late-stage data in skin cancer back in August. Right now, it currently takes around six weeks to manufacture this shot, from sequencing a patient's tumor to delivering that to the actual hospital.

43:56But the CEO told me he expects this vaccine to get faster to manufacture over time. Here's what he said this morning. We're working with our partners, Moderna, to do everything we can to accelerate. So that is really the time out of the gate where we expect to be initially. We are going to drive for improvement, but right now the focus really is let's make sure we have the supply ready. We have the market ready to bring this important innovation to the market. And then we'll talk about how do we accelerate. But I do think over time you're going to see that timeline, that timeline shortened. But this vaccine still has to win approval before reaching any patients, Steve.

44:35Thanks so much, Annika. Fascinating. Good look to good to get a look, I should say, inside there. Annika Kim-Constantino, more Power Lunch after the break. As we wait for Anthropic to disclose its new revenue numbers, we do have breaking news on rival OpenAI. Kate Rooney is back with that. Hi, Kate. Hey, Kelly, we are just getting headlines that eight states now, this is including Iowa and Kansas, are suing OpenAI, alleging that basically the chatbot has coached minors to harm themselves or others. So this has to do with children using ChatGPT. The lawsuits do come amid, Kelly, growing legal scrutiny over the companies.

45:15There have been other examples of this. These, again, are state lawsuits, but there have been individual lawsuits on other issues. We had one about the let's see, there's one about a suicide. The family alleges that ChatGPT encouraged suicidal thinking. We have seen more of a pattern of these types of lawsuits. And it does come, Kelly, amid speculation about who is liable in some of these. And we may see this get settled in the courts. I did reach out to OpenAI. We have not heard back, but in other lawsuits that we've seen filed earlier this year, a company has pushed back and disputed some of these claims.

45:52We'll let you know if and when we get a response from the company. Kelly, that's the latest. Kate Rooney and Steve, this seems like one area where regulation is probably coming quickest, and in this case, perhaps fines and punishment as well. Well, we talked about it. We have eight seconds, but the question of whether or not these AI companies are ready for prime time. That's a good point. About being public. Thank you for being here today. Really appreciate it. Steve Leisman, everybody. Power Lunch, that's it for us. Closing Bell starts right now. Real talent is defined by what people can do, not where they learn to do it.

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