Tech Sell-Off, AI Trade Fears and Amb. Tilman Fertitta

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1:03Stocks are giving back that big post-election rally yesterday and then some. We're near session lows. The Dow down more than 1 ,000 points and the tech-heavy Nasdaq is in correction territory, down 10 % from its highs just last month as investors reassessed the landscape. Welcome to Power Lunch. I'm Kelly Evans. Brian Sullivan will join us shortly. Today's sell-off is focused on the tech trade. AI compute, neoclouds, memory stocks getting crushed. with fresh concerns about a slowdown in the AI buildout. Plus, American diplomat, businessman, and investor Tillman Fertitta is here and sitting down exclusively with Brian to discuss the stakes for U.S.

1:39business abroad, energy, and a whole lot more that's coming up this hour. Let's begin with the sell-off, though. Chip stocks taking one of the biggest hits, the SOX ETF, on pace for its worst day since March of 2020. Not often that you see it down 10.5 % in a session. Let's get right over to Seema Modi with more on this. SEMA? Kelly, what seemed like just a rotation from growth to defensive is now being seen as indiscriminate selling. That was a word from Bank of America that put out a note to investors midday today. You mentioned semiconductors. Great focus on the move that we're seeing in NVIDIA on pace for its worst day since 2025 and now has turned negative on the year as investors debate just the impact of midterms and how long that could elongate data centers and what that means for future demand for GPUs.

2:25You're also seeing AMD, Broadcom, and other semiconductor stocks trade lower, as are the memory names. There was a report that Micron, the biggest player in the memory space, is delaying the opening of a plant in Taiwan, about a$4.5 billion plan due to some labor dispute issues, raising some concerns around whether some of the political issues here in the U.S. are starting to extend overseas. That name, along with Sandisk, you'll see down, Wow, about 19 % at this hour. We've been putting a lot of interest in the move in Neoclouds, the companies that lease the data centers, offer GPUs to the Frontier Labs and the hyperscalers.

3:01Well, a data center construction timeline, that being delayed by any means could certainly have a near-term impact on these companies, especially ahead of earnings, where we'll perhaps get some more clarity on the financing needs for companies like CoreWeave and Nebius. If we were to just zoom in on CoreWeave specifically, Kelly, you're now seeing that stock down just about 70 percent from the high it hit back in May and now down about 12 percent. Although Bank of America, again, just in the last hour, coming out in defense of the company, saying that they will be able to meet and fund their contracted backlog without accessing the high yield market.

3:34That, of course, is one of the big questions today. That's an interesting take. Seema, thank you. Seema Modi, let's stick with the chips. The SMH is down 19 percent since last Friday, which puts it in some rare historical territory. Bespoke notes that there are only five other times since 1994 when the semis fell at least 17.5 % in five days. And those are the Asian financial crisis, the Russian debt default, the dot-com bust, the 2008 financial crisis, and the COVID crash. We need something to cheer us out. Let's bring in Interactive Brokers Chief Strategist Steve Sosnick. He's here on set along with Carson Group Chief Market Strategist Ryan Dietrich, who is also a CMUC contributor.

4:14Welcome to both of you, Brian. You can just kick things off. When you hear those stats, like what Bespoke is saying, are you buying now throughout the correction, waiting for it to get worse, anticipating that it might get worse before it gets better? Well, I think we should not let Sully leave the country next time. That's what happens when he leaves the country. You look at what's happening. Obviously, we didn't expect this, right? I mean, news trumps charts is an old phrase that we learned. The charts didn't look all that bad. Just yesterday, it's 72 % of the stocks in the S &P 500 above their 50-day moving average.

4:44But when 37 % of the index is tech and tech is down 7%, we see what's happening. I think the thing is, yes, we're still optimistic here. We don't need any major changes. Kelly, I was looking for something different to say from other guests. I look at the dollar today. Dollar is down a little bit. Look in history. When you have really bad sell-offs, you need to get more of a bid in the dollar. We're not seeing that. So maybe that's one little minor positive and just stay diversified is how we're looking at this. I wonder why you're looking for something different to say. Because do you hear a chorus that you agree with one way or the other?

5:12Meaning, are you getting from others the message, stay the course, don't worry, you know, don't make it? What are you perceiving that everyone else is doing? And are you or aren't you part of it? No, I guess we're part of the stay the course. I think that's true. I mean, we are overweight equities, right? Uncontrained tactical models, about 68 % equity. So, but look at that. I mean, Europe's doing pretty well today, right? Low volatility. We've had this barbell, momentum low vol for two years now. And yes, our models are probably going to underperform today because we're overweight equities. But there are some other areas that can kind of help this.

5:43And honestly, bonds are finally giving you something. Gold's doing pretty well. We have some gold to manage futures. So this is still an ugly day, no doubt, with the bespoke stat you just said. But again, if you're all in tech, it's really ugly. If you're diversified, it's not fun. But we're going to get through this. Do you, Steve, see the days like this as the price you pay? So for instance, Triple Q is one of the best-performing parts of the market for a couple of decades now. The return is outpacing the S &P, but the down days, you get the opposite of that. The down days are worse. They're awful.

6:09I mean, is it a moment to enter and to take the price you pay for the upside? Or do you think there's something more significant here where, for instance, is that upside being driven by tech and is the tech now in trouble because of the politics and the news cycle? Well, think about the narrative change that we've gotten in tech recently. It went from all money that was invested or spent on AI is good and will return whatever. We never really questioned the whatever. So all of a sudden is, what is that ROI going to be? What is that ROE going to be? And in some cases, do I get even return of capital in the case of some of the more troubled situations?

6:47So that is a big change in narrative. And looking at bespoke statistics, there were five incidents there. Three of them, the Fed came to the rescue because it had nothing to do with what was going on, the Russian debt crisis, COVID, and there was a third one in there. But the other ones, the dot-com crash and some others, these are secular. And so the problem is, if the Fed's not riding to your rescue, and this Fed does not appear to be doing that, remember, the Fed put applies to the banking system and the credit markets, not the stock market. If we have a long period of time, I'll explain it.

7:23I'll just leave it at that. And so I do think that this is a big secular change in mindset. And the problem is, if you had this trade that was unquestioned and everybody was fully invested in it, who's there to take up the slack when the winds change? And this is what we're seeing today. What do you think is really going to happen? If we were to, Larry, I was going to say Larry David, I don't think that's who it was, Larry Adam, last hour from Raymond James was saying he is buying today. And in fact, he said among his trade ideas, he's fading healthcare where he thinks it's gotten expensive. He's into tech, especially some of the mega cap tech.

7:58And he likened what we're seeing today to the tariff tantrum from April of 25, which we both remember very, very well. You had equivalently sharp dislocating moves and the ensuing recession that was supposed to come. I remember I was at a dinner of supply chain executives that month and there were probably 30 people around the table. Every single one of them said a recession is coming by the end of the year. Every single one. And they were wrong and that didn't happen. So is this another moment where everybody's racing to price in a what if, what about outcome that could present itself as a buying opportunity?

8:30The difference, yes, I understand the freak out around the tariffs, but the tariffs were sort of, the president made a series of decisions at that point. The market hated them. The bond market got yippee, his word, not mine. And we turned around. It was basically, OK, I did something. The market hated it. I'm going to turn it around. And the market didn't hate it quite as much. We've come to grips with tariffs on and off, but so be it. It was done. In this case, this is a more existential issue because, number one, if it was just the change in House and Senate and the governor's mansions, you could say, OK, that's one thing.

9:10But we were already starting to question the legs underneath the trade. Now you've got some outcomes that were just completely not there. The four states that see the most AI build out, Virginia, which had a blue governor before, but Georgia, Ohio, Texas all turned blue. And in the case of the governor-elect of Texas, she wants to put a moratorium on new development. She's not going to stop if there's a shovel in the ground already. But this, you know, we all talk about the giant backlog of orders out there. When are these going to get realized now? So this does, this is a big existential change.

9:46It's a fundamental change. And that, to me, is a big difference. If you're getting it because the market's just having a bad reaction to something like some of, like, think about Apple and Amazon earnings. The earnings weren't bad. The stock reacted badly. They bounced back. If you have a big fundamental change, as you had with, let's say, Intel or Alphabet, where the story was materially worse, it takes a while for stuff to bounce back. And maybe, Ryan, to what your excellent point is, Steve, is that in the case of tariffs, the markets pressured the president and he kind of backed down. In this case, we can't rerun the election and it's not clear anybody cares and is going to try to back down.

10:20This might be exactly the reaction they wanted from whether it's the American people, the people they elected to kind of slow down AI development. If that's what's going on here, it's not there's not going to be a tweet, you know, unwinding that. There's no easy way to fix it with tariffs. It was like a dial. You could turn it up and down very quickly. and we saw what happened. Now, you mentioned April 2025, the tariffs. That was one of the last times we've seen a VIX spike like this. VIX is up like 11 points. I know the VIX is up like 65%. I don't like to use percentages on the VIX. But that's a pretty big spike.

10:48Now, we've seen bigger, yes. Today, just look, about 1 ,700 stocks are lower on the New York Stock Exchange. Kelly, that's like the most we've seen over a year. Not a surprise. This is the worst day, potentially, in 17 months. At the same time, these are some signs. What have we seen? I've come on with you for a while saying, hey, breadth is okay. Today's a perfect example. Nine sectors are outperforming the S &P 500 today. Now, I get it. All 11 sectors are lower, but it's because tech is pulling it so much lower today. So, again, I think our thing we're really stressing, our Carson advisors and our clients, over at equities, yes, but stay diversified.

11:20Have some low vol. I mean, banks, I know banks are getting hit today because everything's getting hit today. But banks are breaking out of a 19-year kind of consolidation. I still think there's some positives out there with financials, industrials, health care. Health care is our largest overweight. You know, that's kind of the anti-AI trade, if you will. And I feel like those are some areas. And one more, we were lower in October in the midterm year. And I know seasonality hasn't worked out well this year, but never in history have you had a lower October than a lower November. November is usually a pretty good month.

11:50There's lots of other stuff happening right now. We're so optimistic, though, that as bad as this feels, October started off really hot. November started off pretty poor. We saw how that flip-flopped. Maybe we can be a little optimistic here. And you mentioned you're looking at Europe, the dollar. Like you said, it's not spiking yet in a sign of kind of real systemic stress or anything like that. Really appreciate it, Ryan. Thanks. Ryan Dietrich joining us from the Carson Group. Steve, we'll see you in a little bit later on. Thank you, Steve Sosnick. And we just want to get you a quick check on the bond market as well.

12:14As mentioned, there's actually an offset today. It's kind of that 60-40. We said the 60-40 portfolio is over and maybe today it gets a second life because the 10-year yield is down to about 4.833%. It was even lower a little bit earlier on. That has Treasury yields falling, I should say, to multi-week lows. The U.S. economy was still displaying some resilience as well. The jobless claims those were good 57-year low this morning. And the next read of the employment picture comes tomorrow with the official job support, where economists are expecting 59 ,000 new jobs and the unemployment rate to remain steady at 4.2 percent.

12:47Coming up, it's a sea of red, the Red Sea on Wall Street. But the midterms sent a blue wave through Washington. Now all roads lead to Rome. How about that, where Brian Sullivan is standing by. Brian? Yeah, you know, there's so much talk about Texas. So we're not in Texas, but we figured we'd bring a little bit of Texas to Rome with the ambassador to Italy in San Marino. Texas' own Tillman Fertitta, who's going to be our exclusive live guest. And guess what? It's the perfect day. Even though the markets are down, we're talking to a gentleman who became one of the richest men in the world by buying low.

13:23We'll ask him what he thinks right now about markets, the election, the economy, the consumer, and more. live from Rome Italy on Power Lunch next.

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15:11Welcome back. Brian Sullivan is live in Rome today drilling down on Europe's energy crisis. And he is joined now by a very special guest who will weigh in on that, the election, the economy and much more. Brian, take it away. Yeah, Kelly, thank you very much here with Tillman Fertitta. Of course, everybody knows him. He's the owner of the Houston Rockets. He is the owner of Landry's 700 plus restaurants, the Golden Nugget Casino Chain. And by the way, the reason we are here, the ambassador to Italy, Ambassador Fertitta. Thanks for thanks for sitting down with CNBC. Heck of a day today.

15:44Tilman Fertitta: Always great to be here with you, Brian. And it is kind of a heck of a day back there in America today. No, it is. And I understand that you are now the ambassador. So things are a little bit different than the Tillman that we're kind of used to speaking with. But do you think today is about the election? I know you're not a markets guy, but you do own stocks. Oh, it's definitely, it's a reaction, just like yesterday was a reaction. And today you're getting another reaction. And that's what happens anytime you have a big swing like this, a new presidency or what happened yesterday. People are trying to feel it out.

16:20Tilman Fertitta: You know, even a guy like myself, rather both from being the ambassador here, trying to make sure it figures out what's going to be different. And also, I still own a company there, even though I'm not running it. I still own it. And in your brain, you're trying to figure it out what's going to change for us. So everybody's a little skittish because it's the unknown. And we all worry about the unknown. People are panicking about Texas and data center growth. Listen, you are a Texan. You are one of the most, maybe the most famous business person in Texas. But you've grown your business under all administrations.

16:57Ann Richards was a Democratic governor of Texas in the early to mid 90s. And you grew. Are you confident you can keep growing your businesses? That the Texas economy will continue to grow even now?

17:10Tilman Fertitta: You know, for sure. I mean, Texas economy, it's kind of it's American. We talk about like compared to Europe, America's growth compared to the rest of the world's that, you know, Germany's whole stock market isn't even worth as much as Apple. So America is great and it's not going to slow anything down. My company has grown through all administrations, rather who controls the House or who controls the presidency. And that's all American companies. OK, it's it's we're a capitalist country, but we better stay a capitalist country. You know, one of the reasons that I'm here, other than, of course, speaking with the ambassador to Italy, is to talk about the Europe's five year energy crisis.

17:54It's not a new thing. This has been a rolling problem since we first started talking about it in 2021. Italy gets about 45, 47 percent of its natural gas from America. A lot of that comes from Texas. There's about nine natural gas export facilities under construction, most of which are in your regions, Louisiana, Lake Charles. we have significant business interests. Are you worried that that's going to slow down or stop now? Or do you think that will continue on, that growth, that construction, those jobs?

18:24Tilman Fertitta: Well, it has to, okay? Because you can talk about all the other types of energy there is, and I think that we proved that they really don't work, okay? You got to have LNG and you got to have oil. And Italy is the gateway to Europe with LNG and realizes the importance of it, But still, they're struggling here right now. Energy costs are high, and we have to do whatever we can do and use all sources. They're even going to look at doing the small nuclear plants here again. You've got to have energy. You're never going to solve it with all the alternative ways. We'll get it done. You're bringing that messaging, I think, part of bringing a lot of business to—I know you're friends with and you've spoken a lot with Lorenzo Simonelli, right?

19:08who's the CEO and chair of Baker Hughes, an Italian by birth, an American company making their turbines, a lot of which are made right here in Italy. Do you feel like with Prime Minister Giorgio Maloney, there is a turn, there's a feeling, at least in Italy, that we need to pivot to get smarter about energy so we can have some growth? Because they've got almost no growth here, but the same inflation and borrowing costs that we have in the United States.

19:35Tilman Fertitta: They do. And what people need to realize is, So much of your growth in America until the tech world came in was energy. Energy will help a country grow. And I think that Italy's realizing that, the importance of energy. And that's why they're kind of becoming the gateway of LNG, because they realize energy is growth. Because one thing, every time you build a new building, every time, no matter what you do, it takes energy to operate it. It does. And, of course, energy built your hometown of Houston. and your family's given a lot back, and now you've built all these hospitals and everything that you guys are contributing.

20:10But I want to talk about what you've been building, which is really a gaming empire. You bought Caesars. I think you're the largest or one of the largest shareholders of Wynn Resorts.

20:21Tilman Fertitta: What's the goal there? I'm an opportunist, and that's why just like today in a down market, you've got to take this as an opportunity to buy. This is just a a blink. It's closing your eyes for a day. And if you look at where stocks are, it is a buy-in opportunity. I've always been an opportunist. You owe hundreds of millions of dollars in stock, maybe billions in stock. You're not a seller today. I wouldn't even think about it. And it is billions of dollars in stock. I don't want to shortchange it. And I do not, I want people to watch CNBC to know what's happening, but do not sweat it out. Do not worry about today.

21:03Tilman Fertitta: It's just today. And tomorrow could be up 15. Well, you, you, there was a recent article with you. I think you were named the second most powerful player in restaurants in the United States. Maybe, you know, could debate one or two. Um, you said you're an optimistic or patient buyer. I think was the wording that you use. You wait for things to come to you, right? The market's actually down text down about 10 or 12 % over the last couple of weeks. It's not a one-day election reaction. Tilman Fertitta, you don't mind buying when things are down? Absolutely not. And honestly, if you look at the greatest growth in my stock portfolio, it was 1999, 2000, the tech crisis.

21:46Tilman Fertitta: It was 2008, 2009, during when the world was blowing up. The only time that I did not buy stock when the world cratered was 2020, because when every one of your businesses shut down one day and you have 50 ,000 employees and you have a payroll tail coming after you, you say, I better keep a hold of my money. Yeah. Have a little bit of dry powder. But talking about all that, what I want to be known for is the best ambassador. Okay. How do you define best? You want to have a great relationship. with the administration, of course, here in Italy. Do you? And I do. And you want to work every day to help the 800 major companies that do business over here.

22:31Tilman Fertitta: And you want to help all the Italian companies that do business over there. Italian companies are investing$55 billion in America this year. Pirelli Tards is building a billion-dollar plant in Georgia. So there's so much that goes on between these two countries every single day. Yeah, and like we talked about Baker Hughes, and I don't want to just sing, I'm not singling out Baker. I know him because I cover a lot with energy. I want to pivot to consumer. Obviously, you've got restaurant brands across the United States. You've got hotels across the United States. You've got Caesars now. Do you see any cracks to the consumer?

23:06You've always been straight with us. How's the consumer doing?

23:09Tilman Fertitta: You know, honestly, I do not look at it every day like I did when I was there, okay? And because believe it or not, you really stay busy as an ambassador helping all these other companies and all the political stuff. The consumer has not cracked at all. OK, restaurants are doing extremely, extremely well. Vegas is a little soft only because it's so expensive to buy an airline ticket to get there right now or to fill up your car in California to drive there. But this is a day in time. OK. And when you really think that it's really fuel costs that is the biggest issue, that's going to hurt travel.

23:52Tilman Fertitta: OK. Now, we've got to fix this inflation problem. OK. Because this inflation problem. How do we fix it? Well, well. Well, the Democrats campaign largely on affordability. Well, let's see what they do. Well, that's going to have to do something. And hopefully our our president and he will. And he is a dealmaker. That's the art of the deal. I think he's going to sit down with the Democrats come January and we're going to figure this out. Well, he's going to have to. Well, I have a lot of faith because he understands, just like he wants interest rates down. People, at the same time that inflation is going up, you're killing the whole housing market.

24:31Tilman Fertitta: If you kill the housing market with high interest rates, that kills the economy. You have to have a good housing market. So we've got to get interest rates back down. How do you do it? We've got to find a way to slow down inflation and bring costs down. And energy is the biggest. We've got to solve this energy problem. I will say this. Gasoline is$9 U.S. equivalent a gallon here in Italy. Maybe that's why the cars are about this big. We're going to wrap it up. I've got to ask you this. Obviously, on the Rockets, you bought the Connecticut Mystics. You're bringing them back to Houston, the WNBA.

25:04That's booming. Is there room for a second NFL team in Houston? I mean, would that be something you're interested in?

25:11Tilman Fertitta: Well, sports is, it's amazing that there's been better sports appreciation than the stock market or anything else. You know, I always go back to when I paid$2.2 billion for the Rockets in 2017. I said, oh my gosh, because it was the most ever paid for any sports team anywhere. And what are they worth today? Seven, eight billion dollars. So sometimes it's better to be lucky. And what could you have bought them for 30 years ago? It was? 80 million. 80 million. But then I would have built my company. That's true. You said you were a patient buyer. So just to wrap it up on an optimistic note, because you've also said you want to be the best ambassador to Italy and bring capitalism here and help them hopefully with their, because they need a Houston guy maybe to help them with the energy because they need a lot of LNG, as we've talked about.

26:03Your message is stay patient on a market like today, right, To all the people out there that obviously are not billionaires like you are.

26:11Tilman Fertitta: But I was patient. I waited 25 years, but yet I've still got$6 billion in appreciation. Because by waiting out. By waiting it out. And by buying when things look bad. So the last message is, how do you do that then? Sit here and wait and don't ever panic. How do you not panic, though? You just don't panic. You just sit here and be patient. Everybody should be patient in life. and everything will take care of itself. Tillman Fertitta, the ambassador to Italy, really appreciate your time. Thank you for letting us into the ambassador's residence, Sevilla Taverna, just a spectacular place. Great to see you again as well, my friend.

26:48Always, Brian. And everybody at CNBC, all my friends. And maybe tomorrow the market will be back up 5%. We'll see. Tillman, really appreciate that. Kelly, I'll send it back to you in Inglewood Cliffs. I know, big market day. Thank you for making some time. Of course, Brian, great interview. We appreciate it. It's great to see the ambassador as well. It's been a while to hear from Tillman Fertitta. And I loved how we said, and this is relevant to today, everybody, Tillman just said the most that he's been buying, the biggest in his portfolio, has come from years like the dot-com crash in 2008. So just something to keep in mind today.

27:16Not everyone is selling. Call buyers are stepping into a handful of tech names. We'll get out to Oliver Reddick to break down the options action next.

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29:07I don't need to tell you it's a sea of red on Wall Street today. If you were hoping that had changed here at the 2 p.m. Eastern hour, 2.30 really, unfortunately it hasn't. We've got about 90 minutes into the close, and we're pretty much sitting right at session lows. The Dow is down 1 ,700 points. The Nasdaq is down more than 5 % today, and it's now down 10 % from its highs last month, aka correction territory. Every single name in the Mag 7 is also in the red right now after huge gains yesterday. Microsoft is up 7 % yesterday, down 3.5 % today. Look at NVIDIA, down 8%. Tesla down 11%. The Mag 7, as they're known, has a race to about a trillion dollars in market value today.

29:44It's larger, for context, than the entire market caps of JPMorgan, Berkshire Hathaway, and ExxonMobil. And you can see the relative outperformers of the group include Apple, down 1.5%. Despite all that, there's been some bullish call buying on several big tech names. Oliver Rennick is following the options action for us. Oliver, it's good to see you again. What are you picking up on? Hey, Kelly. Yeah, as the market sits at low, is the VIX still generally below the high? So there is some calm. And there's some of that in CoreWeave as well. Despite it being at the center of this sell-off for weeks, it doesn't scream end of the world in the options.

30:18And volume is pretty high. It's twice the 30-day average. And obviously, it's been a very busy 30 days for CoreWeave. It's about an even split between puts and calls. And among the top five trades by size, it was one call buy, one call sale, and three put sales, with the 40 strike expiring in November and in January, both getting sold in some size. Now, if you zoom out a little bit and look at the total put open interest, though, the concentration around Corweave is at the 30 strike, which is about 30 % lower here. and where the stock traded roughly 18 months ago after its debut. And arguably right now, maybe one of the few areas of visible support, Kelly.

30:59Yeah, and you spoke last hour, Oliver, with a trader in the SPX pits. And where you noted earlier today, it was kind of frenetic. Despite the fact that the indexes haven't approved, you said it just feels calmer now. And maybe, I don't know, maybe that's a bad thing. Yeah, as we made lower lows there in S &Ps, the VIX just has not been able to push past that. 28. Keep in mind, too, that while VIX is at the highest level that we've seen in months, it actually was higher at the start of the Iran war, though we're getting close to that. The one day move in the VIX is definitely pretty juicy, Kelly.

31:33To get a comparable move for that low to high today, you have to go back to Liberation Day in April 2025. So clearly, this is a potential for regime shift. But the other thing to keep in mind is that if VIX hasn't made higher highs while stocks are making lower lows. When we close out today, that takes us closer to Friday, which takes us closer to the weekend. And the closer you get to the weekend, generally, the more vol is likely to come in just because of the weekend. So I think right now, this is fairly measured, I would say. This is not necessarily a panic. This morning, though, was pretty manic.

32:07Yeah. Oliver, as people start shouting behind you, come back on if there's more to say, Oliver Reddick. We appreciate it. Let's get to Frank Holland for the CNBC News update. Frank. Good afternoon again, Kelly. A New York appeals court is hearing President Trump's bid to toss out his conviction tied to a 2016 hush money payment to adult film star Stormy Daniels. In May, a jury unanimously found Trump guilty on 34 felony counts of falsifying business records. The now president continues to deny those allegations. The case is expected to eventually be appealed to the state's highest court and potentially to the Supreme Court.

32:40The Archdiocese of New York formally agreed to an$800 million settlement today with some 1 ,300 people. who said they were sexually abused by its clergy and other leaders. The accusers can either receive a lump sum payment of around$250 ,000 or receive a larger payout if they allow a deeper probe into the extent of their alleged abuse. And after five years, Live Golf says the divisive league is widening down operations and will no longer plan a restructuring. A Live Golf lawyer said in bankruptcy court today, the league could not get the combined financial employer support for a viable Live 2.0.

33:13investment firm BC Partners reportedly pulled its funding this week. Kelly, back over to you. Yeah, it kind of looked like it was headed this way and then maybe not. And yeah, now it is a little more final. Frank, thanks very much, Frank Holland. Coming up is today's tech sell-off. Actually, a big buying opportunity. You can see the tech index down about six and a half percent. And our next guest made a bold contrarian call earlier this week on a name you won't even believe it. We'll talk to him more about that next.

33:49Welcome back. The Neocloud ETF, and yes, there is one. It's on pace for its worst day ever, down about 12 % right now. And one of the companies at the center of the sell-off is CoreWeave, which lost 30 % of its value just in the past week. It's down today as well. But our next guest is making a bold call on the stock. Paul Meeks is head of technology research at Freedom Capital Markets. Paul, it's great to see you. Always love checking in with you over the years. Explain why you think the market is getting it wrong on CoreWeave and whether this applies beyond that one to the neocloud sector more broadly.

34:23So the problem with CoreWeave is the narrative, not based on fundamentals, based on something else, is just so negative. And unfortunately, it's a self-fulfilling prophecy, a doom cycle, where if the creditors are worried about Corwee paying back their debts, then of course, they have to borrow going forward to fund their AI infrastructure build at exorbitant rates. I cannot change that trajectory. But what I can tell you is fundamentally, if they get funded, here's a company that last year did$5 billion in sales. In three years, they'll do$42 billion in sales. And I have them in that 2028 period doing an EBITDA margin of close to 70%, which is a good business.

35:13Now, if they can get on that path and folks feel comfortable with that path, then they'll feel more comfortable about the debts and Corlew's financial wherewithal to pay those debts. I think we're going to get a little bit of relief. I don't know about the stock price, but fundamentally, I see it when the company announces earnings early next week. And also the other big neocloud, Nebius, announces. And even tonight, the minor league neocloud, IREN, is reporting. So we'll get a little bit of taste of what's to come. But I think that the market has taken this way too far. And the fundamentals, particularly driven by demand signals, look pretty good.

35:56You know, still, it's a big statement to say if the funding is there, And the model, business model is kind of predicated on that. You know, the credit people I talk to, you know, just informally when I'm asking them about the name, I can't say they're excited to get involved. You know, they look at it and they're like, I don't know, you know, maybe for a different pair of hands. So talk more about the if they get funded part of this and how much that, you know, how much leverage they have both to the upside and to the downside, if that's the case or if that's not the case. You know, I have to admit that's at least partially the case.

36:39But, you know, they're going to fund going forward via special purpose vehicles where they're taking the cash flows from their investment grade hyperscale of customers. and the last time they funded one of these vehicles, and Nebius does the same thing, they are borrowing at about 6%. Now, that was a couple months back. There is going to be a much wider spread now. But if they can show a, not necessarily a pop in revenues, I think that's a foregone conclusion with the voracious demand in the industry, but if they can show a continued strengthening of their EBITDA margin, and I expect to see a little bit of improvement sequentially when they announce next week, and then a much bigger improvement sequentially between now and Christmas, I think people will feel better about lending them money.

37:28But unfortunately, it's kind of like you can have a healthy bank, but if there's a run on banks, generally speaking, then they could be in some trouble. So I am not fool enough to downplay the credit risk. Yes, it's gotten worse over time, but I feel strongly about the fundamentals, particularly the demand from its customers. If it were anyone else, I wouldn't have even paused. But I said, if Paul Meeks thinks there's something to this. All right. So we've got the companies reporting that you mentioned. We'll watch. What a time for that as well. EBITDA margins will watch and we'll see if they can ride this out.

38:00Paul, thanks very much. We appreciate it. Thank you. Joining us today from Freedom Capital Markets. By the way, you can read more of his call on CNBC Pro. Coming up, tech is in choppy waters, but our market navigator has some picks beyond the sector to help you sail through the volatility. We will reveal them next.

38:26Boy, do we need our market navigator today. Stocks are near session lows. We've got each of the MAG7 names trading kind of deeply in the red. The question is where investors can turn to for opportunity. And our next guest is highlighting some under-the-radar names. David Spica is the chief market strategist at Turtle Creek wealth advisors. It's great to have. Are you in Texas? Are you Texas? We're in Dallas, yes. All right. We'll come back to that because you are in the news right now. Oh, yeah. But you're looking at non-AI plays to some extent. You have a few of them. NASDAQ is one of them, which surprises me.

38:57Well, NASDAQ is not an AI play. I mean, obviously, their market infrastructure is what they're known for. And quite honestly, they do better when there's more trading volumes. So a day like today is not necessarily a negative, but they're also turning into a financial tech company with software and data and analytics. And so mission-critical software that helps with things like compliance and regulatory issues and risk management. And also don't doubt the, don't undersell the fact that they've got their indices and the ETFs based on those indices, and they make really nice licensing fees off that.

39:29So it's not just the normal NASDAQ. All right. They were at all-time highs on Wednesday. Another name was WW Granger, also at all-time highs just yesterday before all the chaos today. Granger reported yesterday morning before the market opened, blowout quarter. Again, they provide the tools and services that industrial companies need to operate. And so they came out yesterday, had a blowout quarter. They are producing very strong free cash flow. In fact, all of these companies we're going to talk about are producing very strong free cash flow. Something else that we've been hearing a lot about.

40:00That's what people are looking for because this is one of them. And then your final one is Motorola Solutions. Motorola Solutions, not the phone maker. Motorola Solutions spun off from Motorola the phone maker, and they provide services to police, fire, and government entities for cybersecurity, for data analytics, for video surveillance, and AI-enhanced solutions. So these entities need to get up the chain and get up the curve when it comes to digitalization and modernization. And so Motorola has a great opportunity to grow there. Three different ideas if you want nothing to do well to some extent with AI.

40:36Is Texas going to be OK? Well, I think Texas is going to be fine. Now, the thing is, we're hearing a lot about the new mayor, governor, Gina Hinojosa, saying she's going to put a moratorium on data centers. I don't believe that. That was a campaign trail talking point. Texas's economy has really benefited from technology in general and specifically from data centers and the growth of AI. She doesn't want to kill the golden goose because what do all politicians want to do? They want to get paid. They want to get reelected. And she wants to get reelected and she wants to keep Texas blue. So I don't believe the moratorium is going to come to pass.

41:08All right. Words of wisdom. We'll see if the market can shake itself out of this. David, thanks very much. Thank you. David Spico with Turtle Creek. After two days of market whiplash, we'll talk about where retail traders are buying the dip. If they are, where are they cutting their losses? That's next.

41:26We have an hour to go in today's brutal trading session as retail investors appear to be, well, are they slamming the sell button? He's nodding. Kate Rooney has the latest data. Kate, kick us off. Well, Kelly, so retail investors have been this reliable source of buying over the years when stocks tumble. Today, it's been the opposite, apparently helping drive this tech sell-off. Vanda Research tracks this closely. They note massive selling of single stocks by individuals, especially today in the first 30 minutes of the session. Firm adds that this is on track to be the largest amount of retail selling since that late July capitulation and sell-off.

42:03Their exposure here, it's concentrated in tech. You've got NVIDIA, Tesla, the rest of the so-called Mag7. They're widely owned by individual investors. And it's a departure from this playbook that we've seen in recent years, which is essentially by the dip. There is potentially bullish interpretation of this, though. As Mike Santoli points out, retail capitulation can sometimes mark a market low, as it did in late July. But we will see, Kelly. Back over to you. All right. Let's talk to Steve Sosnick about that. Kate, thank you. He's back with us from Interactive Brokers. You get the flows. You see them on your platform, retail and institutional to some extent.

42:36But on the retail side of things, what are you seeing? Well, what we've been seeing is they have been buying into this recent market sell-off. Remember, you know, we talk about the NASDAQ composite. Today. You think they're buying today? Today, it's hard to tell because I'm not privy to the data on an intraday basis. What I have seen leading up to this is they accelerated their buying considerably last week. They bought a lot of Alphabet into that sell-off. And it's outperforming today. It is outperforming today, but it hasn't done it. Yes, it did okay because of external factors. What I have noticed after earnings is if the company is selling, we've had a lot of companies sell off on good earnings.

43:14If they sell off on good earnings, they tend to recover in a day or two. If they sell off on bad news, they don't. It took a while. Alphabet was not going back up. Intel was not going back up. They were selling off on bad news. But our customers reacted the same way toward them as they did, let's say, toward an Apple or an Amazon, which was more of a temporary, or Shopify, which is a bit of a temporary dip. So you'd be looking, once you can kind of see that data with a little bit of a lag, maybe what are they doing with NVIDIA, the chip names, the memory names, the neoclouds? They have been buying all of them, which kind of makes me nervous when I hear what Kate just said.

43:47because I do think a lot of them, when you have some of these stocks down 5%, 10%, 20%, some of that is going to be either, if not for selling, it's going to be all kinds of stops being triggered. That's where it becomes very difficult. And obviously we don't like to see that from our customers. The only thing I wonder about is, I keep hearing about all these funds that are, I don't want to say blowing up, maybe that's returning capital, having horrible months. And I just wonder, is it on the institutional side where people are over leveraged and trying to, And they're getting washed out more so than on the retail side.

44:19But I'm just curious what you think. Leverage is everywhere. I mean, I think what's, you know, margin debt, no matter, margin debt has basically been an all-time high. That's individuals and institutions. People love leverage when it's working for you. And I think we all fall, and I think what happens is we fall in love with leverage when it's working for us. The problem is leverage is your worst enemy in a downturn. Because, you know, here's the thing. If you own a stock and you paid cash for it and it goes down, you've got decisions to make, but they're not forced decisions. If you've bought something on margin and it's going down, you're sweating.

44:53You're either getting forced out, depending on how the firms operate. You're either getting forced out of your trades or you're getting margin calls and have to deal with them. And that becomes extraordinarily uncomfortable. And that's where I think periodically we need to reset the mindset that people have toward leverage. I think we get a little too enamored with it, and unfortunately we fall out of love at the worst times. No easy money to be made, usually. Always. Steve, thank you. Appreciate it. Steve Sosnick. The Dow is down 1 ,500 points, and we'll pick up our coverage on the other side of this.

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