Thoma Bravo Founder, Treasury Bond Auction, Terawulf Exclusive 9/10/26

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1:05Borrowing costs pop as oil hits 100 bucks a barrel. Again, welcome to Power Lunch alongside Kelly. I am Brian. We've got a huge hour ahead. Noted tech investor Orlando Bravo is here in the house talking tech, investments, bonds, and more. He will join us in moments for an extended and exclusive conversation. Plus, an AI power player, Tara Wolf, is making a high stakes bet, she said, on the infrastructure powering the AI boom, building large-scale digital capacity designed for the most demanding high-performance compute. CEO Paul Prager joins us today. All right, it is a big hour, and there is a lot to get to, not the least of which is oil, back to$100 a barrel here in the States.

1:44And while that going up is going to impact what you pay at the pump, along, of course, with trucking and shipping costs and diesel, the bigger economic question may be whether those prices are going to start impacting the broader economy. On top of higher gasoline prices, many of you out there are no doubt facing kind of the quadruple whammy. Higher food, higher health care, higher insurance costs all over the last five years. Through that, stocks have held up well. Yeah, they're down a little bit right now, but keep in mind, just a few percent from all-time highs. And now, many of the investors looking to next week and the Federal Reserve.

2:20And at the Wednesday meeting, traders now see a nearly 70 % chance of at least a quarter point hike from about 64 % before the PPI number came out earlier today. The bond market also in focus. 10-year yield. Look at that. Creeping. Look at that. It's a big story, Kelly. 494. We are probably up almost 11 basis points now today in one single day. The two-year 456 now across the curve, these are the highest levels since Jan 1. And in some cases, that 30-year auction last hour was auctioned at the highest yield since 2001. It's at 535 right now. Yeah. And we are nearing the highest 10-year yield since, well, two years or three years ago.

2:58And we are awaiting the results of the Treasury's$6 billion buyback operation that just actually took place. We're going to get those results in moments. But let's talk all of this with a very special guest. One so special, we even put breaking news animation up for you, Orlando Bravo. He is founder and managing partner at Tomo Bravo. Orlando, great to have you. Great to be here in New Jersey with both of you. I actually love it here. Do you really? I really do. Let's switch spots because you're in Miami. We're happy to take the show down there. We love the state income tax rate. Come over anytime.

3:28It's great. All right. So 4.94 percent. We're probably going to hit five. You're a professional investor. I know you don't trade bonds. I get it. But will 5 percent or even a little higher than that, will that kill the markets, kill the economy, kill private equity? We're already getting hit pretty hard because we're in software. So given people's lack of understanding of AI and software, we're paying in our companies, 80 companies, we had to refinance already$20 billion of debt in the last year and a half. And we're paying rates that are, or spreads that are 150 to 200 basis points wider. Does that kill us or kill the economy or kill software?

4:06Absolutely not, because as owners of companies, and that's how people adjust, we just have to cut more cost or grow the earnings more through innovation. So we adapt to that environment. Now, we all know, and this is well documented, that we have a P &L problem in the country. Meaning the U.S. government and its deficit, because the president was talking about this last night, almost saying, what company wouldn't, when it's doing this well, issue a$5 ,000 dividend check? You look at the P &L of the U.S. and you don't think it looks so hot. No, the P &L of the U.S., we're almost at a$2 trillion deficit.

4:43It's expected to increase over the next five years. And not only increase, but also on a relative basis. As a percentage of GDP, we're almost at 6 % on deficit. It's expected to increase to almost 7%. So that has to be dealt with. Now, it's really, really, really difficult to fix the spending and tax situation, but on the growth. And that's what the government is trying to do. Trying to grow it our way out. Spur economic growth and GDP growth. Then you have people saying stronger growth, which is what we've had. Six percent nominal past couple of quarters is why bond yields are coming up. No, no.

5:15Who says that? Well, I say that a little bit. But that doesn't explain the rest of the world then. No, it doesn't. Because they have higher bond yields than us or at least higher rises and no growth. And what's going on in Japan and France. I mean, look at what's going on. But to that point, there's a little bit of a doom loop here. The better that the economy does, the more that bond yield goes up as a result, the bigger the deficit gets. So even trying to grow our way out is a little bit tougher now than it used to be. And that's why we're in software and technology, because the way out of it is through productivity growth.

5:48Not wage growth, not nominal inflation, good old-fashioned productivity growth. And that's why this AI build-out is so critical and so important. And the government is looking at those yields because that build out is very dependent on a set of rates and a stock market level to continue to fuel it. There's a lot of money going into it. So once again, productivity growth is is the key way out of this versus Congress. So we have a guest coming up also in a few minutes, Paul Prager of Tara Wolf. He'll talk about building out huge power plants in places like Kentucky, right, where you don't have private equity executives.

6:24And so let's forget about your employee base for a second. Obviously very well educated, probably very well compensated. Is the AI build out, and I'm talking about carpenters, electricians, concrete people, whatever, everybody built into the build out. Is that inflating incomes enough to overcome the impact of higher rates, higher gas prices, higher insurance, higher health care, higher everything? No way, no how. Not yet. I mean, the input costs, including the massive increase in oil prices, are going all through the economy now. Now, we have 80 companies doing about$35 billion in revenues. And, of course, these are knowledge workers, right?

7:07Developers, salespeople, support people. But we're not seeing ourselves that massive wage inflation right now that we typically see. We're also not seeing us having the ability to increase prices massively to our customers. and housing economic activity as we see it, because software can be quite cyclical. Customers can always wait a quarter or two for productivity gain to perform a project. Our customers right now are buying a lot of product. We don't see any big decreases in what they're willing to spend. So there's a healthy aspect of the economy now that we're witnessing. Well, let's talk about the unhealthy one still, because we just got the results of the Treasury's buyback.

7:45This is the supersized buyback of 10 and 20 year debt that just was conducted. Rick Santelli brings us those results. Rick. Well, I'll tell you, it's it's different than a regular auction. It's a reverse auction. And the amount accepted was five point one nine billion. They could have gone to six billion. There's a couple of metrics that I find very fascinating. When I do regular auctions, I look at bid to cover. How many dollars worth of bids compared to how much was available for sale? When you do a reverse auction, you call that offer to cover. And in this case, it was$10.489 billion were offered for sale.

8:25They accepted$5.19 billion. So if you take$10.489 divided by$5.19, you get$2.02. That's the offer to cover. It's weak. Most reverse auctions, you're looking at$2.5 to$3 is normal, which means that the sellers thrown out about$10.5 billion worth. It should have been closer to$15 or$20 billion. They weren't aggressive in that regard. And the fact that they didn't go up to$6 billion probably means that the Treasury thought some of that stuff was a bit too expensive to buy. So if I had to grade this auction, it would be somewhere around a C, maybe even a C -. Now, it doesn't mean the Treasury did anything wrong.

9:08I'm looking at it in its entirety. The dealers, first one, just seemed a little gun-shy throwing it out there. Or they don't really want to sell it back at these levels. It's a variety of potential reasons. I would value a guess that the next one of these we get, I think on the 24th of September, you will see that much more is offered by the sellers. That would be my prediction. Or, Rick, is it a sign that there's just not that much demand for this? In other words, it's actually kind of a good sign, right? People are like, yes, no, it's a good sign. It'd be much worse. Because the Treasury wanted to buy it.

9:44Right. You want an IPO. The Treasury wanted to buy it, and the sellers were reluctant. Exactly. A hot IPO, you would say it's five or six times oversubscribed. This was like, ah, two times, you know. Yeah, exactly. So when I say it's an average one, it's nothing against the Treasury. It's nothing against Besant. Right. It's that the whole process wasn't found to be super valuable to those on the sell side. All right. See what Orlando thinks, maybe. Rick, thanks very much, Rick Santelli. Do you have a response or reaction to this? It's kind of new. I mean, they've been doing this for a few years, but it's getting more attention as the program.

10:16It's getting more attention. It's bigger. And there has been a lot of criticism. It should have been a lot bigger. Oh, it's not going to move the needle. Oh, there's a fiscal problem. Sure, many of those factors could be true. But if you have tools at your disposal to manage the balance sheet, go for it. I think it's astute. Lower those long-term rates or try to. Buy short. And there you go. Is there anything the government can do because the bond market is going to and no disrespect to the Federal Reserve. They've got a meeting next Wednesday. We'll be in D.C. could be a shocker. I just don't know what the Federal Reserve can do right now.

10:48Orlando, hundred dollar oil because there's conflicts in Russia, Ukraine and Iran. I have no idea what an interest rate move is going to matter to that. That could be true. I mean, what would you do if you were the Fed chair? Well, I don't I'm not looking for that job. Leave me in private equity. I really, really love what I do, grinding with these companies that are great in software. This is super, super complicated. But look, we'd probably have a rate hike. And those are the odds right now. Europe just had a rate hike. But yeah, it's a supply problem. People talk about dollar debasement and all the rest of it.

11:22I will say that technology is the one thing that has helped. Can imagine if ChatGPT hadn't come along four years ago? I mean, truly, where would we be in this economy and the stock market? We had a horrible stock market year in 2022. So, yes, it's been disruptive, but this has also been one of the biggest. I mean, you talk about productivity. You would say AI has it, no? A hundred percent. Look at the massive AI build out. Look at the productivity that's coming that hasn't really even started in corporations. Look at these awesome IPOs. Trillions and trillions of dollars. That is a big boost to the economy.

11:53Yeah. All right. We'll get more into it. Software has been on a very good run lately. This is a well-timed. I'm so happy I'm here with that timing. Well, that's the next block. So we got the whole next block with you sticking around to talk about this. Orlando Bravo of Toma Bravo. We'll see him again in just a moment. We're also just getting started here on the show. Still ahead, Tara Wolf CEO Paul Prager on the data center build out. We'll talk to him about hyperscaler demand and what$100 oil means for AI's power hungry future. But after the break, as mentioned, we'll have Mr. Bravo back to discuss AI, maybe some risk, software and the biggest opportunities in tech right now.

12:29Don't go anywhere.

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14:30Welcome back. Orlando Bravo, the founder and managing partner of Toma Bravo, is here on set with us. We want to talk about your core expertise, of course, which is in tech. Your company is one of the largest software-focused funds,$170 billion. I think we talked about assets under management, 80-some different businesses, and a tough moment for software as a service with AI coming on the scene. You're quite positive about AI, but it has been disruptive. So what's the state of play for all of these companies in your portfolio? The first state of play, which is really important, and you see it out of the big cap companies, those great companies, Salesforce, ServiceNow, and some others with great leadership, the fundamentals are excellent.

15:08We just had this meeting yesterday with all of our key investors, and one page after the other, 500 million of EBITDA, growing at 20%, high retention rates, high net retention rates. Now, that is only part of the story, what's happening today. But when you look at these companies now versus two years ago, they're now AI-centric companies. We have a public position in SailPoint. They reported earnings yesterday. It's all public. 30 % of their new ARR was all AI. AI is one of the biggest, most positive things that ever happened in the software industry. So the market got it exactly wrong. No question.

15:44Exactly wrong. It's going to destroy software. your take is and what investors appear to have discovered the last couple of weeks is no, no, no, no, no. Software will benefit from AI. Some. Not all of them. I mean, there's still names like Intuit. There are still names that are down 20 more percent from the highs. And you know more about these businesses than I do. It still seems like there's a separating game that's happening where they want to see who is well positioned to actually benefit and deploy AI. And who's still at risk of disintermediation? There are a couple of things that put you in a really, really good position.

16:16What is your solution? What are you selling? Are you selling apps? Are you selling code? Or are you selling a system that runs your enterprise or your processes? That's the number one thing to look at. The second big thing to look at is what is your degree of domain expertise? Do you bring to your customer the ability to run manufacturing intelligence in a way that very few people can? What are you bringing? and what is your solution to your customer? Now, overarching all this, this is where leadership today has a premium. You could have all those attributes and they could look great, but if you don't have entrepreneurial leadership, usually founders that are willing to move very quickly and go to the future and invest and make the right choices, you're still going to be left behind.

17:04Well, look at Meta, look at Airbnb. But that's the way software has always been. Do you know Mark Benioff? I do. Like well? Pretty well. Like well enough to like deliver a message for me? A hundred percent. I'll text him right after this. So two to three weeks ago, whenever it was, he sat with Dario Amadei of Anthropic in like a podcast format. And they were all friends and friends and friends. Whoever set that up for Salesforce deserves a gigantic bonus because it added about 20 billion in market cap to Salesforce that day. because did it not, correct me if I'm wrong, did it not show the investing world that AI, at least Anthropic, and Salesforce, which I think is a company you're talking about building sort of that domain system, can be friends, not enemies?

17:53That was a huge moment, I thought. Well, that combination or that partnership is about making this software system now an intelligent software system. And both partners will win and people will get a lot more value from both sides of it. So I think that was terrific and it's still undervalued. I think I really want to set the record straight with your viewers, with investors, because this software thing is, once again, AI is the most positive thing that I've ever seen happen in software systems. And it works as follows. Software companies, and many venture capitalists misunderstand this, are not selling you code.

18:33Let me give you a specific easy example. Take payroll. We all get our payroll check every two weeks. A payroll software company does not charge 100 ,000 employee customer$10 million for code. They charge them for, I will take care of paying all your employees on time with the right deductions and the amount will be right. And if there's a mistake, I face the liability for it. That is a highly, highly complex system of commerce. When you have an agentic world come in, the agents are going to use that system many, many times over, more than humans. My only point would be look at a Monday.com, right?

19:10A$200 stock that's now 84. So you feel passionate that this is going to help software, but you have to admit it's you can't, it's not as broad as saying that everybody in the software, and you already said, you've got to look for the founder CEOs and the ones who are doing, you know, they have a real business. But there are many companies in software that would have been disrupted anyway, that don't have those franchise market positions. That's why it's important in the public markets, in the debt markets, in the private equity market to be a specialist. When you walk up the stack, because I want to talk about something people claim, those system vendors also sell you applications.

19:45In payroll, you have your recruiting app, you have your time and attendance app to help humans do their work in an automated way or make decisions. People say, well, those apps are going to get replaced because now the customer can build them with AI. That is right. But software companies, the system vendors are not standing still. They're building platforms to let the customer go crazy and build apps in milliseconds. And you're going to have an explosion of software. And those platforms are worth a lot more than the static apps. And the final layer you have is agents. Who is going to bring agents that have better outcomes and then cut your cost that the domain experts that have 30 years of experience in that domain?

20:27Salesforce has it. Sounds like it. SailPoint, that's your company. I assume you believe they have it. The numbers are there. Who else? ServiceNow. ServiceNow. What a company. Bill McDermott, former CEO of SAP. What a just a terrific company. But here's where leadership comes in, what we're finding, because we buy companies with, say,$10 billion market caps, $20 billion market caps, is what we're finding in the public markets is that the large software vendors really have it together, and they're already in the future. That lower to mid-market is very, very mixed in terms of leadership and their AI strategy.

21:06I had my partner, Holden Spade, he had a meeting with about 10 of these last week, and he came out of it a bit underwhelmed versus what we're doing with our companies because we're private equity. We're so aligned that we have no choice if we want liquidity to really send them to the AR future. So Workday is a 45 billion market cap. And there were those rumors about Silver Lake a month or so ago. Would you look at bigger sized companies, even publicly traded ones like a Workday or others where they might be down 50%, but you see all these positives you've talked about? Those bigger opportunities are excellent.

21:39I can't comment on that specific one. We own Dayforce in partnership with a founder, a terrific company. He's known as the best innovator in the payroll and human capital management business. But doing bigger deals is going to be a thing going forward because now these stocks are trading at levels where the large caps are more comfortable. And it's much better in this environment to build a much broader platform. Can I wrap this up with a very lighthearted question just to kind of – we had a pretty meaty – I had like five more hard-hitting ones. But I think well, ask him. We can just talk the future of private equity, institutional investors, the asset class is underperformed.

22:17Private credit still has all these question. I mean, rates, how much pressure. But I look at him and I go, I think I think he's been through some cycle. Well, I think he's going to have. Let's get him to agree right now to come back. Can I we have to wrap it? Can I ask a very short, lighthearted question, please? Is the eye going to kill us all? Yeah, it's going to be awesome. I can't believe that blog. Software and a predictive model is all of a sudden going to hurt us. It was a bit unfortunate that that was posted. Why? Because... Well, a 10 % chance is going to kill us means a 90 % chance is not going to kill us.

22:52So that's good. That's the good news takeaway that I'm being a math guy, I guess. I love that it was lighthearted because I know how you... You know I'm being sarcastic. Of course you are. But you know what the interesting thing is? It just has it does not help the data center build when when people that are working and have good jobs and are not in technology are reading this stuff that this is really harmful when when it's just software and a great math predictive model working on our behalf. Orlando, we really appreciate it. Do come back. Thank you. We'd love to continue the conversation. All those hard hitting smart questions you just had.

23:28But they're all, you know, people that we ask these every three months and then he's still sitting here going, yeah. Will you come back? I would love to come back here in New Jersey. You're willing to come back to New Jersey? 100%. Straight from Miami. Straight from Miami. Well, Teterboro's close. Coming up, speaking of AI, power player Paul Prager, the CEO of Terrowolf on AI. The data center boom. Hyperscalar demand and maybe even a little bit, but don't tell him about oil. He's also on set. He ventured to the wilds of New Jersey. We've got him here next.

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24:45Your money should move you forward. With SoFi, you get award-winning banking, investing, borrowing, and more all in one app. So you finally know where your money is. Make your first move with SoFi Checking and Savings. competitive APY, no account fees, a bonus when you join with eligible direct deposit. Terms apply. SoFi Bank and a member FDIC. When you're ready to invest or pay off that debt, everything you need is right there. As a SoFi member, you get access to SoFi Wealth's world class financial planners to help you know what to do next. Get started today at SoFi.com slash callherdaddy. SoFi, get your money right.

25:22This is a paid advertisement by SoFi Technologies and is not intended to be financial advice. This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Schwab Market Update, an original podcast from Charles Schwab, provides an information-packed daily market preview on stock updates, U.S. and global economic news, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com slash market update podcast, or find Schwab Market Update wherever you get your podcasts. All right, welcome back to Rise and Oil.

26:01Price is showing no sign of slowing down. In fact, it's accelerating WTI crude right now here in America. It's nearly$103 a barrel. It's the first time since May. In fact, U.S. benchmark on pace for its eighth straight higher day. The last time that oil rose eight sessions in a row was three years ago. And these are some of the highest oil prices we have seen since 2022. four years ago, at least the last five years. But one important thing to remember is this. It is very easy to forget, especially in the era of the short attention span. From 2007 to 2014, a barrel of oil was largely over$100. The subprime crisis sparking an economic crisis, which also hit oil investments.

26:44That set oil prices higher. In fact, when you factor in inflation. $100 oil in 2008, basically the same as$130 or$140 oil today, making any comparison to the time in America, of course, that time and not a good one. But this is also important. Even in the recovery period after that, oil prices were a lot higher than they are now. And still, the U.S. economy clawed its way out of recession. In fact, one reason the economy did get better was that higher oil led to higher investments in energy. We told some of these stories firsthand back then. And so maybe the bottom line is this. While higher oil and gas and diesel and heating oil prices, they are painful for millions of families and companies.

27:29Could this actually lead to more investments in energy? Maybe more investments that also help power our AI revolution, which is right now, to Kelly's point earlier, powering the entire economy. And that maybe is the perfect segue to your next guest. He is a real power player. He is the chair and CEO of Terrowolf, Paul Prager. Also began his career on Wall Street as an oil trader in the turbulent markets of the 80s. And a former naval officer. Paul, great to have you on set. Thanks very much. I want to get to oil and more in a second. You just heard our wide interview with Orlando Bravo. What he wants to do, your company in Kentucky, big deal, you just announced, Lake Baron in New York, you're looking to make happen.

28:11Straight question we've asked you before. Any sign from where you sit of a slowdown in AI investing? No. No. Demand is robust. We've got a site that we've got the most active data room we've ever had. Six major players in there. Terms are increasingly better. Duration on these deals is increasingly longer. There are investment-grade backstops for the right deals, well-structured. Demand is extremely strong right now. So there is, and we just heard about this from Orlando Bravo as well. He said, yeah, I mean, these headlines about, you know, AI killing humanity could really slow down data center development, lead to more political backlash, moratoriums, and all the rest of it.

28:59But you don't think we're seeing that? Or is it that you have found a way to navigate? And is it that people in the industry understand that the politics are one thing, but the way to get it done is kind of another? Yeah. High power compute and AI is not going away. And we're at the very beginning of an uphill climb towards fulfillment where these people have the access to power that they need. Near term power access is everything. And we're a long way to go before the customer's appetite is fulfilled. I think you have to focus on power availability between now through 30, because that's what our customers are looking at.

29:40And they're very, very keen. Through 2030, you mean? Yes. So the next three or four years. Demand is huge. Yeah. Is the power there? So the power is there, but you've got to know where to look for it. I mean, I think Terawolf's expertise is in looking at former industrial sites, sites that have stranded energy infrastructure, sites where we already have connections to the grid, sites where we, if necessary, can marry a new generation facility so that we could become surplus generators, contribute to the grid, which is something that a lot of states want. And the rate payers want because they want to make sure that their rates are protected.

30:19If anything, we think rates will go down as a result of our participation. Go down. Yeah. As a result, we're taking advantage of advantage of stranded electricity. We're giving the utility a customer for for revenue that they didn't have before. And we're willing to bring new power online to create new generation at certain sites. And a lot of that generation is coming from natural gas. Now, I do want to call on your former expertise as an oil guy. Price of oil at 103. I'd love for you to comment on that as a former naval officer, officer, what's going on in Iran. But you care more about the price of natural gas.

30:55Natural gas is still below three bucks. It hasn't really moved for a number of years. What's going on with oil? But more importantly, what's not going on with natural gas? Why is natural gas not moving, even as the price of oil, of which natural gas extraction is a byproduct, soaring? I've been in the execution of data centers and power plants for a long time. I've been out of the trading business. But oil is well known as an event risk commodity. Natural gas, much less so. It drives here in the United States the price of electricity on the margins. Our facilities are taking generation from sustainable sources, hydro, nuke, as well as natural gas.

31:37And to be honest with you, the demand for power by high-power compute AI, it's not really affected by non-significant changes or insignificant changes in the price of electricity. Sure, oil that's high on the margins will affect things like logistics and deliveries, but it's not driving what happens in the high-power compute AI data center. But I guess what I'm trying to get at is somebody came to me and they said, Brian, we want to we want to soar electricity demand, you know, by 20 percent or 30 percent, whatever it is, over 10 years, because we've got to power all these big data centers. Natural gas.

32:16And most of that is going to be done by natural gas. I would say, well, natural gas is going to be at five bucks because obviously it is because demand is soaring. We're still at 280. Yeah, we have a lot of natural gas. It takes years to develop new natural gas plants. We're working on small nuclear reactors as well. Not Tara Wolf, but the industry. And so I think the United States will always have a very good commercially feasible energy solution. But again, electricity to the high power compute AI taker, our customer, it's not something they're really terribly concerned about. My last kind of observation, and we've been talking a lot about this, but now that heating oil, as I understand, and diesel are kind of the same thing, Diesel's the highest level ever.

33:02We're going into winter, so a lot of Americans will have that kind of price shock. Can anything kind of help ameliorate the refinery, George? You can't bring a refinery online that quickly. So is this just a waiting game to see if other countries can? Listen, again, I think oil is event-driven in its price. It's not what will drive electricity prices, but certainly it contributes to people's concerns are what are going to be my electrical prices, which is a social issue for the hypercompute AI industry. Exactly. I think people have a sense of, I'm probably one of them. I just go, my utility bill is this kind of broad, vague thing.

33:40All I know is it's a, you know, whatever, it's a big number. And having to think to myself, well, no, but that's heating oil, so that's a diesel, so that's not AI. But it will feed this idea that, you know, utility bills are going up. But I think our industry has suffered for a few months now with the NIMBY concerns, the not in my backyard concerns. And I think the industry has done a really good job of getting organized around it. And I think, one, there is a lot of misinformation. Two, there's a lot of misunderstood information. And three, it is incumbent upon us, and that's what we do in the local communities, it's why we've been welcomed back, why we have the opportunities we have in Kentucky, why we have the opportunity we have to expand in New York, why Anthropik signs long-term deals is because you have to educate the customer.

34:28You have to go to the local community. You have to explain to them that, hey, we're a closed-loop system. We're not taking water from the lake. Hey, we're not making a lot of noise. Measure the noise output and you'll see it is what you're accustomed to in your backyard. We're not going to increase rates for your electrical bill because we're going to take stranded assets, take advantage of that. Two, we're going to work with the utility and build new generation to drive prices down. As long as we can educate the local community, then we'll get like the positive, you know, bill of health that we got from Governor Beshear in Kentucky who said Tara Wolf is doing it right.

35:06Well, I will say this without insert topic. If one political party says this must be good, the other one is probably going to say this must be bad and then invert that the next time. Let's talk about Tara Wolf. You're 20 analysts or so that cover the stock. Target price just over 35. Stock's at 1640. So the Wall Street target is double where your stock is now. So what are investors missing about this story? Well, I think the NIMBY story took center stage over the summer and the whole space traded down. I think, you know, if you just take a look at what we've got contracted, everybody would say our stock price should be higher.

35:43As CEO, I'm focused not on stock price. I'm focused on maximizing shareholder value. So for us, it's an execution story. And I think we are early in the game of being able to sort of have a wide view of who's going to be able to execute and who's not delivered. So because the data centers are just now coming online. Terrowolf has executed. That's why Anthropic came back for the 20 year deal in Kentucky. I am excited about the continued appreciation for what we do. But again, we need to be very involved in the local communities, telling everybody, here's who we are. Here's who we are not. And this is why we should be good neighbors with you.

36:31And as a result of that, more sites come online, more contracts or leases get done and credit, you know, Great credit backstops enable great financings. Those happen. And then equity value will continue to appreciate. Paul Prager, the chair and CEO of TerraWolf. Paul, really appreciate you coming on. And also, like Orlando Bravo, coming up to New Jersey, daring to cross that river. Great to be here. Appreciate it. Coming up, sticky inflation is raising the odds of a rate hike next week. Our Market Navigator has some picks to help hedge against it after the break.

37:16Welcome back to Power Lunch. Time now for our Market Navigator segment. We're going to get the latest read on inflation tomorrow, just days before the Fed's September interest rate meeting. And our next guest has some ideas on how to protect your portfolio against stickier inflation. Joining us now for that story in the case is David Bonson, the chief investment officer over at the Bonson Group. David, the inflation story I just went and checked on CalShea for the predictions markets. 64 percent of traders on the platform think there will be a 25 basis point hike coming up at next week's meeting.

37:49Inflation's front of mind. How do you protect your portfolio? Well, we believe a permanent protection exists in dividend growth investing, that when the dividends, the income from the portfolio are growing at a higher rate than the rate of inflation, a significantly higher rate than the rate of inflation. And, Dom, they're doing it every year, no matter what is happening in the market. That is an inerrant inflation hedge. All right. So if you're going to do that, the types of companies you're looking at are in specific industry groups that have been typically viewed as both defensive and bigger dividend payers.

38:24Which companies specifically have caught your eye for dividend payments and inflation hedging? Inflation hedging, dividend payments and dividend growth. You look at Chevron, by definition, 50 years of annual dividend growth, very connected to oil and gas. You look at the utility sector. People say there's inflation. My utility bill is going higher. American Electric Power, very levered to the cost of power in the country and sharing that growth of revenues and profits with investors, growing their dividend over 6 % per year. And then I think that there's a lot of various commodity oriented plays and so forth.

39:06But when it gets to consumer staples, you get the best pricing power. Pepsi, which is down a tiny bit on the year. And yet that dividend growing for decades because they have the ability to raise prices as things like bottled water, soda pop and snacks are going higher in price. And one final question before we leave, David, just how concerned are you and or your clients about the inflation story? Do we really have to reposition till the end of the year? No, I don't believe that we have to reposition, but I say that because we've already positioned around a permanent expectation. Dom, if inflation was 2%, not the 3 % people are worried about, 2 % still erodes your purchasing power.

39:50So no matter what, investors should always be sensitive to this because it's the norm. Dividend growth, we think, gives a great solution. All right. American Electric Power, Chevron, PepsiCo, the picks from David Bonson. Kelly, I'll send things back over to you. All right, Dom and David, thanks. Let's get over to Pippa Stephens now for the CNBC News update. Pippa? Hey, Kelly. The federal appeals court ruled against the Trump administration today, keeping in place a lower court's block on new rules for mail-in ballots before the midterms. The judges said they would cause chaos and voter disenfranchisement.

40:21The new rules include new design and voter database requirements. The case is also being weighed by the Supreme Court. Canadian Prime Minister Mark Carney announced a new roughly$250 million aid package today for Ukraine following a meeting with President Volodymyr Zelensky. It comes as Ukraine runs critically low on U.S.-made Patriot interceptors that are able to stop Russia's ballistic missiles. The weapons will be provided through a U.S. program that allows foreign nations to buy and supply weapons to Kyiv. And one of Princess Diana's most iconic dresses is going up for auction. She wore the so-called revenge dress to a party in London on the same day her then-husband, Prince Charles, admitted to having an affair in an interview.

41:04The dress will be featured during Sotheby's Luxury Week in December. It's expected to sell for between$150 ,000 and$300 ,000. Brian, I'll send it back to you. Still so elegant all these years later. Thank you very much. All right, still ahead. Forget rugby. American football is coming to Australia. I tried. So Alex Sherman trekked to the land down under and spoke exclusively with NFL commissioner Roger Goodell. You'll hear it from Alex at about 4 o 'clock in the morning there. Next.

41:43Hey, Australia, are you ready for some American football? Tonight in America, which is tomorrow morning in Australia, the San Francisco 49ers play the Los Angeles Rams on Netflix. So Alex Sherman either decided to fly nearly 24 hours or was told to to meet up with the NFL commissioner and a big wig at Netflix. He is live tomorrow morning today in Melbourne, Australia, and is with us now on, I think, where the sun is probably closer to coming up than it was when it went down. Yeah, that's right. It's Friday here, and this 49ers-Rams game is going to take place on a Friday morning at 1030 in the famed MCG, the Melbourne Cricket Ground, which is just to my right here.

42:31I'm on the roof of the Pullman East Melbourne. I keep messing up the name of that hotel, But it's the Pullman chain of hotels, which is nice enough to let me use their rooftop for this live shot. This game, and of course the first ever game in Australia, it is one of nine international games this season for the NFL. That number will go up to 10 next season. And Commissioner Roger Goodell has talked about increasing that number to 16 games. But he's going to need player buy-in in order to move that number from 10 to 16. which will have to come with the next collective bargaining agreement. So I sat down with the commissioner and I asked him, do you think the players like this international travel?

43:21It can be very disruptive to a player's routine, particularly when it comes in the middle of a season. Listen to what he told me. It really struck me when we were, I think it was in Ireland, and the players really take the mantle for saying we're ambassadors for the game, right? We're helping to expand the game on a global basis. We're expanding our own brands at the same time. I think they see the opportunity. I get calls, texts from our players during the offseason, and they're all over the world. So I think this generation of players is used to being international. I think they're used to looking at opportunities to continue to grow their brands.

44:02And I think it's great for the NFL.

44:07So, of course, the reason he says it's great for the NFL is that the more eyeballs, the more revenue, right? And, of course, the NFL is wildly popular, by far the most popular sport from a viewership standpoint in the U.S. But internationally, there's a lot of room to grow. We got a little bit of data last year for the Week 1 international game, which was on YouTube, where 18.5 million people watched that game in the U.S. and only 1.2 million watched it abroad. Now, some of that has to do with time zone reasons, of course. As I just said, of course, all these games are based around the U.S. It could be the middle of the night in certain other countries.

44:43But this game, Netflix has it, and Netflix has the global rights to the game. And Netflix and the NFL are, of course, joined in their mission to make this game more popular. Netflix wants more eyeballs, just like the NFL does. I spoke with Chief Content Officer Bella Bajaria about how Netflix increases the popularity of international games. Listen to what she said. We also have all of those country offices that all make local originals in their language and in those countries. They know how to speak to that audience. They know how to make that connection of why that event, whether it's NFL, which maybe there's still a growing sport in those countries, or it's just a completely different kind of one-off event or the Westminster dog show.

45:30We know how to sort of connect with that audience. So basically what Bella Bajaria there is saying is that the data that Netflix has can actually push international viewers toward the NFL where maybe they wouldn't click on a game to begin with, but the content that they do watch could be associated with an American football game and maybe that makes them a fan. We got to go, Alex. But I also know not only are you awake all night, you're a giant San Francisco 49ers fan. So I hope you can stay awake for the game, have some of those flat whites. And we also have the only ever comparison between the NFL and the Westminster Dog Show in the history of media.

46:10Alex Sherman, thank yous to you and the entire Pullman East Hotel roof team. Alex, thank you. I don't know how he's going to do it. I mean, that is a long fight. That is a long day. I like those flat whites. Quick check of the markets as we're near session lows. The 10-year yield is kissing 4.95 percent. We'll have more after this. A new op-ed from Stan Druckenmiller in the Financial Times warning that yields could go even higher. And Peter Bookvar also writing in, Brian, to say the low demand we saw for the repurchase auction at 2 p.m. could be because those 30-year bonds are trading at 65 cents on the dollar and no one wants to take the loss.

46:47Anyway, we'll pick up coverage with the Dow down 384 points. Thanks for watching Power Lunch. Closing bell starts right now.

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