10AM Hour: Broadcom’s Deal to Finance Anthropic’s Chips, Sofi CEO on Earnings, ‘Disruptive’ Launches New $10B Tech Fund 10/27/26

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0:40For faster trades anywhere you go, try the all-new Fidelity Trader Plus. Learn more about our most powerful trading platform yet at fidelity.com slash trader plus. Investing involves risk, including risk of loss. Fidelity Brokerage Services, LLC. Member NYSE SIPC. Good Tuesday morning. Welcome to Squawk on the Street. I'm Sarah Eisen with Carl Quintanilla and David Faber. We are live, as always, from Post 9 of the New York Stock Exchange. Coming up this hour, as AI-related companies from Anthropic to Meta look to raise a flood of new money and firms like Broadcom stand to benefit, we'll talk to tech analyst Ben Reitzis, who just published a note on Anthropics as the S1 is a major clearing event for the AI trade.

1:21Plus, famed tech investor Alex Davis from Disruptive will be here to talk about his just announced new$10 billion tech fund. And we'll be joined by SoFi CEO Anthony Noto, first on CNBC, as that stock gets a lift on this morning's earnings, though it's still down around 40 % on the year. Let's get some new home sales. For that, we'll turn to Diana Holick. Morning, Diana. Good morning, Carl. New home sales in September came in at a seasonally adjusted annualized rate of 676 ,000. That's a beat on the number. The street was looking for 653, but we saw a downward revision to August numbers. So that actually comes in down 0.6 % month to month from August, that is.

2:02And it's down 5.3 % year over year. Now, this count is based on signed contracts. So people out shopping in September when, of course, we all know mortgage rates shot up. We started the month around 6.8 % on the 30-year fix and went all the way up to 7.5%. That really hit the buyers out there. We know from home builder confidence, we saw that drop to a 14-year low. And we also know from housing starts, they also came down in September. But looking deeper into these numbers, the sale price in September median was$400 ,400. This is down 3.9 % year over year. We've seen the builders cutting prices.

2:43We know that that is influencing their margins, really squeezing them, also because they're doing mortgage rate buy-downs. As for for sale inventory, 476 ,000. This is 1 % below the August estimate, and it represents a 8.4-month supply. We had seen supply up as high as nine-month supply, but 8.4 is right around where we've been seeing it lately. Again, it's kind of a surprise to the upside on the actual number, but we are down year over year for September. Back to you guys. Okay, Diana, thank you. Diana Ola. Consumer confidence also just crossing, and Steve Leisman has that for us. Steve? We got a big beat here on consumer confidence coming in at 91.7 versus a consensus of 81.

3:28It was supposed to tick down yet. September revised up a little bit to 84.2 from 81.9. I'm not saying the consumer has gotten all of a sudden very happy here, but certainly happier than they previously were. And I think on the day, we're three for three on beats. As Diana said, that was a beat, even though you're down year over year on new home sales. We had a nice beat this morning on durable goods. So a little bit better flattering the economic outlook here on these three data points here. Of course, the consumer has many troubles, but we don't know exactly what's bothering them. Expectations had been the real problem in this data that had sent it to new multi-year lows.

4:05But now we're back for the best number since June 2026, guys. Yeah, not not bad in an environment where oil prices have still been higher. Yeah. OK, Steve, thank you. Got a lot of color from earnings. It's been a big earnings day and week as to what the consumer is doing, how companies are dealing with inflation. I always look for the macro takeaways from some of the earnings reports. So on inflation first, because today is the kickoff of a two day Fed meeting. Whirlpool talking about high steel prices. Listen to what the CEO said on the call. Steel, and particularly in North America, has seen a massive price increase over the last 12 months, actually, of 50 percent, which I think in many ways you could argue is a little bit disconnected from reality because iron ore went down and international steel price went down on a completely different level.

4:48I think it speaks to the build-out of AI and data centers a little bit and just the demand that we're seeing in this country for why steel prices are so much higher. And just overall, Bank of America put together a good chart of inflation mentions in the earnings calls so far, you know, what we're seeing this quarter. And it's elevated. I mean, it's not at the highs that we saw in 2022 when we saw really high inflation rates and the Fed had to act much more aggressively. But consensus third quarter earnings growth is still tracking 27 percent. And the mentions of weak demand are well below average.

5:21But inflation and cost pressure are high. And they're reaching multi-year highs there. Just some more color on how the consumer is doing, guys. PayPal CEO says we're seeing good signs, but we also don't want to get ahead of ourselves. UPS CEO, some nice mentions ahead of the holiday season. Consumers remain resilient and the outlook for holiday demand is strong. and RCL, Royal Caribbean. While it is still early, 2027 bookings are pacing ahead of historical levels at higher rates. We'll have the CEO on next hour to talk a little bit more about the strength that they're seeing. But travel in particular has been a real source of strength.

5:58Yes. Although I know you looked at Hilton today and sort of the warning and the revenue miss over at Hilton. Yeah. But I also thought Hilton, I mean, even with that, sounded pretty bullish. And especially this was one of those interesting winners that they mentioned that they're seeing an uptick in business around the A.I. build out, which is just a little bit surprising for a hotel company. The CEO on the earnings call said we expect red par growth of four to five and a half percent on business transient momentum. And that carries into the fourth quarter, particularly in the U.S., where supportive policy, increased private sector investment, including A.I.

6:32and ongoing public infrastructure spending is supporting demand. demand. I think, you know, the Hilton numbers maybe reflected they were already coming from a high place, but it was notable that they talked about that kind of policy and investment driving higher, you know, occupancy in hotels. Yeah, it's interesting. J.P. Morgan last week sort of had a warning about Norwegian and Matt Boss, who does a great job covering consumer retail, sort of worried about Americans' demand for European cruises. Name's knocked down 30 % for the year on Norwegian? Yeah, I mean, a lot of these cruises, though, came in as high flyers into the year.

7:08And so questions about whether that demand can continue, which, by the way, we have heard. We've talked to the Carnival CEO every quarter. We'll hear from Royal Caribbean. I mean, they've been super bullish. Just another data tidbit on dining, more anecdotal color, basically, on how the consumer is doing, especially those that, you know, mid to upper income that dine out. The open table numbers continue to look good. This is where you go to make reservations and it's a reflection of restaurant demand. Economists look at it. Year-over-year change in seated diners by week, and it's been positive since June.

7:41The most recent was up 12 % year-over-year. So, again, not bad. If you're Kevin Warsh and you're deliberating, you know, with your colleagues about what to do, it's clearly inflation as the bigger risk factor right now and the dual mandate. Jobs and economic demand continue to hold up nicely. housing is, I mean, obviously we heard Diana. We saw those Whirlpool. Jim put up a 45-year charter Whirlpool. Painful to look at as well. But housing right now figuring prominently into any number of companies that play into that cycle. Yeah. I mean, there are parts of the economy that are hurting. And unfortunately, housing is one of the most rate sensitive.

8:21So when they do raise interest rates, that definitely doesn't help the housing market. And you saw that reflected in the Sherwin-William comments and some of the others. But that's kind of been stuck for a while. The The thing is, you know, housing is like, you know, what, 10 percent of the overall economy, 12 percent of the overall economy. You have a consumer demand environment that continues to be good. And then this massive tailwind from the A.I. build out and investment. And that's really what's been driving the higher those that combo with the supply shock of high oil and diesel prices because of the war is what's driving the inflation.

8:55Yeah, we'll learn a lot more with P.C.E. and GDP later in the week. Shifting to tech this morning, Broadcom partnering with Blackstone and a handful of banks on a$63 billion deal to finance AI chips for Anthropic. Comes as Anthropic's S1 filing sheds some light on the company's financial performance. Our next guest just published a note on Anthropic saying its financials are rock solid and the public offering will be a major clearing event for the AI trade. Ben Reitz is here, head of tech research over at Melius. Been dying to know what you thought of the prospectus yesterday. Yeah, well, I liked what I heard.

9:27Obviously, you've got to look through some of the risks that make you feel like we're in a sci-fi movie. And once you move past that, the 85 % gross margins for inference were really good. And, you know, I'll bring out my handy duo. But we published a chart about how the cost of compute is going down for them. For every dollar they spend, the cost is going down and down. It's going to cost them, you know, for a dollar of revenue, 25 cents going into next year. And that trend is really good. So what I think was good for the market was they got to see a healthy gross margin and a lowering cost to serve, which then promotes the economics of the AI business.

10:09Do you think that as we get clarity on the current quarter, revenue growth will be satisfactory? I do. I think that they're in the process of kind of laying expectations for investors that are they can beat. I mean, hopefully their banks are giving them somewhat decent advice to sandbag the numbers so they can outperform them. But I do think there's this issue that's against revenue of combating distillation from the Chinese models and the folks that are, as in their words, stealing from them. And they have to cut that out. That'll be a headwind for a few quarters. And then when they get to the other end of that, there's probably more acceleration.

10:45Yeah. I mean, they say as much as five to seven percent revenue hit from distillation, although there seems to be belief that maybe a lot of that already took place. how do you see margins? Again, in terms of gross margin, you mentioned it, but as we learned, they're spending enormously on compute. It may become more profitable, and leases and everything else, they're only ramping that up. Do you continue to think gross margins will actually increase? No, it's hard to say they increase from the 85 on inference that we're seeing. Well, that's on inference, not trading, obviously. Right, but look, the bottom line is, there's going to be a lot more.

11:20One of the things I liked was that there's going to be a lot more training. They're going to have to push scaling laws and whatnot to then sell the razors kind of training and the blade is the inference. And so that's going to... The training is not cheap. No, no. And I thought it was good. You know, the NVIDIA commitments actually looked a little bigger than I was thinking. Obviously, the Broadcom and Google stuff was in line with what we were thinking. Look, I think that as long as there's margins coming out the other side like that, there's going to be financing lining up. And I know right now you guys are looking at me like I'm crazy because the market's blowing up a few weeks ago.

11:56But as long as the margins are coming out like that, I do feel like the private equity firms will be lining up to help them with financing. And look, Hawk Tan last night is a pretty smart guy, and he's backstopping 60, you know, I guess. Well, not all 60, but they are backstopping a good amount with these residual value guarantees that Broadcom is doing on that. You know, what about open source models? This continues to be a question. And by the way, I don't feel like I get great data in terms of really understanding how much is actually being used or not. We hear different numbers. How big a threat is it to the likes of Anthropic and OpenAI?

12:31The margins in particular, which you're hanging the thesis on. Yeah. And the margins at Anthropic are showing you what the frontier can do and that really it shows an appetite for the frontier. Most of the revenue comes from models done over the last six months. And that shows that there's a huge appetite, at least right now, for the frontier. We actually, thanks, David, we wrote a piece Monday about open models. And what I think the market is trying to digest is there's been a massive shift in tokens. It used to be 80-20 closed open. Now it's about 20-80. And so what is happening is there's a massive surge in tokens towards open models, which actually depresses revenue a little bit near term.

13:13And some folks are saying, oh, adoption's slowing. Actually, what's happening is that enterprises are playing with the open models and actually laying their data on top and going to actually have a productivity boom probably over the next two years as they train on top of open models to get productivity. So I think that Anthropic, OpenAI, and maybe Google are like on the frontier, and then the rest will be open. And you'll get a much higher revenue per dollar invested on the frontier, which will kind of be like Apple and the iPhone. You know, Apple gets the lion's share of the economics of apps and the mobile.

13:52It's kind of like what Arvind Krishna said last week in earnings. He said, I mean, he predicts, you know, in a few years, it'll be 80 percent open models and then 20 percent frontier. So the question is, is that enough for these companies to maintain their pricing power? It's not a lot. I mean, you can't have a lot of companies. You're going to have to have a few that duke it out and go after it. And they're going to have to go into pharma. They're going to have to go into other apps and attack the application layer, even though software is having a bounce now. You've got to be careful because Anthropic still could just decide to get in your business.

14:28And I think they're going to get into cyber. I think that they are going to partner, but they're also going to have to do it because they're creating a lot of the pressures on cyber. So there's going to be a tug of war with them in cyber and a lot of apps that we know today. And we'll see how it goes. But they're going to have to do that to get margin. Finally, just the most surprising thing for you in the S1. I mean, I feel like we kind of had an idea of a lot of the things that would be in there. Or anything sort of stand out? Well, I think that, you know, in terms of the big surprise, it's kind of hard to say.

14:59I mean, a lot of it leaked, I think, was just how they laid out the story. And they didn't really put a TAM. Like, you know, the big difference versus SpaceX is they put that bazillion, gazillion TAM out there. 30 trillion. 30 trillion. And then, you know, and sort of like there's a rule in startup land. You kind of do, oh, 10 % of TAM if you're a leader and that's your valuation. And, you know, but they they they were careful how they danced around it. And they mentioned the 40 trillion dollar labor, Tam, but they didn't want to go, hey, we're going to attack that. We're going to augment it. And I thought I really liked the health care stuff.

15:34There's a lot of positive stuff coming from A.I. You know, I'm involved with Mount Sinai a bit and they're doing some great things with A.I. And I just think that the curing of diseases is going to be a big source of revenue for these guys. Okay. Comeback post-Microsoft? Oh, yeah, absolutely. I'm looking forward to that one. You know, they feel like the hyperscaler that has the wind at the back right now. Yeah, what a turn this year. Ben, thanks so much. Yeah, thank you. Thanks, guys. I really appreciate it. All right, here's our roadmap for the rest of the hour. After the break, SoFi surging this morning after reporting strength in its lending business.

16:10The CEO, Anthony Noto, joins us first on CNBC. Plus, we're going to have much more on the tech trade. We're going to speak with investor Alex Davis from Disrupted. His firm announcing just today a new$10 billion fund for late growth equity. And later on, early Facebook investor turned critic Roger McNamee says AI's risks to humanity are all hype. But there's a real danger that the market is still ignoring. He'll join us to explain when Squawk on the Street continues. Legacy Credit Scores only look at a brief snapshot in time, and that limited view often leaves millions of qualified credit seekers out of the picture.

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18:25Welcome back to Squawk on the Street. Check out SoFi surging this morning, pacing for its best day in over a year after the company posted a beat on the top and bottom lines, logged record loan originations for the third quarter. Shares are still down around 40 percent on the year. Joining us to talk about all this first on CNBC is SoFi CEO Anthony Noto. So, I mean, the performance was better and I think it reflects well on the consumer. What did you see, Anthony? We saw very strong growth, Sarah. Specifically, we had 44 percent year-over-year growth in revenue to$1.4 billion. It was driven by member growth of 35 percent, products growing even faster as more members use more products.

19:03So products grew 44 percent. And then we had very strong improvement in revenue per product. So those are the three underlying drivers of the business. We're fairly diverse today. We have more than we have eight businesses that generate 100 million dollars or more in annualized revenue. And so we're seeing contributions across the board. As you mentioned, lending remains strong. Credit was very solid, and we're seeing our company have the ability to raise our interest rates on our loans commensurate with changes in benchmark rates, which did put pressure on the underlying value of the assets. But we were able to offset that through a hedging program that worked quite well.

19:37So we're really happy with the results. It's our 20th consecutive quarter of achieving more than the rule of 40. That's revenue growth plus EBITDA margin, which was 34 percent when combined with revenue growth of 44 percent, puts us over 70. And the outlook we raised for 2026, as well as establishing 2027 earnings per share of about 90 cents. So the stock's trading right around 17 times earnings, despite the fact we're growing earnings from 2025 through 2030 at about 40 percent. Yeah, I mean, I was going to ask, does the guidance actually answer some of the skepticism that we've seen in the stock now for 26, 27?

20:14And you're even given commentary on 20, out to 2030, I think. That's correct. We've done an excellent job of diversifying the business over the last eight years, and we have great visibility into these eight different businesses that have$100 million of revenue or more. So it's fairly transparent to be able to forecast out the number of products by business of revenue per product. We think we can achieve about 100 million products by 2030 compared to about 27 million today. That's a 4x increase. It's a very ambitious goal. It's not easy to achieve, but it's definitely within our range. Even if it only increased at 3x, that would be quite an accomplishment relative to where we are today.

20:55It doesn't take much of an imagination to look at product growth of 4x or 3x for that matter and seeing earnings growth equal to that. You know, I have a good friend that used to say stocks go up for one of two reasons. Either the earnings go up or the multiple goes up or both. Right now, we're exceeding expectations on the earnings side and providing an outlook that's well above where expectations were previously. Eventually, we'll likely see multiple expansion, just given the fact that we keep being in estimates. You know, can you just explain? I mean, SoFi is a different model than the banks, but we are in an environment of rising interest rates and there's a higher rate outlook.

21:32So net interest margins, those types of things are really scrutinized. And I think they're around the banks. And also there are some questions about how banks perform in that kind of higher rate environment. How do you outperform? We outperform because we have the technology and data to be able to price real time. So as benchmark rates go up on our new originations, we're raising and passing on that higher cost to the consumer. That was one of the big overhangs of the company was could we perform well in a higher rate environment? In 2026, we've really crushed it. 44 % revenue growth is an acceleration relative to Q2 and Q1 that also grew over 40%, but not as fast at 44%.

22:12So we're able to do that because we have real-time data. We have the ability to transfer that cost onto the consumer. Our competitive position is strong enough that it's still a better rate than they'll get other places. In addition to that, we're also hedging against what's on our balance sheet from an interest rate perspective. And so we showed two things in the quarter. One, we can hedge what's on our balance sheet from an interest rate perspective. Two, we can drive originations at a higher weighted average coupon to make up for the higher benchmark rate. And it really answers the critics on can we grow in a higher rate environment, which we obviously did.

22:46Anthony, all these jitters about agents and mobile apps allowing you to shop around for higher rates and move money. Morgan Stanley has a nice chart today looking at IB deposit yields, which they argue are still consistent with trend lines that go back 34 years. Is that kind of your view? What I'd say is this. In an AI world, I'd rather call it SI world, super intelligence world, I think we win even more than we win today because it increases the visibility and the transparency of the competitive rates that we offer. We have a product called SoFi Plus. us were offering 4.4 % interest on your deposits today.

23:23That is a product that is very attractive relative to the rate you'd get from traditional banks. We also just launched tokenized deposits that are offering 4.4 % interest, and you do not need to do direct deposit with us, and there's no limit on how much interest you can generate based on the amount you have deposited at that 4.4%. We have a competitive advantage. We have a lower cost of doing business, And we pass that on in better rates on interest rates for loans, better rates on tokenized deposits and savings. And that becomes an acquisition tool for us on top of the fact that we already have great unit economics against that higher benefit that we give our consumers.

24:00Is that happening? Are you already seeing, you know, are you able to attract a bigger deposit base from from the banks? And I guess the the other the stable coin issuers? Absolutely. On the on the bank deposit side, we exceeded 50 billion dollars of deposits for the first time. which is a significant number considering the fact that we've only been a bank for about five years. The growth that we see in those deposits funds our loans, which gives us a better economic model for the loans than using warehouse lines from the banks themselves. In addition to that, it helps bring people into SoFi, and then they take out more products.

24:35So one of the important things that's happening in the business is that the products per member are increasing as there's more awareness of the products that we offer. And so that person that we bring in through a high interest deposit account like SoFi Money or tokenized deposits, then uses they use a second or third product. One of the products we launched earlier this year is SoFi Plus, which is a subscription based product. And here are two really cool stats. Eighty five percent of the people that are paying us ten dollars a month for SoFi Plus are already our existing members. And then 25 % of them who are already members before SoFi Plus take out another product after SoFi Plus, which means they weren't aware that we had this breadth of offering.

25:14And it reminds me of Amazon back when it was just Books, Music, and Video, and they launched SoFi Prime. And that helped introduce consumers to the array of selection they had outside of Books, Music, and Video. So SoFi Plus is both an economic driver directly and$120 of revenue per product per year. It also is driving adoption of new products and increasing the amount of deposits and assets the member has with us in their investor money account. Very interesting. I wonder if you'll get an added boost from hosting the Super Bowl at SoFi Stadium. As we continue to build SoFi into a household brand name, people trust us.

25:49Our products are superior and we drive more adoption. So the Super Bowl will absolutely help increase our brand awareness. We're looking forward to it. Yep. Same here. Jay-Z, the headliner. Thank you, Anthony Noto. So thank you, Sarah. Take care. Thank you. Well, up next, several key names in the Dow reporting earnings this morning, including Boeing. We're going to break down with CEO Kelly Orkberg just told us about the quarter. Plus, don't miss early Palantir and Airbnb investor Alex Davis. He's coming up in just a few minutes. The disruptive founder just announcing a new$10 billion mega fund where he is putting that money to work or he plans to.

26:25We'll have that discussion when we come back.

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28:00Welcome back. Watching Boeing today under pressure after the company said third quarter losses were narrowing but still came in above expectations. Revenue did beat, growing four year on year. Boeing delivering 161 commercial aircraft in the quarter. That was one more jet than a year earlier, and that's after getting two more MAX models certified in the quarter. Kelly Ortberg did join us in the last hour, and he talked about ramping up production. I think the uncertainty in our financial performance is narrowing. We're definitely reducing the risk going forward. We're seeing better performance out of our defense portfolio.

28:34We are ramping up aircraft, and we're doing that in the right way. And, you know, people want us to go faster, as I mentioned, but we're going to be smart about this, stay disciplined. And the outlook is there. We have$745 billion of backlog, and it's our job to execute on that backlog in a profitable way. Stocks, obviously, near session lows here. It is still the third worst Dow name of the year. Only Nike and McDonald's have done worse among the Dow 30. Down 20 percent in the last 12 months. Did he speak to the overall problem that investors have with the strategy? You know, the last few quarters have been sort of marred by weird charges on the defense side.

29:15Services was a beat, you know, and free cash flow was a beat, but it is lumpy and they're trying to smooth that. His argument was the uncertainty around the quarters is beginning to narrow, but that's going to take some time for the market to process. Yeah, and it doesn't treat it like a defense company. He was saying that that business is better as well when you can go to, I don't know, a SpaceX now or even a Lockheed Martin as well. Time now for a news update. Dom Chiu has it for us. Morning, Dom. Good morning, Sarah. Israelis are casting their votes in a key election that could remove Prime Minister Benjamin Netanyahu from power.

29:45It is the first major vote since the October 7th Hamas attacks three years ago. By mid-afternoon, already 45 percent of Israelis had voted, making it the highest voter turnout by this time in 50 years. British prosecutors charged two men today under Britain's National Security Act following an incident last month at a U.S.-run military base. They are accused of trying to assist Iranian intelligence operations. The U.S. withdrew its bombers from that base shortly after the police made the first arrests linked to that incident. And a federal judge extended a block on the Trump administration's renovations of the historic East Potomac golf course.

30:24The order temporarily stops the government from removing or damaging additional trees at the venue and requires the administration to give 10 days notice in writing before making any major changes. President Trump previously announced plans to redevelop the 106-year-old golf course despite legal challenges. Carl, I'll send things back over to you guys. All right, Tom, thanks very much. Still ahead, a new$10 billion fund just announced by Disruptive's Alex Davis, one of the largest private investors in growth and late-stage tech, including some names like Airbnb, Databricks, Palantir. He'll tell us the next companies he's targeting.

30:59In the next hour, the CEO of Wormel, his first interview since being named to the top role at the food company. We'll get his outlook for inflation and the consumer with the Dow down about 114. We're back in two. Welcome back. Private technology companies staying private longer, of course. They are growing larger, requiring more capital. This morning, Disruptive announcing a new$10 billion flagship fund aimed at backing roughly 10 growth and late-stage companies with investments up to$1 billion for each of those companies. The firm saying it sees opportunities in areas that include AI, infrastructure, defense technology.

31:35Joining us now is Disruptive's founder and CEO, Alex Davis. Just a bunch of music before you, too, there, Alex. Good to have you. And thank you for being here. How do you decide, you know, 10 companies, a billion dollars each, roughly, so many to choose from. How are you sort of going to use and make the decision process over this next, let's call it, year or so as you make those investments? Yeah, it's a good question. I mean, there's so, to your point, there's, when I started in this business, there were 11, at least that we counted, private companies of a billion dollars or greater. And now we think there's 6 ,000 or at least many thousands.

32:15Many thousands. Many thousands. Right. We think there's about 6 ,000. It's obviously growing every day with AI, but no different than a public company portfolio manager is we're sort of picking the companies that we think are best in the world, the most investable and probably closest to proving themselves as public companies and then activating our team to understand those companies better, get closer, selling me helpful to them. And then we make a play for those companies and not very much the way that it works in the valley mostly is a lot of these companies go after the venture capitalists.

32:56We do the opposite. that, you know, take those inbound calls. It's more that, you know, we see the universe of companies we want to invest in. And that's really what we're going after. Right. Now that universe, of course, and probably a lot of those 6 ,000 or whatever it is, companies that have valued over a billion dollars that are private right now are in AI, I would assume. That's got to continue to be a focus for you. Sure. Sure. And then, by the way, AI is like AI infrastructure. That was my question. What part of it do you see the most potential growth in? The thing is, we want to find end-of-one companies.

33:30So if it's the best model maker on open models, for example, and that's something we might be largely behind and think it's undervalued or we don't. Well, to that point, you've owned a significant stake in Reflection, for example. Correct. But it's not the only one. And you need to build an ecosystem. And it's not to say that we wouldn't be invested in others. Because ultimately, I think we need a thriving, open U.S. ecosystem. In China, they have a massive, thriving, open ecosystem, which could ultimately surpass what we see as the closed company. It could. Actually, I'm curious, as our viewers now are looking at some of your investments that you currently have.

34:11But Anthropic, you own through SPVs, and there is concern around open models. How do you view that and your ownership in Anthropic, for example, which will be going public in the not-too-distant future? I think there's nothing to say about Anthropic that you guys haven't been talking about, but I think the growth is incredibly explosive. It's probably the most impressive company I think we've ever seen in terms of its growth and actual revenue. And I think their ability to have held the amount of capital they've raised is really impressive. and they put their S1 out a couple days ago and it's incredibly impressive.

34:54But I think he knew it would be and for the last at least year or so it became a massive outlier and really sort of tripped up I think some of the things we thought OpenAI was. Right. All right. Well, your ownership of Anthropic, your ownership of ByteDance, I believe, and other names sort of that you already have. Do you add to them with this new fund, or is it going to be totally different new investments? I think it will effectively be new investments. I think anything that we do going forward will be new. There are some cases where we might have done really well with an existing company. Our pro rata at this level, we've been a really large investor, could be so big that it could end up being another billion-dollar check into one of these companies, largely, and we could talk about defense tech.

35:53I think there's a huge opportunity there for us to do more of these things, but certainly will add to existing companies. We always have until they've gone public. Yeah, but you've never done it through a fund structure. No, no. So why now? Well, because I think it's becoming harder, actually, for the best companies to decipher who these SPVs are. And I think there's more nefarious activity and opportunities, at least for that. And you really want your companies to know who you are and to know that you're good on your commitment. And I think what we've seen with SPV is not when I started in 2012.

36:29This was a normal thing a family office might put together. But to do something that in aggregate means putting maybe hundreds of investors or thousands of investors, the companies don't appreciate it. The very best companies, you know, the companies that are outside of that, they don't care. And then that's adverse selection. So I think us putting together a very large committed fund, that helps. How long is it going to take you to invest that capital? You know, we've invested like six to eight new deals a year. and we've said this is 10 companies. We didn't put a time frame on it. So it could literally be, you know, 14, 16 months, 18 months, and then we would do the next one.

37:11So D11 would be a new fund. You mentioned, obviously, defense. You were a fairly early investor in Palantir, or at least it goes back a long time. The company, of course, has been around for a very long time. What learnings do you have that you think will enable you to sort of identify the next generation of companies that will benefit on the defense front. Obviously, Palantir has also moved very strongly to the commercial front as well. But back then, it was largely a defense contract. Yeah, it was. And they were just about to get into commercial. And I think a lot of it came down to the people.

37:45And the thing attracted me to Palantir is sort of the thing that attracts me to all these companies is who's winning the fight for the best engineers and the best talent. And at that time, it was Peter and Alex Carr that were winning that battle. And it actually wasn't close. That's where the best in the valley wanted to go. And it seemed like a place to be invested in. And you could sort of see it at the time. It was them and Meta and LinkedIn and others. Well, they've now become half trillion, trillion plus dollar companies. And you really couldn't have gone wrong with those first 11. You think you can still identify where the best engineers are going?

38:25You can. Yeah, you really can. I mean, you can imagine that if I'm if I am building, if I'm a pre-training lead at a model company and whatnot, well, and I want to build to the frontier. Like there's only one or two places for me to go. Maybe I could take a shot at going to one of the open models, which have to go get massively funded and figure out a way to keep up to where the closed are. But if that's what you want to do, you're going to end up at Anthropik. And finally, Alex, you've been around long enough to sort of have a sense as to when things might be a bubble. There are plenty of people who believe there's too much capital chasing not enough opportunity right now.

39:07and that you conceivably and some of the investments you make ultimately could be a victim of that. How do you view it? Yeah, I get asked the question all the time. And I know you guys talk about, you know, how do you perfectly time a bubble? And I think we're in a situation now where you can see supply and demand and the sort of bottleneck in the middle of it is really around compute and the amount of things that companies like NVIDIA are doing incredibly well, I don't think viewers at home realize what a shortage there is to compute. And that's really driving so much of even what you see in the S1 that was just filed.

39:52But we're nowhere near solving the oxygen, basically, that these companies need to breathe in order to understand even how close we are to actually maximizing the amount of compute companies need to be able to make the kind of change. Run agents, which are basically, where you basically have AI, building AI and whatnot. Like, we're nowhere near it. I mean, we're very early in the cycle. And so, you know, we could be part of a bubble, but it might be that we're in one for a very, very long time. You'll be on your third fund by then, I guess, is what I hear you saying. Possibly be. Right. We'll all be good for you.

40:34All right, Alex, to be continued, but certainly appreciate taking time. Thank you. Yeah, I appreciate it. Alex Davis is the founder of Disruptive. Let me send it back to you, Carl. David, thanks. A lot more to come next hour on Anthropic. We'll be joined by Altimeter's Pauline Yang, an early investor in that name. And then after the break, what the options market is signaling about Robinhood getting ready to report after the close, stock has dropped six straight quarters following results. Stay with us. The rise in bond yields may have cooled off just a bit, but that doesn't necessarily mean they'll stay that way.

41:05So what portfolio moves can you make as a caution over inflation and rates remain steady? We'll speak with a wealth advisor who's banking on a few stocks, regardless of what Fed does with policies tomorrow. Tune into our Market Navigator segment later on today on PowerLens for more on that, 2 p.m. Eastern time. Welcome back. Robin Hood moving higher this morning ahead of earnings after the close, But the stock has dropped following its last six reports. Let's get to Oliver Rennick at the CBO in Chicago with a look at what the options market is signaling about this one, Oliver. Hey, sir. Yeah, rough recent history on earnings.

41:39Robinhood will offer an important update on how the everyday investor has been faring in this quarter's choppy market, as well as a look into how a rapid push into technology and new services is changing the broker's business model. In short, think less crypto, more AI, event contracts, options, and wealth management, too. After a 20 % drop from last month's highs, positioning and options right now looks mixed. Put contracts have piled up during this month's drawdown, and the ratio of open puts to calls sits at the highest it's been all year. Market makers are pricing just under a 7 % swing for Robinhood after earnings, which is smaller than its median move near 10 % the past year.

42:22It also looks like the bulk of the put contracts are concentrated at the 85 strike, which is about three bucks below that priced move, suggesting bears think this could swing more than expected if it's to the downside. Now, flip it around. For the bullish angle, there are more call contracts trading by volume than puts today, with traders picking up the 96 strikes expiring Friday, which need a 5 % bounce to pay off. And then for the speculators, this is Robinhood after all, of course. It's the 111 strike calls getting action. Those are 40-cent trades that would need some kind of big shocker here to spur a 17 % rally for those to pay off, guys.

43:02It's going to be interesting, Oliver. Obviously a good look at sentiment and volume on all kinds of instruments. Oliver Renick watching Robin Hood tonight. When we come back, the results from the latest CNBC Fed survey as the FOMC meeting gets underway today. Respondents laying out their predictions for inflation and the outlook for the S &P. And the next hour, Royal Caribbean raising its full year outlook. CEO is going to join us next with his first reaction to results with shares of better than 6%. Welcome back. The Fed is meeting today. It's getting underway. And a rate decision will be coming tomorrow.

43:34Steve Bleseman joins us now. He's got the latest results from our CNBC Fed survey. Steve. Hey, David, we got oil shocks, tariff shocks, war shocks, but the economy keeps chucking on. Respond us to the FedCNBC Fed survey. We did 205, Q4, Q4 and GDP in 25, cranking up to 243 estimated this year and then remaining still above potential at 2.2 to figure potential. One eight to two percent probability of recession ticking down again. Twenty six percent. It had been twenty nine percent in the prior survey. Looking at the outlook for CPI. I don't know if we're going to go to that one right now. Let's see if we can.

44:12There's the recession outlook, 26 percent probability in the next 12 months, come down from 29 percent. Looking at the outlook for inflation, 3.7 only coming down a little bit. 3.6 is the expectation for this year, but a better movement. I don't we're moving a little bit behind now on our on our graphics, but I'll just tell you what the data is coming down to 2.6 percent in 2027. There we go. One, two, not much change. And then a nice, a better move. 2027 unemployment rate not much change 4.2 pretty much unchanged by year end a little tick up but still to a pretty low rate 4.3 percent looking at a Fed chair Warsh says Mr.

44:50Morgan in all of his future conversations with President Trump needs to repeat this mantra the quickest way to bring down inflation in the U.S. is to end tariffs and end the war in Iran that's Rob Morgan senior vice president and market strategist at Mosaic S &P seen flat for the rest of this year A 4.5%, 5 % jump expected for next year. Biggest risk in the economy, war in the Middle East, as you might expect. The AI bubble bursting is the next one. And continued high inflation is the third one. 93 % chance, no change at this meeting among our 30 respondents. 76 % say a 25-base point hike is coming in December.

45:26And then more than half expect a hike in September. Finally, 43 base points is the amount that they expect. You can go online, CNBC.com, and read all about, guys, the CNBC Fed survey and all the results from this month. Carl, David? Really interesting numbers, Steve. Do they, on the GDP, do they just do real or do they do nominal as well? No, that's real, although we have a lot of commentary about nominal, Carl. It's funny you ask about that. Not funny. It's smart is what it is because we're seeing 6 % to 8%. And what guys are saying is 6 % to 8 % nominal GDP. How can the Fed not be hiking? The economy is running hot is their conclusion.

46:03So why aren't they going to hike tomorrow? It's a good question. And some people said, in fact, Richard Bernstein saying, how can you not be hiking, given that the inflation data has come in hot? I think they're waiting. They've signaled they're going to take more time. I think it's OK, Sarah. They're going to do another quarter in December if that's warranted. And then you also have the expectation in the market right now for further hikes in 27. We'll learn a lot more tomorrow, Steve. Really interesting numbers. Thanks. Thanks to the policeman this morning.

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