10AM Hour: Wells Fargo, Chime & Charter CEOs 9/9/26

0:00Chime CEO: At Janice Henderson, we strive to deliver better outcomes through insight-led investing, innovation for clients, and a partnership approach that's core to our identity. I'm Jessica Lianzini, Head of Fixed Income Client Portfolio Management. I'm passionate about my role in investments.

0:16Charter CEO: It allows me to partner with our clients, simplify fixed income, and support them in achieving better outcomes for their clients. Janice Henderson, investing in a brighter future together.

0:30Chime CEO: With the Discover Cashback card, it's payback time when you earn cash back on everyday purchases. Activate and earn 5 % cash back at different categories each quarter on up to$1 ,500 in purchases. That's 5 % cash back at different places each quarter, like grocery stores, on gas, and at restaurants. It pays to Discover. Terms apply. See discover.com slash 5 for details.

0:56Charter CEO: Good Wednesday morning and welcome to Squawk on the Street. I'm Sarah Eisen with Carl Quintanilla and David Faber. Live from the Wells Fargo Healthcare Conference today in Boston, more than 300 companies participating, 2 ,000 people attending here. In just a few minutes, I will speak with the host, Wells Fargo CEO, Charlie Sharp, about his business, the economy, and much more. Next hour, CEO of Biogen joins us for a rare interview on the company's drug pipeline and rising healthcare costs.

1:23Chime CEO: And here at the Goldman Sachs Communicopia Conference in San Francisco, The CEO of Chime will join me. We'll talk about their deal by Stride Bank. The CEO of Charter on that company's closing the acquisition of Cox. And we'll also have an exclusive with Visa CEO. Talk, of course, about the consumer and how that company is using agentic AI. Meantime, markets struggling a little bit here as we work our way further into September. Dow's having its worst three-day run in several months. Only sectors positive today are energy. for obvious reasons and a little bit of tech. VIX above 16 is the highest we've seen in a little bit.

2:02Chime CEO: And we're watching that 10-year at 4.8 ahead of some Treasury buyback announcements later on this morning. We'll start with these rising AI fears and a new warning from a now former Anthropic researcher who quit over concerns the company and competitors will not be able, he says, to control the models that they're building. Following that warning, another An anthropic safety researcher said there's a greater than 10 percent chance that AI, in his view, could kill all humans within the next decade. David, a lot of buzz getting generated. I think the one post on X already has 50 million views by itself.

2:36Chime CEO: What's the tone out of Communacopia on some of this stuff? Yeah, I mean, listen, this is a debate and a theme that's been going on for many years. It's not as though it's new. And in fact, those same percentage numbers, I think, were shared by the likes of Elon Musk many years ago. In fact, one of the reasons why he and Sam Altman at the time when they were friendly launched OpenAI to to to make the technology safe as it advances. And it is advanced at a rapid pace. And of course, as you might expect, given an investment conference in San Francisco, Carl, that certainly has been one of the focuses here.

3:11Chime CEO: Sarah Fryer, for example, yesterday was a guest here. She's the CFO of OpenAI, mobbed, treated like she's a rock star in many ways. And you might expect, of course, her session was full to the brim in terms of people who want to understand the underlying growth rates, want to understand what's going to be happening when and if that company does go public being OpenAI. And of course, Anthropic as well, expected to hit the public markets even sooner than perhaps OpenAI. We don't know when we'll see that S1, but it can't be too far away. And the underlying growth rate there is as technology continues to diffuse.

3:47Chime CEO: And the enterprise has been astounding. And that's been the subject of a lot of what I've been discussing with the CEOs here. How quickly are you using AI within your organization? How much friction is there in terms of diffusing the technology within the enterprise? And then some broader conversations as well around what it all means for a society. In fact, I did have one of those conversations yesterday with Brian Chesky. He's the CEO and founder of Airbnb. He did have a more positive take, although, of course, admits like so many others that we simply don't know what the future holds in the near future in terms of the advancement of this technology.

4:27Chime CEO: I'm not confident that it's going to be positive, but I think it can be. It's like nuclear power. It can either light up a city or destroy a city. AI is not inherently good or bad. It's what happens based on what's in our hands. So, you know, those kinds of conversations are certainly taking place, Sarah, around here. But for our viewers and the importance in the investment community, of course, the real question continues to be return on invested capital and whether, in fact, and what kind of efficiencies corporations around the world are going to be able to see from the use of this incredibly important technology.

5:06Charter CEO: Yeah, I mean, I think that this is the classic tension in society, and investors are grappling with it too, which is like, move fast on AI, but don't build something so dangerous that it's going to kill us, right? There's this post circling around. It was forwarded to me from someone in the hedge fund world, from a German banker, actually, from DWS. It was a LinkedIn post. He just got back from China. And he sort of posted his thoughts and what he heard from China. And I just want to read you a part of it because I think it's making the rounds and I think it kind of speaks to what's at stake. So apparently in China, he learned 10 generations suffered because one generation missed the Industrial Revolution, which is how they think about, you know, missing in the 17 and 1800s, the lost generation there.

5:49Charter CEO: And it took them a while to catch up. That's how they're looking at AI. It is the number one priority there. It is the number one issue. They are guns blazing when it comes to the development of AI. It's the top priority in China. And so we deal with that at the same time as dealing with some of these warnings from the researchers, guys, Carl and David. And, you know, it makes you think like the U.S. has to be there. Even if this technology is incredibly dangerous, we have to lead it. And I think it shows what's at stake. And I think it also is a pretty big warning for Europe that if they're so behind, you know, what what then?

6:25Charter CEO: What sort of lost generations are they going to be looking at?

6:30Chime CEO: yeah well we have talked oftentimes about the races i mean there's the race between the companies themselves to be at the forefront to have the frontier models that are the most powerful models of course sarah the race between an open ai and an anthropic and uh an alphabet and on from there and then there is the race with china and then there's the key question of course carl as well which is simply when both open ai and anthropic are public companies probably in less than a year from now, certainly, and they have significant shareholder bases that are pushing them as they should for continued and significant growth.

7:05Chime CEO: Will they be willing to withhold more powerful models from the market, even if it means foregoing potential profit, if they feel those models are not safe? That is sort of the debate that we're starting to have right now, and it's important one as well. Yeah, I'm not sure some of these analogs really work. I mean, Chesky, using the nuclear fuel metaphor is interesting, but nuclear fuel can't make decisions by itself like AI potentially can. It's going to be interesting. Sarah?

7:36Charter CEO: Yeah, I mean, we're going to pick up the conversation here, I'll tell you, with some of the executives. And I do want to start because we're here in the 21st year that Wells Fargo has hosted its annual health care conference. Joining me in Boston right now is Wells Fargo CEO, So, Charlie Sharp, thank you for having us.

7:52Charlie Scharf: Thanks for being here, Sarah. It's great to be with you.

7:54Charter CEO: I know you've been doing this for a really long time, but it does feel like an exciting moment, at least, when it comes to healthcare M &A. That's been a big story for Wall Street and a big story for you. Is that part of the play here?

8:04Charlie Scharf: I think there's no question about it. I mean, healthcare, it's dynamic. There's a huge amount going on. We're in the middle of a lot of it. This conference is a great example of it. We have over 300 companies, 850 investors, which is almost double. what we had last year. And they're here because we get to convene these two groups to talk about all the changes that are going on.

8:26Charter CEO: What about dealmaking?

8:28Charlie Scharf: Dealmaking, it's happening. I mean, you know, there's capital available. There is a huge amount of evolution and change going on in the industry. And so you've got a lot of people wandering around having conversations about what's next, what makes sense. And so I would expect more of that to continue.

8:42Charter CEO: I was going to ask how sustainable, I mean, just broadly beyond healthcare, the wave of dealmaking that we've seen? How sustainable is it?

8:48Charlie Scharf: Listen, there's a huge amount of capital available. There's a huge amount of change going on in the world broadly. And people are very active in the markets and thinking about if they can get deals done in this administration. Now's the time to get them done. So unless something happens in the markets to change liquidity or change spreads, I would assume that's going to continue.

9:07Charter CEO: Where does Wells Fargo play? Because I know a big priority for you has been growing the investment bank and there's been some progress there. Where are you in terms of taking share and how much more do you see to go?

9:18Charlie Scharf: Listen, I think we're in the beginning of what we view as what our opportunity is, but we've made great progress. Our market share in the investment bank in the U.S. is 4.3 percent, up from 2.5 percent just a couple of years ago. We're number six in announced M &A, I think up from 14 a couple of years ago. But we've got big aspirations because of the relationships that we have and our opportunity to convene these groups of people and to be able to participate more broadly in a value-oriented way for all of them. So it's a huge part of our future, and we feel like we're just getting going, but you're seeing it in our results.

9:57Charter CEO: And you go up against the Goldman's and Morgan Stanley's and J.P. Morgan's.

10:01Charlie Scharf: Listen, there are a lot of great competitors out there, the traditional banks, the smaller institutions that focus just on these things. But what we have is we've got a balance sheet. We've got intelligence. We've got relationships. We lend to people. We provide cash management services. We've been banking a lot of these customers for decades and decades, and they like doing business with us. And we intend to do more with them.

10:24Charter CEO: Yes. The lending, I mean, that's another key part of the story right now in the investment. I mean, and the investor debate sort of around your stock. That's been growing double digits after you had the asset cap lifted. I think some of the concerns were around the cost, the margin, for instance, when it comes to competing and whether you have to aggressively price these loans to grow the business.

10:44Charlie Scharf: Yeah, that's not what we're doing. I mean, what we've seen is, as you pointed out, coming out of an environment where you can't grow, we had cut back significantly on our financing assets in the investment bank. Those are high return but lower margin. So we basically added those back. That impacted our net interest margin, but we're making more money and our returns are higher. You know, that's moderating. That's not going to be a big part of the story going forward. We're not competing on price out there. We're competing on our abilities, our relationship. And that's what's going to drive the higher returns that we see in our future.

11:19Charter CEO: What do you think is the most underappreciated upside potential for your earnings growth right now in the market?

11:24Charlie Scharf: I don't think it's underappreciation. appreciation. I think our investors want to see results. And so it's up to us to show that across all of our businesses, we're showing real growth. And we're starting to see that in every single one of our businesses. And we would expect to see it more consistently across every one of them. Our return on tangible common equity, when we started our journey, was high single digits. We set a target of 15. We achieved that. We said now 17 to 18. We feel very comfortable that we're going to get there in a reasonable period of time. And then we're going to raise it from there because the natural mix of our business supports a higher number.

12:01Charlie Scharf: And so we feel really good. And we just want to show investors that this franchise is capable of delivering the things that we think it's capable of delivering.

12:08Charter CEO: Well, it's also helpful that credit quality has been remarkably strong. Any change there?

12:13Charlie Scharf: No, and it's not just credit quality. It's overall health of our customer base. It's consumers, it's businesses. When we think about credit on the consumer side, Delinquencies are actually improving from very, very healthy levels already. We don't expect that to continue. It's not going to go on forever. But the health of the consumer from a credit perspective is really strong. Their spending, their savings levels are sustainable. And one of the things that we see which is super interesting is the idea of this K-shaped economy that did exist, which the more affluent customers were growing faster.

12:45Charlie Scharf: And those with lower incomes were suffering somewhat. Then we saw a period where the affluent were continuing to grow and the lower end was stabilizing. Now they're growing in tandem. So still at a lower level, but you are seeing growth there. And so it's interesting because it just tells you that there's broad-based strength out there, regardless of what you hear when you hear about some of the polls in terms of how people are actually growing.

13:13Charter CEO: I was going to say, is that surprising given the inflationary pressure and the higher gas prices?

13:16Charlie Scharf: Listen, I think it comes down to people have jobs and their wages are growing. And as long as those two things exist, yes, we should be concerned about inflation. Inflation is very, very real. But when people get their paycheck, they see more money in their paycheck, they have the ability to spend it. So that's what we're seeing in the results. And that's contributing, again, broad-based growth, consumer, which also translates through to what we see with small businesses, our commercial banking customers across the U.S., and large corporates.

13:45Charter CEO: Yeah, because I was also going to ask if higher interest rates are going to ultimately put pressure on, you know, the small businesses or those that are taking out loans.

13:54Charlie Scharf: Not smaller businesses because, you know, they don't borrow long at those rates. And, you know, we'll see what happens with shorter term rates. But again, what you see is that the underlying strength of their customer base is strong. And so as long as their customers are strong, they'll continue to do fine.

14:12Charter CEO: You did just say a moment ago, though, that inflation is real. So how big of a problem do you think we have on that front? Listen, I look at it as there are a lot of reasons why we are where we are.

14:24Charlie Scharf: It's not particularly surprising. I think what's most important is there's acknowledgement that it's there and that it's a hugely important focus of the administration, as well as the way the Fed is thinking about things. And so, you know, tariffs are complicated. Higher oil prices are complicated. You know, the argument that there's a greater good here, which we need to get through, I do believe is fair relative to why we are.

14:51Charter CEO: You mean when it comes to fighting Iran?

14:52Charlie Scharf: I think why the reasons why we're fighting Iran, absolutely. And creating a fair and level trade environment across the world. And yes, it's been disruptive in this period of time. But again, when you look at how we've been able to grow the economy and how we've been able to sustain employment and grow wages, that's hugely relevant to our ability to get through this time period and get to the other side.

15:21Charter CEO: So you're not against the tariffs?

15:23Charlie Scharf: I am not against the idea of the tariffs at all. We could look at each one of the specifics and say, is it all right and whatnot? I don't know. Canada's not right now. Listen, but again, I think what you have to look at and say, and by the way, this is what we hear from our customers. When we go around and talk to our customers, we talk about how you felt before tariffs and how you feel here. What they talk about is fair and level playing field. It wasn't a fair and level playing field. We can politicize tariffs all we want, but they look at it and they say, we want the ability to sell our goods abroad the same way those companies can sell their goods here.

15:59Charlie Scharf: They don't believe that was the case. And that's, you know, so they look beyond the shorter term disruptions because they want to wind up in a better place relative to their ability to compete.

16:09Charter CEO: So because of all of this, do you think the Fed should be raising rates next week?

16:12Charlie Scharf: Listen, I think I'm not going to prejudge what they should do. I find what Chairman Walsh says very refreshing.

16:18Charter CEO: I know, you're a fan.

16:20Charlie Scharf: Well, I think, I mean, how can you not be? I mean, when you think about it.

16:23Charter CEO: Some people want information and guidance and a little bit more about what would cause them to raise rates.

16:28Charlie Scharf: I think he is spot on. Not that it's for me to judge, but when you make the statement about things like dot plots and having lots of people talking about things, there's no question whether it's the media, whether it's laziness that exists in parts of the investment community, people focusing less on the facts and more on those types of things, which are either backward looking or more gossipy in nature. And so his point of do the work, look at the underlying facts, that's what we're going to do, and draw your conclusions based upon that, because that's what we want to have the ability to do. To put the Fed in a position because of things that are put out there that make it harder for them to attack an environment like this, I do think is not a great position to be in.

17:12Charlie Scharf: And so creating the flexibility and being clear that you're going to make your decisions based upon the data you see real time. And even these conversations about what's going to happen with rates, you know, two, three, four months out, you know, there's a huge amount going on. And I do think the Fed should have the flexibility to make the decisions that they're going to make and explain why they made them.

17:31Charter CEO: What do you think about the administration or the Treasury Secretary's intervention and increasing the buyback, which we should get actually in the next hour to try to calm yields?

17:41Charlie Scharf: Yeah, and I saw you did an interview with the Secretary talking about whether it's, you know, in line with what the Fed is doing. Listen, I think what you're hearing from the administration is that they have a point of view on what they think will drive the risk premium over a period of time. And they're willing to take action based upon that. And so they feel very good about their ability to control inflation and to create the kind of growth in a way that don't hurt each other, that actually help each other along the way. And they're willing to take actions to actually show that. You don't have a problem with it.

18:20Charlie Scharf: I don't have a problem with that. And I think, you know, them being clear about how they feel about things through their actions is reasonable.

18:27Charter CEO: Do you have a problem with the Clarity Act? Because the crypto lobby has come out with a campaign ahead of a procedural vote next week. And they say the big banks are against it.

18:36Charlie Scharf: They is who? The crypto lobby. Well, they're a lobby for crypto. So that's not surprising. Just to be really clear, I'll speak for myself. We would love to see a great clarity bill. And we're really close. But there are things about it which, if passed, as is, I believe, and I think a lot of the banks in this country believe, including the small banks, which are incredibly important to this country, are that if passed will create an environment which is unsafe. Deposits are incredibly important for the banking system. They get recycled into loans, especially for small banks and communities. And so protecting the deposit base is incredibly important.

19:16Charlie Scharf: And that's not what this bill currently does.

19:18Charter CEO: This is the issue about whether they can offer yields or rewards for keeping stable funds. No question.

19:23Charlie Scharf: And we're fine with rewards, but not pulling deposits out of the banking system, especially the small banks. And they're the ones that are the most unhappy about the way the bill is currently written, not the larger banks. So if it goes through as written, what happens? The second issue is any money laundering, which is regardless of what people say, when you look at the way things are written today, protections don't exist across the crypto industry to provide the kinds of protections that the financial system that's regulated currently provides. And so you fix those two things. Absolutely, we're supportive of it.

19:53Charlie Scharf: And we do want to build past because to create the kind of environment where it's clear what regulated institutions can do is incredibly important. That would allow us and others to compete on a level playing field with crypto, which we're all for. We want them to compete on a level playing field, and we want to compete on a level playing field.

20:11Charter CEO: Okay, got it. So it's not quite as nuanced as the banks are lobbying against it. Finally, you know, Charlie, we were just having this conversation on AI. Big topic of conversation today is this anthropic researcher that resigned and warned that everybody there thinks that AI could kill us. That there's more than 10 % chance, at least. Do you have existential concerns about where we're headed?

20:33Charlie Scharf: I'm not an expert. I think I've got, I'm incredibly excited about AI and I've got huge concerns about it. And I think this is no different than other critical innovations that have happened, including in the healthcare space, right? We want people to create new things. We want people to create drugs. But to the extent that there are dangers there, you should acknowledge them and make sure they're the right protections, but allow the kind of innovation that we need. And so I heard what you said about China. I think we feel the same way as a country, which is we have to be in the forefront of this, but we should acknowledge that there are risks, not politicize it in terms of, you know, whether it's Republican issue or Democrat issue, and just ask what are the right ways to create protections that allow the large tech companies, these large language model providers, and companies like ourselves to use these amazing technology, because it is an incredibly important and exciting part of our future.

21:24Charter CEO: Okay, Charlie Sharp, thank you very much. I know there's going to be a lot more discussion around AI and healthcare today as well, which is one of the most promising and positive developments around AI. Thanks for having us here. We'll see you later on stage. That's Charlie Sharp, the CEO of Wells Fargo. David.

21:39Chime CEO: All right, Sarah, thank you. And thank you for bringing that to us. We've got a big show still ahead. We're going to be sitting down with the CEO of Chime, Charter, and Visa. They're all going to be my guests right here at Goldman's Communicopia Conference in San Francisco. Carl? Missed the CEO of Novartis after another disappointing drug trial saw those shares have their worst day ever in yesterday's session. Dow down 415, close to session lows here. Squawk on the streets back after the break.

22:07Charlie Scharf: This message comes from Wise Business, the only account your business needs to scale globally. You're building a business with global ambitions, but hidden fees are eating into your margins. With Wise Business, you can pay overseas suppliers without exchange rate markups. Have customers worldwide get payment details in 22 currencies so you get more of each hard-earned payment without hidden conversion fees. Be smart. Get wise business. Download the app. T's and C's apply.

22:37Chime CEO: Ever notice how every new AI tool asks you to explain your business to it all over again? Google Workspace with Gemini skips that. You get Google's AI built right into the premium versions of Gmail, Docs, Sheets, and more. No new tools. No extra logins. Just one subscription that gives you personalized AI right inside your actual workflow. Make work less work. Try Google Workspace with Gemini at goo.gle slash workspace with Gemini. With the Discover Cashback Card, it's payback time when you earn cash back on everyday purchases. Activate and earn 5 % cash back at different categories each quarter on up to$1 ,500 in purchases.

23:19Chime CEO: That's 5 % cash back at different places each quarter, like grocery stores, on gas, and at restaurants. It pays to discover. Terms apply. See discover.com slash 5 for details.

23:34Welcome back.

23:35Chime CEO: Take a look at shares at Chime. They are higher this after the fintech company raised its outlook and announced a$590 million cash deal to buy its longtime banking partner, Stride Bank. Joining us from the Goldman Sachs, Minucopian Technology Conference here in San Francisco is Chimes co-founder and CEO Chris Britt in a first-time CNBC interview. Good to have you. Thanks for having me, David. Good to see you. Be here in your hometown. All right, speaking of hometowns, this bank was founded in 1913 in Enid, Oklahoma. I've been there. Have you? A few times, yeah. Because they had been a partner of yours for as long as seven years.

24:09Chime CEO: Seven years, yeah. So why not just keep the partnership? What does this do in terms of enabling other things as a result of your ownership? Well, as you know, we have great ambition here at Chime. We want to be the leader in primary bank accounts in America, and we've shown explosive growth over the past decade. We now have over 10 million monthly actives relying on Chime as the primary way to manage their money and make financial progress. And for us, you know, I've been clear, I think, on this topic, which is that we always looked at the bank charter as more of a when, not an if, given these grand ambitions that we have.

24:44Chime CEO: And so every year we looked at the opportunity to potentially extend partnerships, add new bank partners. In this time, it felt like the time was right given the changes in technology, the regulatory window that's opened, and most importantly, just the confidence that we have in this incredible team at Stride, led by Rud Baker, who's been the CEO there and been a part of the bank for over 50 years. So I feel really good and confident about our ability to integrate this bank and continue to just keep business as usual. What does it allow you to do, Chris, that you weren't able to do previously at China?

25:18Chime CEO: Well, a couple of things. First of all, we are at the size and the scale that we feel we should no longer be reliant on third parties. We are the ultimate accountable party for excellence in service and product delivery and so forth. I think the number one thing that we're trying to achieve here, beyond just the economic advantages that we can talk about is greater velocity. Whenever you work with a third-party bank, this is a highly regulated category. So in this age of AI where you can build products and software and experiences faster than ever, if you think about that production line of creating new products and services, if you get to the one-yard line and then you get sort of slowed down by third-party approvals, compliance, and so forth, it just slows you down.

26:02Chime CEO: So we think having all of this data and processes unified within QIIME is going to unlock a massive increase in the ability to innovate for our members. So that's probably the number one reason why we wanted to do this deal. Okay. We're taking a look at the stock price here. You can't see it, but it's obviously been a very good story lately. It hasn't always been that, certainly since I can remember when you, of course, came public. But a very good year overall. Do you feel like you have the momentum in your business that you can continue to see sort of sightline to to the kind of growth numbers that are going to contribute to continued rises in that stock?

26:37Chime CEO: Yeah, absolutely. We've had five quarters now of beat and raise as a public company. So I feel really good about that. The first year I'd be lying if I didn't say I was a little disappointed with with the stock reaction. But again, we we recorded a great quarter just about a month ago. Well, what did you learn from that? You know, that period where you were perhaps disappointed. What did you learn from your investors that perhaps are you now applying that obviously has turned things around? Chime is a company that was not an instant success. We had some tough road along the way. And so I think that really built a lot of character in the business.

27:12Chime CEO: And the people that work at Chime really truly are mission driven. So we focus on our members and we focus on delivering awesome products for them. And it's really resulting in great results. In fact, as part of this announcement for the Stride acquisition, we announced that we're raising guidance for the third quarter and the full year. So now Q3, we said 30 percent top line growth and 17 percent EBITDA margin, which is close to a rule of 50 almost. So we feel really good about the momentum in the business right now. Yeah. And that is another reason why the stock is up over six percent. You know, we are here in San Francisco.

27:44Chime CEO: Many of the conversations, not surprisingly, that I've had with leaders of organizations are around AI. And I did want to hit that with you in the short time we have left. It's an important part of what you are doing. I think you said, Chime, AI-assisted code, you've risen from 29 to 84 percent of the code shipped over the last four months. And you actually did reduce your workforce by about 10 percent at the end of July. Are those two things related? No. You know, the change in workforce was really about reducing layers. and sure, AI was a part of it, but it was not the main reason for the change.

28:21Chime CEO: It was more about smaller teams operating with greater speed, given the ability to use new AI tools. But when I think about AI, I think about, you know, first of all, it's creating an incredible opportunity for us to be even more productive, more efficient, without having to increase the size of the workforce dramatically. So it's changed our operations dramatically, but it's also, you're starting to see it come into effect inside of the Chime member experience. experience. And we just see, we think we're just at the early stages of being able to, you know, improve experiences, make things work faster.

28:53Chime CEO: And then even with our new AI assistant, Jade, it gives deep insights into your spending history. It gives you tips on what to do even better. It can help you, you know, cancel subscriptions if it sees that you've got, you know, multiple recurrences that don't make sense. So lots of like really cool insights and actions that can be taken. And finally, Chris, what would be the most useful productivity any measures that you track, that investors could track, that imply what, for example, the progress you're making and what hiring may look like as well over the next year? Well, if you look over the past four years, we've reduced our cost to serve by 10 % per year, while we've increased our member base up now over 10 million active.

29:31Chime CEO: So I'd say you're clearly seeing it on the efficiency side. But the next chapter is going to be how the consumer experience continues to evolve in an AI-driven world. And I think at the end of the day, consumers in the financial services space are going to want to work with a partner that is trusted and works within the regulated realm that's required in the banking and financial services space. So we think we've got a good advantage in that. When do you expect to close the Stride deal? First half of next year. Knock on wood, of course, we have to go through the Fed and OCC approval, but we have strong relationships and hopefully we'll get good support for this deal.

30:05Chime CEO: We think it's great for consumers and it's obviously great for our business as well. Awesome. Well, good to get a bit of a catch up here. Chris, look forward to future conversations. Thank you. Thanks, David. Chris Britt, CEO of Chime. Sarah, over to you.

30:18Charter CEO: Yes, we've got dueling conferences here, David, with you in tech and me in healthcare. Still to come this morning, for me, the CEO of Biogen is with us live from Wells Fargo 2026 Healthcare Conference. More on the company's M &A strategy, the outlook for new drug development. Plus, later, do not miss the CEO of Novartis, the stock coming off its worst day ever after some disappointing drug trial data. The CEO will join us to discuss. Don't go anywhere.

30:43Chime CEO: Ever notice how every new AI tool asks you to explain your business to it all over again? Google Workspace with Gemini skips that. You get Google's AI built right into the premium versions of Gmail, Docs, Sheets, and more. No new tools, no extra logins. Just one subscription that gives you personalized AI right inside your actual workflow. Make work less work. Try Google Workspace with Gemini at goo.gle slash workspace with Gemini. With the Discover Cashback card, it's payback time when you earn cash back on everyday purchases. Activate and earn 5 % cash back at different categories each quarter on up to$1 ,500 in purchases.

31:25Chime CEO: That's 5 % cash back at different places each quarter, like grocery stores, on gas, and at restaurants. It pays to Discover. Terms apply. See discover.com slash 5 for details. Hmm. Interesting.

31:41Charter CEO: Something amazing is happening when teams brainstorm ideas. Devices are keeping the energy flowing. That's because CDW is building modern workplaces with Acer devices. Built-in security, uncompromising processing power, and fast connectivity help fuel collaboration so your team can innovate quickly.

32:00Chime CEO: Wait, guys, that's a great idea.

32:03Charter CEO: Acer and CDW make amazing happen. Learn more at cdw.com slash Acer.

32:36Chime CEO: Yesterday, it's basically semis, AI hardware, plus today, Meta, carrying things. You know, we're basically six months into a round trip in oil prices. If you go back six months, it's right after the start of the war, is when you first got, like, WTI up to 95, et cetera. So what's happened in that six months? Well, the S &P 500 has essentially kind of up, it's up a couple of percent, call it that way, from May. We've basically kind of been able to plateau around these levels, The early June highs were defended last week, you know, 76 and change. We talked about that. So we're not that far above them right now.

33:13Chime CEO: What has happened is the market has narrowed back out. So everybody was celebrating the broadening. I always push a get back against this idea that a broader market is a better and safer market. The equal weighted S &P 500 is now starting to really roll a little bit. Maybe we don't know if this is actually getting a little oversold, but it's below the 50-day. It has not really performed particularly well. And the impact of oil is, as ever, mostly on the consumer cyclicals and the industrials. If you look at those two on an equal weighted basis over six months, basically dead money as the S &Ps managed to perform a little bit better.

33:48Chime CEO: So the dance continues. You know, the market continues to try to rotate away from these areas that are exposed. What's fascinating coming in yesterday was the way, come out of Labor Day, and it seems like investors are like, wow, why are health care and software up so much? We need to knock those down. Those are not necessarily where we think is going to be the engine of the next leg of this bull market. And it seems as if, in the confusion of who gets disrupted with all these new models, we're back to buying Micron and AMD. Yes, back to picks and shovels. Citadel's out with a note making the rounds that maybe the highs for the month are in.

34:23Chime CEO: He does talk about second half of September, seasonal weakness kicking in, options expiry, quarter in, things like that. the pattern, the history, the flow work would lead you in that direction. You know, whether that's true or not, I do think you have some, you know, I think it's like two of the last five Septembers have been great. But I do think it's interesting that while everybody is conscious of this and conscious of the midterm election patterns that say we should have some weakness here, people are not really positioned for outright weakness. I think institutions in particular are pretty full in terms of equity exposures.

34:58Chime CEO: Put call ratios are very low. So it's kind of like, unless the market itself and its behavior gives me something to worry more about, I'm not going to back away. But I do think that the rotations have become very difficult to navigate and to kind of ride this slalom from what are we preferring today? You could say tech. It's not simple as that. It's actually where within tech it's going to get you hurt and it's going to protect you. Yeah. I mean, the forward PE for tech at large is way down than it was earlier. It is way down. I think a lot of that is because semis are now bigger within tech. And so Micron's never going to get the full multiple.

35:34Chime CEO: And so it's a little bit of a composition effect. But it's absolutely true. Only Apple has held a real premium valuation through this whole period. Interesting times, Mike. We'll stay close. Mike Santoli. Let's get a CNBC News update as well with Christina Partzinevolos. Hey, KP. Hi, Carl. New financial disclosures from the Trump administration show the president gave$45 ,000 cash gifts to three of his aides just over the holidays.

35:57Charter CEO: The three aides each make about$150 ,000 annually,

36:01Chime CEO: and recipients include Executive Assistant Natalie Harp, Communications Advisor Margot Martin, and Deputy Director of Oval Office Operations Chamberlain Harris. The White House said the gifts had nothing to do with their official government duties. Israel's envoy to the United Nations says Prime Minister Benjamin Netanyahu will make a 24-hour trip to speak to the 81st session of the General Assembly in New York City later this month. The quick trip comes after New York City Mayor Zoran Mondavi called Netanyahu a war criminal and called for his arrest. The city, however, would not be able to execute the war on issue by the International Criminal Court.

36:35Chime CEO: And a big upset overnight in the U.S. Open tennis. American Ben Shelton defeated Defendant Champion Carlos Alcaraz in five grueling sets. The match came to an end at 3.33 a.m. this morning, setting a record for the latest finish in tournament history. Sarah, I doubt you were awake, right?

36:58Charter CEO: No, no, I was not awake. I was here in Boston. But these nights have been going long at the U.S. Open. I went to one of the matches. Friday, right? One of them? I went like three hours. Yeah. Yeah, Thursday. Okay, thank you, Christina. Christina Parts and Evolas. Big show still to come, including the CEO of Charter with David from Goldman's Communicopia Conference on its acquisition of Cox, plus the growth in broadband and mobile. A lot to discuss there. And then later, do not miss the CEO of Biogen. He'll be here with me at the Wells Fargo Healthcare Conference. We'll talk the M &A, pipeline, and much more.

37:35Chime CEO: CEO of Charter coming up after the break. Of course, we're live from Goldman's Communicopia Conference. Let's talk about the closing of their Cox acquisition just a couple of weeks ago. And broadband and mobile. Oh, and a lot more. Plus, next hour, we're going to have a conversation with the CEO of Visa. New data about consumer trust surrounding AI and payments. That's all coming up when Spock on the Street comes right back.

38:03Chime CEO: Welcome back. Charter entering a new era after it closed its deal to acquire cost communications. Expanding Spectrum. Of course, the brand it operates under. The reach now is 45 states. Let's bring in Chargers President and CEO Chris Winfrey joining us from Goldman Sachs Communicopia Technology Conference. It's a first on CNBC interview. Nice to have you. Good to be with you. It's like old times here. It is. An actual cable company, or at least what we used to call one, of course. Let's start with Cox. Yes. You know, closed a couple of weeks ago, obviously took some time, California in particular.

38:37Chime CEO: Yeah. Always sort of can be somewhat difficult. So just tell me sort of what would be the operating metrics investors should watch now to say, OK, this thing worked the way you promised it would. I think it's pretty simple. You know, we're now the leading Internet and video provider in the country with the fastest mobile growth in the country with the fastest mobile service. But we service our network is in front of 70 million homes and businesses. And, you know, we service about 37 million of those who are going to delight those customers. But the real opportunity is that you've got nearly 35 million customers who aren't taking any of our services today.

39:10Chime CEO: So the opportunity is to go take the best network in the market with the best products, save them lots of money by combining a wireline network and a wireless network in a way that none of our competitors can do. We guarantee savings of$1 ,000 per year if you take two mobile lines with us. So it's really about growth. It's the opportunity to delight the customers we have, the 37 million or so, and to expand these services to where our network already provides coverage that those customers, residential and business, aren't taking care of. So do you have the go-to-market strategy ready, and has it already started?

39:42Chime CEO: We have. So starting next week, we're going to rebrand all of Cox to Spectrum. We'll introduce Spectrum pricing and packaging, starting with a free mobile line for an entire year, the guaranteed commitment to save you$1 ,000, faster speeds, lower price on broadband, combination with mobile, and then roll out the video product, which you and I have talked about over the years. We've transformed the video space where you now get$130 of programmer app value included as part of your television service, not for everybody, but to the extent that you want video, this is the best place to go get it. And so we're bringing all those services.

40:15Chime CEO: And on video, it's a spectrum TV app is the number one app, the most widely viewed, highest ranked app in the country. And well, I mean, it sort of did change the paradigm to a certain extent. I remember when we were talking about it and the dispute with Disney, obviously some years back. They've been a great partner since. Video losses, they did the last quarter improved sharply. I think video revenue was down 9.7 percent. As you say, your packages now include all these streaming services. But I wonder, Chris, is it ultimately, it's not a growth product. Is it a retention tool? I think it's a retention tool.

40:46Chime CEO: So the value in video for a cable provider is really long gone. The value is a standalone product. The value in the video product is the ability to acquire more broadband and converged wireless customers and retain more customers. And when we have a video customer who utilizes these apps, which are now included in the service, the churn rate or the retention is 40 % better when they have the video service with us and activate those apps. So it's an important acquisition and retention tool. But, you know, what I always tell the programmers is we're no longer in this for the video business. It's about the broadband business, and it needs to work for our broadband business.

41:20Chime CEO: And it does. We're providing value and utility, saving customers money on video, and we're saving them a boatload of money on mobile as well. Like I said, we guarantee$1 ,000 savings per year with the fastest mobile service in the country. Chris, you can't see it. There's a painful chart up behind you because it says since you've been CEO, the stock is down 63.5%. Yes, I'm familiar with the chart. I'm sure you are. It's brutal. Yes. Now, you know, a lot of that, I would argue, is the growth of fixed wireless, which some said was not going to be an issue, but certainly has grown significantly for many of your wireless competitors.

41:54Chime CEO: The worries about Starlink. You're talking about all the benefits of a transaction and what you're going to do, but how do you combat these overall? One is a real thing because we've seen the growth in fixed wireless. The other, we don't really know what Starlink is going to be able to do in suburban or even urban areas in terms of the broadband product. I think you've got to take a look at it from a long-term perspective and then a short-term perspective. Long-term, we have the best network, the fastest speed, gigabit, symmetrical, multi-gig capabilities everywhere we operate combined with mobile.

42:21Chime CEO: And if you believe that demand for data is going to continue to increase, which it always has, now with AI is actually increasing. You think it will increase a lot more? I do. And then, you know, our network has the best capabilities. We save customers lots of money. We have 100 % U.S.-based service. And so I think we have all the ingredients long term to be just fine. Now, we could sit back and say, we're just going to wait for the newness of competition to subside, data demand to increase, and we'll be fine. But that's not what we're doing short term. What we have to do as an industry, and starting with Spectrum, is we need a better go-to-market strategy.

42:53Chime CEO: We've been great network operators, but we haven't actually been the best at going to market, marketing the value and the utility of the services we provide. And then the second, kind of tied to that, is, as you know, cable hasn't always had the best service reputation. No. Some of that's deserved. And, you know, we need to make a really concerted effort to go improve that. We recently hired a new chief operating officer who has a lot of experience in both of those two categories, improving what we call net promoter score and go-to-market. So we're willing to think out of the box, change the way that we've done certain things, and we're not just waiting around for what I know will take place as the demand for data continue to increase.

43:29Chime CEO: These other platforms, Fixed Wireless Access and Starlink, they serve a purpose for a segment of the population, but I think as demand for data continues to increase, as people look to converge products where you have Internet wherever you go, it's only our network that's really going to be able to provide that. So we've got work to do in the short term, long term. But you long term. All right. Well, long term, obviously, the last four years has been quite painful for your shareholders. You did buy back a lot of stock, too. We have. Do you regret that? No. I think over time, I think it'll be just now.

43:56Chime CEO: Do I wish I'd done it a little bit later in time? Yes. But I think in the end, the stock that we bought back will be very accretive to shareholders. I mean, speaking of it, I mean, you have a pay and equity grant plan here. I mean, your hurdles, like you don't start making money till the stock hits$564 a share. That's right. I'm not worried about you in terms of your ability to pay your bills, but what did you do to yourself? Yeah, no, look, this is a levered equity play. And so we're reducing leverage, which creates value for equity shareholders. So, you know, a small change in the valuation of the company can have an outsized impact on the share price.

44:27Chime CEO: If you take a look at where Charter's trading today and you think about even without Cox and even without the transaction synergies of Cox, you know, we're trading at something lower than three times free cash flow of next year. And because you do have some leverage on the balance sheet, when things start to move from an enterprise value standpoint, the outsized impact on the share price is significant. Now, I talked about broadband growth. I believe everything I said there. At some point, even if somebody says, I'm not willing to go wait for that, you have to value the underlying free cash flow.

44:57Chime CEO: We have tremendous free cash flow today. It's about to explode next year's one-time investments that we've made start to subside. And so I think the value of the company sits there from a free cash flow standpoint. You know, I'm not going to sit here and predict share price. But if somebody took a look and said, if this company were trading at the historical average of cable at seven and a half to eight times, which is not crazy. It's not crazy. It was 11 times when it was at$800 a share. Yeah, those were different times. But if you take a look at our free cash flow and EBITDA, the ability to go up as fast as it came down is still there.

45:29Chime CEO: Our EBITDA is better. Free cash flow is better than it was several years ago. And so the opportunity that exists for us is still the same. It doesn't mean that we don't have work to do and that we're not going to go do it. Chris, unfortunately, we're out of time, but always appreciate your taking some time. And I look forward to catching up in the future as well. Thanks for doing this. Chris Winfrey, the CEO of Charter. Sarah, back to you.

45:49Charter CEO: All right. Up next, what options are signaling about the market's expectations for Apple's big product event this afternoon? That's when we come back.

46:00Chime CEO: Welcome back. Apple's big product event kicking off in a couple of hours. Let's get to Oliver Rennick at SIBO in Chicago. go see what the options market is saying on a day, Oliver, where it's historically at least a little bit lower on the day of the presentation. Hey, good morning, guys. Options traders are extending their bullishness on Apple this morning. About 100 ,000 calls were likely bought compared to 20 ,000 puts. And the volume ratio of calls to puts is now the highest it's been since May. Total premium right now is approaching$100 million with about 73 million tied to calls. And the zero-day options expiring today are very expensive, with implied volatility of at-the-money contracts around 80.

46:40Chime CEO: That compares to Friday expiry trading around 47 vol and 30-day at 29. So in other words, traders are prepared for a uniquely big intraday swing today, more than 1.5%. Market makers are pricing the puts a few cents higher than calls, but the top six contracts bought by volume today were all calls. with the most popular, the 320 strike expiring today that costs less than 90 cents and needs an almost 2 % rally. Back to you guys.

47:10Charter CEO: Okay, thank you, Oliver.

47:15Charter CEO: All opinions expressed by Squawk on the Street participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates

47:22Chime CEO: and may have been previously disseminated by them on television, radio, internet, or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Such opinions are based upon information Squawk on the Street participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such.

47:47Charter CEO: To view the full Squawk on the Street disclaimer, please visit CNBC.com forward slash Squawk on the Street disclaimer.

47:52Chime CEO: AI is here, transforming how we work, live, and lead. And the women I talk to aren't waiting for the future, they're shaping it. I'm Julia Boorstin, Senior Media and Tech Correspondent at CNBC. This is CNBC Changemakers, where I talk with the female leaders transforming business as AI reshapes the world. Follow and listen to CNBC Changemakers, Women Leading in the Age of AI, wherever you get your podcasts.