9AM HOUR: AI Trade Rebounds, Telecom Tumbles on SpaceX Spectrum Deal, Apple Slides 10/9/26

0:00Tu Sausage McMuffin with Egg no cambió. Tu recibo, sí. El Sausage McMuffin with Egg Extra Value Meal. Trae un hash brown y un café pequeño por cinco dólares. Solo en McDonald's por tiempo limitado. Precios y participación pueden variar. El precio de la promoción puede ser más bajo que el precio del meal. It's the holiday season at House of Burl, which means that it's the perfect moment to review some key rules. Rule number five, more style means more celebration. Number four, buy gifts, but remember to treat yourself too. Number three, there is no dress code, but always leave them talking. Number two, show off different outfits.

0:35No party remains unattended. And rule number one, have it all without spending it all. Happy holidays from House of Burl, Burlington. Market moving insight and analysis. Join Jim Cramer, David Faber and me, Carl Quintanilla on the opening bell hour of CNBC's Squawk on the Street. Good Friday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer at Post9 of the New York Stock Exchange. Faber's on assignment today. Tech is trying to bounce after the worst day for the NASDAQ in almost two months on that open AI revenue scare. Yields recovering a bit too. Ten year, five and a quarter.

1:08Oil pretty steady. Hurricane Isaiah is now a cat three. as we await landfall on that one. Our roadmap today begins with a tech bounce after yesterday's sell-off following those revenue projections from OpenAI. SpaceX taking on the U.S. wireless sector, pushing Starlink further into telecom. And Apple reportedly cutting iPhone 18 Pro orders due to soft demand. We'll get into that. Let's begin, though, with the AI trade rebounding a day after taking a hit on news involving OpenAI. CNBC confirming the company told investors it hit roughly$50 billion in annualized revenue at the end of September. That's lower than the$68 billion figure widely reported last month, Jim.

1:49I know we've been all over what exactly the FT was trying to say, whether this is just accounting, whether it includes partnerships and all the rest. Well, I think it was more of a game of telephone. And it all started on September 29th when Axios and Reuters reported opening eyes to annual recurring revenues near 70. And that number was wrong. There was no annual recurring revenue. That's just an incorrect story. There has never been a release of this company's annual recurring revenue. So you take that and then someone is in the meeting and goes to the FT, the Financial Times, and says, look, that number is lower.

2:28That's not the right number. So then you get a story which says open AI annualized revenues, 20 billion less than previously. soon. Again, they have not never given you annualized revenue. So it's really hard to refute because they've never given it to begin with. So what it really was, of course, was that they were giving you a net figure of 50 billion. But we're saying, listen, if we did what Anthropic did, we would be at 70. So FT is correcting an inaccurate story with its own inaccurate story. This morning, Bloomberg comes out with the accurate story, and it's about gross versus net. In the interim, trillions were lost.

3:06Now, when you go to, let's say in background, you try to figure out something for OpenAI. OpenAI is not going to correct a story that came out September 29. It's not going to tell you that the Financial Times story is wrong. They're going to say it's confused. It's a confused story. And let's say I had come out here and I said, well, it's a confused story. Well, you know, who am I? You know, the FT is a real organization. and they came out with a story, which subsequently they've even just modified. But the FT story was wrong. The previous stories were wrong. The Bloomberg story is right. Right.

3:37And in the interim, everybody feels that there's a big shortfall, which was not true. Yes. So does it deserve a—does Oracle deserve to close down six? No. No, not at all. That's a mistake. The market got that wrong. Look, there's a lot of things wrong. You know, there's an annual recurring revenue, which, by the way, again, they've never given. Yep. And then there's an annual run rate, which is different from recurring revenue, which is just what they did in September times 12. But these terms, annual recurring and annual run rate, were confused. Net and gross were confused. And you ended up with a huge amount of money that was lost.

4:16All of it started with the idea that the Australian IPO was screwed up. And then the story endlessly about how, and this is my main point about all these articles. And I do have, of course, my chat. Beautifully, beautifully. Although I see it's marked up by a human being. Yeah, I did because I want people to understand that gross versus net, but also about how, you know, that the idea of correcting or saying that the Reuters numbers have since been reduced was just completely false. That was just false. But the Reuters story and the Axis story both talked about annual recurring revenue, and they never gave you recurring revenue.

4:54So how do you correct something? They should have corrected it immediately. I think that it would have been great if Sarah Fryer, the CFO of him, I think is fantastic, had just come out and said, listen, Jim, you ignore that annual recurring revenue, but she didn't. So for viewers who haven't been able to follow every twist and turn of these accounting reports, what do you do? It's just all business is the same. You think nothing has really changed? No, I mean, what I think you have to say is no, it's actually gotten stronger. I mean, that's what people don't want to do is they've never given an annual recurring revenue number.

5:27They've been 70 % growth, and the reporters seem to have got it mixed up. They grew 70 % sequentially, and their enterprise business more than doubled quarter over quarter. It now makes up 50%. It's a really strong story. Now, do I like OpenAI versus Anthropic? It actually depends on the new product. But I would tell you that Anthropic has not changed what it's saying from September 29th to now, and that the FT story is inaccurate. And I didn't want to come on. To say that a news organization is inaccurate requires me to do far more work than I can. Because I don't want to. You've got to dot the I and cross the T when you say that some journalist is inaccurate.

6:12This headline's wrong. It moved global markets. I think it was a mistake. It was just a mistake. Because you confuse annual revenue. You confuse gross versus net. And you confuse the comparison with anthropology. That happens. That's why it's a game of telephone. That's why I started It's Innocent. But I would say here's what's really wrong about all this. It's not a trade. Now, if you look at Symbalist's piece from J.P. Morgan, who's a fantastic strategist, it's not a trade. It's a business. We keep thinking it's a trade. Oh, that whole trade is wrong. No, that's like saying the whole trade of airlines is wrong.

6:47It's not a trade. They're trying to say it's secular versus cyclical. or that all the trades that we got out of starting with Pepsi is wrong. No, these are not trades. They're businesses. And the business of artificial intelligence is verified, actually, by the numbers that Elon Musk is saying if you buy something from NVIDIA and you can rent it out for a lot, that's saying it's a real business. And I really think that we have to stop saying the trade is not doing well. Well, here again, I've got another person who's really close to it who's just saying, look, OpenAI has gotten much better. Now, we all have to figure out who we trust.

7:27Now, I don't talk to hedge funds. Why? Because I'm not going to be subject to their stupid manipulation. I'm not trying to make some hedge fund rich. Everyone's got a book to talk, Jim. Right. But if I'm going to come out here, I'm going to get from people what I think is the right number. Will they go on record? That's the real problem. Yeah. That is the problem. You were out here, and I begged someone to go on the record so that I could say that the FT was wrong. But having done all this work, I want to tell the viewers I know what was wrong. And it was Gross versus Net. Look, I took two years of accounting, and Gross versus Net should have been known.

8:08I mean, you know, debits left, credit right. I mean, you should have known that. Someone did not vet that story correctly. But no one did it with malice. You know, this is no malice of forthright. But the idea, we've got to get away from the idea, look, that whole thing's a trade. Although you will admit it did expose the fragility of some psychology around this space. Absolutely, because people don't understand, because these are private companies. You can't do it. Now, there are people who say, no, Jim, they're really not private. Oh, no, they are private. Because if they were public, they would have to come out and correct us.

8:42They can get away with it. But these are, you know, it was an innocent mistake. But everyone's made this kind of mistake. It's just I don't think people realize that when you make a mistake about the most important move, not trade, move that we've had, it can really derail things. It really can derail things. Strange curveball. Jim mentions Musk, and there is a lot of news this morning regarding SpaceX, which is moving higher in the pre-market. The company strikes a deal to acquire Grain Management's 800 megahertz spectrum portfolio. and that does set the stage for Starling to enter the wireless wars, so to speak.

9:16News is taking a toll on shares of Verizon, AT &T, T-Mobile, Jim, which were all down 5 % to 7 % here pre-market. Look, this comes out in grain. I first think I say, like, grain, like Archer Daniels? No, this guy, grain, is obviously a multi-billionaire today, not an oligarch. We found out it was the Indian oligarchs that are frustrating our own oligarchs. I mean, the oligarch's got to get in one room to solve this stuff. But I thought that this was the biggest worry that when I took Starlink in Italy, the biggest worry was I said, I'll be blocked. The building won't work. He said, no, we're not in Milan where the buildings are tall.

9:57And you mean an urban environment where buildings block the sky. You know, don't worry about it. You can just, that's the problem. Well, this apparently solves the problem. And Musk's tweets made that clear. You know, you could say, well, Musk sometimes is according to this morning with that great interview with Ed Bastian and Phil Lebeau. Well, sometimes he's a little maybe. He said Ed Bastian's going to lose his job. I love what Bastian says. I don't pay any attention. I'm not paying attention. Actually, before you move on, just so viewers know, Phil Lebeau with Delta and Ed Bastian today on this reported back and forth between Bastian and Musk over the use of Starlink at Delta.

10:37Take a listen.

10:41We had conversations six years ago when Starlink was just launching for aviation. We, in fact, gave him some of our planes, not him, but SpaceX, some of the planes to test it out on. It was fabulous. They just weren't ready to scale when we were ready to go. And we had disagreements on the business model in terms of access to the customer and various other things. I won't get into any details, but I'm a big fan of Starlink. But you saw Elon Musk's post where the report came out that you had said, look, we don't want to do work with Elon. And I know you just said you're a fan of Starlink and Elon, what he has done overall as a businessman.

11:18And he said, look, he will lose his job over this. That's what he posted talking about you. What's your reaction when you saw that? I don't pay any attention to it. No reaction at all? No reaction at all. Everyone's entitled to their opinion. So Delta's going with Leo, Jim, which means I assume if you're Legacy Telecom, the new competition entrants are not done. No, but look, I think that there are a lot more satellites. I think that everybody, I think that Leo, and I think of Amazon, I think it's terrific, but they are well behind what Starlink's got. I know that Biosat, they introduced this stuff on my show that they had like a live thing.

11:55But when you go, I was on Delta and I had nothing live. Maybe that's just one Delta. I don't know. I don't know. I mean, I would just go with Starlink because that's the new gold standard. You want to be the gold standard. Delta is the gold standard for an air for a company that we have for an airline. I was on Emirates, which is, I think, the standard for high end. At least, you know, look, the people in front of me had a shower and a bath tub or something. Yes. But you didn't do the caviar service. They did not have Starlink when I went and they had Starlink when I came back. And, you know, this is happening in real time.

12:31So I totally get it. But I think that people all know that Starlink is absolutely right. What do you think? The one to get. What do you think telecom does here? What kind of cards do they have, if any? To know Trump? Pretty bad. Yeah. Look, they have a workforce and a product that's too expensive with still too many people. customer service that is considered subpar. Yeah, I mean, you know, give me an agentic version. And look, I think that they're legacy companies. I mean, it's OK. They're legacy companies. Are they Smith, Corona, Marsham, which I used to trade? That's a typewriter company. No.

13:13And people are very ingrained in their habits. And they may not necessarily switch. But I do think that it's very easy to see why you'll want to take Starlink. because if it's not going to be blocked by buildings, I do think, I wonder whether he wants to tie up with somebody. Does he want to tie up with T-Mobile? Does he want to do it himself? I mean, some guy came to see me in Italy. He knocked on my door. He said, listen, I understand you're having problems. What are you paying? I'm paying$200. Okay, how about$50 ,000 and there's no, oh,$50 ,000. I mean, they knocked on my door in Italy. I mean, he's got a plan in different countries.

13:44We're going to talk to Brendan Carr of the FCC later today, talk about some of this spectrum. We did get an initiation of SpaceX over at Barclays Gym with an overweight 254, 12 months. Now, that's 230 was Goldman up from 220, where they ratified the 220 by going to 230. But remember, we do have new stock coming to hit the market today. And it hasn't mattered. One of the things that people should realize, it has not mattered. It's been, you know, sometimes it's hurt the stock, sometimes not. But be aware that there is new stock coming out today. And you have to have the space. I don't know if you get the SpaceX lockup watch that I get.

14:20Is that also claw-generated? No, this is chat sheet. Okay. Up to 328.4 million shares will hit the market. Now, August 6th had a tranche of 911 million. Stock was up 6.14%. Next trading day, it was up 15.83%. Now, August 20th, day 70, was down 4.05%. That was 319 million. Then on September 9th, 319 million, down 3.86%. Day 105, which is September 24th, down 0.22%. So it's not really dispositive. But this today is 328 million shares. And I don't think it's going to affect the stock. I really don't. Because this thing is so low, I don't think it's going to affect the stock. I mean, we've mentioned some of the Jonas Morgan Stanley notes lately.

15:08Cheap and getting cheaper is how Adam put it. And he argued that the urgency to get into the stock is before the next heavy flight. Oh, I think he's dead right. Honestly, I was talking to someone who was very high level at Goldman, and we were going over how conservative the numbers are still about what they'll do, about how much money they'll make. And there's an interesting piece, Jonathan Wilde, in this morning in The Hurdle on the Street, talking about the CapEx of NVIDIA. I would say that you want to look at the investment. You have an investment with NVIDIA and Musk, which shows you that you really can make so much money if you buy NVIDIA product.

15:49I don't think they need to do all these injections anymore. I think they have an ecosystem. And the ecosystem is a compute trading market, basically, where you buy the most recent, the Virubin, and then you lend it out to people who need it more than you, and you make a ton of money. This is what, three years ago, Jensen said this would happen. said it's going to take four years to be able to get it so people start making money. They did it in three years. Yeah, well, we've talked about futures markets and compute for a while now. I know. And for anyone who wants the full story, Financial Times, Sarah Fryer published a LinkedIn post not that long ago.

16:29It has a little bit more about it. She is the CFO of OpenAO. Yes. Good A Block. We'll keep going here. We'll get to Apple and some of the reports regarding these component orders. Obviously, this Welcome Home event on the 13th. We'll get to Humana, some news there. We'll touch on Netflix, of course, Starbucks, Chipotle after a short break. I got that one.

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18:12Trae un hash brown y un café pequeño por cinco dólares. Solo en McDonald's por tiempo limitado. Precios y participación pueden variar. El precio de la promoción puede ser más bajo que el precio del mill. Take a look at some S &P gainers here at pre-market. We'll get to Humana and these Medicare Advantage Star Ratings. that have basically 95 % of their members in a plan with at least four stars. Nice gains yesterday, Jim, and today. I'm a four star. I don't mind that plan. I don't know. Got lucky. Yeah. And we look in there, more telecom-related news as the SpaceX Spectrum deal is reverberating all around the market.

18:47We'll get Kramer's Mad Dash countdown to the opening bell in just a minute. Tu Sausage McMuffin with Egg no cambió. Tu recibo? Sí. The sausage McMuffin with egg extra value meal brings a hash brown and a small cafe for$5 only at McDonald's for limited time. Prices and participation may vary. The price of the promotion may be lower than the price of mine. Weren't agents supposed to take things off your plate? Building another to handle the others is a bit much. Don't make more work out of work. Gemini is the one agent that knows all parts of your business and actually gets stuff done. You give it a project, close your laptop, and when you come back, the job's finished.

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20:01Happy holidays from House of Burl, Burlington.

20:07Time for Kramer's Mad Dash as we count down to the bell. So periodically we have reports about components and whether the orders for components are lower for Apple. So therefore we can say that a certain iteration is weaker. It's this time talking about the Pro and the Pro Max and how Apple's cut components. Now, two things to this story. One, we never know. Because Tim Cook is playing to me endlessly. Jim, we actually play a game. You're never going to know who are components. You've never been a fan of Nikkei's supply chain Apple stories. And the reason that is is because Tim Cook said that's just not how it's done.

20:41So I figured I'm going with Tim Cook over Nikkei in terms of who we know, Sarah Fryer versus F.T. So, you know, Carl, periodically I see people send invitations. You know what kind of invitation I'm talking about. Yes, to your funeral. Yes, and the people who are selling today, I may have to mail them invitations, or maybe I'll email. I may Slack them invitations to their funeral. Yes, I can get them because on October 13th, we have the home. We're going to see the home iteration. Apparently this time the home iteration is done right. More importantly, October 16th is the date that everybody write down because that's the pre-order date for the duo.

21:17So if you're selling it here, I don't know. I'm not going to use the terms anymore because I've become more of a statesman, more of a diplomat, more like Gandhi. But I've got to tell you that you're stupid as plywood. And I don't. Louisiana Pacific, I'm not trying to insult them, but it's Orient Strandboard is your brain. Okay, OSB. The only thing I would add is that Tim Cook has said memory is a problem. Memory is a problem, but you know what? You know what Tim Cook said to me? Have you seen the trade-in price for these things? The trade-in price is so much higher than you think. So, I mean, there's a little...

21:48Now, Tim Cook is now no longer the CEO. I would say that Tim Cook in, I don't know what, 16 years never steered me wrong. So I'm not suddenly going to say, you know what? And that guy, let me tell you about that. No, because I just think that the component stories are not a good way to invest in Apple. Trade in it. Go ahead. But in the end, as I always said to Tim, own it, don't trade it. And with the upcoming Duo Duo, you better write it down because you're not going to get one for Christmas if you don't order that. You're just not. The Duo is the most exciting thing I've ever seen. I'm going to get a T-Mobile account so I can donate, so I donate.

22:22I can watch my Duo. You've never had two phones until now. I'm going to have two phones. I've never had two phones. The question is, do I get three phones just so I can have a personal phone? We're going to watch those early numbers once we start getting some data on sales. Yes. We'll get the opening bell. Dow a little bit weak. Part of that's going to be Apple. A reminder, you can catch us anytime, anywhere. Just listen to and follow the Squawk on the Street opening bell podcast. High oil prices, inflation risks, and now worries over growing public debt could send the 10-year yield to six for the first time since 2000.

22:53That's what PIMCO's chief investment officer told the FT. The 10-year yield has risen almost 120 basis points this year, Jim. They say given some of the technicals out there, stopout activity among the hedge funds, quote, you can certainly get there. Yeah, I think we're headed there. I think we're headed to six and a quarter half on the 30-year. I think that we've got a war that has made it so inflation-sing green and so many different things. And just listen to PepsiCo call, you'll understand the whole food chain of oil and gas. We don't have any relief anywhere. We have mortgage rates incredibly high.

23:30If you take them, obviously, you're rolling the dice versus your 3%. And there's just inflation everywhere. And I think we have to have two rate hikes, maybe three, because if you don't end the war, then the longer it goes on, the more that everything gets ingrained. And I think that's just simple economics. It's not guns and guns and butter that we're doing like during Vietnam where rates will go up. And it's just that we have a lot of demand for money. And the Treasury is obviously stretched. Michael Semblist, again, with a great piece talking about how there's ways to be able to cut the budget deficit.

24:06But none are being done. So, yeah, I think we're going to have that. And that's not a debt crisis. We had it in 95. You actually made a lot of money. It just stuck with the market. I think this shouldn't change your attitude. Yeah. Kind of discouraging words out of CBO yesterday on the deficit, on the growth you would need to bring down the debt-to-GDP ratio. That's important because Larry St. I think is a great mind from BlackRock has said we can grow out of it. I think it becomes more and more difficult as we see it go up. And, you know, the president is not really committed to any sort of deficit reduction.

24:43Here's the opening bell at the big board on Wall Street today. It is the FDNY doing the honors, highlighting National Fire Prevention Week and remembering 25 years since 9-11. At the Nasdaq and Times Square, it's YSAT Space Holdings, satellite comms company celebrating going public earlier this month via SPAC. And at CBO in Chicago, broker-dealer STG Securities, as we open not too far from 7 ,800 once again, Jim. You mentioned Sembalist over at J.P. Morgan. Really nice chart of the percentage of S &Pers that are outperforming on a three-year trail. I mean, we're zooming in on 20%. Yeah, there's just so many companies with stocks that are doing terribly.

25:25But then again, we know that the AI adopters are doing really well. Here it is. Oh, we have it, Michael? Yeah. We got permission? Yeah. Wow. Thank you, Michael. Thank you, Jamie Dimon. His eye on the market is something that is probably the most passed around piece of research in America. And there is, he actually has a good piece about short-term rates and their threat to corporate profits. And it's been nil. But this is actually quite a positive piece, except for the fact that you have so many stocks that are doing badly. And it keeps getting worse and worse. 60 % of the S &P 500 stocks are down more than 20.

26:03Just a couple weeks ago, it was 40. These last two weeks have been very bad. Yeah. So I would assume if you do believe a 6 % yield on the 10 happens, then that chart continues in line with its trend. Yeah, I think it is. I mean, I don't know what. Look, it's not the end of the world. Maybe it'll make it so that there'll be some people talking about deficit reduction. But you look at all the—there's just—we've got the government needs money, and we're doing the AI investment, not trade, and that needs money. So we don't have good inflation numbers. If you look at where I think that Warsh is going to take short-term rates, it would make natural sense for the curve to be to six and a quarter, six and a half, maybe six and three quarters on 30-year paper.

26:46Look, we're in a terrible environment for inflation. And we're going to look back and say, wow, that was a bad period. Yeah. Page one of the Times today, speaking of energy and the conflict in Iran, is more not so much about a deal with Iran now. It's about regional war and the Houthis versus the Yemen and Saudi government. We got a nice, again, Jim, we got these charts on tanker rates. And we keep having to extend the axis because the cost of an oil supertanker now is up 1 ,000 percent in a year. It's now Bloomberg with a great piece. It's more expensive to charter a tanker from U.S. to China.

27:23It's more expensive than launching a Falcon spaceship. Incredible. Yeah. And you can just look at the charter of Nordic American tanker. Now, Herb Zorn Hansen, I've been in contact with Herb Zorn for, I don't know, from when Herb Zorn worked here. She and I both talked to Herb Zorn. And the North American tanker stock chart is the chart of what's happening. I just think that, again, this is bad inflation. Look, Germany has inflation. They don't have, I was reading RBN today, they don't have enough storage space for natural gas. What are they going to do? There's inflation everywhere. But we're part of the inflation.

27:56We're probably as egregious as any other country. Maybe the most egregious. Well, as Yardeni's pointed out, on a 12-month, if you look at whose tens have moved the most, it's France number one and U.S. number two. Yeah, absolutely. And France is more political than we are, but they've been avoiding dealing with the deficit. Well, longer than we have. I mean, remember, we did. There was a period in the 90s where we actually paid down debt. It can happen again. Yeah, but you need globalization along with a new technology, right? A Cold War dividend would be nice. Yeah, and we need everyone to use Claude and become much more productive.

28:35And no, look, I'm anti-inflation. I'm not willing to say stagnation. The economy is growing really well, and wages are not going up. That's true, actually. I know, I know. Atlanta Fed wage tracker today comes down a little bit. Yeah. So, I mean, we're not in a position where it's salary push. It's not doing that. And that's why I say all different inflations are all kind of different inflation. Yes. This is not the 70s. Is it the 90s? No. Then we had like a lot of cross currents with Mexico. We had to worry about the peso. And then we had later 90s. We had Russia. We had South Korea. This is us.

29:14This is on us. And I think that I'm not going to pick on the president, hate him or like him, because I think Congress has been completely ridiculous. And we'll see if that changes in about 25 days, whether or not we're going to be talking debt limit in a month. But I mean, look, I think small business is going to be crushed by this. That's when people act. That's when small businesses, because that's that's people, that's voters, that's constituency. On all of that, Jim, it does kind of bring us to Delta, which was down pre-market. Good first double miss in a couple of years. 172 misses 182. The irony of all of this, Jim, as they guide lower for Q4, is that premium revenue is up almost 20 percent.

29:52Look, I see Delta down. I'm not going to say it's going to be up at the end of the day. But Ed Bastian laid out a really positive story because people are taking their money. He talked about how much money people now have and they travel. I wish he had then said, and that's post-COVID. That's the change that turned out to be secular. I mean, who knew that that would be secular? Most people are coming back to work on Fridays. But the secular, this is the long on money, short on time trade. I thought it was going to be a trade. Now I decided it's not. Just the way people view their lives post-COVID.

30:25Because a lot of people knew people who died. So do these airlines all need to trade down tonight? Deserve to trade down? Oh, people want to, you know, they'll look at the charts, look at the PE. They'll say Delta's really good. They'll sell them down. And United Delta are really in a class by themselves. I think they're good, but I don't want to, I not want to donate airlines in an environment where inflation is so bad. It's just really bad. I mean, I got to say, Jim, we haven't even started earnings for the quarter, but Levi, Pepsi, and Delta are not the best way to start. No, I mean, look, I've been thinking a lot about Levi.

30:59They blame the weather in Europe. It's been unseasonably hot, but I don't like companies that blame weather. Blaming weather has been a not great thing to do. And I like Levi, but they had the wrong strategy. They were doing baggy. We're supposed to be low ride. Wrong message for back to school. But we can keep going. Everybody has their own excuse or maybe just say, look out. Everything's going to be asterisk in the end with the exception of a couple of like SpaceX. Yes. You're not going to have, right now you're not going to have really good numbers. But I'm hoping that the banks are so seasoned that you take Goldman.

31:36My travel trust owns Goldman. Goldman has a lot of ways to make money and a lot of levers. So I don't want to necessarily say, you know, Goldman at 13 times earnings is expensive. I think that J.P. Morgan has historically put out a release that's very hard to understand. But at the end of the day, it tends to be positive. I mean, J.P. Morgan is down 30 from his high. I mean, the only thing I would say on financials, you know, this week we got a good look at the insider selling to buying ratio, right, where you have more sellers than buyers. Number three is tech. Number two is energy. And number one are banks.

32:07Well, you know, there is a real fear among the banks that news is going to make it. So whoever has that, whoever's doing that kind of thing where they're not really paying you a lot of money, news will find it and send it to whatever bank is giving you three and three quarters, whatever. I don't fear that, in part because the story today we saw about somebody's balance sheet that ended up everyone was looking at. I think people will not trust Muse right now with that level. But they eventually, in the same way that when I started the street tech, no one would give me their credit card. Now it's like, you know, everyone has their credit card.

32:40Take my credit card. No, I had to, like, knock on doors to get the credit card. And now we all know it's safe. And I think that Muse will eventually be good. I know that Zuckerberg's in with some more stuff today about, you know, people, I don't know, chirping. That Muse is a real product. Yeah. And it's really still been crushing, just crushing. Jim, the action in the legacy telecom names is notable. Biggest laggards on the S &P, AT &T down almost eight, Timo down almost nine. We did, we unwrapped a soundbite that John Stanky of AT &T gave to Faber at Communicopia talking about competition with Starling.

33:20Take a listen. fiber is absolutely 100 % the best way to move data. And it always will be, at least in my lifetime. You believe that firmly, obviously, and you've put the strategy in place. Put the company's name on it, my name on it. And so we've been doing that for a number of years to put us in a position where we can compete with anybody. And I feel really strongly that I'm sure there'll be some innovative opportunities that come from satellite. There'll be some desire to work their way into parts of our business. And our job is to take our great wireless infrastructure, our great fiber, our great ability to support customers and meld these products and services together on one bill with new features and win in the market.

34:03And we have every intent to do that. The problem is that win in the market. It's entirely possible that his stuff is going to be better than Starlink. But how about if Starlink's appreciably cheaper and not everybody wants to pay a lot? How about if Starlink can say, listen, so maybe we're second lower in latency. The latency I have in Italy is so much faster than the cable. It's insane. But I just say that if the latency is a little bit slower or you have some buildings that are offline, but he's charging$50 instead of whatever, not everybody in this country wants premium everything. Yeah. What's up with the Tower stocks today?

34:38Why would they be outperforming so well? I guess if you link the Towers with what he has, maybe you can create. I mean, some people say that they have certain, like someone was saying tomorrow you buy Ecostar because they've got a level of wireless, of spectrum. Look, I want to just make this point that if you, that you don't have to be perfect to take everybody down. You can take everybody down on a very good option. Remember, T-Mobile took a lot of people before they went. Remember when they were the disruptor? John Ledger would come on with us. I was saying, John, do you have the whole country covered?

35:13You'd say, no, but you see, there's a lot of areas. OK. I mean, he crushed it. Who would have thought he could crush it by not even by having two thirds of the country? So I listened to John. Stanky's good. He's going to put his name on it. But the fact is, is you don't have to be perfect to ruin everybody's pricing. Yeah. Just enough to disrupt. Exactly right. I mean, he would come on. Ledger from Timo back in the day would call AT &T and Verizon dumb and dumber. That's back at a time when AT &T owned television. Yeah, he's hysterically funny. Siever not as funny, but he got the point. Now, look, I mean, T-Mobile is the one that if I were Elon, I would need to kick the tires about whether they should merge with him.

35:55Obviously, people don't feel that way today. But I do think that going against Elon has been a sucker's game. So at what point do we just say, you know what, Al, he's coming in my market. He can really disrupt it. I mean, Comcast has phone. And, like, you know, you start saying to yourself, okay, so how did Comcast go? from 40 down to 20 over the last couple years. Well, how's it six times earnings? Maybe they'll have something that's competitive with Starlink, but Starlink decides to bring everybody down. Hey, maybe Starlink gives away Starlink. Starlink was virtually giving it away when I first got it.

36:30Just saying, listen, we'll get you started. Sure, yeah. It's one of those things. You know, like when my mom used to buy the encyclopedias at the A &P. Well, A, B, and C. I knew so much about A, B, and C. I never learned the other guys. because those are free. You did a lot of school projects about Alaska. Oh, my God. When I got to D, I was Delaware. I was a dead man. But he can give it away. He can give it away. Why not? I mean, just make it so that if you have these other guys, we'll give you a year free. I mean, that doesn't mean it's better. It just means it's smarter. Comcast, by the way, you mentioned, got to 2075 yesterday.

37:05That was a new multi-year low. Down 25%, yield 6.3%. Remember, they're splitting up into universal. But I look at price earnings multiples, and I know that you can say, well, wait a second, you should look at cash flow. But this thing is six times earnings. And when they're that low, that means they're not good. You know, you don't buy a stock at six times earnings, betting it's going to go to 12 times earnings. You can buy Micron. People think it's going to be 20, and I think it's going to be eight times earnings. I think that's fine. Ford and Comcast have the same multiple, but Ford's managed to hold the 12 level.

37:43Yeah. Well, we talked to, I think, about Gil Luria yesterday. I think his target on Micron is basically a three-handle, as in$3 ,000. I mean, look, I happen to think Micron's terrific. It's only, interestingly enough, it was down gigantically yesterday. It's only up two right now. I think that people are still confused about gross versus net. I also think that people just say, you know what, this thing's too hard for me, this trade. And if you look at Semblis stuff, it's not a trade. It's a dramatic industrial revolution, which is what Jensen Wong said. Now, Jensen's out there. Jensen hasn't been talking the last couple of weeks, but there's a lot to say that go back and rewind.

38:20Just go rewind the tape of what Jensen's been saying. And it's an industrial revolution. Everybody it touches is going to do a lot better. And if it doesn't touch you, then your company's not going to do well. And you're going to make a lot of money. And that's what Musk was the first to realize you could make a lot of money. You do raise an interesting point about sectors that are really beleaguered. I'm thinking of the homebuilders. BTIG yesterday did a report looking at the S &P 1500 homebuilders. Not a single constituent is above the 20 or the 200-day. Their argument is whenever that happens as a signal, your next 20-day returns median 6 % plus.

38:56Well, look what happened yesterday when we had decent tape and we had interest rates drop for 25 seconds. Home Depot went up. I'm being facetious. We didn't drop a little bit. And Home Depot went up$9. But the problem is Home Depot is not doing well. So then you've got to suffer with, I've got to go through the quarter. I have to have numbers lowered. And if you look at Lenar, I thought Lenar might bounce because Stuart Miller does a great job. Yes, and the Berkshire purchases, they added a little bit more this month. Nothing. And then you look at toll. You know, the toll, they have, what, 27 % are going to be cash buyers.

39:28So it's doing a little bit better. But, you know, I don't want something that's doing a little bit better. I want to make a lot of money. And if you want to make a lot of money, then you have to go buy Lumentum. You've got to go buy Co-Pair. I mean, I think, did we build that chart about crowding out? This is from Jason Furman yesterday, Jim, to your point about just how limited. He's a smart guy, Furman, when he was in government. Yes, yes. I said, wow, this guy, make him a lot. Yes, but to your point about AI crowding out everything else, he takes a look at construction spending on a real basis.

39:57We have data centers at the top, that blue line, everything else, Jim. Well, that's all. I mean, there's no. I've been in a bunch of cities in the last six months and a crane is hard to find. By the way, there's only one crane now in the largest borough in Brooklyn, and that's turning a prison into a retail area in prison. I'm still trying to. I wonder if the late David Simon would say, listen, it's really great. There's six floors of prison, three floors of retail. I don't think that Dave would be. But there's I can't find any cranes in a lot of different cities in the country because commercial real estate is stuck.

40:31I mean, the only stuff that I really see happening is the conversion. And that was because the governor changed the tax laws. And maybe even since the Pfizer problem, we'll see a slowdown there. But when you go around the country, you see data. When I saw the Micron plant. In Idaho. Yeah, in Idaho. I mean, it was so vast. And when Sanjay Mrocha, the CEO, took me around, it was like being in a city. And I think that when they do Clay New York, which will be the largest project in the world, they're going to suck a lot of tradespeople up there. Because there's not enough tradespeople in the Syracuse area to build these things.

41:11Right, right. Good luck trying to get an electrician. Very hard. They have to change the unions hold your ears. But right now, you can get an electrician, someone who's not a master, but you can get those people, but the way that the unions work, those people can't do the job. But remember, it'll be really interesting. The union jobs. Do you know that the Clay New York, Micron is going to be union and non-union? And I don't know how they're going to do that. The interesting work site. Last thing, Jim, on some of these insurers. UNH is leading the Dow. We mentioned Humana before. Is that the Medicare stuff or is that just a defensive posture today?

41:50I think that Humana is Medicare. UNH is a little bit less that. Humana got the high stars. I mean, look, it's a star game. I remember when CVS, when Aetna didn't get it in previous CEO and had spent a lot of years, just crushed it. I now feel that you're de-risking CVS because you now got the star. The stock was down$5 in the aftermarket. Now it's up 15 cents. That's the one to buy. 3 % yield, 10 times earnings with David Joyner in there, who's ready to roll. He and Mahomes. Texas Tech. Don't mess with the Raiders. Okay. You're going to be up early tomorrow. I know that. I got a game on Sunday.

42:35And what's tough enough is I think Howie's got me. I think I'm going to play fullback because they're shorter. But thank God I'm not center. As we go to break, watch Treasuries here. We will get you, Mish, in about 12 minutes. And with that, we'll definitely look at some of the one-year, three-year, five-year inflation expectations as the 10-year, a tick above five and a quarter. Stay with us. There's a week today to Chipotle as we, again, with the FT. Well, you know, look, I mean, Brian, Nicole, I thought that the statement that they released made indicated that this is not something that they would necessarily pursue.

43:14My sources say it's something that, of course, they could look at. I think Scott has not delivered what I think Brian Nichols would like or anyone would like, but I think that the idea that, therefore, you would go buy it doesn't necessarily— I mean, I would think that Pepsi and Starbucks would get the word that's going on. Yes, we had that discussion last night. Disparate input. Yeah, look, it's about me. Anybody can look at anything. I mean, one of the things that David said over and over again to us is, hey, don't forget, any bank group puts anything to anyone, and people will look at it, but it doesn't mean they'll take action.

43:47We'll get to stop trading with Jim in just a minute. Let's get to Jim and stop trading. Morgan Stanley has a very good note today about brokers and exchanges in North America. And they gave a double upgrade and therefore sell to overweight for SIBO. Investment cases change and they're talking about how they see attractive optionality with the new predictions market product launch. And I have to tell you, I don't I look at prediction market for very little because there's just people going for long shots all the time. I have a product idea that I will share that I think will crush everybody. But, you know, I haven't I haven't played my cards yet here, but I know it's right.

44:23Well, I'll tell you, Jim, we're watching some of these casino names. I mean, when Las Vegas MGM. I mean, it is it is rough and a lot of it's getting attributed to prediction markets. Well, yeah, I mean, the British margins are wreaking havoc with traditional disruption again. Yeah. Look, I think that they have to be look right now. Everything is Wild West, so I'm not going to say there's no. I mean, the idea that we have any enforcement or anything, we're not in that kind of, we're in a different stage when it comes to our country. Yeah, although some argue the clock's ticking on that window. Well, all I can say is that will people be allowed to lose this money forever?

44:56Can you really just say, you know what, we don't care how much you lose. We got a couple of companies making big earnings. Because if that's our country, well, you know, that's not the way I want to parent. Yes. Jim, good luck Sunday. Thank you. We'll be watching. 9.30. Don't forget, lower expectations, everyone. Yes. Mad Money, of course, 6 p.m. tonight. Thank you. Have a great weekend. You too. You've been listening to the opening bell on CNBC's Squawk on the Street. 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, and may have been previously disseminated by them on television, radio, internet, or another medium.

45:32You 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. To view the full Squawk on the Street disclaimer, please visit cnbc.com forward slash Squawk on the Street disclaimer. It's the holiday season at House of Burrell, which means that it's the perfect moment to review some key rules.

46:02Rule number five, more style means more celebration. Number four, buy gifts, but remember to treat yourself too. Number three, there is no dress code, but always leave them talking. Number two, show off different outfits. No party remains unattended. And rule number one, have it all without spending it all. Happy holidays from House of Burl, Burlington.