9am Hour: Bull Market Turns 4, Starbucks/Chipotle Update, AI Deals in the Works? 10/12/26

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0:33Schwab Market Update, an original podcast from Charles Schwab, provides an information-packed daily market preview on stock updates, U.S. and global economic news, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com slash marketupdatepodcast, or find Schwab Market Update wherever you get your podcasts. It's Jim Cramer here. You're listening to the opening bell of CNBC's Squawk on the Street. Don't miss a minute of the action. Good Monday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer, David Faber at Post 9 of the New York Stock Exchange.

1:10Future is losing some gains here to start a busy week with bank earnings, CPI, PPI, retail sales and more all on deck. Bond markets closed for Columbus Day. Brent near 107. That is the high for the month so far amid news of more tanker strikes in the Strait and the deadliest attack of the war so far over the weekend as the Houthis strike Riyadh. Our roadmap begins with the bull market turning forward today, the longest bull market run since the financial crisis. Plus, keeping an eye on two potential and different AI-related deals, NVIDIA and Amazon, both involved there. We'll give you some details as we get them.

1:46And Salesforce, it's one of the top S &P stocks pre-market, getting a big boost from Bank of America, a double upgrade. It's now a buy. It had been an underperformed. Lots to get to this week, Jim. You've been working some phones over the weekend. Yeah, this weekend I worked up with Brian Nichol. I can confirm that Starbucks is not going to buy Chipotle. They're not interested in doing it. They're going to stay laser-focused. Brian says he's got great momentum at Starbucks. Importantly, plenty of room for growth. And what's going to do is look forward to sharing fourth-class results, including fiscal year 27 guidance later this month.

2:20So let's just put that to bed. Move on. When that had crossed, I think it was an FT story. I indicated, Jim, that I had been hearing the rumors about it, but obviously had not reported anything on it. And there were a lot of doubts around it. I would say that the market reaction was somewhat muted. Chipotle did, you know, Starbucks stock did go down. Chipotle did have a bit of a bid to it, although immediately gave that up the next day because they're in the middle of their turnaround. It's going really well. And the key question that I got, by the way, when I initially heard it was like, really, was why would you get in the way of something like that?

2:57I mean, I don't want to spend too much time with it because it's just two companies. But I do know that Brian Nichols say, look, our turn is real and the numbers are real. And we don't want to derail anything. He confirmed, of course, what he said last time. They almost said it's 7.9 percent comps. Why would he even look at Chipotle? So I know that they do talk, obviously. He left Chipotle with a great relationship. But that story's done next. Done over, finished. Yeah, it's as finished as the Eagles were when they didn't take a touchback. Tough, tough game, Jim. There's really tough. That was really rough.

3:36Eight seconds. Yeah, although, I mean, Washington, the end for the Reds for the commanders was as strange as anything I've seen. When I was coach of the week at Summit High, I integrated my knowledge, and we knew.

3:55Meantime, the bull market turns four years old today, the S &P rising around 117 % over that time. Jim, there's some nice retrospectives this morning about where we've been over the last four years. Geez, you know, the gains have been so great that it made me think how integral the stock market has been to what I think we all could say is just the strength of the U.S. economy. I mean, over and over again, we're seeing these articles about how the middle and lower are doing poorly. And I am not going to disagree that there isn't just a big gulf between the top and the middle. But I do think that we don't factor in the trillions of dollars that have been made by being invested.

4:35And some of it, of course, are going to be passed on to the next generation. But it's been a remarkable time. And the whole time, I think, that there's been a huge amount of doubt, David, about what's going to happen. There has been, and there often is. And there will continue to be a good amount of doubt. But doesn't that cut to just continue to invest? Yeah, and not to mention, I mean, we go back and forth. I know Carl has plenty of numbers that will say that the consumer is potentially weakening. But at the same time, what you continue to hear from many corporate leaders in that world is the consumer remains surprisingly strong, despite what has been the significant move higher in rates.

5:08Back to the market, though, Jim. Bull market, four years, yes, but we've got a bear market in a number of areas right now, starting with when we, and we're going to hear from the banks this week in terms of earnings, but that's been ugly. Housing, the consumer. I mean, you don't have to look too far to find plenty of stocks that are in a bear market. I would argue that either you're in a bear market or you're close to a bear market. for most of the market. And some, of course, are obviously smaller companies that we wouldn't even talk about. But major parts of the economy, Carl, I know that major parts of the economy just aren't doing well.

5:45It will be very interesting to see retails at the end of the earnings period. But we're going to have the banks tomorrow. And I don't know, you get a guy like Jamie Dimon who's very focused on sustainability, but he still may say, you know what? We're not seeing what we thought we'd see. And that perhaps even the quarter point rate hike has had an impact. Because, holy cow, on the long end, everyone's talking about the 8 % mortgage. Now, they need housing prices to come down. But I think you could argue that the impact of the Fed trying to slow the economy is already here. Well, the transmission mechanism for rates is normally a year to 18 months.

6:25You think we've gotten some transmission in three weeks? I just think the 30-year... Well, no, but I mean, the 30-year is trading like a small cap. But I just think that, you know, if you want to buy something, you really struggle with how much the money costs. Yeah. Ten-year money is going to cost you around 5.3 percent right now. And it's more than it's been. There's the 30-year at 5.6. We talk a lot about, obviously, the enormous needs of the U.S. government to continue to borrow, given a$2 trillion deficit, a more than$40 billion national debt, interest costs of which are now well over a trillion dollars a year.

7:02for all of us. And then the crowding out effect of all the borrowing going on in the capital markets by and from companies that are spending enormous amounts of money for the AI build-out. But what do you think about... And the crowding out effect that may exist there in terms of, yeah. What do you think about the idea that the lower middle people really are being squeezed and that the upper is not being squeezed? I think it's probably true, but it has to be to some extent. But, Carl, I mean, you follow these numbers more closely than I do. But generally, when you speak to the heads of banks, and we're going to hear from them, they continue to say the consumer broadly is strong, which is somewhat surprising, given what Jim's talking about.

7:48Bank of America has been positive, and they've called for three hikes. They've been the most hawkish on rates. So there is that sense, I think, from the banks that economy's strong, rates will need to go higher. I mean, there is a lot of discussion over the weekend about the dividing line in the consumer now is whether or not you own stocks and whether the stock market in this case is the economy. I think that, look, a lot of people own individual stocks. I mean, the numbers that the major firms share with me last week is that there's been a doubling in the amount of people who actually own individual stocks.

8:22I don't think individuals, I don't think they're buying Louisiana Pacific. I don't think they're buying Horton. You know what they're buying. They're buying Meta. They're probably buying SpaceX. Over the last few months, I think that you could say that maybe they've been buying Amazon. Obviously, they've been buying Micron. They've been buying NVIDIA, Jim, to some extent. I was going to save that. They've been buying AMD. Yeah, well, they do. Yeah, they do. I met an Nvidia millionaire again this weekend. It was like, you know, hey, thanks. I guess it's so commonplace. It's like, hey, thanks. What do you expect?

8:59What are they supposed to do? Get down and kiss your feet? What are you expecting? Genuflecting? I have watched viewers give him flowers on the street. I would have done this. I would have said... Have you seen that? Oh, yes. Remember that, Jim? It's at two in the morning. That's true. That's true. She was waiting outside. That whole thing is weird. Two in the morning, the two of you. What? I think the bandit... Where was I? I think there's something in between, hey, thanks, and bending down and kissing my feet. Like, how about this? Hey, Jim, thank you for making me money. How about that? This was just thanks?

9:32Thanks. Thanks. Like a thanks for nothing? Yeah, kind of. I was surprised you didn't flip me five. Here you go. Thanks a lot. Like a tip. Like a coat check. Well, I got to get the backstory on 2 a.m. and flowers. All right. That was a good one. Let's turn to the AI trade. We're watching two reported deals in the works, including NVIDIA now making a play for Reflection AI. And then Amazon in talks reportedly to buy Descartes, which was an anthropic story about a month ago. I got nothing on that one. The Reflection thing, listen, I do know some of the large investors there. I think there had been an expectation perhaps that we what's interesting here.

10:12It's not necessarily if there is a deal for Reflection. I don't know that there will be. It may be an increased investment. It may not. Misha Laskin was on last week, the guy who runs Reflection. Remember, they released their latest open—they're releasing their open model. But the bigger takeaway may be simply Jensen Wong's focus on open models. Yes. Hugging face, you know, other areas, if they do something for Reflection. And we'll see where it ends up. Remember my story back from Christmas Eve when they bought all—they bought Grok, but they didn't buy Grok. I know. GROQ. Well, of course, the antitrust.

10:45Right, you could see something like that here. We'll see what we end up with with reflection. But the larger thing is that he does, you know, OpenAI and Anthropic obviously are generating a lot of demand for his chips. But he likes open models. Yes, he does. I think that he wants to keep the customers happy when open models cost very little money versus the proprietary. Now, remember, he didn't have the, neither one of those companies have necessarily said, you know what, this is the way to go. But they've not been like Elon Musk. They flirted with AMD, one case right after. Another one says, listen, we want to build our own.

11:26Let's get an acquisition. There we go, Descartes. So I think that there's tension. I think there's tension in the group about how much you should rely on NVIDIA. Yeah. You know, what I hear in the mornings and what you talk when you talk to some large investors, it's not about whether or not NVIDIA, and I don't know if they're going to make this move. in terms of reflection, kind of seems a bit strange that the CEO would have been on last week talking all about this, but is what's the run rate at Anthropic and what is the run rate at OpenAI? Never have two private companies have had more of an impact on the public markets than those two every day.

12:05And last week, there was a lot of reporting from others on terms of OpenAI's recurring revenue annual rate and where it would be because, remember, they're raising$30 billion at a$1.4 trillion valuation. This is OpenAI. And they're obviously talking to potential investors about that. And they came out with a$50 billion ARR number. And suddenly it was like, wait a second, because there has been this narrative that they have regained the lead on Anthropic. By the way,$50 billion is big. Then late on Friday, you had Bloomberg say it will be$70 billion by the end of the year. But that's where the focus is for Wall Street, on these two private companies that don't have to give us anything.

12:45Not only that, but what we were talking about last week, Carl, was that OpenAI was using apples to Anthropik's oranges. Anthropik is using this gross number, and OpenAI is using a net number that gives some of the gains to its partners. David, you said something interesting. Yeah. The two pieces in September, led by Reuters, talked about ARR. And the difficulty is ARR was meaning run rate, not recurring. Right, run rate. And recurring stick. Annual revenue run rate. So you have this problem that George Kurtz, CrowdStrike, once explained to me. He said, Jim, ARR, when it's recurring, is really fabulous.

13:28ARR, when it's not recurring. It means it could go away. I know. It's a consumption model. I appreciate you clarifying, because sometimes you put the recurring number in there when you mean. No, I'm not doing that. Two in the morning, flowers. But it was a safe flower. Anthropic, by the way, is having another meeting this week. From what I hear, I think we've got other, as at CNBC, we've heard the same. I've been hearing. I know they are. High level, you know, and not expected to share. Apparently, they may have had a couple of meetings last week. They're not really test the waters anymore. They're sort of in between test the waters and filing that S1, which we're all sitting here waiting for.

14:08But sort of high level. but we're not necessarily going to get the numbers either that at least OpenAI is sharing with people who are considering putting money in that company at a$1.4 trillion value. But this is the key. Where are they in the competition with each other? Obviously, we're going to talk a lot more as well, guys, about safety and alignment. There was that interesting essay, or I don't know what you want to call it, a note from Satya Nadella this weekend. Oh, that was important. Yeah. We must assume a model is compromised, he writes, and contain it from the start. Think of it like an emergency break.

14:41An authorized person should always be able to pause or shut down a model mid-task. That's Adam Nadella. This is the kill switch that everyone said, well, no, that was rightly derided. It's not really possible. Although I think that if you combine CrowdStrike or Palo Alto with Okta, it is totally doable. And it's just that these companies, Anthropic and OpenAI, they should be more in touch with what's going on with the cybersecurity team because they're ahead of the game. No, I mean, listen, when it comes to safety, we did get Anthropic also talking about investigating unintended model actions and their valuations, talking about cutting them off from the Internet.

15:20And then back to Nadella, which did get a lot of attention over the weekend. and we need to separate the supply of intelligence from the authority over it. There's Anthropic, of course, as well. I'm going to have a chance to talk to the OG, as far as I'm concerned, when it comes to so much of the technology world in this country, Michael Dell. He's going to join me tomorrow. That's terrific. Don't miss it, 11 a.m. Are you going to ask him about the accounts? Of course. The Invest America accounts, of which his foundation has given$6.25 billion. So it's$250 for every kid in certain zip codes. That's happened.

16:03That's how much that a lot of the rich people want to save when they move to Florida. And it goes into the stock market, so they've got to start watching. But, you know, it would be interesting to hear from him as well, given his guy started in his dorm room at 19, building Dell Computer in 1984, and he's still at it. Incredible. Incredible. We'll get to the move in energy today with bond markets closed. And a nice little spate of upgrades. Yeah. CRM. And Adam and Jonas, he wrote a label on SpaceX. Did you see that? He wrote a note on SpaceX? I know. Adam Jonas? It's like the daily now at this point.

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18:02Start with as little as$1 with no account fees or trade commissions on U.S. stocks and ETFs. Hmm, that's music to my ears. I can only talk. Investing involves risk, including risk of loss. Zero account fees apply to retail brokerage accounts only. Zero dollar commission does not apply to customers designated by Fidelity as a professional equity trader. A limited number of ETFs are subject to a service fee of$100. See details at Fidelity.com slash commissions. Fidelity Brokerage Services, LLC. Member NYSE SIPC. We mentioned some upgrades this morning. Biogen gets taken to overweight over at JPM.

18:34Got some other ones. Salesforce, T-Mobile. Nice price target increase for Apple today. we'll get to all of those I'm a day on this stuff except for the hardware stuff yes, we'll get to some of the action and memory today as well to the downside Kramer's mad dash in the opening bell in just a moment 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.

19:16Make work less work. Try Google Workspace with Gemini at goo.gle slash workspace with Gemini. Hey, Fidelity. What's it cost to invest with the Fidelity app? Start with as little as$1 with no account fees or trade commissions on U.S. stocks and ETFs. Hmm. That's music to my ears. I can only talk. Investing involves risk, including risk of loss. Zero account fees apply to retail brokerage accounts only. Zero dollar commission does not apply to customers designated by Fidelity as a professional equity trader. A limited number of ETFs are subject to a service fee of$100. See details at Fidelity.com slash commissions.

19:50Fidelity Brokerage Services, LLC, member NYSE SIPC. Still waiting in line? Again? That's time you'll never get back. Save time and money with Stamps.com. Over 4 million businesses have skipped the line with Stamps.com. Join them to save up to 90 % off carrier rates from your computer or phone right now. Print postage for certified mail, registered mail, and packages in seconds. Then schedule a pickup right from your home or office. For a limited time, go to stamps.com and use code podcast for a free welcome gift. Taxes and fees apply. All right, let's get to a mad dash. We'll get you started for trading on this Monday.

20:28About eight minutes from now, we'll get started with an opening bell. Software stocks, big comeback for some, including Salesforce. We mentioned that double upgrade this morning. Now, also, we have a double downgrade of Adobe. That's Wells Fargo, the Salesforce's bank of America. What I think is most interesting, Adobe's easy to copy. And I think people have been doing it. You and I discussed that in the break. Adobe's very expensive. People feel that perhaps it is no longer worth as much because of Claude, because of ChatGPT. The Salesforce is very interesting. The B being the subscription, not the stock.

21:04Right,$660. Now, this is very interesting, David. Salesforce had a fantastic dream force in a great quarter. And people are kind of coming around to thinking maybe there's no disintermediation. It's really to Monday.com, smaller outfits, HubSpot. What's interesting is the guy did wait. The analyst did wait until it came back. So it wasn't like a, well, I bought at the top situation. But a lot of it has to do with what's sticky and what's not. And Salesforce is regarded as very sticky. It gets in the organization. People like it when they use it. And Adobe is regarded as being easy to disrupt, whether it be from Canva, whether it be from Figma, whether it be from the – I mean, I don't know.

21:48I subscribe to Adobe, and I just find that you can kind of fool around on an amateur basis and beat it. Yeah, there's some question as to whether AI tools can be used to create essentially similar sort of applications as well, which is one reason why that stock has not seen perhaps any of the comeback that has been the case for so many of the other names that earlier in the year the narrative is going to be disremediated, Claude's going to do it all. Service Now has come back, too. Now, remember, relational blows up, and then everybody comes back and starts buying. That mattered, too. Yes. Situational.

22:26Situational awareness. But what's situational was, frankly, they created a lot of what's happened since they had the problems. Yes. Yeah, there was definitely a market dynamic that they were very influenced or influencing. All right, we've got an opening bell about five and a half minutes from now. Don't go anywhere. Watching the energy markets this morning. Brent crude topping 106 once again after that deadly attack on Saudi Arabia's airport in Riyadh. Iran-backed Houthi militants in Yemen attacked the airport on Saturday, left 12 dead, more than 300 injured. Jim, this is the worst or the deadliest attack since the conflict began in February, March.

23:04Yeah, this is not a war crime. You're not supposed to go after where these, obviously, individuals are who are the people who are not part of the war. It's interesting that when the president declared that there was basically just a truce between Ukraine and Russia to be able to send more diesel, that momentarily brought oil down and then it's come right back up as if the truce isn't real. Well, people start doing some math. 300 ,000 tons in a month is about two hours' worth of global consumption. Oh, it's true. And I know Brian Sullivan's done such great work about how much it costs to ship things, David.

23:4510x. Yeah, he was talking about that on Squawk this morning in terms of just the added amount, the millions and millions per tanker, which increases the cost per barrel significantly. Yeah, I don't know if we can drag over. We built the chart of physical versus futures in terms of Brent. But it looks a lot like April. And J.P. Morgan wrote last week that October is feeling a lot more like the spring in that if you need oil today, you're paying more for it now than you have ever. There's a look at, you can see the spread today versus back in late March and April. There's no shortage. It's the way it is.

24:22I do think, Carl, that, oh, my, oil could be as low as 50 if things were full out. If not for the war. People are full out producing, full out. It doesn't matter. Saudi's under some pressure, just generally speaking. obviously these horrible attacks on the Riyadh airport over the weekend. They got that big FII conference coming up. Very much unclear to me whether security teams at various companies are going to let their CEOs attend that. I think 60 % of flights canceled today into Riyadh and GoFair this morning, saying it's halting some flights through the 17th. There was a period where so many of my friends went to Dubai.

25:13I just don't hear it as part of the people's plans right now. Let's get the opening bell here at the big board on Wall Street this morning. It is the NYSE celebrating Columbus Day and Italian-American heritage. Frank Bisagnano, the Social Security Administration Commissioner, doing the honors. And we're going to talk to him in about 45 minutes. It's at the NASDAQ and Times Square. It's Axe Compute, a neocloud AI infrastructure company. And at SIBO in Chicago, it's TGIN, a nonprofit expanding access to breast health education, resources and support. So 7 ,800 holds over the weekend, Jim. Goldman argues there's a perfect recipe, they say, to blast through 8K.

25:53Right. You're grinding upward. Not really that significant bond pressure. kind of, yeah, just one of those positive scenarios, which says stay in. It is interesting that what's been leading us were, say, a Western Digital, SanDisk. We don't hear that anymore. Instead, it's the software company. So, there's a little bit of a switch there. But that rallied really broad last week. And I think that Goldman took note of it. We actually had a lot of stocks that have not been going up have a decent week last week. Yeah. Goldman ups equities. But semis, meantime, Jim, are pacing for five straight days down.

26:32I think NVIDIA, about 6 % off of those all-time highs. No, and people do not want to own those stocks. They want to own the stocks that were just crushed. I did the sales force because that's what people want. When you look at that chart, are those great companies? Yes. Are those companies that are for sale? Every one of them is for sale every day. And we should include, by the way, because I've been recommending Intel to the club. Intel was great, and then Intel's been terrible. And I think that it's important, David, to point out that these were the market leaders. And so, I mean, Micron apparently upped its buyback or said it was going to up its buyback.

27:04Nothing, nothing is moving these stocks. And yet you can move ServiceNow with a feather. Yeah, there were some reports out of China about a new process for making DRAMs. I don't know, I mean, the first thing about it other than that headline. But it did have an impact on Samsung and Hynix as well in Korea. guys and does seem to be impacting Mike Rundstock, perhaps. There'll be a time when we'll see the actual earnings, and I think they're going to be very impressive. But right now, people are just saying, look, this is overdone. And they've been saying that. I happen to think, having spent a lot of time with Mike Rundt in Boise, that Mike Rundt's going to have a really good quarter.

27:44But sometimes between now and the quarter, you have endless selling. Intel's just been straight down from 115. And yet, I understand that business is quite good. But people care that the service now business is quite good more than they care about it. We'll get TSM on Thursday. And, of course, before that, we'll get a ton of banks, Jim. What's your general feeling going into tomorrow? Well, I do think that the expectations are so low as if all that matters is IPOs and some M &A and not bond issuance and not trading. I mean, there's been just volatile moves. You know that David Goldman is acting as if Goldman's stock is acting as if Goldman's not doing anything right in trading.

28:26And yet Goldman has had a pretty good beat on things. Yeah, they have. And when we get an anthropic IPO, that'll be yet another. That'll be a fourth quarter potentially big revenue moment for them or at least whoever's leading it. I don't know, Morgan Stanley or Goldman upper, you know, lead left. The decline in Goldman. If we get it, when we get it. These stocks have come in hot periodically and they've just gotten blown up. And now. Yeah, because it's not about the capital markets as much right now as it's about net interest margin. And then when you talk about it and you have to differentiate.

29:02I mean, mortgages are a pretty important part of Wells Fargo and Bank of America's business, right? Credit cards, mortgages, things like that. But how about if Wells Fargo comes out and says, you know what? I know that you didn't care that we didn't have good net interest margin last quarter. people wanted good they decided to go out really build up where they are in the tables over time Wells will build that business and it will make a meaningful contribution but it's still nothing compared to those other parts of their business that's why I'm saying that I think that they heard the call I think the net-ish margin could be better and the stock acts like that so I totally agree it's Charlie Sharp just saying alright alright I know what you want and I'm going to give it to you Well, yeah, but the other parts of their business are incredibly important, right?

29:49Well, no, I'm totally in sync with you. The consumer part of the business. I'm completely in sync with you. As a matter of fact, you might as well be speaking to me AI, both of us, and we just decided to sync. Okay. You know what's working is your Palantir. I don't know about this morning. Oh, my God. The Palantir is going to 250. It's going to 250. I heard someone use it as a verb this weekend. You were stubborn when it fell back into the 130s. I am steadfast, and I think Alex Karp is doing remarkable things, and that when you hire them, your company just does much better, that there's real value added with the forward deployment of the engineers.

30:26Is it a defense story? Because the defense names have not been playing. No, I think it's the story of people who are saying, listen, Boeing, Boeing, we need some help, Palantir, come in and help us. Palantir is your whisperer. Palantir is saying, listen, the real action in your company is this place, and you're not making that much money in this. And it's like the old McKinsey, except for it's instant. And Carp is instant. And you've been using Nike as an example. Well, Nike, well, I think that Nike, let's see what Palantir does for that. Yes, yes. You've got Palantirians in the company. Yes, you do.

31:04And then some who maybe aren't Palantirians. But I just think that if you wanted, look, I think that Alex Karp and his team, Alex Karp and his team, you bring them in, and I think that they shake up the joint. It's not like McKinsey, where you used to bring him in to be able to say, hey, I'm firing you because McKinsey said it's okay. It's more of like, guys, here's the world deal, and here's where we're going to make a lot of money, and we're going to do it instantly. And Palantir, I'm not going to say the stock's inexpensive. I'm going to say on its growth rate, on its profits, it's an amazing company.

31:36And it wasn't done overnight. Palantir's been around for a long time. It has. And Carp, I think, is actually... Very long time. Private company for most of those years, yeah. Look, if I said that Carp has softened a little, would that make sense of a story? No, he hasn't softened. Okay. You think he's softened the last time he was on with you? We had him on the other day, and he did not say that the shorts should be sprayed with fentanyl-laced urine. He did not say that at the time. Well, that's extreme. He said that before, hasn't he? Yes, he does. I find him, I mean, I know he probably doesn't want to hear this, but I find him entertaining, and more importantly, I find him to be money.

32:07He's money. When someone's money and able to change a company, I kind of don't care. I don't want to be sprayed with urine, obviously. That would be unfortunate. But I think he's going to 250. I'm a steadfast. He went to 150. I did not, and I felt like jumping into a pool of urine. I now feel that I've been a bit intimidated. It's sterile, by the way. It is. It's sterile. It's sterile. It can't hurt you, really. Is that true? Yeah, it's sterile. There you go. And you know that from... Not fentanyl-laced. Even fentanyl-laced. I guess it can't get in... I don't know. I think he's great. Jim, we're going to get this Apple Home category launch.

32:41Yes. And JPMorgan today does go to 360, prior to 340, which is basically where we are. Actually, one of the best Mag 7s of the year, right? Oh, yeah. And there was someone last week who said, listen, my channel checks indicated that Apple 18 may not be that good. And I'm like thinking, why don't you watch the NFL where they're giving away the 18 in order to open an account? I find, David, that watching the NFL, I can make a lot more money than some of these animals. By the way, did you see the ads for SpaceX? Yes. During the games this weekend? Yeah, the Arthur Clarke thing about satellites bringing us, making us all one point.

33:17Yeah, I thought that was, I mean, maybe I've missed them previously. I haven't watched as much NFL. I was going to come to you and ask you. Just starting to sort of watch more a lot now. I was going to ask you, is Starlink, do they have to buy T-Mobile? Can they do a joint arrangement with Comcast? No, they're not going to do any of that. They're doing their own thing. This gets to a favor report, guys. How about it? Can we do it? We could have used you on Friday. I know. I'm sorry. I know. Some of the stocks are recovering ever so slightly this morning. Verizon's up 1.25%. AT &T up about 1 % right now.

33:51T-Moo up almost 2%. after significant losses of market cap on Friday. On the news, of course, that SpaceX had bought Spectrum, 14 megahertz of Spectrum as well, to basically start to try to compete. I mean, they got to do a lot more. Don't get me wrong. But to compete on the terrestrial level, they aren't going to be able to do it on satellite alone. That is actually become a terrestrial carrier competing with the other cell phone, if we can call them that, or terrestrial networks. Remember, they, Starlink, that has been a competitor in broadband, largely in rural, and perhaps maybe a bit more now in somewhat suburban areas.

34:30But this idea that they somehow could use satellite to compete terrestrially was always thought to be not something they would be capable of doing. And now they're showing it by putting out$6 billion on Friday, or on that deal, to acquire the spectrum they did. They're now at about 80 megahertz in total. But to put it in perspective, I think T-Mobile has 350 megahertz. They got 85 ,000 different sites where their towers, where they're, you know, where they are propagating a signal from. SpaceX has none. My point is, it's going to take a long time for SpaceX to become potentially a key competitor in the terrestrial cell phone market.

35:15And then, of course, the question is why, given where the margins are in that and the price competition that goes on that, it's going to take a while. You know, people I've spoken to say maybe they're one fifth of the way there. And, of course, it's not a great margin structure, but it is SpaceX. It's Elon Musk. And you have to take it seriously because you talk about CARP. I mean, we know this guy also. He's a moneymaker. I know he is. Or, you know, at least for his investor base. Everybody weighing in this morning, Deutsche Bank on SpaceX. We don't think SpaceX is contemplating a traditional cellular build-out, utilizing macro-sites, traditional small cells at this stage.

35:50And thus, we believe the sell-off in the stocks of the big three was excessive and misguided. Pivotal research. Elon appears to have created a legitimate new low-cost carrier. They've already got them way ahead, aimed at the rural and suburban. These guys are behind me here with the dish on the roof. But what it will do eventually is allow them to sell a combined broadband and wireless telephone product, which is what we're seeing from the likes of AT &T. I did have a chance to talk to John Stenke, who runs AT &T, about this very threat a little over a month ago at a Goldman Sachs conference. Here's what he had to say.

36:30Can he increase the capacity of the satellites in the Constellations 20-fold? That's not a concern? And he can go and put more and more satellites up there, and there's still not going to be fiber in terms of their ability to, one, perform on latency, two, reliability, and three, what it can do to ultimately take on more capacity. Not to mention all that data. I mean, I would assume we're only going one way. Then, you know, the upstream becomes really important from a technical perspective, and especially in a mobile world, going from a low-powered handset device up to a satellite is always going to be constrained in upstream capacity.

37:05We've talked about all the infrastructure we've built inside stadiums and hospitals and high-rise buildings where, if you're in downtown Chicago, 45 percent of your traffic is coming from inside a building. That's being handled differently than cell towers outside or a satellite that can pick up something on the street. We're in a really good position in terms of that infrastructure and what it can do to meet customers' expectations. So that was Stanky. Meanwhile, AT &T is$150 billion market value. Verizon,$179 billion. Timo is down to$162 billion. And then you get to the Charters and the Comcasts of the world.

37:42Comcast has a$73 billion market value. And Charter, Charter does have$93 billion in debt. Its market value, its equity value is almost like a stub. It's below$18 billion, guys. And meanwhile, SpaceX at$2.2 trillion. Let me ask you, I have Starlink in Italy versus the telecom in Italian, which is terrible. And I get everybody if I call. Well, you're using your broadband. Right. But you're not using a phone on the streets of Italy and using Starlink because you can't. Exactly. I'm just saying that how many people are rural and could use it? A lot. Yeah, and maybe that matters. A lot. Although for that, you need power, you need towers, you need leases, you need customer support.

38:36Where people are actually moving around as opposed to in their homes using the broadband product, Jim. No. Moving around, it's a very different construct. I'm just struck. And it will take them a long time. And the question, of course, also is, well, do you even want to be a competitor in what has typically been a pretty price competitive area? But it's just, I guess what I was thinking was, oh, grain. He bought grain. And I'm thinking, Graeme, what's he doing buying Graeme? Graeme was the name of the company that sold him the spectrum. That hit me from left field. Yes. I mean, I felt like I struck out, what, 21 times in that?

39:12But meanwhile, as the Starship cadence increases, they're going to start, and as it succeeds, they're going to be releasing more and more of these V3 satellites, which, as I said to Stanky, You have 20 times the capacity that the satellites that are up there now. The confidence of Stanky did not resonate. The shares of the stocks just got so obliterated. On Friday, it was really ugly. Really ugly. And again, a bit of a rebound today. But yeah, that market cap loss overall was large. You take a look there at what's been happening. Wow. Look, this is, again, these two markets. I mean, but I was thinking, how many people, when you talk about SpaceX.

40:04Yes, sir. It's not just three people who make a lot of money. Companies that are involved have shareholders. And the shareholders are making a lot of money in SpaceX. Yes, they are. So that's part of who makes money. But is that rich, richer, or are we finally getting people who are not? I would defer to you for that answer. I don't know. Yeah, I don't know the question. I mean, of course, you guys discussed it earlier. We do have Adam Jonas yet. I guess he has to weigh in every day because this is the only company he covers at Morgan Stanley, right? Yep, the only company he covers. Actually, Goldman's got a nice chart looking at what the expirations do to the overall S &P, and the impact is pretty short to the degree it's negative at all.

40:47Right. There's some that when they unleash stock goes down, four or something up. I do think, let's go back to Jonas, who I think is a great analyst. Maybe this is the way stocks should be covered. Maybe we have situations that are just so important that you need one person, because we're getting this trillion-dollar effect. We're treating trillion-dollar companies, at the same time we're talking about$27 billion companies. I know. I think that if I were at Morgan Stanley, if I were running Morgan Stanley, and I'm not Ted Pickles, he does better than I do, I would say, okay, listen, I want an analyst who just covers NVIDIA.

41:26I want an analyst who just covers Microsoft. I get it. Right. To your point, SpaceX is worth, yeah, is worth what? Comcast is$72 billion. SpaceX is$2.2 trillion. Right. Well, look, you have the NFL, okay? Is it shocking that there's just one reporter that covers, There's like four players covering the Niners who are 5-0. I mean, if you just did like the way sports is done, then you would say, listen, we, for the main companies with the main share, one analyst. So you want analyst coverage to be as concentrated as the market. I sure do. We've been having the opposite problem where we don't have enough guys to cover public stocks.

42:05I know, but I just find that when I talk about a company that's, say,$32 billion, during the break, David might say, you know, you talked about a$32 billion company. I'm talking about two trillion companies. I know, but you know, your answer always has been the same, which is, yeah, they go up two, and you can make money in a$32 billion company. And you certainly can. There's no doubt. You can even make money in a$4.2 billion company. True, but if you just cover nothing but Apple, I think you probably have a lot of... What do you think has a$4.2 billion market value? I'm trying to think here. Yeah, that would be versant.

42:34Why did you do that to us? Why did I do that? Because you can make money in it, I'm saying. There's always opportunity to your point. Why do you hurt me, Michael? It wasn't meant to hurt you. I knew it was you. Flowers are two in the morning. The whole time. I knew it was you the whole time. The whole time. We'll take a quick break here as stocks open with some nice gains up here. S &P holding on to the two points that it has right now, 78.12. Stay with us. Well, that move in Chipotle from last Thursday when it got up to 33 on the heels of that FT piece has now been completely unwound as the company Starbucks tells Jim, And we want to be clear, we are not buying Chipotle.

43:14Starbucks is doing well. I thought Starbucks would go up a little more. I think that's the trade there. Chipotle, look, they're not doing as well as we think. Keep an eye on some of those comps as we work our way into earnings season, really beginning tomorrow. Stop trading with Jim is next. Let's get to Jim and stop trading. Bruce won't quit. And that's why beta is a monster long. I mean, apparently this adoption by the small, medium-sized business is rather incredible. I do believe that we see Salesforce doing okay. That's not being, Muse is not doing against that, but it is against, I think about Hub, and I think about Monday.com, and I think that they're crushing it because you can do so much with Muse.

43:54So I say don't sell Meta, because remember, it's only up 3 % this year. It's been a big underperform. Oh, yeah. Wait, right. Although, no, year to date, it's up 13%. But 12 months, yeah. 12 months. Okay, that's actually much better. I'm sorry. I just do feel that this was a great outperformer, and then it underperformed, as you can see. And then they came up with a terrific product. Yeah, well, you see those three peaks at 600, and it finally got through it. That was huge. And look, it's not like Zuckerberg's out there promoting it. There's just great adoption. You know, I thought that... I do wonder when it will, like Amazon already said no to it, right?

44:34Muse can't traffic, move around on Amazon. And I do wonder how many financial institutions will follow that as well, because it creates all sorts of problems for that. If it does a transaction, then it says it's the bank's fault instead of Muse's fault if it gets something wrong. I think deposits are much more sticky than companies are worried about, and that regional banks are not going to get hurt by Muse. You're not going to figure out this and this to pick up three quarters. That's not what Muse do. We're not that good. Well, keep an eye. That's going to be a huge story for the banking earnings.

45:04whether they are disrupted by this inertia play. Tonight, Jim, Mary Barr. I've got Mary Barr for a couple of segments. I think Mary's been, since 2014, done remarkable work. You take a look at the compound valuation, what she's done. And what a thicket she has to go through, whether it be China, whether it be the president, whether it be tariffs, or whether it just be just the general kind of economy where, no, it's been not that great for autos with rates up. That's only a$72 billion market bet, Jim, really. See, this is what I mean. See, and then after I'll say, you know what? GM is one of the most important companies in the country.

45:40We can all agree on that. I intend in my next life to just do nothing but cover companies that just hit the trillion dollars. Yes, only. I'm going to be specialized. You could have a bunch of them. We basically do that now. Yeah, well, everything else is on IR. We basically do that now. It's not true at all, actually. Jim, we'll see you tonight at Monday, 6 p.m. Eastern Time. 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.

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