9AM HOUR: Dow's Big Post-Election Rally Takes a Detour, Nasdaq Sell-Off, Arm CEO "First on CNBC" 11/5/26

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1:06Good Thursday morning. Welcome to Squawk on the Street. I'm Carl Quintanillo with Jim Cramer, David Faber at Post 9 of the New York Stock Exchange. Dow's looking to add to yesterday's gains after its best day in 19 months. Big names like Amazon, Microsoft, Apple are higher, even as semis and some power equipment adding to losses today. B of E hikes for the first time in three years. We'll get some vet speak. Energy's bouncing after yesterday's historic drop. WTI on track for the worst week since the beginning of COVID when those USOs went negative. Our roadmap begins with the Dow looking to build off yesterday, coming off the best performance in a year and a half.

1:42Plus one meta executive breaking down the midterms impact of the AI buildout, saying developing data centers is going to be harder following this week's results of the election. And speaking of AI, shares of ARR under pressure this morning, despite a Q2B smartphone memory prices weighing on growth. We're going to speak to the company's CEO, Renee Haas, about the quarter, a lot of other things that will be later in this hour. Let's begin with the markets. Dow and the S &P on track to extend yesterday's big post-election rally. As for the AI trade, chip makers still under pressure. Meantime, Meta's Dina Powell-McCormick says that getting data centers built is going to be harder in the wake of the midterm.

2:23She delivered that message at yesterday's WSJ tech conference. But she did say some of the winners who ran on the data center backlash may be ready to negotiate. Take a listen. We did have a governor that won last night who did make data centers a big part of the platform, say as soon as we get past the inauguration, let's meet because we don't want to lose this investment in our town. We don't want these jobs to go elsewhere. Meantime, Jim, you got CoreWeave at 46 today, got a downgrade of Cisco, some other things. Yeah, CoreWeave bonds trading down again. You got that 15 to 60 percent yield.

2:59I spoke to Dana this morning just because, look, I think that she raises the point that we're all worried about. She says, look, we are proud to have a community compact that prioritizes investing in the people, small business and teachers. We hire locally, ensure the jobs are sustainable for years. We try to make a major economic impact and invest for 20 years. That's going to be the formula. Now, that's the formula that they've been using. I think others have to adopt that formula because I think that what's happened, David, is that when things were on the table, it was like no more subsidies.

3:27Everyone knew there was no more subsidies. But now it's about being a better citizen. Being a better citizen costs more than not being a better citizen. All true. Don't you think it's a bit early to be making judgments about exactly what is really going to be happening on the ground in all of these states? No, I don't. You don't. You think you can actually understand and figure out what the legislatures of these states or their executives in the form of the governor or what our new representatives and senators are going to do if it comes to any potential legislation? You think you can figure that out now?

3:56No. What I can figure out is that some companies seem to know the drill, what they need to get in, and others don't. And the ones who don't are going to be rejected. Remember I told you yesterday it was like FERC, where Biden was able to make it so that you couldn't really do a lot of pipelines. You can, with regulation, really kill anything. And I think there's some states where it's going to be killed. But you can also temper the severe judgment by saying, look, we're offering a package. And that's what I keep seeing that Meta's doing. They're offering a package. Because, you know, Louisiana, it's wide open.

4:31No, I get that. I guess the takeaway that I'm getting from the people I speak to who are also trying to figure this out, because it is vitally important, is simply that it is likely, Carl, that there will be some sort of a slowdown. You could probably assume the rate of change, the pace of advancement will slow. But beyond that, it's very difficult to understand on a granular level what's going to happen in Texas, what's going to happen in Ohio, what's going to happen in so many of these other states. Yeah, and I think it's an NGMI situation for a lot of these fringe, maybe the iRens. Not going to make it, NGMI.

5:05It's what we used to say at the desk. NGMI is not going to make it. That's what we use because we're looking. You've got UPOD, NGMI, and TDL. Look, WGMI is we're going to make it, so you can do some of them. It's funny, all these years I've never heard you say NGMI. I thought I knew every single one of yours. I thought it was a little bit too abstruse for this crowd. But when we start getting some of these companies that, when I look at their debt and where it's trading, I immediately, because you're looking at the debt, not the equity. The equity is not in play. The debt is telling you NGMI. Here's PIMCO yesterday, Jim.

5:42To David's point, the conventional wisdom seems to be that the rhetoric, data center rhetoric, is merely election year rhetoric. We would disagree. these new governors will be hard-pressed not to follow through on at least some restrictions, if not outright moratoriums. Well, look, I mean, the world changed. I mean, if you don't think the world changed, then I really think you ought to look at the other articles in the Wall Street Journal, which was how the data center backlash could play into the hands of big tech. Big tech knows how to do it. Listen, you know, Gina Powell McCormick. The other companies that are doing it on spec, And we have on-spec companies, and we have whole indices of companies that seem like they're more Bitcoin miner than they are actual data center builders.

6:26Yeah. And I question their longevity. Well, yeah, perhaps, although they did have access to power. They already had powered shells, as we say, and that gave them a nice leg up. And they found customers yesterday. Riot found a customer in Anthropic for a lot of potential compute there. Yesterday's move, which was when we were talking about at this desk, was significant in terms of the accretion of market cap to some of the largest companies in the world already, whether it be Microsoft or Amazon or Alphabet. But a lot of it, I think, Jim, was because they have so much compute already. And the value of that compute is only going to be more valuable.

7:04Yeah. And that makes compute is gold. Now, let me offer you. I'm not predicting anything. Although SpaceX has a lot. And it was down yesterday. But that's a different animal. A lot of money coming. Well, also, that has to do with Elon Musk and the pressures he may be under. But how about the skeptic? The skeptic says that almost every day, NVIDIA opens up and finishes down. Today, it's down. Okay. Well, the skeptic says if it opens up every day and then finishes down, which is bleakering. That if it starts down, that'll end up? This is the first time I've seen it. Well, I'm saying the skeptic.

7:36In other words, there are lots of people here to say, Kramer says. I'm not saying that. I am making the observation that the stock opens up all the time and everybody's believing. What happens if the stock opens down? In other words, not because they own Compute. They're like Mr. Compute. They are. They're also Mr. Bank. Yeah, they're Mr. Bank. When we say Mr. Bank, we mean that they are certainly helping to fund a lot of the build-out as well with various guarantees that they have provided for certain offerings and things of that nature. But I'm just saying, look, this stock has been one of the worst stocks since the year.

8:10This is the cheapest multiple on NVIDIA in about a decade. We're at 16 and a half now. Right. And remember, we had that period of unnatural moves, right? The June period. The Koreans were buying and everyone was excited. That blow off is, it's still not. But if there is a slowdown in data center construction that begins, let's call it next year, and extends, will that result in fewer GPUs being sold? I think undoubtedly you have to say that it's going to be stretched out. Stretched out. In the same way that if you were in the pipeline business and you woke up on Biden one, I think you'd say, you know what, guys, we don't need to make as much pipeline.

8:50Well, there's also the double whammy, Jim, if there's a data center slowdown and the war ends. defense competes for the same chips, the same power, the same industrial capacity as data centers. And so then you're that. I mean, look at Cummins today, down six. Cat's red for the year. Well, Cat didn't raise. They should have raised. But they didn't raise. And a lot of people felt that it was like, if your business is so great, why not raise? I don't know if you got to read Michael Semblis' unbelievable piece, But I didn't know that we used all our tomahawks. Now, tomahawk is filled with technology.

9:31It was the most tomahawks that were ever used. Pretty much in any war, it was done in one month. David, we're short tomahawks. Yeah, I've heard that. Yeah? I have, yeah. Not good, though. Not good. No, you want tomahawks. You do. You want weapons. Weapons, if you're a country of our size, good to have weapons. Speaking of the war, we did build a chart of Brent's intraday action yesterday. And the moment that Vance posted that post about the war being responsible for the midterm results. And you can see Brent responded immediately, down 7 % on the day. Look, I think that, look, I thought the rally, people, we always have to figure out what's the rubric for the rally.

10:17I still think it was inflation. I mean, people. Wait, which rally? Okay, so the country spoke, and the country did not send the market down. No. The country sent the market up. One of the reasons why I think is that we've all had enough with presidential-derived inflation. Okay. Your point is that there is going to be the war in Iran and or tariffs both have been... Right, the rejection. And also, he didn't do health care. Now, well, you could say the convoluted health care, but health care had gone up ridiculously under this president. Ridiculous. The tariffs? Wait, health care costs. Yeah, well, I don't know.

10:54Have you seen? Oh, you're probably a contract player. So you don't. You're like a. What are you talking about? I have to go buy my health care insurance. Oh, well, no. Yes, we get our own insurance. I mean, I wouldn't say that it protects against. Catastrophic. That's about. OK, there's my wife and then there's health care. They're too close. In terms of your cost per month? Yes. They're too close. I mean, in my family, the rates went up. I mean, I hate to be anecdotal, but I've been fighting for policy for my kid. But you're not alone. And that was an issue in this election, was the fact that the subsidies for Obamacare went away.

11:26They went away. And there is an expectation, perhaps, that they will be restored with the new Congress. Right. And that's why I kept coming back to HCA yesterday. Well, you can't blame the Queen of England for that. So you picked the president. Yes. I'm saying that, like, your health care went up big, your gasoline went up big. And, you know, that was not just in the form of Hakeem Jeffries. No, it was not. It was not. And somebody had to pay the price. In other words, it wasn't the rampant corruption. People will overlook rampant corruption. You're okay with rampant corruption. I don't think they are, actually.

11:54That seemed to be a very significant issue in the election as well, Jim. Okay, rampant corruption. We'll put that in there, too. But I do think that the war that kind of didn't seem all that popular in retrospect with Milnet. Yes. These all emanate from the giant, the ballroom. The ballroom, yes. Yes, the ballroom. The ballroom. They changed their name. They changed their name. It's not the White House. It's the ballroom. I see. You're calling the entire White House complex now the ballroom. Everybody knows that better than White House. White House. Geez, I mean, like, you know, White House? Yeah.

12:27I got a White House. Do you ever hear it called the White House? No. I mean, look, we can make this very simple. This was a referendum not on the Democrats doing anything right. It was a referendum, not a referendum on the Republicans. It was the presidential mandated inflation. and he should have mandated it the other way before the election. And then we'd be talking a different talk. Are you okay with this Cisco downgrade over at Morgan Stanley? I thought that was fat. Which is, by the way, not an indictment of the model at this point, but more like it's done so well versus the S &P. Well, I guess, I mean, look, one of the stars, Arista Networks, which is their competitor, did well yesterday.

13:08And I think Cisco, I would rather own Cisco than a lot of the other stocks we're talking about in tech. I don't think Cisco's bad. It's down a lot. Chuck Robbins has done a good job. That last quarter was very special. He didn't talk the numbers up, which is what hurt. But I do think that you're up against Arista, and Arista had a great quarter. I didn't think that that downgrade had anything special to it other than, you know what, this thing's going up a lot, and I don't want to get hurt. I don't want to hurt people. Guys, on stocks just as well this morning, I did want to hit Qualcomm for a moment, because it is going to be down.

13:42Go ahead. Yeah, and it's... What? No, it wasn't good. No, it wasn't good. Fiscal year 26 non-GAAP revenue was$10.44 billion. That was down 7 % year over year. Diluted EPS,$2.17, down 28%. Automotive and IoT growth partly offsetting weakness overall in handsets. Looking at guidance here. Non-GAAP revenue guidance is$10.4 to$11.2 billion for Q1 of fiscal year 27. And they're talking about DPS guidance now, and you can figure out the multiples at home, 215 to 235 as well. How has he done overall, that Christiane Armand? What was his performance, multi-year performance? It's funny you should ask that, Jim.

14:23He will be a guest later on CNBC. Because our incredible production team has put that together for you. And I think it's notable. I wouldn't say it's good. No. No, that's bad. Is flat good or bad? Well, it depends. But given the competition, if you want to call it that, group, not good. Not good at all. Well, David, that's what happened. Why do you mention that, Jim? What? Why do I mention this? Yeah. Because the two companies that reported last night are Qualcomm and Arm, and people seem to not like them. And I'm trying to figure out how much of it is data center, of which Qualcomm's cracked into it, and how much is just ennui.

15:05Like phone ennui. Ennui. World weariness. That's E-N-W-E if you're from Philly. Or like if you're watching Nocturne, which is really not Philly, but they're training. Understood. Do you have ennui? Yeah. I got ennui when it comes to the semis. That's why I was thinking. You do. Because we've been all over the block this year. There was a moment in the summer where you had had it. Right. Well, that was that. I was situationally aware of what was going on. And you went straight for J &J. And then you came home again. Right. Well, because I felt that they were overdone. And I do think that, like I said, we're all writing off NVIDIA, but it is the cheapest that it's been.

15:42We've got to focus on that. Very cheap. Yes, Carl just told us, 16 times. That is quite a low multiple. The balance sheet of that company is still great. Incredible. Last I looked, Jensen Wang is still Jensen Wang. Amazing margins, incredible free cash flow. Jensen Wang is still Jensen Wang. He is still Jensen Wang. There's a price to own it, but people would rather own Apple. interestingly enough I was on this call earlier this week I thought it was pretty negative it was the Apple call and I was coming with this DRAM negative DRAM rap I looked at the micron and stuff but they came out with the pot like listen DRAM is going to go up from now until Kingdom Come the stock is still up 28.5 % year to date I say own it, don't trade it it's above the street high target at this point That is something you actually consistently said about.

16:32You have said consistently, own Apple, don't trade it. I will give you that. What you've been saying on mic, I have no idea. Okay, but I appreciate what you just said about being an Apple. And I like Tertus. I'm just giving them a hard time because in truth, it was a remarkable quarter. And I thought they were a little defensive. And I wouldn't have been, particularly when I can go to T-Mobile beginning today and get a duo for$800. And if you're right about memory, then that margin story is not as dire. Oh, the margin story is going to be fabulous. So I am right on memory. Wait, you're right on memory, why?

17:04Because data center construction is going to slow, and then therefore we're not going to use much memory. It's peaking. The stocks lead to... It's peaking? It is? In the out years, yes. Because there's a lot of... Look at the demand destruction in PCs. I'll give you some DRAM. I got DRAM. You want some DRAM? I got to get some DRAM over here. You see my DRAM? I'm filled with DRAM. I got a special deal with DRAM. T-Mobile. 800 bucks for the duo. I'm buying five. You still have? Oh, stop it. Five duos. You keep talking about buying five. You haven't bought anything. We have to go right now. I'm buying five duos.

17:36Watch the futures here. It is those hyperscalers that's going to help the Dow, and you can see the impact on the futures and the inverse effect on the NASDAQ. Tons of news in consumer. Oh, this is the greatest day ever. Restaurants. We'll get to some oil and health care. We're going to hit Dutch Pro? Too fast. Too close to the sun, chief. after the break.

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19:31Look for a big bounce in Applovin today, leading the list of pre-market gainers, but Tapestry's not far behind. With a nice beat, they raised the guide, Coach was ahead. Talk about that and a lot more. Get Kramer's mad dash and countdown to the opening bell. in just a moment.

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21:22All right, seven minutes before we get started here at the New York Stock Exchange on this Thursday. Time for a mad dash. Costco. Yes. Now, what's interesting about Costco is the actual headline number was very, very big. You had one that is increased to 12.8%. But there were, during this period, all over the world, particularly in Japan, there was a kind of a sense that you had to start hoarding things because of the war. It unnaturally took Costco up. But still, in the U.S., you did have 8.1 % comps, which is rather extraordinary. And remember, Costco was a volume. This was for the month of October.

21:59Right. Costco is a volume store. It's not a price store. Their goal is to do a lot of volume and get the money from the card. And I continue to think that Costco represents great value, Costco and Walmart. Walmart might have more of a margin problem than Costco, which is not reflected in the fact that Walmart stock has gone up greatly. But this is a company... I mean, this is another year you would have been safe in Costco. Well, my trust has a big position, so I'm safe in it. That said, what is the multiple now? Well, yeah, it's like$39.40. Wow. And you're comfortable with 40 years worth of earnings?

22:34The late Charlie Munger said this is the only stock in his whole lexicon that he felt you have to not pay that much attention to the PE. And I've adopted that for a long time, and that was Richard Glanty, the CFO, who taught me that. Richard Glanty schooled me many times until I realized that I was an idiot. That's fine. but that I understood exactly how they could have a bottle of, say, 2017 Caymus for$75. And I said, you're getting killed in this. I'm beating the heck out of you with that. He goes, no, you're going to tell probably a million people that we had Caymus for the price that we paid it for.

23:09Right. And I have. Yes, you have. Does it regain this peak here? Yeah, we will. You think so? Yeah, we will. What was that? No, I got no problem with anything you're saying. Is that the Qualcomm short? I don't know. Jim's got it out for Qualcomm. You had it out. You brought it up. I didn't bring it up. You just brought it up. You had that chart ready. I didn't know. You can't blame our producers for actually doing a great job. It's fascinating. By the way, speaking of that world, Rene Haas is going to join us. Of course, he's the CEO of Arm. That'll be a bit later in the show. So, Trini research with an outlook for the AI trade, saying it's the end of the trade as we know it, looking at the gap between revenues and CapEx.

23:54They add that, quote, the asymmetric risk is no longer to the upside but to the downside. Jim, they say the peak of mega commitments is already well past us. Cetrini always gets bullied a bit with a post, but they've been right about some things in the short term. Look, I think they're missing the point, which is that there's now incumbents like a Microsoft, like an Amazon, to some degree meta, Apple, where there's just, I can't say Google yet, where there's just tremendous gains going to be had because, as David said, computers worth a lot. And I prefer to look at it as like, if you want to, you can look at it as.com.

24:33This is Amazon Survivor. But I know that the PE multiples are going to come down for the companies like the Caterpillar. But these are good stories. They're just not good stories now. They have to come down. They still have to come down. But money does go elsewhere. Money goes to Procter. It goes to J &J. That's the way it is. But that death knell thing, how do I explain Amazon going to$300 if they're dead? I think the notion would be that positive free cash returns sooner than we thought. I think that Amazon's going to make a lot of money in the second half of 2027. A lot. It's going to open above yesterday's high.

25:11Let's see what we get here in a second. Let's get the opening bell at the big board on Wall Street. It's NYSE chair Sharon Bowen and governance intelligence, an intelligence platform for governance professionals. At the Nasdaq and Times Square, it's Hilton celebrating its first day of trading at the Nasdaq. And at CBO in Chicago, the CBO floor operations team. Jim, as we're still a little south of 7700. Yeah, look, I think that the idea that we have to necessarily tackle more from yesterday. Yesterday was one of the greatest conventional Dow days I've ever seen. And it's just hard to come in and say, you know what?

25:50Abbott Labs was at 103, and now Abbott Labs, I'm going to pay 118. It's up 17 points straight. There's a lot of parabolic moves in companies that usually don't have parabolic moves. So I think that I don't advocate trading. I do say, listen, if you haven't come into an Abbott Labs, you can wait. It could go your way. We might have a strong employment number tomorrow, and people start talking about, yapping about maybe Warsh hasn't done yet. Right. Yeah. I mean, I'm looking here, obviously, some follow-through from yesterday. Amazon shares are up. Alphabet shares are up. Microsoft taking a bit of a breather after a significant move as well yesterday.

26:31Again, I think on this larger idea that any slowdown actually in many ways would be beneficial to these companies that already have the compute and that they will be able to actually garner even more for it. Think about what Anthropic has been paying for its compute and what we've learned from its S1 and its amended S1 in terms of the ramping cost that it's seeing when it's trying to get a hold of short-term agreements. It's longer-term agreements that were done some time ago, much cheaper than what it's paying for access to shorter-term compute. And we talk about SpaceX in that regard, a company to which they were paying as much as$3.1 billion dollars beginning in December, something we learned a month.

27:11That's what we learned from the S-1, the original S-1. Interesting to note, those space pictures have not been a beneficiary in the same way, despite the fact that that is also considered at this point a hyperscaler and obviously has plans at some point to put data centers in space, where conceivably there will not be as much opposition to them. There might be higher cost. I think there's also a general view that Musk is going to be in for a bit of a grilling in a number of different ways, including most likely being called in front of Congress to testify, based on a couple of conversations I've had around foreign affairs, for example, given what Starlink in Ukraine.

27:51And, you know, we'll see what else comes up. But it certainly could be something else that takes a bit of time away from him doing other things. No, totally. And we know there's some special vehicles that people are getting stock and they're selling. I want to go back to the concept. I want to come back to the concept of a conceivable short-term bottom in the stocks that have just been eviscerated. You know I respect NVIDIA greatly, and I think at a certain point, NVIDIA represents some value. At a certain point, I think Micron represents some value, but people have decided, you know what, they can never reflect what the people have spoken.

28:29They can never reflect it enough. They can all go down. But I do think that these companies are not necessarily dead. I think that they got too high in June during the blow-off. They got too high. They've been going down consistently. You know, David, the one I'm going to ask you about, which just seems at this point to be unbelievable, is Marvell. Yeah. It's funny. We talked about it in the 10 yesterday, obviously. I mean, that just keeps going down. That again, this goes back to the idea of anybody selling into the data center conceivably is not going to be selling as much as quickly. Right, Jim?

29:06Exactly right. So whether it's Marvell and or their merger partner or the company they're buying, Lumentum, they are both relying on continued spending on data centers and selling into them. Look at what happened to Dell yesterday as well. Oh, that was... They got absolutely crushed. This has been, you know, this has now taken on a life of its own in terms of it's not deal related. There's a look at Dell again today. Look at the sell-off in that stock. That is right, by the way, right at the 200-day here. Look at Wells Fargo, okay? Look at J.P. Moore. Have you watched the banks? I mean, what, the Democrats?

29:42Are they pro-bank or something? Dell's lost 37 % of its market value in a month. Yeah. Yeah. Yeah, yeah. You don't need to say more than yet. I mean, servers plus PC. Servers is really, I mean, that was one of the worst IPOs. That's kind of the benchmark of this Europe in terms of, wow, people, can we have the IPO? David, see that chart? Yes. That's suboptimal. It is suboptimal. Yes, I believe that to be the case. When it comes to Marvell, just real quick to wrap up because you did ask, right? It's 4.5 times each Marvell share for each share of Lamentum. Yes, exactly right. It was done at a fairly low premium.

30:19as we told you, would be of course. Lumenum shareholders are disappointed in part because they think they should have, you know, this is a company whose stock was, out of 52 weki of$1 ,143, the deal is now worth, you can do the math, a lot less than that. And then Marvell shareholders on the other side are also feel like, well, why are you buying this company at all? When this thing finally, if it ever does get approval, certainly the Chinese approval is a key here, what is going to have change in the marketplace? Is it a commodity or not? Of course, Matt Murphy says absolutely not, as does Lumentum's CEO.

30:49But, Jim, it has been poorly received. And then on top of that has been this significant change in the landscape. Right. Now, David, there is this merger purgatory. Union Pacific got downgraded today, basically saying, listen, who knows what's going to happen? I know that it took 18 months for Kimberly to buy Kenview. Yeah. These mergers, CVS on a split up. Maybe people just say, you know what, I can't. Call me the day before it happens. I know. What is that about? CBS did not get a good response yesterday on the news of the desire to shrink, to grow, as we used to like to say. Remember that one?

31:26Yes. And, David, I think that you're up today, though. Someone said to me, Europe is going to hold up, Kimberly Clark. And I said, well, like, why? But they did. They held it up. And it was a major stuff. I got worried. Yeah. China is going to be an important regulatory for Marvell. China is going to figure very prominently in the deal that is yet to be announced, and we'll see when, in fact, it ever does get announced, which would be SpaceX buying Tesla. China is going to be vitally important there, how they deal with that. Look at Coach here. Oh, my God, that group is so bad. If you own the computer already, you are a beneficiary.

32:07Right, that's the story. If you are involved with filling out the data center, you are conceivably hurt. If you're building the data centers and you haven't gotten it built yet, you're also not looking great, right? Look, I happen to enjoy Michael Intrader's, he writes a lot. He's got, talking about he's got more than 1.5 gigawatts of active power. But then I looked at the 9.75 of 10.131, and there's like 77.8. So, you know, you can pick any one of his bonds, 9.58 of 7.15.32. and those are at 75. What I'm saying is that if you're, say, private equity, do you say, you know what, I want to get involved in one of those situations because I can make 21 points?

32:48Or do you say, this is unlimited downside and I don't want to be involved? Which do you say? I don't know. You do a lot of work and try and come to a conclusion as to whether that's a great opportunity. Well, I think that they arguably may be the best. Now, look, I mean, I'm looking at Iran. I'm looking at Nebius. Nebius was a$15 stock when I met them. Could it go back to$15? Well, this is the problem. Could Micron go to 150? I don't know. I mean, NVIDIA is like we're still looking for NVIDIA to have put in a bit of a bottom there. You know what I mean? Guys, I did want to. 128 sold to you. Sold to you.

33:21Okay. Yeah, I'm offering a million shares of 126. Real quick, Jim, I did want to get to something else, a news event involving Liberty Media, which is really F1 this morning, if I can quickly, because it's an interesting deal. John Malone, of course, the founder of Liberty Media, had significant voting control of F1, which trades under the symbol Liberty Media Corporation, F-W-O-N-K. He had 48 percent control. This morning, he's given that up. He's given that up for more economics overall, but for shares that are voted in the same way that everybody else's shares are voted. Namely, we're talking about A's and C's, common stock, Series A, Series C.

34:11He is increasing his overall economic ownership to about 3.5%, but he has given up his ability to potentially control the company and sell that control. And apparently, he was actually, at least there were some inquiries that came to him, We know from a press release this morning from the company, as well from interested parties. Because think about it, you could spend a lot less money than buying the entire company, but potentially gain control if, in fact, he had agreed to sell it to you. He would get a control premium if he had done that. He's not. Instead, in his continued effort to collapse his share structures, to simplify his overall estate, Malone has chosen to take more equity from the company, which has then now taken in that voting control.

34:57And if there ever was a potential buyer, they would have to buy the entire company and all shareholders would be the beneficiary of that control premium were to come their way. Of course, the market is taking this as at least the potential that it increases the likelihood that there would be a buyer. We'll see. One could imagine that while there might be a buyer for his stake previously and the 48 % voting control that would have come with it, that would have cost you dollar-wise a lot less than buying an entire company that currently has a$26.4 billion market cap, not to mention any control premium you would now have to pay.

35:32Also, out with earnings this morning, apparently perfectly good, strong. Just a note on that, this is a significant transition in a sense for F1, which is the main asset at Liberty Media overall at this point. And the stock is responding, as you see, guys,

35:57positively. That's it. I assume there's no questions. I think that was an excellent report. Thank you. Thank you. There are a number of ETFs, Jim, at all-time highs. Staples, the banks, XLV Healthcare. The bank, I mean, think about it. If you told me the Democrats, the blue wave, going to happen, the first thing I would normally do is sell the banks because they were so horrible to the banks before. Now suddenly they're great. I mean, there's been a, it's been a free for all. There's been very little pushback to anything a bank does under the Trump administration. Suddenly we've got a happy days are here again for the banks.

36:31That's a kind of a hard thing to realize. Now, maybe the banks have been selling at 12, 13 times earnings. So if you're in a tech stock that's at 28 times earnings, you say, aha, I'm going to buy those because they're value. They're low value. And I like that call. I own a lot of banks for my chapel trust, but it has been not great. Well, I shouldn't say not great, because this year has just been okay. But, wow, I mean, they are flying. I like Bank of New York, and that's doing very well. J.P. Morgan's great. Don't rule out Wells Fargo. Charlie Sharf's doing a great job. So if you want cheap banks, Wells Fargo's at 11 times earnings.

37:08That's a lot different from some of the other companies we look at. There's some classic volatility in the restaurants, as we mentioned. There's pizza, there's shack, there's Cava, downtown gym. You mentioned bros earlier. Well, I do think that we have to go back to, some people feel that we have to go back to when this end of the price increases. Because there have been food, these restaurants have taken a lot of price. And I know that because Chris Kempchensky is really offering some great deals at McDonald's. And that stock, I think, is bottom. Wow. Talk about a little mini parabolic move, Jim.

37:44This was a 230 name in mid-October. It's almost 280. But he listened. He realized that we've got to have a lot of stuff for$5 and$6. And that's what's happening. And he's also got the franchisees doing some things that they're really buying in on. I think that stock is still a buy. I think Kim Chinsky has really kind of solved some of the problems by taking prices down. Yeah. Down dramatically. Guys, I did want to quickly end with Apple 11 just because incredibly volatile stock. Squeeze-a-rooney-mint-batty, my friend. Remember, of course, this was a stock that had incredible highs to the benefit, obviously, of a number of key shareholders there.

38:21That said, it had been down sharply, but up, I mean, it's at 31 % today. Jim mentions a potential short squeeze. That said, you know, the guy came in ahead of estimates both for revenue, for how they measure EBITDA. Management also said on the call, consumer advertisers spend continues to have healthy growth of double digits, quarter over quarter, growing triple digits year over year. So some positive news there being added to by perhaps what has been a significant downtrend where people have taken a short position to benefit from that. Yeah, that had been one that we always heard that Google was eviscerating that.

38:53Well, I'd like to be eviscerated like that today. Okay. Inviscerate me that way, Chief. Getting some breaking news out of D.C. For that, we're going to turn to Eamon Javers. Morning, Eamon. Yeah, good morning, Carl. What a difference an election makes. The Democratic sweep on Capitol Hill is going to have some impact on some big finance names. Senator Ron Wyden's finance committee staff intend to dig into J.P. Morgan's relationship with Jeffrey Epstein with a particular focus on the conduct of high-ranking executives and their handling of the bank's relationship with the disgraced financier. That's according to a source familiar with the committee's thinking who I spoke to this morning.

39:31A particular focus is going to be on the role of Mary Erdos, the chief executive officer of JPMorgan Chase's asset and wealth management line of business and her relationship with Epstein. But guys, clearly there is going to be a change on Capitol Hill once Democrats get the gavels. They're going to be looking at a lot of these corporations, their relationships, the relationships to the Trump administration, the Trump family, all of that now open season for Democrats up on Capitol Hill. And they are gearing up today to begin those investigations. Back over to you. All right, Eamon, thanks. As we go to break, watch bonds today.

40:06I got some macro data claims 189, one of the lowest prints we've seen in a generation. Productivity was good for the quarter. Three six. We were looking for two nine. There's some Fed speak as well. Hammock and our own Steve Leisman with some other stuff we'll get to in just a bit. Dow's down 150. Stay with us. Well, the stock of Arm is under pressure despite beating quarterly targets. Joining us now first on CBC is Arm CEO Rene Haas. Rene, thank you for coming on. It's good to see you. And I'm sure you've got kind of a maybe as astonished as I am that, well, it doesn't matter really how well you did.

40:44You did a great job. But right now is, I guess, not the day to report, huh? Good morning, Jim. Great to see you, as always. Yeah, it was a great quarter for Arm. You know, we had the biggest second quarter we've ever had. Overall revenue up 27 percent. Fifth quarter in a row that we've been up plus 20 percent on revenues. And our licensing business, which is probably the best indicator of future royalties, up over 50 percent year on year. So we're super pleased about the quarter. Well, you know what, Rene? I look at the research today, and I think the research is trying to figure out why the stock is down instead of looking at the company and saying what the company does.

41:28And because they did that, they talk a lot about memories continue to pressure smartphone units. That is not the story. The story is the data center. But I think because of the election, people don't want to talk about the stunning numbers you have in the data center. Yeah, you know, the data center business for us, Jim, we've talked about it a lot, obviously, over the last number of years. But as we are bringing on our new product, the Arm AGI CPU, and what I talked about on the call yesterday was the fact that we now have very high confidence to achieve$2 billion in revenue. Of that product alone in the next year, the result of that is that the data center business for Arm will be larger than smartphones.

42:06And I'm not sure if people have completely internalized that, but that is the indicator for us going forward. We've gained a lot of market share in data center. We were 15 % in 2024, 50 % in 2025. We think we exited this year at 60. So when you combine the IP business, which is growing rapidly in data centers, and then when you add on the RMAGI CPU, we'll have shifted quite a bit 12 months from now. I thought it was terrific that you actually talked about things that you do, which to me were better than just the blue wave, everything's going to end. Talk about your business with Meta and the Muse, because that's not going to go away because the electorate has spoken.

42:47Yeah, you know, the short-term blips that happen in terms of the election and people talking about spending, et cetera, et cetera, to me, I look at that as very, very short-term thinking. In the long game, it's almost impossible to argue that intelligence as a commodity is going to drive tremendous growth on GDP across all sectors. Now, to your question about Meta, Muse, et cetera, et cetera, Meta is our chief customer for the ARM AGI CPU. Muse, the agent that essentially runs all these tasks, which I use, by the way, it cleans up my email every single morning, which is wonderful. That is a great power case for the CPU.

43:26When all those agents have to schedule, monitor, do all the kind of checks and balances in terms of what needs to get done. All that work in terms of the tokenization, that's all CPU work. The Arm AGI CPU, because it's so power efficient, is tremendously well suited for that kind of application. So, yes, going forward, Meta is going to be a huge customer for the Arm AGI CPU. We have lots of other customers as well. Open AI, SK Telecom, Cloudflare, lots of customers for the product. But, yes, Agentec AI is going to be a great use case. Hey, Renee, it's David. I just want to take us to the current moment for a second in which certainly investors are trying to understand what that enormous change in Congress is going to mean for the future of data center build outs.

44:12I'm curious as to your thoughts, given conceivably it could impact your business over time. I mean, you're just talking about how important data center is going to be with you. I know it's early, but how are you seeing things unfold if, in fact, you're seeing them unfold any differently than you were on Monday? Yeah, thank you, David. Good to see you, as always. When we think about what that landscape looks like, and I'm going to talk about it with two hats here. One is my ARM CEO hat, and then also, obviously, I have a role inside SoftBank. And inside SoftBank, we're doing a lot of work inside data centers.

44:42We've got a lot of projects underway in states like Ohio with the Portsmouth Project and other areas. The shift in terms of some of the politics going on could have some short-term impact in terms of how data centers get built out across the U.S. I think in some states where it gets harder, other states may pick it up to make it easier. But I do believe strongly that if the U.S. hesitates in any way, shape, or form in terms of data center build-out, the rest of the world is ready and willing. There is just huge demand for this capacity. And I think globally, the U.S. really wants to be able to compete against China.

45:21China's not slowing down at all. So I think the West is definitely going to continue to invest. Whether that happens at the rate inside the U.S. that it was going to happen a week or so ago, we'll find out. But I'm not really worried about that in the long term. I do think, Renate, it's also, last time you were on, several times I've talked to you, my biggest worry was that you wouldn't get the supply you needed to be able to make the CPUs. It has eased, right? I mean, you've gotten more supply, which means the more supply you have, the more money you're making. I wouldn't say it's easy, but we're more confident about our supply situation.

46:00We have been working on this not for weeks, not even for months, but longer than that. Whether it's wafers, substrates, testers, memory, there's a lot of things required to bring these products to market. While, yes, it's arms first ship and there's a lot of work that we need to do, There's a lot of people inside Arm, including myself. We have worked in the chip industry. We know what it takes to get these products out. We have relationships across the supply base. We've been conservative in terms of talking about our ability to fulfill demand, which is why each time I come and talk to you, Jim, I increase the confidence level.

46:36But now our$2 billion target for the next fiscal year plus, we're very confident in that, which is what I communicated. and a$2 billion business coming from zero, we're super pleased. But supply hasn't gotten any easier. Let me be clear. I was hoping because then I'd be able to nail down exactly what you're going to do. Rene Haas is the CEO of Arm. Thank you for coming on. I know it's a good quarter. I just kind of the wrong day. Appreciate it. No worries. Thank you, Jim. Great to see you as always. Speaking of the wrong day, Jim, Sox is down 7%. AMD down 11%. Yeah. NDX has broken the 200-day.

47:13We haven't done that since April. No, and this is when NVIDIA should be stepping up on its buyback, complete its buyback, and authorize a new buyback. That's what you do. We need to see some confidence among the actual companies in the industry. Instead, I mean, it was great that Brene came on, but it's time for them to put the cash to work, to buy what is the cheapest thing they don't, not compute, but their stocks. So let's see what they do. You're going to cover some of this in your club meeting tomorrow. Yeah, tomorrow is going to be the real impact out of the next year of the election. I think there's a lot of short-term stuff.

47:46I'm going to go out longer. And Leslie Picker is going to interview me, and I am going to talk personally. And it's going to be difficult this time because of the loss of my nephew, who is my doppelganger for 22 years for the show. But I want to tell people how we do our things. And obviously, I think that my outlook for the next year, as per the election, is what you need. I don't like the yesterday was big, today is bad. And there are ways to be able to make money because of this election. And I'm going to win it now. Sounds like you're saying there's always a bull market somewhere? Oh, there's plenty of bull markets.

48:16I heard that somewhere once. Plenty of bull markets. And don't forget, not going to make it. That's your new term. NGMI. Yeah, NGMI. I thought I'd heard them all in the 15 years we've been together. I've been using NGMI since 9 o 'clock today. It's a new one. Not going to make it. This is time for NVIDIA to step up, finish their buyback, and reload. Yes. Jim, we'll see you tonight, if not before. As we said, Dow now down a quick 350. NDX down almost 4%. Wow. Getting a little spicy, and it's not even 10 a.m. Stay with us. You've been listening to the opening bell on CNBC's Squawk on the Street.

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