9AM HOUR: Nvidia's Record Run, Sam Altman Makes the Rounds, Yields Keep Rising 10/5/26

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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. Market insight and analysis. You're listening to the opening bell of CNBC's Squawk on the Street. Good Monday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer. David Faber's back at Post 9 of the New York Stock Exchange.

1:08Coming off Friday's all-time highs for NASDAQ, NVIDIA, the XLK. Yields still in focus, though, the 10-year pin to 5.3. Got a nice batch of M &A and some sell-side upgrades today. Brent 102, AAA gasoline does back off to about 4.36 a gallon. Our roadmap begins with NVIDIA and that Record Watch poised for some more gains after hitting its first all-time high since May on these renewed AI optimism fueling investor demand. Plus, Sam Altman says AI's benefits justify accepting some risks. He said, quote, some bad things could happen. And Treasury Secretary Besson backing off his bond market bluster, now saying the House does not always win.

1:50Let's begin with NVIDIA's record run and a potential$6 trillion valuation now. Jensen Wang's net worth surpassing$200 billion. That's according to Forbes. Jim, we talked last week about pushing through like a tush push through 230. Well, I like that. I mean, I think kind of the things that happened were there was an Ezra Klein interview that I actually think is somewhat seminal. The people who like Jensen are saying, you know, he's got it under control. He's the adult in the room. And they've got, I think that they've got a lot of the worries, the existential worries that he's cured. Yeah, there are some people who say, you know what, he's become so close to Trump.

2:24It's really amazing. But what has mattered, I think, is that we finally don't care about China. We're so thrilled about all the orders that he has, Jensen has, that we stop thinking without China what's going to happen. David, when you're away, there's the tug of war, tug of war, tug of war. But NVIDIA breaking out is a seminal situation because$6 trillion in the end, pretty major. Yeah, I mean, you hit two different things there, which I think is interesting. One is obviously the operation of the business, talking about how successful it's been and whether even they get any China orders, how much that matters.

2:56The other thing you just said is that the existential crisis has been cured. No, the people who like him are saying the existential crisis. I see, because I listened to that same interview and I found some of his answers less than compelling. OK, so that's where I wanted to go for a second, because this was the first time I felt there were people on both sides. I have very informed people who said to me, your friend, Jensen, enough with that. As soon as you hear that, you know, he's being very glib. He's not really addressing it. He's got this idea that we're fine. What seemed to matter to Wall Street, that carried weight on Wall Street.

3:37I don't know if it carries weight, say, into the elections, where I think that the data center is a disaster. There's two separate. There really are two separate arguments being had. Thank you. It's better than I say it. One is about NVIDIA and its ability to continue to execute on the opportunity and around whether really it is circular financing or how much it's at risk and how much its business is going to grow. Obviously, you know, you have great insight into that. Then the other is the one that we talk about at this desk as well, which is this raging debate, Carl, about what the advance of this technology is going to mean for society.

4:14And Wong spent a lot of this interview referring to, which was a couple of weeks ago now, talking about that. Bill Gates obviously also then responding in a very different way. On Ezra Klein as well. On the same. Good for Ezra. Good for Ezra. About this idea that Jensen raised simply saying liability is enough to curb bad behavior. Right. And I'm paraphrasing here. No, that's right. And that companies will do the right thing and should not release products that are unsafe. And I wonder where I've been living in. He and I are similar ages, but we've been living in different worlds, I guess. Yeah, that's true.

4:47It's funny. I have some friends who are in the insurance business, and they're literally saying, okay, so will Chubb do it? Do you really want Liberty Mutual? Someone said that. Do you really want Liberty Mutual? I said, look, I am not close enough to the issue. Companies are always thinking about the greater good and not necessarily their shareholders. Right, Jim? Yeah, we've missed the cynicism. We've been going at this level. We forgot to go in the scrum. Welcome back. Thank you. 40 years of covering business. Maybe it made me—I wasn't born cynical. No. No, and I wasn't born yesterday. I think that this is about the midterm elections.

5:21I think that this has become maybe the most hated force in America. Well, they're a month away. Do you think it will have a real impact on the ability to build data centers in this country? They are. And or should we just, I mean, SpaceX stock took off again. I mean, maybe orbital data centers are coming sooner than we think. Well, I think that they will. I think that that's part of the theme of Adam Jonas. No, I'm just saying, Carl, look, the midterm election, something that surprises me is that the staunch nature of how whoever can identify with anti-data centers does boost their numbers. But I do think that in the end, there'll be a couple states that don't seem to mind.

5:59But I think that it's going to be a radical defeat for the data center because they forgot. You do. Tom McCormick, these people were so tone deaf. And I don't think that she would disagree with this. They forgot. They ran over the country. And now the country has actual politicians who can run them. Yeah. We're going to talk about Sam Altman here in a moment. But he did say over the weekend to Politico, I think, don't think spending money on politics is what's going to make people feel better about it. The industry needs to figure out a way to address what the actual concerns are. And right now, a lot of people in the industry are being quite tone deaf.

6:35Well, I'll tell you who's not being tone deaf, the people who listen to Microsoft. I think, and this is something that my friend Ben Wright just said this morning, but we had a really terrific outfit called 100X on Friday, which does polling. He's been a partner at Goldman. He does a great job, Rob Pace. The sudden advance of co-pilot, I think, and this is over Gemini and over Chachupiti, although it's still close, in his polling, indicates that what could be happening here is a belief that Dario blew it up. That Dario basically said some things that made it so he sounded erratic. Maybe you have to go with the parent.

7:17And the parent, David, is always going to be Microsoft. And this could be the reason why this stock is breaking out. It's copiling. Interesting. Was that an upgrade that we got? Yeah, it was, right? Which is surprising because he really hated it. I went with it the whole way. No, he's been quite negative on it for some time. I think that's fair to say. And I think that you're seeing maybe some belief at the corporate level that perhaps you go with Copilot because maybe you don't want to go with people who are saying, listen, this could end the world. Because in the boardroom, it's like, why are you going with the end of the world?

7:49Or we've done a lot of business with Microsoft. Are they end of the world? No. No, they're adults. And you've got to be careful. because as much as I think that there could be existential, if you're in the boardroom, it's not existential. It's like, hey, maybe we go back to Microsoft. They weren't that bad. I see their name on the NFL. They've got something going there. Let's use that. It is what corporate America is like. Dario is crossing over from the point of view of what corporate America wants. All right. I want to explore what you're talking about again. What do you mean? When you have...

8:20By the way, Dario, of course, Dario Moday, you're looking at him there. He runs Anthropoc. We're still waiting for an S1 there. By the way, given the move in rates, I don't know anything. But I do wonder when we're going to, you know, is bringing an IPO now. So we're obviously not coming, but interesting moment to try, given what's going on with rates. Not to mention we haven't even talked about Europe yet and oil still hanging in there. But the 10-year, what, 5-2? I think the oil, the Saudi's cutting price is not being acknowledged enough. But we'll get to that. What I thought was interesting, twofold.

8:53First, Gary, look, I had the good fortune to interview him, and I think he's absolutely right to be worried about these issues, because the issues are very big about what could happen. But he did something that I've seen people have when you meet the president. He agreed with the president. He wholeheartedly agreed with the president. Do you wholeheartedly agree with the president in front of the president and wholeheartedly disagree with the president behind his back? I've seen this happen. I saw it happen with Brad Karp, who ran Paul Weiss. He went down there for Paul Weiss. He really didn't make any compromise.

9:26Then maybe he didn't make a compromise. Just so you know Paul Weiss sides with the president. The president's a powerful person. When you're standing next to him and you disagree with him and then suddenly you agree with him? What is that? Is that somebody I want to be with even though I like him? So what? Okay. No, not okay on this one. That was an amazing turn about by a person. Yeah, I mean, could he have been more pro-Trump? I mean, just put the damn MAGA hat on when they come to doing that stuff. MAGA me. When you are about to become a public company and you have responsibilities to your shareholders, you are in a very difficult position if you disagree, because this administration certainly has shown a willingness to extract whatever it needs to to accomplish what it sees as its goal, right?

10:25How about, Mr. President, I don't know if it's super intelligence. As a matter of fact, it could be AI and it does have issues. How about saying something that's consistent with what you've been saying? You know, when I think about people in that position who disagreed with the president, I can only—Jay Powell, when they were standing next to each other in hard hats, remember that? About how much it costs and the overruns. There was a man of great integrity. There was a man who was willing to put it all along. Darren Rhodes on Venezuela at first. On Venezuela. Macron on the loans to Ukraine not being loans from the European Union.

10:55Sure. And then the Chamber of Commerce on tariffs. I mean, that does happen. It's rare. But it's rare. And corporate leaders in particular are hard-pressed to find many who truly disagreed publicly. Publicly. You don't know what happened privately. By the way, he hasn't denied that he ever wrote those blogs, those papers. No. No, but I thought he was part of the pro-president view of things. Listen, don't you think that the debate that we're discussing here is also breaking down on political, as so much does now in this country from a political perspective? On the one side, you've got move fast, as quickly as possible, no regulation or very little, although we do now have an AI czar in Jay Clayton.

11:38And the other is, whoa, whoa, whoa, you know, regulate, regulate, regulate. You know, I just have a guy who just says, look, it could be the end of the world. And next thing I know, he's next to the president saying, look, Mr. President, this is super. I'm just saying that if you're going to do that, it's a little difficult to believe that that's not erratic behavior. And I don't want to be with erratic behavior. I want to be with Satya. I want to be with Amy Hood. I don't even care if co-pilot isn't as good. I know I'm going to cover my ass. Well, Melius, his report is literally the adults are in charge, to your point.

12:14On all of this, Altman does continue to make the rounds today when it comes to talking AI safety, the OpenAI CEO, discussing the issue in a cover story with Vanity Fair. This is what he had to say to Politico about what people should accept when it comes to AI. We have always been a big believer that this technology has to be democratized and put in people's hands. I think one of the biggest differences between us and some of the stricter, let's say, AI safety people is we believe that the world should accept some bad things happening for the benefits of this technology and people having the agency.

12:49So, like, you know, I disagree, but I understand the perspective of people who are like, this technology is going to get so powerful and it's so dangerous that a single lab in San Francisco should have it and make sure nothing bad happens and kind of figure out how to dole out the benefits. I think that is a completely unacceptable tradeoff from a perspective of liberty and human agency and people self-determining the future. So that's making the rounds this morning. It goes back to the same debate we've just been having in this idea of painting anthropic as seeking regulatory capture to protect their moat, essentially.

13:25You heard him. He didn't name them. We know there's no love lost between Dario and Sam. They once worked together, of course. Again, to remind people of history, open AI was begun with safety as being the key. Elon Musk was the original investor because this technology was seen as potentially one day be so powerful that it needed to be protected. We know what open AI is now. Today, obviously, they're talking a lot about safety of late. And Anthropic was created by people who left open AI. Right. Dario and his wife and Karnofsky, a few others who left to create it because they didn't feel like safety was being taken seriously enough at OpenAI.

14:04Now, what. And that just continues today, this debate. Well, I mean, if you were listening to Sam Altman, could you not say that you were listening to people debating atomic energy? Yes. But right. The Manhattan Project was in the hands of the U.S. government. Right. The Making of the Atomic Bomb, I think, is Dario's favorite book. By the way, one of my favorites, too. Although I really didn't understand most of the physics. I'm sure a lot of people do. It's still a really good read. I like the book Downfall. Oh, yeah? Yeah, because at the end it says, the next one's on your head. President Truman's to the man who ran Japan at the time.

14:49This is existential for a lot of people. My father was in the Sixth Army. He was ready. I just think that you have the situation where you have people on the one side saying, look, this is the end of the world. And the other one saying, hey, listen, we'll give you a good deal. This is a pretty good product that we have. Yes. I mean, I'm thinking of just last few weeks, Accenture, certainly some moves in biofarmogen. Yeah, I don't want to hear about the emperor. I don't want to hear about what happened in World War II. What I want to hear about is, hey, you know what? We have a pretty good deal using, we're using that Microsoft product.

15:27Let's maybe switch over to that because I don't really want to know about, like, whether it was right to do the sandbox. I don't want the sandbox. Come on. You're talking about board members. These board members in America, typical board member in America, just wants to be able to check a box, okay? Because they have a lot of things to do. They have a lot of money. They got to pick up$200 ,000 from four different boards. Correct. Okay. So it's like, oh, Microsoft. Yeah, I haven't heard them say. Anybody hear them say it's the end of the world? But they're offering us 30 % off. No, Satya has not said it's the end of the world.

16:07No. No. But I think you probably get a good deal. Good deal on what? Copilot. Oh, yeah. Sure. Why not? Good deal on the end of the world. They're not discounting the end of the world. That's full price. Welcome back. Let's go hard. Regardless of whether it's coming, let's just, I mean, if it's the end of the world or not. It only ends once. Consumer spending may be holding up for that very reason. And that's really where we're going. Take a look at the pre-market here. We'll get to some of these upgrades today on DraftKings, Microsoft, as we said, Harley, Wells, Estee Lauder. Future's having a tough time getting back to flat.

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17:21With higher predictability and greater access to credit, everybody wins. Get started at VantageScore.com. Weren't agents supposed to take things off your plate? Building another to handle the others is a bit much. Don't make more work out of work. Gemini is the one agent that knows all parts of your business and actually gets stuff done. You give it a project, close your laptop, and when you come back, the job's finished. No matter your industry or role, your agent has the skills to help every team stay in their flow. Seriously, make work less work with Gemini on Google Cloud. Check response, subscription required.

17:56This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Schwab 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. Got some M &A on the tape today. There's a look at C.H. Robinson buying RxO. Cash and stock deal valued at$5.8 billion.

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19:11Download the app. T's and C's apply. Weren't agents supposed to take things off your plate? Building another to handle the others is a bit much. Don't make more work out of work. Gemini is the one agent that knows all parts of your business and actually gets stuff done. You give it a project, close your laptop, and when you come back, the job's finished. No matter your industry or role, your agent has the skills to help every team stay in their flow. Seriously, make work less work with Gemini on Google Cloud. Check response, subscription required. This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab.

19:46Schwab 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. All right, let's get to a mad dash. We have eight minutes before we get started with trading here at the New York Stock Exchange. First opening bell of the week. We're going to be focused a lot on Europe and the French bonds suddenly blowing out.

20:27Difference between German borrowing costs and French borrowing costs. But let's come back to the financial sector here and start with Wells Fargo. Now, we're about to have bank earnings. And typically, we would not get anything of any substance ahead of the numbers because other than China general, like, look, this group is soggy. But Morgan Stanley fixed its neck out this morning for a stock to be owned for the trust. It's not been good lately, but it's been good long term. Wells Fargo, upgrade to overweight, top pick. And this is the net interest margin stabilization. It had been very criticized in the previous quarter.

20:59But, David, I need your help on this. This talks about how that really Wells is finally starting to make it an investment bank. I know Charlie Sharp, the CEO, did talk about that on the call. He felt that it was not given the significance that it was deserving. Have you seen Charlie be able to recruit some top people? Yes, without a doubt. They have recruited a number of people. It's been a number of years now. Yes. But it takes a while to have it all coalesced. That's what I didn't know. It takes a while. Obviously, using your balance sheet as one of the biggest banks is a helpful way to get yourself in an advisory position as well.

21:35and then having it all come together where you're actually one of the top M &A advisors and capital markets and things like that, you know, it can take a while. But they have done that hiring, and I think they have, they would argue, seen real progress. Right. Now, Charlie has told me, Jim, we can't focus necessarily on both at the same time. But this piece says it's finally happening. He's worried about NIM, that interest margin, so he's going to help you there. And he's bringing in the right people, and they're going to begin to win some deals. Now, he has moved up on the cap tables. But the reason why this is important is Charlie Sharpe.

22:07That's not bad, 5.71%. Charlie Sharpe historically has been a winner. And the multiple, 11 times earnings, means he's the loser. And I don't think that's fair. I think he's a very good CEO. But once, you know, they had the asset cap lifted, right? Yes, they did. But it didn't really do what we thought it would in terms of real positive for the stock. Exactly. And that's where a lot of us got it wrong. I thought that the cap removed would make it so they were more aggressive. Charlie just has, look, I'm just doing this thing the way it should be. The cap removed, we have more capital. Actually kind of made it so that they could buy back a lot more stock.

22:43But I only point it out because it's an odd call to do ahead of the quarter. Yeah. All right. Well, there it is, looking up as much as 2 % this morning. We'll keep an eye on the broader financials as well. We've got an opening about five minutes from now. And don't forget, you can catch us anytime, anywhere. Listen to and follow these. Squawk on the Street, Opening Bell Podcast. I can't control the bond market. What I can do is try to get people to slow down and think, because my job in the financial markets for 30 years was to be outside the door, ear to the door, when policy was being made, sometimes with myself over the transom, and think, like, what policymakers gonna do, should do, can do.

23:24And now that I'm in the room, and what I meant by I am the house, is that I have superior information. Like, people could ask, obviously, the Japanese would have liked for us to intervene in the yen at some point, any time since January. Why did we do it then? People should sit back and ask themselves that. Treasury Secretary Besson to Axios over the weekend, saying he cannot control the Treasury market, but arguing that yields would come back down over time. They certainly haven't, though, since he initially said, bet against me. No, they're bad again today, which means we're going to have to see if they turn like they did on Friday.

24:05I actually didn't mind this. I thought it was good that he admitted he was wrong. Now, did he say, David, you know, I shouldn't have said it? No, that does take a bit of that. It's such a leap of faith to say, you know what, I got this completely wrong. But at least what at least he owned up the fact that it was such a mistake. Yeah. Meanwhile, here we are at 5.303 % on the 10-year. There were those, I think, who come on our air and said 5.25 is the market, which the market starts to really suffer. What do you think? Well, look, I think housing is now going to be at a 50-year low return. For starters, we're building houses a little less than we have.

24:46We've got 50 % of the people. It's an important industry. I don't want to pronounce it dead, but it's awful. We'll talk about what it might mean less building for rental CPI in a few minutes. Let's get the opening bell here. At the big board on Wall Street, it's Estee Lauder. In honor of Breast Cancer Awareness Month. At the NASDAQ in Times Square. At Seacoast Banking Circle, Florida. Community Bank celebrating its centennial. And at Seabowl in Chicago. Universidad Panamericana. a university based in Mexico, Jim, as we start the week above 7 ,700, which has sort of been a mental line in the sand.

25:26I'll tell you, it's NASDAQ versus bonds, maybe. I think that what we saw on Friday was a little seminal. We had the interest rates actually opened higher, and then interest rates went lower, and the stock market is still with that. And the interest rates came back a little bit. The market stayed strong. David, it is very difficult to keep your eye on the market when your eyes need to be on oil and on interest rates, because they're much more powerful right now. Right. Obviously, we've got a strengthening dollar as well, in part because of rates, what you've seen there, and concern about French borrowing costs right now.

26:04It's not Greece at all in any way, but it's obviously far larger as well in terms of its bond market. Well, and there's this undercurrent in France is, did capitalism work? I mean, the questioning of capitalism is something that I find very daunting. Although in Brazil, they're thinking, hey, the other way didn't work, so maybe there's just a lot in play. But, you know, Carl, when I hear the tenure fail, an auction fail, I want to see an actual auction fail. You do? Because I don't want to hear that they're bad. That wouldn't be a good thing. No, no, I meant that this is more, it's not as dire as people think.

26:44If David mentioned Greece, you don't even get that good a return yet on France. I mean, like, oh, baby horses are really bad. Oh, I mean, of course, looking at these charts, it shows rates have been moving up worldwide. It's not just the U.S. phenomenon. Right. So all I'm saying is that we've seen it on France, I think in some ways, because I think there's a question about socialism. And that socialism is in the air here, too. and I think a lot of us once again thought that the issue would be Democrat versus Republican, did not be extreme Republican versus extreme Democrat and whether they agree with each other.

27:18Well, maybe it's because, as the journal writes today, the top one-tenth of one percent of the wealthiest among us own 15 percent of national wealth. Well, you hear it endlessly when you get away from the world that we're in, where you just hear the term oligarch as if it's not funny anymore. It's just, well, let's be a polygarth. It's an issue. Yes. Well, yes, yes. It's an issue. The concentration of wealth and power in the hands of very few. And back to our continued debate about AI, that also conceivably will be some think putting a great deal of power in the hands of a handful of people. Right.

28:08And it's not the way our country is... Given it's not going to be controlled by the government. Well, I mean, when you look at history broadly, that's not been... We've not been an oligarchal society. We've been much more aware the CEOs didn't make that much more say than the people who weren't lying. Only 300 times or so. I mean, look, I think if you go back to Reagan. They're not worth 300 times. Just go back to the Reagan presidency. Yes. Reagan was very much against what's happened. Was he? Yes, he was. Elizabeth Warren once read me the beginning of a speech, and I said, oh, man, you're really out there.

28:45No, I was actually reading the president of Reagan's speech. Jim, we mentioned all the upgrades today. You talked about Wells. But EL, while they're here, Hogg, we mentioned Milius. What's going on here? Hog has a year. They're making a comeback. They've got a new product coming, Estee Lauder. They got management in that changed. And there was a lot of room, so it's a good brand. Bill Lauder, how many years have we seen him do the right thing on breast cancer? He's just been a stalwart. I can't tell you, David, how many there are people out there doing quiet things who are not pounding the table, quietly trying to cure this horrible disease, and he's probably at the forefront, I think.

29:24Yeah. Guys, we mentioned there was some deal making. There's a smaller deal we're going to have a CEO on later from C.H. Robinson. But there was also a large software deal that the French company, Back to Schneider did, for PTC software. We're talking$23 billion. Purchase price represented over 42 % in terms of a premium to where the stock closed. and they're going to issue between 5 and 6 billion euros worth of new equity, finance it as well for another 16, 17 billion of new debt. It's interesting in the sense of it is being seen as sort of industrial AI. They're very involved in the data center side of things in terms of producing for power production and things of that nature.

30:13Large industrial company, of course. But now they're moving into sort of design, engineering, manufacturing, And it apparently is the data, not just the software itself, but the data that is part of this acquisition that they see as very important. And they're talking about a big revenue synergy number, I think as much as$800 million in revenue synergies. You can see what it's doing. They're paying, I think, 23 times EBITDA. That's not insignificant multiple. By translation, it could have a positive impact on different names in our market as well. That's so true. And I wonder, you know, I guess maybe Autodesk or some of these kinds of names.

30:53I haven't even taken a look, but there is that translation at least going on, given from their market to ours as well. Well, when I was out at Dreamforce, Mark Benioff, the CEO, often wants me to spend some time with companies. And I try to spend enough time with—it's hard. There's so many. He's always urged me to spend time with Schneider. He said, why? Well, because we tend to be very ethnocentric about who really does a lot of AI, physical or otherwise. And he felt that Schneider was at the lead. PTC's been out there for a long time. Boston-based company, 1985, with 30 ,000 customers. I know.

31:32So the other side of the argument would be, oh, yeah, Claude's going to eat their business. And so now they want to sell. And these guys are buying. They obviously view it very differently, clearly, and see real value here in terms of data and context and what they can do in terms of integrating that business. When you were away, I started thinking, oh, my God, we're coming to the quarter, and there's no one talking M &A. And is it just frozen because of the war? And here's a French company, and we know France under par, who just takes the step. Can we have any hope at all on some surge of M &A?

32:11Sure, we can have hope. I can't tell you it's going to happen. Bankers are always trained when they're talking to reporters, even ones they've known for a very long time, to sort of say the pipeline's looking good. The lawyers tend to be a little more straightforward. But I think things are fairly active. Whether they get to the finish line, Jim, is always the key question. And rates may have an impact, certainly, on deals that require a great deal of debt. You know, cross-border is always difficult. Any trust is weird right now. You just don't know. But usually it's not seen as a huge gating issue.

32:46And we're going to talk to Jonathan in the next hour about all that environment. Jonathan Cantor, former head of, obviously, DOJ. How much did I? I'm going to take it. I mean, but I've been, the other thing is IPOs. I mean, we're transfixed about the idea of Anthropic. But where's the$12 billion,$15 billion? Where's just the ones where I just would have expected at this moment we get? And how much of it is that companies can stay private longer? Well, there are. I mean, Anthropic is, listen, at a value that could approach$2 trillion. It'll be the largest IPO of all, I mean, as big or bigger than SpaceX.

33:29And then there are names like Nscale. Have you heard of this? You know, that people are wondering, is it going to come or not? Or when? There's Meta for whatever reason. Well, Meta has, that's Muse and that's the, look, that's enterprise over consumer. Meta's doing quite a good job. And the success of Muse, which has powered that stock now to a better performance than Alphabet, Amazon, or Microsoft on the year. Well, because Muse is a very powerful product, and I think a lot of people feel that it helps you become more productive. Now, Carl, there's been so many sources that just say, you know, individuals, sure, they want to be more productive.

34:09They want the coffee maker on. Individual small companies, they need it because they're just like deluge, and they don't know how to do the things that they need to. And Muse apparently is very good at telling you your pitfalls. And I really like that. It's one of the things I think that is so powerful that the small businesses are using it for. Yeah, there's been some anecdotal, I guess you'd call them reviews, of people who have been using it. And then now some of their service has been interrupted. I don't know whether that's about websites getting smart to Muse or blocking it. But interesting.

34:42A couple other tidbits. One is that there's some analysis that maybe Snapdragon powers some of the Muse hardware, which would be good for Qualcomm. Yes, and Qualcomm did win a big contract with China. I've got to give them that. But I will say that having used Muse, having a business that uses Muse, it's a way to go. I sure wish I had it when I was running the restaurant because there were so many things that I did not know could go wrong. And there was no one to talk to. Right. So now you'd have somebody to talk to. Well, no, no, I got rid of the restaurant. You did. So I have no one to talk to.

35:18That made us sad. particularly because the bar actually made me even more sense we had really good times at that bar oh 10 years it was fantastic i got to know i could sit in the high tap watch my wife i got watch my wife have to serve it was kind of like can't you buy another bar you can't because when you own a liquor company like i know there are not allowed to own remember after prohibition you can't own a bar you can't get rid of mescal the mescal company you're going to keep that It's now tequila, David. Wait, what happened? Profit. Thanks to, can we talk about some of the tools you're using to find new distribution markets, for example?

35:55We use, it's really interesting to try to figure out what your social media should be by using a professional, which is using Muse. Yeah. You hire someone and they don't know as much as Muse. Yeah, of course. And also they want benefits. Next thing you know, you're paying for dinner with a guy. But you got Muse. I'm never buying dinner from Muse ever. No. And Muse is working 24-7. It's funny you mention that, guys, because we did build a chart, thanks to the Daily Shot, of non-farm payrolls since GPT was released. Have you seen versions of this chart? Do we drag it over to the D-block? Just remarkable.

36:39Because we talk about, oh, is there labor disruption within AI? Yes. There's the dot. That's when chat was released. And this is what the IT sector of NFP has done since. And yet you would hear the argument that more software engineers are being hired. I hear that. As we had all been talking about the death knell for being a computer scientist. I don't know. I mean, again, there are very different views on this, Carl. I'm sure Bill Gates has a apocalyptic view, I think it's fair to say, on what's going to happen to employment when cognition is no longer a scarce resource. Were you not intrigued by when Jensen Wang talked about the long division?

37:21But Jensen Wang, as many others, believes that more jobs will be created without a doubt. So many people will be empowered to do things they otherwise could not do. How about Jonas saying he doesn't really drive anymore? It's all FSD for him. But Jonas is doing some very quality work, and I thought that was a significant piece. By the way, look at SpaceX stock, which is now across the$162 threshold. Withstanding all of that selling that we've talked about, basically at this point you can ignore when the lockups expire. They don't seem to have a particularly long impact on the stock short term.

37:54The money they're making from Colossus by renting that out. Yes, Colossus, the success of Starship, the release of some V3 satellites, what that's going to mean for Starlink, and then orbital data centers. You know, the reports that he's starting to move. I'm hearing Elon's starting to move some of his best engineers more on the orbital data center side. Can't come soon enough, right? Get them off of Earth. I continue to think that younger people should be buying this stuff. Yeah, Adam's got a note out today, reiterating his overweight 300, but he has this EV to EBIT adjusted for growth. And he argues that if you use this metric, it would, even at their 300 target, would be in line with Amazon, below Alphabet, and below Meta.

38:42Look, anyone, of course, who, and I use Starlink, it's rather remarkable. That's not where the money is. The money is the foresight that Musk had to go to Elon, to go to Jensen, and say, I want everything that I can get. Give me a million, and I'm going to, and it worked. Remember, Elon was once critical of Jensen, saying he was charging too much. I know. And then Anthropoc came along with a need for compute, is paying an enormous number, as I think Alphabet also is a customer there as well. I mean, talking to One Bull this morning,$100 billion of 28 EBITDAs, what they're working with for SpaceX is a possibility, so you can do the math.

39:20Not outrageous. 21 times 28, something like that. Right? That's pretty good. Right? Yeah, I'm doing the math right now. Look, I think it's, I still want it to be more, I just don't want to give people's expectations too much. Wow. Guys, I did want to end what I got on my list with Peace Sky, which is going to close the deal to acquire Warner Brothers Discovery. New company going to be called Skydance. You can see the stock is down. Remember, all the equity is coming in. In fact, it's in. My understanding is they're going to wire the money later today, make sure it's all there so they can close tomorrow.

39:54Obviously, you don't want any hiccups at all. Huge bond deal. Perhaps we haven't talked about it enough. The largest corporate bond deal of all time, helping to finance this. They had to do it at a higher price, I'm sure, than they wanted to, given the move up in yields we've talked about. Going to cost them another as much as$400 million a year in interest. They did save that ticking fee, though, almost entirely, given where they're going to close it. It hasn't ticked very much because of the agreement they did reach with the state attorneys generals. And now it's all about, can you deliver on more than$6 billion in savings?

40:28Essentially, you need to. And I would expect we're going to start to hear from leadership about their goals specifically and then telling their shareholder base how they're going to hit those goals. Remember, Peace Guy shareholders now do get those warrants at 12. They're good for 10 years. They're good until 30. So that's an important component that they got as well. And the equity coming in, which is$47 billion, I reported this,$25 billion from Saudis, other investors, and then$22 from Larry Ellison and Redbird. That gets struck at the lower end here, around$9. Were you surprised to see Anon Kraiz move over from Intel?

41:08Yes. Big hire. He will be co-CEO, Anon Kraiz, of the overall company. Ellison will be chairman and CEO. But a lot of what I'm talking about in terms of delivering on the execution on those numbers, that they have to, that's the key here, will fall to him. Yeah, well, I mean, I remember when he came to me with Patel and said, look, the balance sheet makes it so it can't be sustained. I'll fix the balance sheet and then get things going. And he did as far as he can. And I know that a lot of people feel ultimately jumped ship at a bad time. I think the company should have gone private. They were doing so well.

41:42I do worry, David, when if you remember when David Zaslav took over from the predecessor company and the stock was at seven, eight, he said, I have to sell a number of things. Is everything been sold that that could still raise money? I don't know. There are other things. I mean, the problem continues to be you've got to sell things at a multiple to EBITDA that would be above what your leverage ratio is. And that's not easy, certainly given the state of where cable networks are currently valued. And so I think the focus really is trying to re-energize overall. Obviously, streaming is a key part of this, as you'd expect, and putting together Paramount Plus and HBO Max is going to be a very important component of this overall.

42:26And then they are committed to delivering as many as 30 films a year. The history of those who have bought Warner Brothers, so to speak, and delivering value for their shareholders, Carl, I think it's fair to say it's not particularly good history. That's checkered. Yeah, a little checkered. Also some examination over the weekend of the cost to ensure their credit against default beginning to move in tandem. The Oracle side and the Peace Guy side. Bloomberg kind of framed it as managing your Ellison risk overall. Well, I do think that every time I think, well, hold it, maybe we'll quickly break out.

43:01I say to myself, what is the exposure, the Larry Ellison exposure, knowing that Larry Ellison is not someone to trifle with? No, he is not. Oracle shares are up nicely today. $440 billion market value, well down from what was it at its height, a$700 billion company. That's true. You notice Palantir creeping back up. You doubled down on that$250. Yes, I did. I think that Palantir is doing some remarkable things with companies that I follow, and they don't talk. I know that Alex is a boisterous fellow boy. Internally, when you bring them in, they don't say a thing. and they've been having some success in some of the companies that I deal with.

43:41Interesting open here. We're split between the Dow S &P. Tech is definitely helping out, along with a little bit of consumer discretionary. Watch bonds as well today. It's going to be kind of a light week for data. We'll get ISM services, FOMC minutes through the course of the week, U-Mish on Friday, but of course next week is the big week with CPI and the Fed. Stay with us. Got some bargain hunting on names that are well off of their all-time highs. This B of A ups DraftKings to buy 27. Citi goes to buy hog 33. Texas Roadhouse. Evercore goes to outperform 200. They've been hurt by the cause of state.

44:18Boy, it's loved. It's loved by patients. Yeah. They say Evercore, their bull case of 300 by 2029. You've got to have more steer. We need more steer, David. We'll get Stop Trading with Jim in a minute. Let's get to Jim and Stop Trading. The drug stocks have been weak here, really. Nothing to write home about. But Lorraine came out with this piece today, Bristol Myers, Moving the Sidelines by the Hold. I think the most significant part is that one of the key drugs that they had, Copenfi, which is an antipsychotic, may not be adopted much in the Alzheimer's disease psychosis. That's one of the reasons why I initially liked this stock, was precisely because of that indication.

44:59Sure, it's an inexpensive stock. But frankly, unless you have a pipeline that's kind of like a lily, you're going to be left behind. And I think Bristol now is going to be very much left behind. I don't think you can buy it. Interesting. At one point, wasn't Merck the best Dow name of the year for like five minutes? It was. And I do think that, look, I think the melanoma vaccine is something that we get some more paper on by the, I think it's October 23rd, to see exactly how big that market is. but I think it's going to be far larger market. People who have it and then don't want recurrence would pay anything for it.

45:36And I'm a genuine believer in having, unfortunately, my daughter had melanoma. She's beaten it. But you know what? When you've beaten it, it's with quotation marks. And this is why this vaccine would be very important. Merck's still number three for the year behind Cat and Cisco. Jim, it's good to have us all back together. Yes, together, guys. I like the back. I would say the fourth, but when you say yes or just look at me, that's not the fourth. I like the back and then the fourth. Just not. Oh, my. Good to have you back, Chief. Yeah, good to be here. We'll see you tonight, Jim. You chief me.

46:15I had to chief you. I mean, like, I was just at the Eagles yesterday. I'm chiefing you. Sorry about that. That was a very unfortunate situation because I now, I don't want to have a second divorce. The first one was very costly. The first one was very costly. Okay? Just putting it on the record there. Okay. Sharing that with you and nobody else. Mad Money, 6 p.m. Eastern Time. You've been listening to the opening hour of 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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