9AM HOUR: Stocks Hit Record Highs, CrowdStrike CEO on AI and Stock Surge, Skydance Era Begins 10/6/26

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0:39and global economic news, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and And subscribe at schwab.com slash market update podcast. Or find Schwab Market Update wherever you get your podcasts. Market moving insight and analysis. Join Jim Cramer, David Faber, and me, Carl Quintanilla, on the opening bell hour of CNBC's Squawk on the Street. Good Tuesday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer and David Faber at Post 9 of the New York Stock Exchange. Future is solid here as the Dow S &P ride this four-day win streak in these early days of October.

1:15Yields lower today. Got some Fed speak on deck. Notable relief in crude, WTI near 87, diesel futures well off of their highs as the White House directs Treasury to start deferring some diesel taxes. Our roadmap begins with a momentum-fueled rally with the NASDAQ on another all-time high, NVIDIA chasing that$6 trillion market cap. Plus, it is official. Paramount Skydance finally closes that acquisition of Warner Brothers Discovery. And the AI cybersecurity trade, here's a crowd strike. They've surged over the last six months. The company's founder and CEO, George Kurtz, he's going to join us right here at Post 9 in just a few moments.

1:53Let's begin with the markets. Nasdaq's poised to open at a fresh record high this morning. Jim, what's getting a lot of attention are the one-month gains on Arm, on AMD, on Intel, and NVIDIA, too. Yeah, look, this is a secular trend, and it's pretty obvious that it just keeps getting new legs. This Metamuse product is flying. I do think that the inclusion of CPUs to not just GPUs was part of this new wave that's very hard to stop. I mean, David, you know, when you have this kind of just big secular trend and not a lot of others, it's almost like there's a funnel. It's like people just say, you know what, I got something I can buy.

2:39And the numbers are going to go up versus so many companies right now where the numbers are being cut because of rates. It's just not a rate play. It's just an incredible trend, and it's a profitable trend. It would seem to be. It's funny. I don't know that Carl even knows this. By the way, nice suit today. How about my tie? You and I focused on the same chart this morning, which was this S &P excluding AI. Yes, yes. And so that goes exactly to the point you're making as well, and I think we did have it built. But there it is, Jim. I mean, that kind of tells a lot of the story right now that you're talking about.

3:15Yeah. Look, is it right that it's happening? Well, I don't know. In March of 23, you could say that there's just a few companies that did well. We've had in the 80s and 90s just a handful of companies that do well at a given time. These are gigantic companies. And by the way, when money comes in the S &P, all they do is grow, grow even more. But we'll hear from George, from George Kurtz, that this is a trend that takes in more than just 10 companies. but it doesn't take 500 companies. There's a lot of companies right now. I was doing a piece this weekend for the club. We're going through sector by sector and not being able to find a single stock in so many sectors.

3:55Like retail. I wanted to say, well, retail, I think this is your chance. Your chance for what? Your chance to get the head in to it? You want to go? No, I hear you. I mean, it's not just obviously a stock market story as we've discussed endlessly and will continue to. It's also a bond market story. All the money being raised by these companies. I would refer to a couple of headlines this morning. We've talked about that Broadcom chip deal,$60 billion. These numbers are just enormous, of course. That going to market in terms of the banks that have committed to it now starting to try to sell down some of those commitments.

4:27And on and on from there, you've got a 10-year hovering around 5.3 percent. And yet the cost of capital doesn't seem to be stopping the willingness of those to buy what they're selling when it comes to the debt to help fuel this continued expansion. I'm glad you pointed that out because it just doesn't seem that there is any level where people say, you know what, I don't care. I got to have it. And then there's other people who don't seem to care whether you think the credit. Is that good? It is making the cost of capital more expensive. and it does change the return parameters to some extent.

5:04You're at the fulcrum of it. I think Oracle and Skype, this is it. I mean, because Oracle is, I think, the weakest other than... No, we talked about Allison Risk yesterday. Yeah. FT with a good piece looking at CCC, borrowing costs, getting up to 17, Even Double B's was talking with Santoli before the show this morning, Jim. We don't want this because this is Global Crossing. We don't want Global Crossing. No, we don't. Global Crossing, a reference to, or we don't even want Quest. We give reference to in 2000 when we had a lot of bad paper, and people were saying, what are you worried about? Why are you worried about bad paper?

5:47And I remember thinking, wow, I mean, you could make your year own some of this stuff, but of course that's because you were reaching for yield. I mean, a lot of what you might be talking about, and I can't wait to hear what you say about the closing of that deal. That's a reaching for yield deal. Nine percent, 8.8. Oh, yeah, the bonds they've issued. I mean, the Paramount deal, to a certain extent, is a leveraged buyout. I mean, that's what it is. It's like a burning band. Remember that? I do. Ohio Mattress. They certainly hope that's not the case, Jim. And I don't expect in any way that they think that that would be the case.

6:20I don't even want to think that it could be the same. But more to the point, though, what does it mean, you know, for the Oracles, for the Corweeds, for the Nebiuses, for those that are not the absolute top when it comes to issuing credit, what is it? OK, here's my thinking, that if they're in trouble, then you buy Microsoft because Microsoft has the money. If they're in trouble, then you buy Google because Google has the money. If they're in trouble, you go buy Meta. I mean, it's just there you go again. There you go again, Faber. Look at this, Microsoft. Look at it. I mean, something is probably going to be on the bell of the ball.

6:57Why? Because they have enough money. I don't know. Because Amy Hood's a good CFO. I don't know what to say. It's been quite a year for that stock having been down, I think, at one point almost lost a quarter of its market value at the lows. The rats were leaving that ship in the 300s because we didn't think that they had a product. But we've seen a number of those kinds of rebounds. I mean, Meta, of course, another perfect example as well. Totally. And you pointed out the continued popularity of Muse seems to be propelling that stock. We were musing about comebacks of the year. Would you say Microsoft, CRM, Strategy?

7:35There's been a few. I mean, like right now, ServiceNow is in town, like Bill McDermott. I mean, there's like five guys saying, you know, it's a little better than I thought. $40 price target increase. I mean, there is just this still overhang of that unfortunate hedge fund situational where, like, there's a nice rebound in some of those. Look, Mark had a great—Mark Benef had a great quarter in Salesforce. It was a great quarter. Service now is having a good quarter. Paramount's got to know what hell they're going to do. But before—yeah, we're going to talk about the closing of that deal in a second.

8:09But to come to the broader point, I mean, with a—all right, the 10-year now is a bit below 5.3. Right. Yesterday, I think it hit 5.35 percent. And the Nasdaq hit an all-time high. Yeah, and that's not supposed to happen. But oil was down a point, you know, it was down a percent at one point. But you just said that's not supposed to happen. But it is happening. So what do you make of it? I said yesterday was a total anomaly day. That's what I led with. I said it's just a total anomaly. I cannot make sense of yesterday. That's not necessarily bad. It was just hard to make sense of it. I mean, more than half of the Russell 3000 has been cut by 20 percent.

8:42I can't look at those companies. I have my parameters. He won't look at them, Carl. He just won't even look. He just won't even look. He just won't pretend they're not there. I don't rubberneck. They don't exist. I don't rubberneck Russell. They don't exist. Well, I don't know. I mean. Well, you don't know? Well, Lamb Weston, what have they come up with? Crinkles? Yeah. Yeah? What could be more important than frozen French fries? Okay. Okay. So I had Danny Meyer last week. Believe it or not, frozen French fries hold up better than ones that are fresh cut. Yes. And it made me think they had time to buy Lamb Weston.

9:12He learned that the hard way, I guess. Initially at Shake Shack, they went with the fresh, and then they were, nope, it's got to be the frozen. You know, I cut the line at the Mets once. He told me I could cut the line. People were throwing stuff at me. As they should. Why would you think you have the right to cut any lines? Danny said it was okay. Oh, Danny said it was okay? He said it was okay. Yeah, it doesn't work like that. You're like a food nippo baby. Yeah. You know, like the problem with Shake Shack was that it was keeping people from seeing the game. The line was too long. I said, why is that a problem?

9:44It's the Mets. Yeah, this year it was not a problem at all. You want to just be on that line as long as possible. Look, I'm trying to, you know, they're interviewing me. I'm playing running back for the Eagles in Philadelphia. Speaking of the NFL, you know, that's going to be a key question, of course, as well, in terms of the cost for Paramount, which is now the owner of Warner Brothers Discovery. And, of course, they own CBS already. Now they own CNN as well and a stable of cable networks. And most importantly, HBO Max, the streaming service and the studio Warner Brothers itself. The deal has been completed.

10:21It now will trade under the symbol SKYD. Yeah, that's important. Because Sky was taken, I guess. Right? Yeah, I think Sky is some other company champion or something like that. It is the end of a long saga, one that we have, of course. been with you for every in and out and up and down. I was looking back through. You know, I like to go through the old files, guys, as you know. They get pretty hefty. This one got pretty hefty. I don't know how it compares to some of the others, but it's, you know, pretty. What do we call it? That's like three inches, right? But I will tell you, Carl, remember when I was saying that I thought he was going to kill it.

10:58But at 27 and a half, when the California court went against it, you said, look, this can be overturned. Don't worry about it. You said, don't worry about the deal. I did. You made the ARBs fortunes. How do you feel about that? Good. Good. Love making the ARBs fortunes. But I am looking back at some of my early notes. Look. Do you see that number? 22 to 24. Remember when Zaz said, man, I'm going to get seven? 70, 30. Look at that. 80, 20. That's good. That's over a year ago. 25 is 11 times. They got 31. They got 31. And that, of course, added a lot of debt, not to mention the rise in rates that we were just talking about, which have added interest costs.

11:39Six billion in synergies are needed. They've got to get to them fast. They've got to get to them fast. What are you doing? Taking a picture so I can tell people it's true. And, you know, it's not just about, as you know, putting together the two streaming services and having some very large number of subscribers. You've got to make them profitable subscribers. What don't we get from Netflix anymore? We don't get the numbers anymore, right? What we do get is, you know, we get the free cash flow numbers. If you go to Dave Zaslav, who really did a remarkable job, remember he said, listen, I can have this stock go up four times over to seven.

12:12What is there left to sell at Paramount Guy? And don't say CNN because I'm sold to you. No, I don't think they're in the selling mode, John. No, I don't think so. How can they pay that coupon? Through generating cash flow to do it. All right, they're going to be six and a half times levered. That's a very large number, and they've got to get that number down quickly. But that's the plan, because you can't sell a cable network at six and a half times EBITDA, so forget it. So you're always going to be upside down. What is it, about three times? What do you get for a cable network? Three? VSNT, my friend.

12:43What's that? What does it get? Yeah, about three and a half times. Thanks, David. Three and a half times.

12:54Can we see CrowdStrike? I need a pick-me-up. Okay. You get a pick-me-up. We'll keep our eye on media. We'll welcome SKYD here to the exchange as they transfer from the NASDAQ. Win-win. To Jim's point, when we come back, CrowdStrike's George Kurtz will join us at Post 9. We'll talk some AI and cybersecurity stocks at an all-time high. Here's what one OpenAI executive told the New York City Council yesterday during that hearing on AI safety.

13:26I also don't think it matters whether it's 1 % or 10 % or a 20 % chance that something catastrophic will go wrong. None of these levels is remotely acceptable. Meantime, take a look at the pre-market here at CrowdStrike Up 2. Stay with us. with the discovered cashback card it's payback time when you earn cash back on everyday purchases activate and earn five percent cash back at different categories each quarter on up to fifteen hundred dollars in purchases that's five percent cash back at different places each quarter like grocery stores on gas and at restaurants it pays to discover terms apply see discover.com slash five for details.

14:14Weren'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.

15:09member NYSE SIPC.

15:39and king. It's not the stand. It's an engineering problem, and it can be beaten. I'm talking about the agentic AI craziness that we hear from a couple of companies. Where are you on things, like the NVIDIA open agent safety platform, which made me feel pretty good, and I thought that it became an engineering problem with that. Well, we're obviously part of that. We work very closely with NVIDIA, and when we think about what an agent does. An agent is a program that actually runs and touches other files. It touches data files. It takes action. And what's important is the model providers are focused on trying to build guardrails around how the model actually thinks.

16:20But when you put it in production, you need to see what it actually does. You need to understand its actions. And one of the things that we focused on is building the flight recorder for what these agents are doing. You have to have traceability on what they're actually doing, and you have to tie that into the ability to enforce it, which is what we've collaborated on with NVIDIA. So this is a solvable problem. You just have to have the right partnership and technologies coming together to build safety for companies that are using these agents. Okay, so you've got people on one side who say it's a solvable problem, and then people on the other side who say we've got to slow things down because we have no idea what can happen.

16:57Why are the people in the latter camp so ascendant right now in the discourse of the general populace, not where you are right now, but the gen pop, particularly ahead of an election? Well, look, I think there's a lot of different motivations out there of who wants to do what and slow things down. I think when you look at AI in general, it's been a foundational technology. I mean, it's the greatest sea change that I've seen in my lifetime and certainly in my technology career. So you've got to be able to harness it. This isn't in racing, you don't slow things down. You want to have the greatest amount of safety so that you can go faster.

17:33And I think this is an important topic. Obviously, safety and security is important, but you've got to do it in the right way. And it doesn't mean that you have to basically slow everything down and then give our adversaries, like China and others, an advantage ahead of us. So I think this is why folks are coming together on one side versus the other saying it's solvable. We just have to do it in the right way, and we've got to do it without a massive amount of regulation. Well, then what is it? What's solvable? I want to try and understand this because you hear different things from different people.

18:01Bill Gates did an interview I listened to last week talking about we need a supervisory level across the world, given the open models, not just the closed models that we all talk about here. So what actually would work? Well, what actually works is let's start with the right standards, right? So if you look at what the organizations are focused on now is self-regulation, but things like the NIST standards, which come out of the U.S. government, right? They're working on updated ones for AI, which basically is focused on how do we build and train models and put guardrails around them. And then you have board oversight.

18:35You've got external auditors. Those are all great steps. Fantastic. But then when you put it in production, you have to see what it actually does. Think about a plane. You build a plane to certain standards. Then you put it into production. You fly it. And when something happens, you have to go back to the black box. What did it do? What really happened? So there's runtime control. You've also got a federal regulator called the FAA that's looking over your shoulder all the time. You do, but I think at the end of the day, we can wait for the next five years to get AI models out, or we can be competitive and have self-policing.

19:07Yeah, but we don't want the plane to crash, George. That's why you've got regulation around those planes, because you've got people involved in actually creating them. But from a plane manufacturer perspective, it takes years to get something certified. Do we want to wait five years to have a model certified? Well, yes, because in five years there are people who have been in the scrum who say that we could all be dead, which is a suboptimal situation, George. I think it's nonsense, Jim. We're not going to be dead in 2030 with a 10 percent chance. Well, then why say it? Why do you think people just say it because it's like they're novelists?

19:41I think people have their own motivations for why they want to say it. I know, but some of them are very close to the technology, George. I mean, they're working in the labs and the safety researchers are actually looking at alignment and they're saying, whoa, I don't like what I'm seeing. Well, I think they should consult the security guys more often. Because if you look at what an agent does, it's a program that runs just non-deterministically. And these are things that CrowdStrike has been focused on protecting what a human does for many, many years, right? An agent is superhuman, touches a lot of different files, but the technology is there.

20:10And I think what's important to remember is that the security industry now is moving from keeping all the bad guys out to enabling AI to be used safely. So we move from security to safety. And that's not just a bigger market. It's a different market. It's allowing the CEO to expand their business and run faster. And this is the opportunity that we see in front of us, not only for the security market, but for CrowdStrike. Meantime, you're announcing, I think it's your fourth startup accelerator with AWS and NVIDIA? Yes. So tell us about that. What do applicants do? Well, we believe in the ecosystem and working with smaller companies.

20:49There's lots of companies around the world that are incredible, and we want to be able to incubate them. We want to make sure they can leverage a platform like CrowdStrike, Falcon. We want to leverage technologies from a foundational level like NVIDIA. We want to leverage the hyperscalers, AWS. So we're putting them all together, and we're basically looking for the next gems, the next leaders. Who's the next potential CrowdStrike? And we want to make sure that they've got everything that they can to be successful. Well, George, today, this is Jen Stumman this weekend. With over 100 industry partners, we introduced NVIDIA, OpenAge, and Safety Platform.

21:24Anthropic was in, where was OpenAI? Does it matter that a company like OpenAI does not join this? Look, I think it's a good question for OpenAI. At the end of the day, they're all incented, and I think the market is going to basically determine who's got the greatest safety around their models, who's delivering the right enterprise features that they need, who's allowing data sovereignty to take place. There's a lot of concern about where all this data goes and what happens when it hits the model providers. And I think ultimately the market is going to determine that. If you've got safe models, you've got good models, people are going to pay for it.

22:00And I think that's what's important. Can I come back to our world for one second here, the financial world in general? I mean, what I hear certainly from leaders of financial services firms as well, both larger and smaller, is the main fear is a cyber hack of some kind. Never on them, but on one of their competitors and what that could do and the chaos that could unleash. How real is that threat? Well, I think from the standpoint of cyber hacks, it's a threat for everyone, right? And whether it's a model provider being hacked or whether it's someone getting hacked from them, obviously these are things that we have to account for and protect against.

22:38And that's why it's so important to understand what the agents are doing and what they're touching and where they're going. I mean, if you look at one of the hacks in Australia, it was 84 days before anybody knew what happened, right? Which is why what I talked about, this black box traceability is so important. If you're actually looking and you understand what the agent is doing, it's easy to tell what is happening. There's a lot of information, but you have to be able to sort through it. And these are things that we're focused on. Todd McKinnon at Okta says that there is an individual identifier of every single one of these.

23:08And you can find out where they are and you can stop them with you. Why is this not just considered an engineering issue? Why is it considered some sort of ethereal, religious death that we all face? I mean, what Todd's talking about is identity, which is incredibly important for his business and our business as well. And from an agent perspective, you want to give it the least amount of privileges to only do what it needs to do. The problem is, if we think about, just think about an employee. You would never onboard an employee, give them super user privileges, and never do a background check.

23:40That's what you do with an agent. You turn it on, you give it privileges, and you get let it run. Never, never? What happened with that flight, the flight you bought? I mean, if you want to use that analogy, you never give it a background check. Well, they didn't give it a background check. They didn't give that pilot a background check. And this is what we're dealing with. So, I mean, right now, what organizations are focused on is finding the rogue AI in their environments because it's everywhere. And two, how do they understand what it's actually doing and put guardrails at runtime? Okay. Remember, there's training the model.

24:11The model has expected behavior. But just like anything else, it may do something that's unexpected. It's non-deterministic. This is the problem. And that's the issue the labs are dealing with. When you put it in production, you have to look at what it's actually doing and determine the prompt that you put in, did it actually take the actions you thought it was going to take? And that's what we're focused on. That's why Krauss-Rank has seen such tailwinds because every company on the planet is saying, what is this thing doing? When something bad happens, do you think the financial services companies all right around us here in Wall Street are going to say, I don't know what happened?

24:48The model did something? Regulators are going to go, no way. What did it do? Show me the traceability of it. And that's why this flight reporter concept is so important. Okay. And congratulations this weekend, Le Mans. Paul Farmer. Team Le Mans. First, 0.60. You beat about six tenths of a second? We want six tenths of a second. Well played. That's George Kurtz, who will, with the coalition, at least make us feel that there is some hope, David. Good. There's hope. All right. Thank you very much, George. Good to see you. Opening bell in just a minute. With the Discovered Cashback Card, it's payback time when you earn cash back on everyday purchases.

25:26Activate and earn 5 % cash back at different categories each quarter on up to$1 ,500 in purchases. That's 5 % cash back at different places each quarter, like grocery stores, on gas, and at restaurants. It pays to discover. Terms apply. See discover.com slash 5 for details. 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.

26:08Seriously, make work less work with Gemini on Google Cloud. Check response, subscription required. Hey, Fidelity. What's it cost to invest with the Fidelity app? Start with as little as$1 with no account fees or trade commissions on U.S. stocks and ETFs. Hmm, that's music to my ears. I can only talk. Investing involves risk, including risk of loss. Zero account fees apply to retail brokerage accounts only. Zero dollar commission does not apply to customers designated by Fidelity as a professional equity trader. A limited number of ETFs are subject to a service fee of$100. See details at Fidelity.com slash commissions.

26:41Fidelity Brokerage Services, LLC, member NYSE SIPC. Hi, everybody. Let's get a mad dash in. Yeah, okay. David, of course, we know that Adam Jones could write about SpaceX from now until forever. He wrote a big report yesterday. It was very positive. Remember, Charles Dickens, that was all on a magazine. They put it together as a book. They're going to put all these together as a book. It's so clear. But this morning, Goldman Sachs. It's the only thing he covers. So he's got to do something on it, right? Yeah. All right. Anyway, go ahead. Goldman Sachs this morning puts out a piece. Premium, premium AI segment.

27:17Here's the thing I didn't think when they were starting. A lot of people were saying, look, they're using it. They bumped$220, going to$230. Price targeting. Wow. All right, we'll come back to that in a moment. Let's get the opening bell here at the big board on Wall Street. It's the Empire State Realty Trust celebrating the 48th annual Empire State Building Observation Deck run-up. Great event. At the Ag Deck in Times Square, a feed and animal space, a company of Neogen, Investor Day tomorrow. And it's T-Bow in Chicago. It's RCM Investments, a wealth management advisory firm. Jim, as 7810 this morning has been, And is this actually 77.50 has been resistance last couple of weeks?

28:00Well, look, when you have oil actually going the right way for the bulls, when you have interest rates going the right way for the bulls, then suddenly you can start looking at a little bit more of a... Interest rates were actually a little bit lower very early this morning. But you can start saying, all right, well, look, we got an upgrade of Procter & Gamble. All right, I'll buy some Procter. I mean, that doesn't sound like a bad idea. and then the stock is up$1.70. It'll keep going. So what people do, we'll say, all right, well, what else was good this morning? Oh, here's an Intel price increase.

28:33Let's buy Intel. And that's what's going on both with tech, but then you stray away from tech, and it's really hard unless there's something really special, and there was nothing this morning that was really special other than service now. Yeah. Avricor did up Procter to outperform 166. They did say the upcoming Q1 is probably the last of the risk to sales for the company. My problem with that is, well, they have a new CEO, but the execution has not been great there. And David, remind me, Unilever. OK, Unilever is doing this deal with McCormick. Yeah. They need money for that. Right. I forgot about that deal.

29:10They need money for that. Now, this is a you're talking about two companies I never thought in a million years would ever be like, I don't know. I don't know about that one. That was not a well-received deal. That's probably one of the most poorly perceived. No, the worst one was Solstice. That's been the worst one. Well, Solstice is no longer happening. Right. That was like, wow, that's a total do-over. That's no longer happening. That's a do-over. Yeah, that one they said, okay, we heard you. This one they didn't. They said, we're going to still do it. I know. And they need money. And I guess they can get money because McCormick is frankly a pretty steady business, right?

29:43Yes, it is. Jim. What? We had a very truncated mad dash. You mentioned a Goldman piece on SpaceX. It's right here. And I noticed the stock is up again, another almost 2%. It's approaching$175 a share. I believe it's made Elon Musk a trillionaire again, given his ownership stake in that name, not to mention Tesla shares, which also have been showing signs of life of late. What did Goldman say? OK, I think the most important part of Goldman and of all the positive things is that they put a lot of NVIDIA. They have a lot of compute and they're able to make between three and four billion dollars a month renting out the compute while they do a lot of other stuff that is pretty exciting.

30:29A lot of monetization. Obviously, the rockets are doing incredibly well. Starlink is doing well, but we know that that's not a huge part of it. But the hosting deals, the hosting deals pricing a floor of 20 billion gigawatt with upside. Right. It's the hosting deals. They are a hyperscaler, at least some would say, given how much compute capacity they have been able to put on. And obviously their Grok model does not need all of that. And so they've been able to rent it out at extraordinarily high rates. And then there's the focus on orbital data centers and how quickly or not that will actually come to fruition.

31:08I talked yesterday about what I was hearing in terms of some of the top engineers being moved at SpaceX to focus on that. You know, it is Musk, so he can move faster than many people think in some ways. Yet at the same time, we also know that he has a tendency to overpromise sometimes. Right. But there's Jensen talking again in that now fabled Ezra Klein interview. He says, yeah, now we have to put him in space. What's it like? Oh, my God. I mean, like it's science fiction. Monday, oh, yeah, we got to put him in space. It's solar. It's great. And then people are saying, man, there's more junk in space.

31:39How much junk can space handle? Well, there is a lot of space. It's a lot of space. Actually, Piper's got a nice chart looking at more than half of space-related companies are outperforming the S &P, RedWire, Global Star, Viasat. SpaceX hasn't been around for the full year, but there's a fair amount that have done pretty well. People like the theme. Some of them have not, Rocket Lab's not been that good, and a couple of them have underperformed. But I think that space has incredible attraction to people for a longer term view. And I really don't want to shut down anybody who thinks a longer term view on space.

32:15No, dude, the page one of the Times today is about putting nuclear reactors on the moon and how we're in a race with the Russians. And we're talking 2036. The race. The race. I mean, George Kirsch talked about the race, David. And I thought that you grimaced when you said race as if like race to what? Like, if we win, what happens? Is there a tape at the end? That is one of the many questions we have. Like, what does exactly a race condition mean? Are we always ahead? Do you always maintain some sort of months-long lead over your rivals? Or is it just an artificial construct to create urgency, like in the 60s?

32:51Race to the moon. Race to the age problem. Right. But we referenced that because it is analogous in terms of the development of nuclear weapons. And then we saw what happened. It was a race. But then, all right, now many nations have them. A lot of people make it sound like it's a race where one side gets a jet engine in World War II and the other side didn't have a jet engine. It almost sounds like that to these people. But that is not the case. It isn't, except with the expectation somehow that you're going to have to defend against it and therefore you want to have the better AI in case your adversary, in this case China, were to come at you in some way or try and take advantage of what might be their technological superiority.

33:31Superiority, no. That's Taylor Sheridan. The swarms, man. Whether it's Asian swarms or drone swarms, I don't like swarms. Remember when Ukraine won the war games because they knew how to do the$90 Amazon drones? Yeah, now we're blaming them for diesel prices because of what the president said yesterday about refinery limitations. Right, it does go back to the asymmetry of warfare. I know. Right, and what a Patriot missile costs and how much a drone costs and what we're spending to knock them out of the sky, yeah. But we do have our own people. We've got people working on the stuff. Andrew. We got people working on it.

34:05Top people. Top. Top. Top. Top. Top. I just. I. The Raiders. Yes. Raiders. Yeah. Hey, the Raiders. The president is Kansas City. That's Renee. President is going to visit Andrew today. And we look for some pictures on that. Leading the S &P, though, Jim, is Constellation Energy in this billion dollar deal with Alphabet. It's incredible. Not that long ago, we had given up on Vistra and constellation. They had become second-rate nuclear plants who have nuclear power. Instead, people were going for Oclo, and they were going for New Scale. Remember New Scale, David? I do. New Scale? I do. Well, I'll tell you, they're back with the companies that have the power.

34:46I saw this, and I said, what's going to happen to the kind of ancillary place, and whether there's really going to be a lot of nuclear power plants that really will be built, given the fact that we can't seem to get even the one in Ontario done up there yet. I hope so. But G. Vinova, because G. Vinova is the best at this. I always felt it was interesting that Bruce Flackway, in Westinghouse, he's out there buying the balloon. Ball manager. Yes. That's not new. I'm saying small-scale nuclear. They made it sound like it's a taker toy meets Lincoln Log. It's a little harder than that. Remember Southern?

35:24The Southern Company and what the overruns were from their nuclear expansion or trying to build that. Yes, I do. That balance sheet. I remember it was... I know, you've been somewhat dubious on the prospects of the timeline for the SMRs. So no one seems to build... I just have to interrupt everything for a moment. The small modular reactors. Matt Irp is speaking right now at Marvell. The stock is up a quick 20 bucks. Okay, right. That's Marvell. That's the CEO. They're having an investor day today. No, I just thought I should mention it. Okay. Do you have any context for us? Anything at all? Do you have any news?

35:56The addressable market turns out to be much bigger than people thought. Once again, Carl, same thing. It's the same thing. Marvell, they do a lot of fiber. They do the knockoffs. You can make kind of a knockoff video with Marvell, although Matt Murphy is close to Jensen. It's the same tight-knit world, Carl, where you either are part of Marvell or you're, I don't know, you're in a home builder. I mean, it's just so stark. Like, I knew that Matt was going to give a good talk. How did I know that? Because Matt is going around saying, look, business has been good. He's not been hiding it. George Kurtz right here.

36:36I mean, George Kurtz has more business. This interview probably cost him like$10 million. That's a new high on crowd. There's a new high on AMD today as Lisa Su is committing to more supply in 2017. Trillion dollar market value of AMD. Why not? She has CPU. she is. She has CPU. She's unbelievable. She's got it. Whatever it is. She's got what you need. David, where's she from? She's from Queens. That's why. That's why. Not everybody's from the Valley. Another great member of the Queens-born community. Why isn't there a TV show about what's happening? Queens. You know, kind of like Cupertino? Yeah.

37:17Queens. There was Queens Boulevard. That was part of Entourage, if you guys remember. That's right. I want to come back. We raced through the Constellation deal because the stock is up. It's worth giving a little more time to. I agree. It's a 20-year PPA, power-providing agreement with Google, 890 megawatts of incremental power. It's coming from 11 different units, so Illinois, Pennsylvania, New Jersey. And it's about$4.3 billion of investment. And it includes, they say, demand response provisions. So that would allow Google to curtail non-critical load during periods of grid stress. And it goes on from there.

37:59Now, they did also execute a separate 15-year agreement covering 2.7 gigawatts of existing PGM nuclear generation. And again, just another example of the hyperscalers. They're pairing the data center growth with the need for power, power, power. Yeah, there's no power, no compute. I mean, it really is. It's just you turn electricity into, yeah. Yeah. Into cognition. That's what it really is. Look, Constellation is a terrific company. Believe it or not, I think you can still go higher. It's down 112 from where it was not that long ago. And when people are a little more exuberant about the traditional versus, say, the Oclos, which, if you look at Oclos.

38:42No, don't look at Oclos. It's another one you can't look at. You can't look at it. You don't like it. You don't want to look at it. Why don't you look at New Scale? I mean, you see how much people lost in the asset. They had the guts to have the symbol of a small modular nuclear reactor. You know, give me a break. I do think, Carl, that when we look at nuclear power, we realize we close so many of them, and yet we try to reopen them. But, you know, when you decommission them, the idea is you never reopen. You can't reopen, basically. So I think that that's such an expensive way. But the way to just start from the bottom up has not really been so great.

39:16Got some action in consumer discretionary today. Some of the airlines, the cruise lines, a little higher, Jim, as we got crewed back into the mid-'80s almost. Yeah, but we had price target cuts on all the airlines today, but I guess people just feel any tick down on oil makes it so people want to be in. They want to buy something other than Marvell and AMD and Intel. Remember how people think, David. They can't just say, you know, I can't come in every single day and buy the same stocks. But the people who come in every single day and buy the same stocks are crushing it. So what do you do? Hey, today's the day I'm going to diversify and we'll pick up some, uh, a good chemical company.

39:53What do you got for me? Well, so that's just momentum then. It's a momentum market. No, it's secular, secular growth. If you have secular growth, you're buying it. It's not momentum. Another way of saying momentum. No, it's not momentum. It isn't? No, because look at microns more. It's pathetic. No, but I think what David's saying is that the market has never been more reliant on basically three names, Apple, Microsoft, NVIDIA. Well, I think that there are, I think it's a little broad. I mean, I think that Meta's doing well. Google, what David did mention on this Google deal, is what, the 150 % growth that Thomas Curran's giving them for Google Cloud?

40:34Maybe 160 % growth. Alphabet stock has underperformed the S &P. Amazon stock has underperformed the S &P. Well, that's because of Muse. Even with its great moves, Microsoft has still slightly underperformed the S &P. NVIDIA, though, is up now almost 30 % on the year. And the man who was to our right, Falstrike, there's a reason why. George offers a product, Falcon, that does seem to feel, when you merge that with what McKinnon's got going at Octa, I have some degree of thinking that the illness will be contained at the facility. What? The stand. The stand. Stephen King. He loves the show. He loves the show.

41:12He does? I think so. How do you know? What are you making that up? I found on Twitter. He seems to think. Remember, he used the... In fairy tale, he called it Kramer Hardware. He spelled it with a C. What do you think? Too egomaniacal? Yes, definitely.

41:31Meantime, we've got a deal involving Andurl and the U.S. Navy. Eamon Javers has some details on that. Morning, Eamon. Well, to you, this is a deal about shipbuilding, and it's going to be in Baltimore, Maryland. The federal government is going to announce a$2.9 billion contract with Andurl of an overall$6.6 billion commitment. Some of the money is going to be put in by Andurl as well to create a new shipbuilding facility in Baltimore, Maryland. This shipbuilding facility is going to be focused on high-end components for Virginia-class attack submarines. The idea here is that they can expand the production base and expand employment in Baltimore as well.

42:09Thousands of jobs are contemplated under this new contract arrangement for this new shipbuilding facility. Of course, Anduril noted, as you look at the images on the screen, noted for its autonomous submarines. Not clear exactly what these advanced components are going to be for the Virginia-class submarines that are being built in Maryland under this contract. but clearly Enduro on the cutting edge of the technology underwater that the U.S. military is using. And we'll see the president this afternoon, guys, in Baltimore, Maryland, making the official announcement at Sparrow's Point later on today.

42:43So that's something to watch for. Back to you. The largest, that was by far the largest steel mill in the world during the great days when Bethlehem Steel ruled the world. And almost every, what, six out of the top ten paid executives in 1964 were Bethlehem Steel. Yeah, we should also point out Palmer Luckey, co-founder, I think, is now playing a role in the Pentagon's review of warfare looking decades out, as the defense secretary announced the other day. I think that, well, look, I think they're real. You think Andrew's real? So does their investor base, that's for sure. They have no doubt about that.

43:22Well, you earlier contested the idea that we knew what we were doing, I felt, in drone warfare. When did I do that? But you looked askance. No, I was pointing about, I was making the point about the asymmetry of those who are able to make these weapons with such a low cost versus those who are knocking them out of the sky at a very high cost. It doesn't mean that we aren't also focused on drones and moving quickly, which it would seem we have to. And to your point, Ukraine and the battlefield, unfortunately, which has gone on for so many years in Russia, is a perfect example of the success that you can have.

43:54though Ukraine is also suffering a lot right now under Russian attack, given all the drones and other things that they're bringing to bear in terms of their endless attacks on that country. Right now, maybe better drones. Well, they had the Shahed drones from Iran, and they improved on them. Now, in the meantime, Marvell is raising its outlook again. Okay. $20 billion in total company revenues, representing 67 % year-over-year growth. Again, Carl, secular growth. Do you want General Mills, or do you want Marvell tech? And then you can say, David, I know it's his total momentum, but he did just raise how much he thought he was going to make.

44:30And by the way, Matt Murphy will be on our show tomorrow. Who will? Matt Murphy's the CEO. Oh, look at that. Good booking, Jim. Well done. That picture's from about 1988. I mean, honestly. Well, that's all right. I like to show pictures of us also that are dated at this point. But Matt has a good story. Remember, this is, just so we know the context. It was true that Jensen Wong said this is the next trillion-dollar company. Not AMD, by the way. So this one, it's$260 billion. So I think people say, well, wait a second. There's a lot of Disney,$260 billion. Jensen. I mean, by the way, just to end on trillion-dollar companies, we should point out the reporting from Bloomberg.

45:14I've gone around this story some time back about OpenAI raising new money. They had sort of, at the point that I was reporting on it, said we hadn't made a decision, but apparently now going to raise as much as$30 billion. Unclear who the core name would be. As much as a$10 billion. It's UAE's return. And some BlackRock ones. At a$1.4 trillion market value. Okay, so why don't you go buy Kraft Heinz? Or valuation, I should say. Not market. I'll buy Marvell. I'm going to give him Kraft Heinz. And Procter, too? Yeah, I'll throw in Procter. And as a bonus, I'm going to give you Church and Dwight. Wait, what am I giving you?

45:51I'm giving you all the slow-growth stuff so I can buy the high-growth. Oh, the momentum stocks. Moment. Gotta go. They literally have momentum baskets. Oh, yeah, I know they do have that. Everyone wants a basket because they've got to make so much money, and they're having bad quarters. Let's go make a basket. A basket weaving. As we're talking, first all-time high for the S &P since August 18th. As we get to 78-17 here, Jim. taking out the summer highs. Very narrow, as David would say. Extremely narrow. It is narrow. Six companies. Meantime, watch bonds. We'll get a bunch of Fed speak today. Williams, Bowman, Schmidt, Logan.

46:34ADP was pretty good. Five straight weeks of week-on-week acceleration, although the trade deficit, a new record if you strip out Liberation Day. Stay with us. Potatoes are $3. Lamb Wesson. There you go, David. I sell you Lamb Wesson. You give me Marvell. All right, there it is. Sky D. I guess they'll go with they won't go with skid, right? Sky D. Yeah. There it is. It's down. You know, what can we tell you? Remember, there's the warrants at 12. You've got the investors money coming in. Obviously, it's all closed at 12. But that doesn't mean the stock price is going to be 12 yet. But that's the plan, isn't it?

47:12And a lot more than that, of course, as they start to execute day one on delivering on so many of the $6 billion plus in synergies that they're focused on to make sure they can not just support the debt load they've taken on to take the company private, but prosper. We've got Stop Trading with Jim coming up. Let's get to Jim and Stop Trading. Going into a new day. Skyworks Solutions finally closed the deal with Corvo. That's going to be the – Rob will welcome, I guess, as the semiconductor that you want to buy that is most connected to cell phones. It's been a bad area. I think the combination of the two is going to be a pretty good company.

47:45and I'd say you can buy Skyworks Solutions right here. Busy week ahead here, Jim, as we get set for earnings to begin, Pepsi, Delta, and the rest. Oh, and Pepsi's got to come through. The stocks wouldn't hit. I think Delta's going to have a good quarter, but we may have to talk about Starlink there, David. And then data center CapEx to reach$3 trillion, according to Matt Murphy from Marvell. $3 trillion, and the question is, where is it going to come from? There you go. Wow, what a show. $3 trillion in a year. It's going to reach roughly$3 trillion? Less than three and a half years from now. $3 trillion in a year will be spent.

48:21That's called a TAM, David. Pull a dresser mark. Addressable. Yeah. Meaning it could be addressed. That's not yet. That's$3 trillion a year. What do you want me to do? I'm reading. One year. We have to go to break. All-time highs here. 78-23 as we put the first record on the S &P since the middle of the summer. You've been listening to the opening bell on CNBC's Squawk on the Street.

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