Risk Play: Sports Betting, Prediction Markets, & Super Bowl LX 2/5/26

0:00Introducing the Total Solutions Advantage only from Comcast Business. It's the largest, fastest, fiber-powered network for small business. Gig speeds with equipment and security included and a five-year price lock. No one does business like Comcast Business. Switch today. Get started for$60 a month for 12 months when you add an advanced solution to a qualifying internet package. Limited time offer. Restrictions apply. New customers only. Requires 300 megabits per second internet, security edge, and additional qualifying service. One-year agreement, paperless billing, and auto pay with bank account required.

0:29Taxes and fees extra. Your data lives everywhere. On-prem, in the cloud, across apps. Bring it all together with EverPure, the platform that acts like a living system, delivering the latest in data performance, security, and innovation without ever slowing you down. Sophisticated enough to anticipate your ever-changing data needs, yet simple enough to feel like second nature. Tame your data chaos with EverPure and make storage and data management the simplest part of your business. Visit everpuredata.com to learn more. Bring in show music, please. This is Squawk Pod, and I'm CNBC producer Cameron Costa.

1:06On today's episode, Alphabet blows past expectations in its latest quarter, but AI spending might be weighing on profits. City analyst Ron Josie explains. I think you should be investing in growth, and I think you should be investing to gain as much possible share as you can. The potential confirmation of Kevin Warsh as Federal Reserve chair is in focus on Wall Street and in Washington. Banking Committee Senator Bernie Moreno joins us. I hope that we can put all this political nonsense aside and let's get Kevin Warsh confirmed. Because most importantly, it is a huge upgrade from what we have right now running the Fed.

1:47And it is Super Bowl weekend. end, Americans are expected to move well over a billion and a half dollars for bets, wagers, and trades relating to the big game. Author Jonathan Cohen says sportsbooks and prediction markets can be a slippery slope for society, especially for young men. What I think we should do is make it all but impossible for someone who's gambling like me,$10,$12 here and there, for that to be the start of a dangerous journey, for that to be a gateway drug into a more serious gambling problem. Those stories plus Amazon's shadow of honor and more fallout from the Epstein files.

2:27It's Thursday, February 5th, 2026, and SquawkPod begins right now. Stand Becky by in three, two, one, cue it please. Good morning, everybody. Welcome to Squawk Box right here on CNBC. We are live from the Nasdaq market site in Times Square. I'm Becky Quick, along with Joe Kernan and Andrew Ross Sorkin. And this morning we are looking at a mixed picture for the U.S. equities. Dow futures are off by about 86 points, but the Dow was actually higher yesterday. It is less than half a percent from its all time high. If you're watching what's happening with the S &P 500, it's flat right now. Yesterday, the Dow was down for five out of six sessions, but it was the Nasdaq that really bore the front of things yesterday.

3:11It was down significantly. In fact, The NASDAQ 100 is now almost 5 % from an all-time high. NASDAQ is, indicated, a little higher this morning. You can see here, though, off by about 1.5 % yesterday for the week today, down by 2.4%. And we haven't seen volatility like this since President Trump was unveiling his tariff plans last April. Two straight declines of 1 % back-to-back has been since April. But then I looked at a one-year, like that looks like, ooh. And then I looked at a one-year chart of the NASDAQ, and it's just like that. And then at the very end, you just see this tiny drop. There are already people who are talking about, is this the time for value stocks versus growth stocks again?

3:56If you look at value stocks versus growth stocks all the way back to 2008, it's a set of lines that have not crossed since that point. But there are people who are looking at this and saying, well, maybe this is a time. I don't want to get premature kind of speculation about some of these things, but it has been a few days and some concerns here about technology and about software companies in particular. It's like anything that just went stratospheric, which includes you're going to get the Bitcoin in a second. I mean, AI, tech, and crypto. I don't, people go on other places. I don't know. Does everyone decide at once?

4:32I don't know. They all use the same AI program. to tell them what to trade? Yeah. Meantime, shares of Google Pay and Alphabet trading lower the company, beating profit and revenue expectations, but investors are focusing on spending plans. The tech giant says capital expenditures will range from$175 billion to$185 billion. That's just this year. Top end of that forecast would be more than double what was its 2025 CapEx, which people thought was remarkable unto itself. joining us right now to break all this down is Ron Josie's Citi senior internet analyst. Alphabet is one of his top picks across the internet sector.

5:13And we'll start with whether it still is, Ron. It remains one of our top picks. And you're right. I think the big surprise out of the quarter, not last night, was it wasn't the 17 percent acceleration growth in search. It wasn't the 48 percent growth in cloud. And it wasn't the demand or at least called the backlog of cloud computing, but the guidance on APEX, which, you know, Edgy, you said it right, sort of unfathomable a few years ago, and here we are,$180 billion at the midpoint. But it remains our topic, to your question, specifically because of the results that they're seeing as a direct relation or result from their investments in AI.

5:51And seeing how Gemini and also TPUs and the agent side of the platform are all delivering better overall results, You know, I think you should be investing in growth and I think you should be investing to gain as much possible share as you can. I don't know if it's an inflection point in terms of just the psychology of the market. I don't know if there's a realization that the CapEx spending all of a sudden turns these technology companies, which were, by the way, capital light businesses. Right, which is why they did so well for so long. and all of a sudden they may turn into, I don't want to say utilities, but industrials in their own way, given the amount of spending that's going to be involved, given the data centers, given if the data centers are in space even, the amount of money you're going to spend to have all of that happen.

6:35So that is, I think, the question that's sort of, you know. Does the growth potential. Circling right now. This better be good. AI better be good. Justify the. Gosh, darn it, if it is really good, no one will ever have a job again. That's just really. But that's the other piece of it. If it's that dark. So win-win. This is what I've always said. Even in success, you could have failure. Because if it's so good. Tell me about it. And then no one has the job. No one has any money to pay for it. I know. And the machines won't need us. So that's secondary. I'm not even. Yeah, that's down the road a little.

7:08That's a second derivative issue. Where we're trying to go with this is. We were talking about how this quarter appears. Not just about Google, but everybody. The first real inflection point. where for some reason, the psychology of the investment community is no longer necessarily rewarding spending. People aren't saying, oh, my goodness, there's this great opportunity ahead. They say, oh, my goodness, maybe these capitalized businesses are going to be like utilities. It's amazing how quickly things have turned. Google was the AI loser, so to speak, in 22, 23, 24. Here we are, 25. They have a real product.

7:43And now in 26, that product is going to start changing how we act and move online. And so how we use internet, how we use websites, how we use apps are going to change completely. And Google is in the pilot seat right now. All right. Thanks so much. It's nice to see you. Thanks, Andrew. My question. OpenAI's models could help power Amazon's Alexa assistant and other internal projects at the company. A source tells CNBC that the collaboration between the two companies is being discussed in tandem with Amazon's ongoing talks to invest up to$50 billion in OpenAI. Separately on Amazon, the company announcing that CEO Andy Jassy will tap its vice president of worldwide selling partner services as a new technical advisor next month.

8:28That role is often referred to inside Amazon as the CEO's shadow advisor. Employees in that role typically go on to assume greater responsibilities at the company. In the early 2000s, in fact, Andy Jassy served as Jeff Bezos' shadow. Amazon is set to report fourth quarter earnings after the bell tonight. You'd have to have a pretty good hope that you'd get to the top spot to agree to be called someone's shadow for a while, I would think. It's kind of cool. Everybody wants to be a shadow. No, you don't. Sounds like a total blackie. You want to be the shadow Fed chairman? No, I don't want to be the shadow of Peter Pan.

9:07Peter Pan, I have a problem with that. That's a pretty good description. Coming up, you know, I don't ever want to grow up. None of us have to grow up. I don't want to ever grow up. I can't. I don't want to grow up. Age doesn't do it. I was hoping it would be like this. Instant maturity? You could cross a Rubicon somewhere, but it never, it doesn't come with it. President Trump offering some details on his decision to choose former Fed Governor Kevin Warsh to replace Jay Powell as Federal Reserve Chair. Here's the president in an interview with NBC News. Does your new Fed pick understand that you want him to lower interest rates?

9:44I think he does, but I think he wants to anyway. I mean, if he came in and said, I want to raise him. If he said that, he wouldn't have gotten the job. He would not have gotten the job, no. The president said he thinks the Fed is an independent body, in his words, in theory. But he suggested that the central bank should take his advice because he knows the economy better than most people, he said. He said he didn't have much doubt that interest rates would soon be lowered. In the meantime, Fed Governor Lisa Cook signaling that she won't back another interest rate cut until she sees progress on price pressures.

10:15Cook telling the Economic Club of Miami that she's more worried about inflation than a weakening labor market. She said, quote, we put a lot of easing into the pipeline at the end of last year. And I think that given where the labor market is, where inflation is, this is the right time to sit back and wait to see what happens. Cook voted with the majority in last week's 10 to 2 Fed decision to keep interest rates steady. And so one of Kevin Warsh's first moves will have to be to persuade her otherwise. It's a hard job. The dual mandate is almost impossible, you know, to constantly. That's why Alan Greenspan always said that he focused on inflation.

10:52But if it's 40, 45, 55 balance one way or the other where the risks are and you're actually making policy basis, you don't have the resolution to do it effectively. It's like a crapshoot or a seat of the pants. But Greenspan, as you know, his theory was if you took care of inflation, the rest would take care of it. A lot, I think, Warsh is more like that. Yeah, I think so, too. The chairman of a major corporate law firm, Paul Weiss, resigning his post amid fallout over emails between him and notorious sex offender Jeffrey Epstein. The emails were among millions of Epstein-related documents released last week by the Justice Department.

11:31Now, earlier this week, Paul Weiss said its chairman, Brad Karp, had attended two group dinners in New York and had what it called a small number of social interactions by email with Epstein, which the firm said Karp regretted. Now, in a statement, Karp said, recent reporting has created a distraction and has placed a focus on me that is not in the best interest of the firm. He will, though, continue to work at Paul Weiss, though not in that chairman role. And here's the interesting part. This is like the takeover is now fully complete here. Scott Barche, who had been the chair of the firm's corporate department, was appointed chairman.

12:04And the reason this is interesting is Scott Barche had worked at Cravath for a very long time, was brought over on a lateral move, effectively. I don't know what we call it. In the legal world, they call it lateral. He's probably the biggest rainmaker at the firm. But he was the lawyer at the firm who really pushed for the settlement with the Trump administration at the very beginning of the administration's term. And Brad Karp ultimately went along with it. And they were the first law firm to agree to this, which then led to all the other law firms to agree with it. There were a number of lawyers who left Paul Weiss because of that decision.

12:50And so the whole thing is that it's fascinating just to see sort of the drama playing out inside this firm, Paul Weiss. We don't talk about Paul Weiss so much because they're a private law firm that you can't buy or sell the stock, but they have a huge influence in terms of just the way corporate America even approaches the world in so many ways. So that didn't hold him back from getting to where he is now, I guess, settling with Trump. When push comes to shove, this is probably a bigger deal. Epstein. For Brad Karp, this is a bigger deal, yes. I like the way it was phrased, though. What was it?

13:29It was a small number of social interactions by email. It's just crazy that in this day and age that there's millions of pages about anybody, A, and D, that you just put in a name. It's all just emails. That's what I mean. Email never goes away. You guys showed me how to, you know, I was clueless over the weekend. I didn't check to see who was in there. Everybody else was, like, searching on the search engine. Yeah, exactly. Look for my name, look for my spouse's names, look for everybody, all my friends, and then look for everybody I don't like. I mean, I think I'd know if I met the sleazebag.

14:07But it's weird. But no one knew who it was. You were in that picture where you just happened to be standing on the same place. I told you, I was at the Victoria's Secret thing, and he was standing on, it was 1995. and in the documentary on him, you can see me in the background. No one knew who he was in 1995. I didn't know who he was in 2000. Victoria's Secret was Les Wexner. Les Wexner was Epstein's initial, I don't know if you want to call him a martyr. Thank God we all dodged that bullet. Because any of us could, before the grace of God, could have been in our business in some way. Yeah, no, I happily never knew him.

14:43Which I can't believe because you are Mr. I didn't, I never knew the man. But you were a little bit young when he was really in his prime. I was like, that could have been, I could have met him at that Victoria's Secret thing. And hey, thank God. Cheese will be next. Still to come on Squawk Pod, Republican Banking Committee Senator Bernie Moreno. He's eager for a change at the Fed, and he'll be pushing to confirm President Trump's pick for chair. At the end of the day, Kevin Warsh is highly qualified, highly respected. Everybody wants him in there. I hope that we can put all this political nonsense aside.

15:24We'll be right back.

15:30Bitcoin is often talked about as an investment, but it was built to be used. With Cash App, you can actually do that. Send Bitcoin instantly, pay at local Square businesses that accept it, or move it to your own wallet whenever you want. It works more like real money and less like something locked in an account. For a limited time, new customers can get$10 added to their balance. Just use code CASHAPP10 when you sign up. And don't forget this part. Send at least$5 to a friend in the first two weeks. Terms apply. Cash App is a financial services platform, not a bank. Banking services provided by Cash App's bank partners.

16:15Bitcoin services provided by Block, Inc. brand. For additional information, see the Bitcoin disclosures at cash.app slash legal slash podcast. Never bet against American grit or American energy. Through innovation, Venture Global is not only building some of the largest energy facilities in the world right here in the United States. but delivering American energy at a fraction of the cost and a fraction of the time. So while others are busy talking, we're busy building. That's Venture Global. That's unstoppable energy.

16:55It's smart to always have a few financial goals. And a really smart one you can set? Earning cash back on what you buy every day. And with Discover, you can. Get this. Discover automatically matches all the cash back you've earned at the end of your first year. Seriously, all of it. And we trust you to make smart decisions. After all, you listen to this show. See terms at discover.com slash credit card.

17:24Welcome back to Squawk Pod, where we're talking Fed, GOP politics, and more. Here's Joe Kernan. Ohio Republican Senator Bernie Moreno, he serves on the banking committee. And we'll just, We can cut to the chase, Senator. It's good to see you. I'm from Cincinnati. I was happy for you, I'll tell you. Not a big fan of who your opponent was. I'm honest about a lot of things. I've gotten to an age where a lot of times, Senator, I just, you know, take it for what it's worth. But congrats on the election. I don't think, have you been on the show yet? Is this your first time? You haven't invited me, Joe, even though we have that Ohio connection.

18:00I can't believe that. I can't believe that. Thanks for being here. But what I'm going to get to now is a little bit sticky. So it just looks like the president was mad about too late Powell, as he calls him, not lowering rates. And then we get to this investigation. Do you think a lot of times where there's smoke, there's fire? In this case, do you honestly believe that there was some criminality that need to be looked into in terms of Chair Powell's testimony? Well, from my perspective, that's up to the Department of Justice. What I will tell you is he's absolutely guilty of being terrible at his job.

18:32He's absolutely guilty of being an egomaniac, and he's absolutely guilty of driving record inflation that crushed working Americans for four years. So that's unequivocal. This guy has run the Fed losing hundreds of billions of dollars a year. He's made the Fed very political, which shouldn't be the case. So he's just guilty of being inept. In terms of he's criminally guilty, that's not up to me. Right. But, Senator, we hear the president every day talk about how great the country is doing right now in terms of GDP and inflation is down. And so are all these good things that are happening in spite of the Fed or you don't give the Fed any credit for orchestrating the any of the economic success we've had the last couple of years?

19:20Well, you said the last couple of years, so absolutely not. I mean, again, they drove inflation up. They were way too late on reacting to the fiscal stimulus that was out of control. The Democrats were there. President Trump is the one that secured our border, has deported over 2 million people that came into this country illegally. He's driven GDP to record growth. In fact, on the campaign trail, if President Trump ever said we'd have 4 % or 5 % GDP growth, your show would mock him. But that's the reality. Record, record numbers. We did an incredible working families tax cut bill, which prevented a$4 trillion tax increase.

19:54You know, my Democrat colleagues like to say that tariffs are taxes. You know what's taxes? Taxes. And we prevented that tax increase. We gave relief to working Americans. They're going to start seeing it now in their paychecks. And 2026 will be a phenomenal year. A good piece in actually the Journal of Day looking at tariffs. There are people can argue both sides of the whole tariff issue, Senator, about whether it's a tax or not. But the people that hate the tariffs the most are the people that want higher taxes anyway. So I don't even really understand. Exactly. I don't understand. It's like you'd love to raise taxes.

20:26Now you're finally calling it a tax, but you don't like that either. Do you think Tillis will be able to stop Kevin Warsh from being confirmed in a normal time frame? Or do you think there's some way around it that it gets out of committee and you get to a full vote? Well, I don't think any one senator should impede an investigation one way or the other. I think if there's a concern, then the concern should be followed through. Chairman Scott, who's a good friend, a great chairman of the Banking Committee, the guy I got rid of was a terrible chairman of the Banking Committee, has said he doesn't think there was intent.

21:05That's certainly a factor in there. Look, at the end of the day, Kevin Warsh is highly qualified, highly respected. Everybody wants him in there. I hope that we can put all this political nonsense aside and let's get Kevin Warsh confirmed, because most importantly, it is a huge upgrade from what we have right now running the Fed. That's for sure. Senators, are you recommending that the case continue? Are you recommending that the case end? That's what I'm trying to understand, given that there are questions. I think there's fair questions to be asked just about why the case was brought to begin with.

21:40Well, my position here is pretty straightforward. As a United States senator, I should not weigh in in criminal investigations one way or the other. What I will say, like I said, clear to me, he's guilty of being incompetent. In terms of whether that was a crime, that's not up to the Senate to decide one way or the other. And by the way, that has nothing to do with whether Kevin Walsh is qualified and should be immediately confirmed. I agree with that. Do you believe that the President of the United States should weigh in on criminal investigations? This goes to the question about the independence of the Department of Justice, actually.

22:12Well, look, the president has opinions. Every president has opinions. Politicians have multiple opinions, even at the same time, in many cases. But you just said that you don't have opinions. That has nothing to do with that. You just said that as a senator, you shouldn't have an opinion. I'm just asking this question. You just said on the air that two seconds ago, you shouldn't have an opinion. And then I said to you, well, the president, and then I said you should the president. And you said, well, the president has opinions. So do you have an opinion on what's going on here? and if you said it's inappropriate for you to have an opinion explain the difference between that and and somebody else am i able to answer your question now yeah so what you asked me was whether i thought something should happen meaning that i should direct an outcome of course i have an opinion look he was asked a question about the renovations at the fed which are completely ridiculous whether he intended to lie or did not intend to lie the truth is he did give us false information.

23:06Intent is something that happens in a criminal investigation. You know that better than I did. I'm a business guy. You should know that as a lawyer. That's not the question. We have opinions. The question isn't whether I have an opinion or not, is whether I should direct the Department of Justice to go one way or another in a criminal investigation. That's what's at heart. Look, at the end of the day, Jerome Powell is the worst Fed chairman of my lifetime. Kevin Walsh will do an amazing job. Let's get the guy confirmed. That's the bottom line. I think of Andrew as a lawyer, too. His dad was a very good lawyer, a famous lawyer, I think.

23:41That's Orkin. And a lot of times he sounds like a lawyer, I think, sometimes, Senator. You know what I mean? Not necessarily in a really good way. No, sometimes in a good way. I just play one on TV, Senator. I just play one on TV. He just plays one on. I see the difference now. And I knew I liked you as a senator. You're not a lawyer, you said. So that's good. What did Shakespeare say? No, we don't want to say that. Shakespeare. That was horrible. Senator, thank you for your time this morning. We appreciate it. Thank you. Where'd you grow up? I grew up, I was born in South America, grew up in South Florida, been to Ohio for 21 years.

24:16Love it. Great state. In fact, if anybody's watching, place to go, leave New York, leave California, come to Ohio. The balmy Ohio. Yeah, it's a lot warmer than Florida, I think, in Ohio. Anyway, Senator, thanks. We'll see you later. A shameless plug here. Senator Tom Tillis, the North Carolina Republican who's no longer running for re-election, has been very outspoken in his break with fellow Republicans like Senator Moreno that you just heard, particularly on the Department of Justice's case against Jay Powell. Tillis was actually on Squawk yesterday, and you can scroll to Wednesday's Squawk pod to catch that interview.