in newest ecology. there is more than meets the eye where they overlap. >> that is very interesting. we should explore. that energy exploration is often one of the top uses for big data. at the same time, you need the energy to feed these models. food for thought. thank you, pippa. thank you for watching power lunch. i will see you in about an hour. first it's scott walker and closing bell. all right john, thanks. i'm scott walker here at the new york stock exchange. this make a break hour begins with a run on the stocks. why tom lee says there is a lot of gas left in the tank for this rally. he is going to join us in just a few to make that case for you. in the meantime, your scorecard with 60 minutes to go in regulation looks like this. we are watching the nasdaq over this final stretch. it is trying, today, to make a new closing high. a little work to do. as you have seen with the nasdaq, things can happen in a hurry! 16,057 and change is the magic number there. seems like there is a new high for nvidia every day.

that is because it continues its own march higher. take a look at it now. about $800 a share. 800, by the way, the magic number to nvidia to say over two trillion dollars in market cap. the dow and the s&p extending their milestones today as the market momentum continues through the week. all of that takes us to our top take. where best position for the next bump in stocks. if the bulls, in fact, all right and another one is upon us, let's ask cameron dawson, chief financial officer -- good to see you again. can we have another like higher? what is your assessment? we i said on halftime today we got through the gauntlet of nvidia. after everything else, we are on the other side of that. things look pretty good. >> i think it is respect the momentum, respect to the trend. momentum is certainly to the upside. trend is certainly to the upside. that doesn't mean that we should be complacent and blindly chase everything. i think we are encouraged by the momentum. we also want to remain very vigilant about things like

positioning and sentiment in valuations, which are stretched. the things about those three items as they are not good timing tools. they can persist. which just means the momentum gives you the lift, in the near term, and over the median term, watch those three things. >> it is so tricky at some points. if you look at everything and you say, wow, the stocks continue to go up almost unabated. nvidia, if i own the structure later in the stock to take my position down? wait a minute, it keeps going up. i don't want to miss. it speaks very much to what tony pesky are a low at goldman has been saying. it melts with your point of view. okay, the dynamic in the games remain inherently-friendly for risk, right? i think we agree with that. with that said, the profile of tactical risk reward has changed. sentiment measures are elevated, the treating community is already long. the momentum factor is stretched. i've got no problem if you want to simplify your exposure to the best parts of the market. i also wouldn't take my eye off the ball with the horses in

this race. how do you navigate all that? >> i think the way we interpret all of these things being stretched, positioning, in sentiment, valuation, is that they add to downside risk if we get a catalyst. the catalyst, likely, even earnings bump. which just means as long as earnings are surprising to the upside and we see a lift in estimates, those things aren't as much of an issue. if earnings revisions start to move materially leveller, then the valuation, the sentiment, the crowding of positioning is what would really cause you to see a bigger unwind. >> do you advise staying with the mega cap train? this idea that the market is going to broaden. broadening, you have to be careful. it is beyond the small caps. i don't know if the russell is necessarily the great litmus test for the broadening. you can look at industrials and some other areas, those look great. it is like 50% of industrials are within 5% of new all-time highs. it's not like the stocks have not done anything. >> yes, and we are also seeing

a rebound in pmi's, which is typically good for the industrial stock as it starts to happen. we see could charge within health care, as well. i think it speaks to the pickiness within adding new position. let year winners ride. let the momentum take he within tack. acknowledge it is crowded and expensive. however, when looking for new positions, looking in those areas that are earlier in the recovery. one area, like health, care we are finding good charts to buy. >> that is another debate. you said expensive. aren't those stocks really expensive? there is great debate over immediate valuation. is it really expensive? i had a conversation earlier this week with stacy rasgon. she knows the company better than anybody. saying, it's a misnomer. it is actually cheap. sheep relative to a lot of these other names, even though the stock price is elevated as much as it has based on is earning a guidance. it's not expensive. >> what is valuation when you're earning estimates go up by four x? earnings were 60 -- >> meaningless? i don't know. >> i actually think it is an

irrelevant of gessen when earnings are going up so much because it is a moving target. when valuation will matter is when there is a question about the sustainability earnings. because we have seen earning estimates go up to $24 a share for 2025, fiscal year 25 earnings, the bigger question is, if you start to see those estimates get cut, that is one valuation becomes a relevant deciding factor. today it is simply less relevant. >> what about rate cuts? how relevant, to use your word, are they today? >> they certainly haven't been to start the year. you've gone from pricing in six and a half rate cuts in january to 3.3 rate cuts today. and yet valuations have continued to expand and yields have continued to go up. we do wonder if you get to a threshold where year this will matter. where yields really start to hedge and say, do i want to pay 21 times for the s&p 500? as of right now it hasn't mattered because it has been an earnings story. we get back to the point of, as

long as earning estimates are going, up evaluations will be mostly tolerable. at least in the short term. it is as soon as those estimates go down that you could see an on wanted all you action. >> do you think that they will? ten years, i'm looking at, it here is 425. it got under four, and then it went back. okay it starts to back up even further. i don't know the market is gonna be able to handle this. it has handled it because you got through earnings season, to your point, very well. can we keep up this pace? >> i think it depends if the market got any of the cuts it is expecting. it is still saying if i get three cuts, that sometime in may or june, what's a couple 25 basis points difference by a few months? if we see a more meaningful uptick in inflation, and i would watch very closely the manufacturing and services pmi prices index. they are moving up, which calls into question the 18 months of disinflation that we have had and if it can continue. does that keep the fed from doing any cuts this year?

it is not our base case yes but it is a higher and higher probability as we see those numbers pick up. >> we know the cuts are pushed off. we know they are probably not gonna be as aggressive as we once thought. even people who think that they shouldn't do anything now, robert kaplan, former dallas president on this program earlier this week said, okay, we will do later this year. three seems reasonable. waller, the fed governor, the risk of waiting a little longer to ease policy is lower than the risk of acting too soon. you are getting a lot of, okay, we can weigh. the economy, maybe earnings in some respects has given us the capability of waiting. they are still coming. isn't that all that matters? rate cuts are likely happening this year at some point. >> we think it is becoming more of an if, at least in the first half of the year. the fed, and we keep coming back to this, has never cut with pm isaac celebrating. they are turning up. we are seeing a cyclical recovery in this economy

partially because financial conditions of east so much. financial conditions are at the easiest level since 2021. obviously, a very different backdrop for the fed which just says, there is very little urgency for this fed to be cutting rates. it would call into question, if we don't get any cuts this year, again, not our base case yet but a rising probability, could that challenge yields? >> i will bring up what someone said today, i think he will agree with this today. don't be surprised if you're used financial conditions fueled by a mania and pushing the fed into the later cut than would otherwise be the case. we need to think about this now, to? the incredible run in the stock market. the alleged, looser, conditions because of a big stock market rally? >> it's not just a big stock market rally, it is also credit spreads. because of the better economy credit spreads have come in a lot. they are very, very, ty. which just says the credit markets feeling good, feeling happy about the outlook. that is one of the reasons financial conditions are so

easy. financial conditions typically correlate with better growth. they are considered to be stimulative to growth when they are this easy. does that work against the fed? >> would you buy small caps today? i know i said, let's be careful about that as the litmus test for the running of the market but, you know? the russell is holding above 2000. there is a lot of hope for those stocks. what do you think? >> interacting surprisingly well with its 50 day moving average despite the move higher in yield. i would not buy all small caps. i would be selected within small caps. we like small caps to generate a lot of free cash flow and have good balance sheets. which just means if yields go back up, if the fed isn't friendly, those names can still do rather well, even keep pace with large caps because they don't have the balance sheet wrists that chunkier small caps have. >> where are we on commercial real estate? i'm trying to think of all the things that have bubbled up into the narrative from time to time. not so much now, but commercial

real estate was gonna blow up. that it's gonna impact more regional banks. before we speak about the rest of, you can't really avoid that. they are large if not the largest part of the rest of. it is -- you thought bond auction this week with kind of sloppy. kaplan, i mentioned him, the former dallas fed prayers only talked about that. are those on the backburner for the foreseeable future? >> i don't think we can ignore the bond option simply because that can provide a lift in yields. that is actually very related to commercial reinstates dress. there has been some optimism that if the fed cuts rates this year and we get lower yields then a lot of the pain that commercial real estate can be avoided. if we don't get the lower yields and refining thing, this is the key point, refinancing starts to kick in in 2025 in a more meaningful way. extended starts to become less of an option. 2025 can be an issue where we actually see more stress. right now it might surprise you the commercial real estate construction spending is

actually still at an all-time high. it just means it hasn't filtered into the real economy because it is such a lagging indicator, such a lagging part of the market. >> not to mention the fact that it's not like every stop with exposure to commercial real estate has been a dud. a cell green, for example, absence november 1st. i think it is up like, 50%! i may not be even giving it its full do. your point is taken. you know how the market is. it has tunnel vision. what's in the here and now? you start talking about 2025, 2026, the market says, are, we will get to it when we get to it. we are going to play the game, this game, as long as we can play. >> you probably overpriced downside over the price in 2022 in 2023. maybe overpriced the upside. we keep watching this 2025 broad earnings estimate because we will start pricing in the path for earnings by about mid year this year. if a recession risk goes out for 2025, that seems like a lifetime away, you will actually start pricing that

inflated this year. >> let's bring in jordan jackson from jp morgan management asset. he joins us today from washington d.c.. good to have you back. bullish or not? >> i am pretty bullish. i tell you, it feels like it is hard to be bearish. you look at the macro backdrop first, obviously the fed is gonna be easing at some stage later on this year. you are seeing positive earnings growth. certainly expectations for 2024 have come down from their peak of around 13%. they are now down around ten nap resent. our macro models are actually improving. it seems like we are coalescing around earnings this year of around eight to 10%. i think we are going to have the max seven continue to be magnificent. i think we're going to have a performance in other sectors that have lied to the big boys up in the index. >> what does that -- i'm sorry. finish your thought. >> i just finish on that point there. some of the other parts of the four 95, the index, they're

gonna play a little bit of ketchup after lagging most of last year. >> i thought you had finisher statement. i apologize for that. i was gonna ask you simply, where do you want to be? if you think the mag 7 is still going to leave, or the mag five, however many stocks you want to put in the best of the best right now. do you want to remain overweight to those? at what point do you, that you know? what i am confidence this market is going to continue to broaden. if i have fresh money to work, i'm not just gonna keep loading. up i had someone by nvidia today on halftime. now a tinderbox. a little bit shy of. that you know what? i've got money, i'm bullish, i want to put in the market. do i put it into the mega caps? or do actually look for other areas? >> let's be clear. it had not been for, the magnificent five or the fantastic four, whatever you want to call, the earnings would be down four last year. they are about 30% from an earnings perspective. when you look next year the markets are expecting somewhere around 20 to 25% earnings growth from them. they are carrying their weight. i am bullish. i am still buying these levels.

again, they are delivering on very lofty expectations. i think they will continue to deliver. the broader macro backdrop remain supportive for other parts of the market, as well. other value orientated parts of the market, also. i think this is a rally that is worth chasing. >> assuming earnings holdup, as cameron was saying, you sound pretty confident that you think they will. >> even if, potentially, earnings don't hold up, something more dire or sinister plays out later this year, the fed is going to cut rates more aggressively, right? we've seen time and time again the central bank of the u.s. continue to step in and be willing to stabilize markets. i think right now the trajectory for the cuts, a lot of it is around the easing of financial conditions. just visibly from mark's psyche sentiment perspective, i think the fed recognizes they can cut

rates, which is visibly good for the market, without necessarily having to ease policy. i think it all falls down to real interest rates at the end of the day. the fed is cutting gradually. with how inflation is coming down, you have real rates that don't budge all that much over the course of this year. >> cameron, you are student of the market. i know that. you look at market history in all the. you look at what is happening with nvidia, two trillion in market cap. i thought we just said it was one trillion in market cap but here we are! do you say this has gone a little bit ridiculous? i want to read you something else. i quote tony pass curler coleman a lot because i think he's got good stuff. here's what he says about nvidia. here is the incredible part, when the market bottom in october of 2022 and we had a market cap of 280 billion dollars. in a 12 month forward peak of 32. yesterday, it added 267 billion dollars of market cap in one day alone. rounding out to two trillion

dollars in market cap and the p is now at 33 times. that is incredible! >> it is all about those earnings. one earnings go from $6 to $24 for this year's estimates, that is what supports the magnitude of the move that we have. that is what is so very different than other big tech cycles where, the late 1990s when it was not based on earnings, it was all based on evaluation expansion. the key thing for nvidia is, can you keep these earnings up? can earnings from today's level x will be extrapolated forever into the future? there will come a time when semiconductors -- it is a very cyclical industry. you will see a slowdown. that slowdown doesn't look to be happening right now. >> that's for sure! >> eventually it will happen. that is when you will call into question the valuation of the stock. >> jordan, what about the consumer? i guess it depends on what part of the spectrum you are talking about but wall maher makes us

believe, okay, that is a stock worth buying, perhaps. toll brothers, royal caribbean. we are still spending, depending on what end of the spending spectrum you are human spending more, and in some respects that dictates the kind of stocks you might want to buy. do we need to increase our exposure to the consumer trade? whether it is on the stable and, like a walmart, or the discretionary and like royal caribbean? >> the broader case is consumption growth is going to slow. obviously you had retail sales numbers for january coming in a little bit weak the downward revisions to the december retail sales numbers. it does suggest that the consumers are coming under a little pressure and, maybe to some extent, as overall growth those downey with the consumers beginning to spend down in terms of the product. maybe deciding to shop at a lower -- a big box retailer, so to speak. i still think the consumers not

breaking but bending. as long as you have a labor market, the american consumer is confident they have a paycheck coming the next friday afternoon, they are gonna spend the next three weeks of that paycheck. that is just the juice that the american consumer runs. on what consumption growth may, slow look at the criticize things and secure times an asset backed security. we are avoiding this lower quality borrowers. still embracing those higher quality upper middle class consumer stocks. i don't think you should dump these names, but i also don't think you should be aggressively over waiting them, also. >> we are gonna leave it there. good to talk to you. both cam, and of course we will see back here tonight. let's send it to pippa stevens -- >> block is having its best day since november 2022 after beating revenue estimates and issuing upbeat guidance.

the payments giant reported strong growth in its square cash app segment. raising its outlook for key profit outlook. those shares up over 17%. mercado libre is having its worst session since may, 2022, after posting a huge earnings myth to a pair of tax impacts. the latin american giant also mixed expectations on operating income. those shares are down roughly 10% heading into the close. scott? >> all right, pippa. we will see you soon. thank you. pippa stevens we are just getting started. up next, more gas left in the tank. that is the call today from tom lee. from fundstrat, the average closing high yet again. he will lay out how much room he has in the future for stocks. you are watching closing bell on cnbc.

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after adding another record high, breaking above 5100 for the first time. my next guest says there still, quote, a lot of gas in the tank for this marker. ali let's bring him in. fundstrat's tom lee back with us. good to see you again. welcome back. >> great to see you, scott. >> you've been right on the money. tell me why there is more gas in the tank for this incredible run? >> well, i think for most there is a lot of evidence of dry powder on the sidelines. meaning there is a lot of potential buying margin debt, for instance, is only a 700 billion. it was 710 billion in october just a few months ago. almost 950 billion in october, 2021. investors aren't that fully invested. sentiment is also still pretty negative based on all the conversations we do with our clients. the best evidence is that stocks are going up on good news. that means that the good news is not priced in. as mark newton, our head of technical strategy says, there is no technical breakdown. i don't think there's any signs

of a tough near term. but those of the things will be looking for for when this current rally could run out of gasoline. >> you really think sentiment is still negative? i read a few moments ago from tony pasture a low at goldman sachs how sentiment is pretty stretched. everyone is long. you really think there are that many people who are still nonbelievers in this? i know there are some out there because i hear from them, but do you really think there are that many? >> yes. i think there are a couple of reasons. one, many people think the stock market is very concentrated. the magnificent 7 are expensive but entity is free cash flow yield is 3%. it is the same at the s&p. it is actually not expensive. i think there is still this inflation mindset. that inflation is stalling, or could come back. investors are inclined to short the market. i think the best evidence that sentiment is still pretty negative is i hear people talk about the market being

expensive. outside of the sayings, it is trading at 15 times. for that has never been an expensive multiple. people look at the price appreciation in the market, because they need participation, they think the bubble. >> you don't have any concerns at all that it might be? especially stocks like nvidia, as we say, seemingly went from one trillion to two trillion in market cap, quote unquote, overnight? >> i mean in some ways i think stocks rise rapidly when either estimates change or they want to reprice the future growth. what's interesting is invidious free cash flow was seven billion a year ago. it is now close to a 50 billion run rate. it has gone up by seven times. the stock price hasn't reason that much. i don't think we will have a bubble until the consensus declares that there is no bubble in no risk. that is when we are likely in a

bubble. i think a lot of folks raising the prospect that this is a bubble means it is too early. >> the market seems to be giving the fed the benefit of the doubt. though it might not cut as earlier that one thought, it is going to cut at some point this year. there has to be the expectation in this bull run that cuts are coming sometime this year. i would imagine. what happens if they don't? >> if the fed doesn't cut i think it would put a lot of risk on the stock market. i don't think the fed is going to hesitate just because the stock market has risen, or the ism's have turned up. the fed's policy rate of close to five nap or scent is the highest policy rate in the world for any developed country. look at the u.s. tenure. almost four and a half percent. germany's ten-year yield is 2.6%. i think the bond market itself is telling us that the fed is overly restrictive right now.

>> you think they should cut in march? >> i think the probability of cutting in march is higher than what is being priced in. i think a lot of it will depend on what severe ecp looks like, which comes out march 12th. we think there are some anomalies in the january cpi, including poor seasonal judgment and the fact that auto insurance is actually accounting for more than half of the rise in the super core services number. if those start to show improvements, i think whatever hot cpr we saw in january, when pricing reverses to a large extent. >> what happens if it's not march? what happens if it's not me? >> if it's not march or may, if it's not even looking like 2024, i do think it puts pressure on stocks. if it is a fed that isn't satisfied with six out of seven inflation reports. they suddenly move this -- they

move the guidepost to nine out of ten i think the stock market will get impatient in just rally anyway. i think it really depends on the path of inflation. >> the other issue, i suppose, as some are talking about is this whole loosening of financial conditions because of this a.i. boom in the stock market. do you think that is an influencer on the fed? on one hand, we are all wrapped up as bose because we look at nvidia looking up. what we think, this is incredible. look at these new records! but there is a price to pay, potentially, for that. that is, perhaps, putting off these rate cuts further than we are able to tolerate. >> the a.i. boom is creating wealth, right? people who own stock, but as you know that hasn't been translating necessarily to consumer spending incrementally, especially for the average american. if the a.i. boom is actually replace the belabor market, because that is really what is being targeted.

turning a service job into a piece of silicon, 98% goes to nvidia, that is actually deflationary. it is actually deflationary to the labor market. i think the fed doesn't necessarily have to be worried if a stocks are actually booming. >> okay, let me make my final question away from a.i.. aside from that, your best idea in the stock market today is what? >> well, i think investors really have to realize that this looks like a cyclical early cycle stock market trade, scott. october 2022 was the low end. the market is getting stronger this year. we are expanding. i like industrials. i like small caps. i think those are good ways to add equity exposure. if you wanted to avoid tech and a.i., that is a good way to take advantage of what is happening. >> i know you like to make big calls but are you still sticking by this 50% gain in small caps for this year?

>> yes. you know, it is premised on the idea that small caps and trading at 44% of the price to book at the s&p, exactly where it was in 99. if the fed starts cutting, when or if, i think it is a launch point, just like 99. 12 years of relative gains for the small caps. i think it is a good risk reward right now. >> okay, we will leave. that tom, thank you for joining. let's have a good weekend. we do want to get to some news. ftc announcing it is taking action against tax prep company, h in our. block and i'm -- allowing them to contact customer service to more affordable online products and that h in our block, quote, deceptively marketed their products as, quote, free when they were not free for many customers. we will continue to follow the story. coming up, making sense of the mega cap mary. mega coming -- mastectomy for a new closing high. it has a lot of work to do between now and the end of the trading session in 30 minutes. most of the maga seven stocks

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welcome back. tech stocks are pulling back a bit in the final hour of trading. still hovering near record high as we head to a close. the sector overall getting a big boost this week from a post earning surgeon nvidia as you know by now. joining us to share his text

playbook, doug clinton, of deepwater asset management. welcome back. what do you think immediate proved to us this week? >> i think approved the a.i. market that we are in right now is not over. there is a lot of questions about the valuation -- the the valuation seem to change at least how quickly those talks have moved. it looks like immediate stop showed us in a lot of the commentary is it still feels like we are pretty early in the a.i. bull market. what we think is a bull market now to what will inevitably be a bubble. i think it will take a few years. i think it kind of gave us a little bit of an all clear in terms of continuing to be excited about that a.i. theme. >> you agree with adam parker, for example, on the show, making the argument that we are not even close to the end. in fact, we are barely past the

beginning of this whole gloom and what it is going to mean and, at such, you need to remain very heavily invested in these large -- >> i would agree with that, depending on what analogy want to use, depending on 1996 of the 2000 room, if you want to created to that. so the remaining three and a half or four, something like that. i think that that is the roy perception. it is too early on. obviously, the market is still getting the reality of how big a.i. is. it is not in the very beginning. i still think we have several used to go. the thing about the maga six, i will exclude tesla for this quick discussion, even though they have moved somebody, people see the emotional reality they look at the charts they look it's a mega tech stock being up 50 to understand the past year, the fundamental reality is they are not that expensive. i know tom just mentioned on the last segment, nvidia trades at about 3% to cash flow yield.

if you look at the average of the mag six it is about three and a half percent. compare that to 4.6 4.2, rather, on the ten year for the best companies in the world that is just not egregiously expensive. >> sure but they are not all nvidia. maybe we learned that this week with what happened at palo alto. how would you assess what that lesson is to be learned? if any, to be the way that stock rain up to the number and the way plunged from it. >> i view that a separate from the and discussion. it really feels like -- and i give credit to palo alto. the issue there was really the strategic change they have made. i think on top of that they have had two or three, or two out of three records here in a row, it just feels like there is more concern growing about the forward growth opportunity for the company. anytime the committee comes out and talks about changing the way they are going to market, in the case of palo alto

offering more free products, trying to get more customers in the door in, ultimately, land and expand i think the changes questions were investors and they are probably gonna have to show its new strategy will result in the kind of growth they've talked about in the long run in the next couple quarters before people get really excited about the stock. >> that makes sense to me. i'm also not trying to suggest palo alto is some great a.i. play. if you look at -- let's say the euphoria, how it is being represented in the market, i would say one a, a.i.. one be, in many respects, cyber. right? and the way that palo alto and some of these others rain up when everything, theoretically, was going up whether with software cloud, a.i., is that cause for concern, to some degree? >> i think it depends, really, on the company you are invested in. one we know, crowdstrike, we think this to have a very big

runway for continued growth. if you think about cyber as an industry, why has it had such a bid similar to a, not quite as aggressive. i think the reason is as we go into this a.i. age, cyber is going to become a more important part of every companies infrastructure spend. they have to protect whether they're doing training all models, running in france on models, they have to make sure that they keep the data secure. that is a cybersecurity application. on top of the a.i. opportunity we also have a persistent tailwind of increased global turmoil. these companies the reasons they do have these strong urge of emerging a.i. from the global tale into where you could argue they can grow 10 to 20 plus percent a year for the next 3 to 5 years. >> i know it's gonna be shocking, but we are going to talk about a stock or an outlet has nothing to do with cyber, it has nothing to do with the cloud, it has nothing to do with a.i.. it is mercado libre. one of your favorites. is that right? tell me briefly before i let

iran. >> it is. it is getting beat up a little bit today. the reason is they are a major e-commerce player in latin america. they really have no meaningful competition. they had a little bit in the pick up of the margin this past quarter with what they reported last night. this is something we see commonly and leading e-commerce stories. a quarter of growth for them. a quarter of investment into some adjusting -- supporting their version of amazon prime. i think it is all get investment that will go towards future growth. it is a company we continue to like here. >> doug, we will see you soon. thank you. >> up next we are tracking the biggest movers as we are heading to the close. back to pippa stevens standing by with. that >> hello, scott. it is getting more cloudy for one energy stock with shares dropping. the name to watch coming up next.

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we are about 15 minutes from the closing bell on this friday. let's get back to pippa stevens now who is taking a look at one name down 30% for the week. which one is, it pippa? >> we are talking about some of, us got. that post earnings doc accelerating the stock down 35%

in the last two sessions. the company missed on the top and bottom line with the ceo calling 2023 with a formidable test in the residential and solar -- and the solar concerns in they are putting in place 100 million dollar at the market equity offering in the coming weeks. management said it is for good housekeeping. they do not intend to utilize it this quarter. it certainly doesn't help sentiment in an industry already facing many headwinds. the stock losing half its value since the start of the year. scott? >> all right, pippa. thank you. pippa stevens. still ahead, warner bros. warning those shares are plunging this hour after fourth quarter results. take a look, down about 10%. what has investors heading for the exits? we will explain coming up. first a quick message at cnbc celebrates black heritage. >> in environments where not many people look like you, you will be constantly challenged

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-- at warner bros. shares, -- joining us with carvana's big move. plus, bob -- breaking down the crucial moments of this friday, as we head into another record close. trying for that on the s&p. and i don't want to get on the nasdaq, but we can only do so much. julia -- digging in on what's happening with warner brothers today. and this big slide, what's happening? >> yeah, quite a slide. warner bros. discovery shares are down 10%. -- the company missed analyst targets on both the top and bottom lines. as the strikes hurt studio revenue, and as linear tv advertising dropped 14%. now on the upside, the company's direct to consumer division was the first media streaming division to report full year profitability. but -- with the neutral rating on the stock, writing quote, all eyes are on how much room there is left for management to manage costs to offset the challenges in linear. and most importantly, with the long return opportunity is to grow direct to consumer revenue, and profits. now speaking of direct to

consumer, ceo david -- said his -- joint -- venture with disney and foxes pro consumer. this is a subtle response to the -- tv lawsuit, this new streaming bundle is anticompetitive. >> scott? >> julia, thank. you that julia -- phil, about tell me about carvana. because it's a bit of a different story than we are used to. there's been big short interest in this name, that's how you've heard about over this last few years, but this is a big and different story today. >> well, the short term run for cover today scott. take a look at shares of carvana. up more than 30%, after reporting after the bell yesterday, its first annual profit. that was enough to send the stock, moving in a continued moving all day long. three things are driving the carbon surge right now. you had to analyst upgrades, raymond james, william blair, both upgrading the stock. the fourth quarter growth profit per vehicle, 100 38%, big improvement year over year. and then you've got short

investors, who may have been forced to cover the short interest, remember, of about 30%. here's ceo earning -- earlier today on money movers. >> we are in a great spot. i think we have really got ourselves to a place where i think the ball is in our hands, we are in control, we are the best position we've ever been. and we're seeing the team executing it. i think the trend is very strong across the entire income statement. we are delivering great customer experiences, we are in a competitive position. >> all right, despite going up 30% today, take a look at this stop over the last three years. because you might be saying to yourself, wait a minute, did this trade for well over $300 a share at one point? yes it did. in the second quarter of 2021, it was trading at about $370. so, a nice move today, but still long ways away from where they were just three years ago. scott, back to you? >> the shortest bet on the end. i mean, you look at where that stock traded in the middle of that chart, we put up. it was rather ominous for a while, phil. >> it was.

>> and maybe back on the road, there it is right now. and if you look at that chart, right smack in the middle, it was pretty ugly. >> yeah, and that was because largely when they had taken out a large amount of money, borrowed a large amount of money i should say, in order to buy an auto, and auction house. that was the part where people said wait a second, how much debt are you taking on? are you able to pay the stat? and then they struggled a bit, that was when people were saying, is bankruptcy a possibility? they're not talking about bankruptcy now, certainly not talking fragrance $70 a share. but certainly not talk about bankruptcy. >> good stuff, filtrate as always. thank you filibuster. bob designing, what did we learn this week? so we've got, we're going to get new highs on the s&p, more new highs on the, down nasdaq still working on a new closing high. but what do we settled, as weak do you think? >> we settled that a.i. is real, and these video numbers are eye-popping enough to say well, this is a new paradigm, certainly on the level of what was going on with

the internet in the 1990s. i think that's been settled, i struggled to explain how important nvidia has become. so the s&p is up 6% this year, 326 -- gain in the s&p, 87 of those points, scott, our nvidia. 26% of the entire -- is due to nvidia this year. but i want to point out that there are other sectors that are still at great momentum. earlier in the week, i kept putting up every day some big momentum names here, like merck, jp morgan, american express. walmart, procter & gamble, travelers. you see some of these names, they've all been spectacular in the year to date. and then there are industrial names that have been doing great. ge has just been a monster recently. parker -- eaten, anger sole -- these companies or big movers at the end of last year. and they continue to be favorites. so please don't keep emailing saying the only thing you guys have been talk about is nvidia. there is some other momentum stocks that are out, there that

are quite quite noticeable. and you don't have to go very par. and a lot of these stocks are sitting in the dow industrial. >> do you think we got some reason then to broaden? or did we just reinforce go big or go home? and go big or go home doesn't essentially mean only to the mega caps, it could mean to those industrialist rocks you are talking all too. >> yeah i think, i personally i love it when the market broadens out. but let's not kid ourselves, let's not try to make an argument oh, we have to broaden out. this story, this a.i. story is so real now, and the nvidia numbers were so overwhelming, that it is very hard to argue well, the rest of the world is going to somehow catch up. i think what we need to see now is a broadening of the story, in companies that, or for example, ipos that are going public. i think that we are going to see a spate of a.i. related ipos. you'll even see reddit now trying to make an argument that somehow, oh they are selling their data, and they're becoming more data -- maybe.

but i am hopeful that the a.i. stories are going to broaden out into ipos, and into other companies, where would just be more efficient overall by using. it >> -- bob, thank you very much. -- all of you as well, -- the highest for the dow. -- for the nasdaq today -- but i look forward to seeing. overtime with. well we agree on the dow s&p, and even -- the on the nasdaq -- that's the scorecard on wall street. but -- another big day for stocks, now at s&p like i said, both closing at record highs, again. nvidia's market cap, touching two trillion dollars. when the closing bell -- morgan brennan. >> we are going to talk about the a.i. halo effect for stocks. but we will also go beyond nvidia, we talked to