peltz camp with egan jones for those reading the reports. we'll see. we haven't heard much onthe institutional side. >> thr with a tough pete titles iger's era of invincibility is over, that the board is going to take a firmer stand during this second run >> it was a good article and got into the woke stuff that hasn't entered the proxy vote but is part of the discussion >> quarter end tomorrow. let's get to the judge all right, carl, thanks so much welcome to "the halftime report." i'm scott wapner front and center this hour, the rally soon to be five months and counting the debate now how long can it last we'll ask the investment committee the key question joining me joe terranova, kari firestone, steve weiss and sarat sethi. a modest loser a lot of talk whether the rally is waning as this quarter month comes to an end. our delivering alpha investor

survey from cnbc, do you think the market has run too far too fast two-thirds, yes, we're in for a pullback do you >> i think everyone thinks we've run too far too fast i was in a morgan stanley complex yesterday and all the financial advisers were talking about when is the correction ultimately going to be coming? if everyone is expecting and wanting a correct, guess what, the correction is not coming there's an expression, never sell a quiet market. this is a remarkably quiet market and if you want to buy insurance, scott, go right ahead and do it. it's cheap enough. the vix is down 13 i wouldn't stand in front of what appears to be a very strong bullish trend. >> so, kari, piper sandler today says cool the engines. a 5% to 10% pullback could be coming investors aren't betting on that, right? we've been talking about money continuing to flow into stocks barclays says a cash deployment is under way broadening will follow quote, an upcoming easing cycle

means there should be scope for equity flows to pick up and performance breadth to widen if you put those two things together, the rally continues. are they right or wrong? >> continuing today and what they might be talking about, i don't know, three months from now, is the rally continuing i would say the rally will go through a period of time where we're going to have these rate cuts, and the market wants rate cuts >> did you vote in this survey, by the way >> yeah. >> you did vote? >> i did don't ask me what i voted for. >> i'm going to ask you right now, sorry i mean, what do you want me to do do you think the market has run too far too fast yes or no? what did you vote? >> i think the market has run very far, perhaps too fast, that doesn't mean i think it's going to go down yet 27% since the middle of october. the s&p. if we're going to have those rate cuts, and that's what determines whether people want to buy more stock, then you're

going to get buying. what you need for the market to stop going up is some catalyst such as nvidia, reports people don't like there's going to be something significant that people start selling, and they haven't seen that yet and they're unlikely to see that for a few months. >> sarat, were you in the 61% or the 39%? i know you voted, too. >> i did vote. >> we're all coming clean. why is everybody so cagey? >> i'm not cagey i did vote i did say it's run too fast. what i like about this rally is it's broadening. today the s&p is up but the nasdaq is down so you are seeing money flowing into commodities, money flowing into energy, into health care, so all the other sectors are now getting capital, and that's healthy for the market it doesn't necessarily mean the fab seven are still going to go to the northeast, but i do think there's opportunity there and if we get a pullback, it will be natural. who knows what causes it the whole 27% the fed said, hey,

we're going to stop. if the fed said we're going to raise again, there goes -- i think you have to understand where you're investing and being if the right places. >> you got lucky i didn't ask you directly. now i'm asking everybody i ask guys when i came in how did you vote >> 39% >> 39. the market is going to keep moving higher? >> correct i want to be clear on something before you ask, i only voted once i think steve voted more than once >> how did you vote? are you part of the two-thirds you think are in for a pullback or not >> i didn't vote but i'll give you my answer now. >> you know what, people, i have to be honest with you -- >> let's move on >> some of us have actual jobs to do. >> some of us do, but what do you do >> i could lie about it like the other three. >> i voted he knows we voted. >> i feel stupid i should have known that you wouldn't have voted. >> congratulations >> if only because they asked you to vote, you probably didn't turn your vote in.

how would you have voted how would you have voted >> it's gone too far too fast, but it doesn't -- i don't know what to do with that information as portfolio management. there are some positions that may be overvalued, may have gotten too big, such as i have a few of those that you cut back, portfolio management, i don't think it means you exit positions, fundamental underpinnings and the price may be slightly ahead from a time standpoint, so, yeah, look, these market moves aren't natural to have this kind of movement in such a compressed period of time if you take a look to sarat's point, it's not just today you take a look at some of the defense names like ttg or textron or lidos they've outperformed the nasdaq and the s&p. i mean, they're up 20% so that's the real outperformance that we've seen the other names. so if you keep focusing on the

mega caps and say it's going too far too fast, i think those stocks may have gone too far too fast and i own them, but i'm not doing anything because the fundamentals are there >> the top sectors for 2024 will be, number one, almost two-thirds tech. so we may think, some of you may think that sector has moved too far too fast obviously people aren't willing to give up the ship yet, and they think this is the place to be, that the trend is obvious and that it's not going to reverse in a meaningful way anytime soon >> well, i'm hoping we're including com services >> i think we are. when we ask the next question, where do you stand on investing in a.i., they say the best through the qs, so you go broad. the second one was nvidia. we know what stocks sort of fluctuate between the two, meta, com services >> i think com services is what

you want to focus on financials, without question, financials are having a very strong performance year to date and it's represented again today if you look at jpmorgan, morgan stanley, goldman sachs, citi, all rallying significantly i think this is a good environment for financials because they're underowned and i think that's so critical i don't think people pay attention enough to what is positioning in a particular sector, and there's a lot of room to rebuild long positions in financials. >> we're not surprised that almost two-thirds said tech, are we >> no. >> at this point i was wondering whether the performance this month where tech is number six in terms of performance was the exception or the new rule that you think that the broadening is going to continue tech will take a little bit of a back seat for a bit and the other sectors are going to run i don't think the broad investing audience necessarily agrees with that >> i think joe is right. you're going to get this broadening we're getting it you're fine to own tech, but

there are other sectors and financials, to your point, i was going to say, look, what has happened since last year asset prices have all gone up. how do they make money wealth management. capital markets, opening up. slowly but opening up. that all drops to the bottom line great balance sheets, dividends, and we're a year away from the blow blowups in the regional banks. there's an opportunity there >> i was going to say i don't think i said tech for that answer, but technology is such a big part of the market now, it's hard to get against it if you think the market is going higher because that represents a lot in the s&p. >> you've also noticed anytime there's been significant dips in these stocks, it really hasn't taken long for buyers to come in broadly people would agree with you, and speaking about a.i. and technology, altimeter's brad gerstner is with us exclusively today. we're going to get to his latest

market thoughts in a moment. i know you want to hear from him on that. first, as you probably know as well from his appearances here, he's been on quite a mission to make sure the next generation is able to take part in this country's upside including a.i. and transformative technologies. he's mentioned a program called invest america on the show before his big idea has taken a very big leap forward with the naming of a ceo council, familiar names to many, who watch this network on a daily basis we'll show them, brad, on our wall as we welcome you to our program today. it's great to have you back. we're looking at this list which is an a-list of ceos in this country. how did you put it together? >> well, thanks for having me, scott. it's a great day and you said it, there are too few people participating in the upside of our markets, and, unfortunately, they're losing faith in capitalism. but warren buffett gave us the answer start with a really small snowball and a really long hill. unfortunately, most people miss the first 18 years of compounding, but we can fix

that right? fix it with a 401(k)-like account, and what better way to accelerate those 401(k) accounts than to get america's best businesses to contribute to those kids accounts of their employees. and today america's best ceos on both sides of the aisle, think about this, michael dell, lisa su, they have said we're ready to roll, we'll contribute to those accounts there are hundreds of ceos behind them i have talked to who are excited for common sense, bipartisan solutions to fix this problem. so the government just has a really small role to play here put a seed into this account, $3.7 million children born every year, a seed of 1,000 in the s&p 500. it can't be traded, and then let the magic of our markets work. people can contribute birthdays,

bar mitzvahs, companies can contribute like these companies have suggested that they would and if you start with just $1,000, contribute $750 a year, by 30 years old it's $200,000. this is going to drive financial literacy, will have a major impact on our savings rate the sociological benefits, increased graduation rates, more optimism, better health, and more belief in free market capitalism so i couldn't be more excited, more appreciative of these ceos stepping forward raising their hands. the council will be very large this is not a board, getting the biggest group of republicans and democrats and independent ceos together and saying, we can fix this >> you've said the government's role is reasonably small nonetheless, you do need the government obviously to participate in this. and i know from speaking with you both on and offline, you've had many conversations with leadership on both sides of the

aisle. can you tell me how those conversations have progressed and where you really think we are? and let's not kid ourselves, we are in an election year, too getting two sides to agree in washington on anything these days is a struggle, to say the least. >> well, i've been incredibly heartened by the reception on both sides of the aisle and in both the senate and the house. i think there's tremendous goodwill around this issue and so we're making a ton of progress nothing to announce today on who the chief authors will be and who the co-sponsors will be. and it is a presidential election year. and the strategy in washington, d.c., is really to build that coalition, to do the research. i'll be announcing some research in may that's brought together leading researchers on the republican and democratic side to provide the research underpinnings for this, and then we expect this will be a piece of legislation that we can get past in the spring of 2025

you have to do the hard work at the end of the day legislators will weigh in. it will be their program this is about putting forth the framework for a program that we think can get passed in a large and bipartisan way you can follow it at invest america 24 on x, formerly known as twitter, and you can see the many people that we announced that are out there talking positively about this from leading democrats to leading republicans. you can't find a lot of things you can get bipartisan support on today, but this is one of those things this can transform america 3.7 million kids, $1,000 per kid, that's 3.7 billion a year, less than one-tenth of a percent of our national budget >> you said businesses and families can add to this account, which you obviously expect ceos to do for the

children of their employees. it can't be traded can you go into a little more detail on that aspect, when can it be traded when can the money first be withdrawn, how the mechanics of this are really going to work? >> let me caveat at the end of the day, this will be participate of a legislative process where people will weigh in with their best ideas, and they're going to have different ideas and they have great ideas, so what we're hoping to do is put forth a strawman and then to score those different ideas to give the legislative process a boost in picking and choosing what works best. but really to have this strong framework, 3.7 million private accounts by the government it would be investing in the s&p 500. at the age of 18 maybe you could take up to 20% of it out for a qualified one-time expense, think college, start a business, buy your first home. and if you add to the account,

you could add on a tax-deferred basis, much like a roth i.r.a. that could compound. we know there's something in the behavioral economic literature called the snowball effect there's a misconception in this country that poor people don't save not true the big hurdle is getting a savings or investment account open it's a superhigh hurdle not only for folks without means but for all families so by getting over the cold start problem, by getting everybody into the game, we're confident, and the research suggests, that those savers will save a lot more. then there's a lot of debate at 18, you know, are they able to take out 20%, maybe more, maybe you turn over all responsibility to manage the account at that point in time. i happen to favor an idea where you could take out 10% more at 30, 10% more at 40, and then at 50 you get the entire account, but the most important thing is

that we get this in the hands of kids they open up their phone, they see they own a small slice of apple, of tesla, of united health care, et cetera, that are all in the s&p 500 that is going to be a game changer when they're learning about financial literacy compounding ownership, capitalism, et cetera. we're really excited this is another major step forward. it's demonstration of two important things number one, companies will contribute to these accounts and that's a huge accelerant the 401(k) accounts in this country is $75 billion a year. if we just contribute $3.5 billion a year to these kids' accounts, it will double the amount in those accounts the second thing is, it's very bipartisan that i think is a warm welcome in an environment where things are very polarized, but we have, as i said, leading republicans

and democrats who are excited about this, and we can reinvigorate the belief in free market capitalism. less than half of people under the age of 40, according to pugh and gallup believe in free market capitalism. >> you continue stealing from our obviously most recent marketing campaign, and you keep working it and you keep us up to date, all right? >> will do will do, scott let's turn our attention if we could now to the stock market, to the s&p 500, among other things can you give me an idea as we approach the end of yet another solid month for stocks, a great quarter obviously, what your current positioning and market view look like >> well, you and i talked when i was on last time i said this year was going to be different than last year last year we started the year everybody was ultra negative remember, it was just 18 months ago. nvidia was $125 a share and meta

was $90 a share. it's hard to actually get your head around how recently that occurred everybody hated those names. so we were very aggressively positioned at the beginning of 2023 we thought that a return to target in our portfolio was up over 80% for the year. we thought this year would be a more normal year, 20% to 30% returns. and a lot of those returns have occurred in the first quarter or the first four months of the year google trading at 19 times meta trading at 22 times nvidia trading at 31 times these are not bubble territory you have to get it right we continue to own those names in our portfolio and others i'm happy to dive into >> some would suggest as they look at valuations, multiples, just because we're not at historical peaks, that doesn't mean we're not overvalued, and a lot of the stocks have run a

lot. right? nvidia the multiple certainly has come in as the outlook and earnings have come higher than many people have in their wildest dreams expected certainly in the near term how would you assess that? >> so you really have to think about how we got here. nvidia, the expectation for nvidia's data center revenue was $20 billion. instead, they did $100 billion so the revenue was 4x what was expected by the street consensus at the start of the year of course the stock will be up a lot. currently trading at 31 times 2025 consensus of $30 a share. it's going to grow this year at 100% the street consensus is that next year it grows at 20%. and in 2026 it grows at 10%. we happen to think it's going to grow faster for longer, and the reason for that is we think the global buildout, the total

t.a.m. they're addressing, is bigger than currently in street estimates, and we think their share of that is going to be larger last week i was at gtc where they announced the blackwell generation and we do our own bottoms up research. we see what hyper scalers are ordering we see what the sovereigns are ordering, and it's large and we think they extended their lead with the blackwell generation jensen is firing on all cylinders. and so we think it's trading below 31 times but is trading 31 times street so, to me, is that bubble territory? i don't think so we're in the middle or in the early, early phases of a phase shift. this phase shift is hard to predict, it's hard to forecast we think certainly through '25 and into '26 demand will be greater than currently is expected >> i had somebody tell me yesterday regarding nvidia, the reason why they did not like it right here was while they would agree with the fact that, yes,

they have this incredible lead, it is but just a lead. it's not a moat necessarily, and others are coming, right there's the amds and these other companies that obviously are trying to chase what nvidia has already been able to monetize in many respects. do you buy into that story at all, or do you believe they have something more powerful than some would like to believe >> well, i'm on the board of a company that is another competitor in the chips space that is build ing to compete as well amd is certainly doing their own things amazon and microsoft and others are trying to build their own chims chips. nvidia is in a dominant position, and i think with blackwell, they are extending their lead everybody would like for there to be another competitor i understand that. you don't want to just order from one supplier. but the truth of the matter is,

nvidia took down its pricing on the blackwell generation and i think jensen described it. he wanted to make it a super valuable even for those who have the thinnest margins, which means it's an extraordinary value to people who are using it for things like medical research, et cetera. so i think they're playing to maintain significant share i think the market is growing super fast of course there will be work loads that get peeled off by custom silicon, but the idea we're going to have a real challenger to blackwell, that's two or three years away in our estimations at best. and that assumes, remember, you have to compete with nvidia and with jensen. these folks are not asleep they're already working on two generations ahead. it's catching up with a runner that is a mile ahead of you and running just as fast as you. very difficult to do >> let's talk about microsoft because there's interesting news of late that mustafaa suleiman

is going to run, you, of course, introduced him to us and we interviewed him when we were out in san francisco last year and certainly remember that what do you make of that and what he could potentially deliver for them >> microsoft is another great example trading at 30 times next year's $14 a share growing at 15%. s satya is firing on all cylinders. they pull in others and now with the hiring of the 75 employees out of inflection, they now have the capability to build upon their own proprietary models and importantly, remember what inflection was doing they had built a consumer chatbot called pi, personal

intel jeligenc intelligence it competed with google, with meta a.i. and all of the other challengers in the chatbot space. i expect, i read satya's tweet like he did, when he announced the hiring of mustafa, who is terrific, that he said we're excited to have mustafa lead our consumer copilot efforts i think what you ought to read there is not only that they're diversifying the models they will be able to deliver to their enterprises but will be for real in the consumer game they will spend real money on it they know this is a trillion dollar prize to go compete with google and others on this, and i think there's a big step forward for them >> the other gentleman you introduced us to during that program out in san francisco was ramaswamy, named the ceo of snowflake. >> 2 for 2, scott. >> who knew we were at the cutting edge of what was

happening in a.i thank you for that you're a big share holder in snowflake. they dropped a bad report recently. >> sure did. >> and i know you weren't happy with that result what does that mean for your position today what did you do after the stock went down a bunch? >> we have talked about this over the last five years 13 fs come out on different firms and people look at them and if you look at our nominal exposure, oh, snowflake is like a 40% position you have people on the set there that know from a portfolio management perspective that would be an unwise thing to do just to be clear, to start the year, it's a single digit position for altimeter we were disappointed in how they tran transitioned and could have been done over a period of months

we love sridhar. he is an extraordinary talent. you can read just the remarks on linkedin and twitter about sridhar, a legendary skill set at google. it's really a product engineering led transition and this is a company that is in incredible position as data at that platform but needs to transform to meet the needs of a.i. over the last year we have this question, what companies leave amazon, leave snowflake and maybe go to microsoft to do their a.i. because they had the openai model and i think the one thing we can say with certainty today is that the a.i. work loads are going to the data, so the 10,000 customers on snowflake, they're going to run their a.i. and those work loads on snowflake. data bricks will do it on data bricks

aws there and microsoft will do it there it turns out the data really does have the gravity. and i think with sridhar leading that company, they gave us conservative guidance. we'll find out how conservative when they report q1. my sense is when you bring in a new ceo, you set the guidance appropriately conservative so they get off to a good start our expectation is they're going to grow a lot faster than that guidance suggests this year. what i do know is this frank is a legend, absolutely. couldn't have been more thrilled to help bring him in years ago he deserves all of the kudos that have come his way but they are not stepping backwards with sridhar sridhar, as frank said, is an incredible product and the right person at the right moment at snowflake. let's take a quick break as we watch snowflake shares rise a bit, because i want to talk to you about tiktok, obviously, given the position you've had in

bytedance. and then you have two new buys i want to go through as well maybe all that's old is new again. lko u tethllit that way and wi ta tyoafr e break. ♪ ♪ ♪ ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪ ♪ [thunder rumbles] ♪ ♪ - so this is pickleball? - pickle! ah, these guys are intense. with e*trade from morgan stanley, we're ready for whatever gets served up.

dude, you gotta work on your trash talk. i'd rather work on saving for retirement. or college, since you like to get schooled. that's a pretty good burn, right? her uncle's unhappy. i'm sensing an underlying issue. it's t-mobile. it started when we tried to get him under a new plan. but they they unexpectedly unraveled their “price lock” guarantee. which has made him, a bit... unruly. you called yourself the “un-carrier”. you sing about “price lock” on those commercials. “the price lock, the price lock...” so, if you could change the price, change the name! it's not a lock, i know a lock. so how can we undo the damage? we could all unsubscribe and switch to xfinity.

their connection is unreal. and we could all un-experience this whole session. okay, that's uncalled for. welcome back i'm courtney reagan with your cnbc news update a federal appeals court has ruled to delay the new texas immigration law that would give local police the power to arrest migrants, keeping it from going into effect while the legal fight over it continues. texas could ask the supreme

court to allow the law to go into effect. the court will hold another hearing on the law on april 3rd. democratic congresswoman kuster of new hampshire announced she will not run for re-election this year, potentially creating a chance for republicans to take the swing district the second congressional district, home to nassua and concord, leans democrat by just two points and the first mega millions winning ticket of 2024 was won right here in new jersey last night. the $1.13 billion jackpot is the fifth largest prize in the lottery's history. 13 players across nine states did match all five white balls, tuesday night's win was the first time the mega millions jackpot was won since december 8th. scott, was it you? share the wealth if it was >> do you think i'd be sitting here if it was >> i know. i don't think it's anybody we know in this building, darn it

>> i love my job $1.1 billion is a lot of money we're back with altimeter capital's brad gerstner. we have new buys from the committee, too i want to get to yours so last year where you were really negative on alphabet, right? you sold it. if there was a dart board, the logo was up there and you were throwing darts, whether pachai was the right man. now you dropped it two weeks ago. >> i'm in the business of finding companies and opportunities. as you remember, i bought the stock around $90 we sold it around $120 last year after they announced intentions in a.i., because we were frustrated by the slowness in the changes. the company was not making the moves as we saw it to get fit in

the way meta and others were and then, you know, listen, i say it everywhere -- on your show, on twitter, on podcasts -- what i think the fact of the matter is the launch of gemini was a disaster for this company they haven't made the structural changes they needed to make, and the stock went down and reflected that as recently as two weeks ago it was at $130 a share, and that's when we started adding to the position again and what got me back in the stock is for the first time sundhar apologizing and philip schindler came out and said structural changes were on the table. and that's key this company needs structural changes. it has a whole heap of competition coming at it like with microsoft, chatgpt search that's coming out, et cetera, and they need to be on their a game i do think the wheels are starting to turn in terms of those structural changes, but this is still a smallish position for altimeter

and we will continue to speak the truth as we see it obviously this is a company that is super capable it has extraordinary resources search is not going away tomorrow and an important part of our decision, we did some research about generative search, and if you look at the generative search results, compare them to the traditional search results, what you'll see is there are a lot more ads showing up on generative search results. so it's no surprise to me if you put ads above it, ads on the side of it, ads below it, the answers are also going to monetize in a way competitive with traditional search, but, and the big but here is, if your competitors come out and don't put all those ads around it, if chatgpt search doesn't have all those ads around it, if microsoft and meta a.i. don't put ads all around it, then you might have to respond to those competitors and it may, in fact, monetize less. so the jury is out on it

i would put it in the bucket of a trade that we hope to turn into an investment, but we still need to see those changes, and we need to see how this evolves. >> i'm lucky everybody on the show with me today here on the desk owns alphabet, right? so what do you think about brad gerstner getting back into this name here? >> i think there has been, and it's interesting because a month ago, steve knows this, technically you need to own some puts against what looks like a breakdown in alphabet, but it's endured a significant amount of negative news and price did not fall con curran with that negative news. that's a classic indication the stock has found its right price point. i think people are beginning to rebuild positions. i like the buy obviously it's a name that is in my portfolio, so i'm happy it's moving higher. i think it's one of the names of the mag seven in 2024 that is ultimately going to outperform >> kari, you own it, too, right? >> google is a stock that was

selling at a discount to the market multiple. everyone was talking about how they had blown the whole gemini launch and, of course, they did. however this is a company that's been working on a.i. for a decade and they dominate search there's no reason to believe that they can't maintain their dominance of search, and they're one of the largest companies in the world in terms of revenue, and they have a huge profit margin it just was gang up on alphabet. and we were defending it, and i'm glad to see it behaving better i'm curious when we get back to brad how he's feeling about his meta stock, because that's one we've owned all the way from, you know, the time it was in the high 80s, 90, and it became our biggest position by quite a lot. and we felt that we needed to trim a little bit, and i'm wondering how he feels about that >> brad, why don't you answer that >> well, the first thing i would say, i don't think dominance in search in google translates to

dominant in consumer chatbot and generative a.i as it pertains to meta, listen, this company was hated 18 months ago. it traded, i think, as low as six to seven times earnings. closer to the market multiple, but i think they're outperforming the market i think they're firing on all cylinders. what people don't understand is this is a founder led business they're all still in their late 30s. i call them animal mode. it's incredible the work being done over there. they've started to get efficient around reality labs. most people probably saw on twitter a picture posted last night of he and jensen together. we know that they're one of the largest consumers it have h-100s and presumably a blackwell chips in the future that will allow them to train the next generation of open models. i'm thrilled they're committed to open sourcing llama it will be the frontier open source model

and they have the place that you can apply all of this a.i. it's making big blue better. it's making instagram better, and there's huge monetization upsides to all of the platforms. and finally what i would say is as a shareholder in bytedance, tiktok, if tiktok gets banned by the u.s. government, which certainly is a possibility, the single largest beneficiary in the world, according to my kids, will be meta, because i ask all these youngsters, what are they going to do if tiktok gets banned, and they all give me a snap answer, and that's they're going to watch it on reels and the realty is if you look at the content overlap today between reels and tiktok, it's very, very high. so it will be a pretty seamless transition, i think, out of tiktok and over to reels for a lot of the under 34s who consume all of this content. >> how are you gaming the whole tiktok saga out? and make sure you're still an owner in bytedance, correct?

>> we're definitely investors. i've been an investor in bytedance almost a decade when it was a news feed in china. let me be clear, i'm an american first and i'm a dad. and so, you know, if i think this company is violating the rules of laws in the united states and unwilling to comply with the rule of law, then it should be banned the only tension i have in the argument is i want to be better than china i want to give companies due process and follow our own rule of law in terms of how that process unfolds. but clearly the house has passed this piece of legislation, the senate's taken it up it looks like at the moment the senate is going to slow roll this and consider their own legislation. but let's play this out. if they say they have to sell the business, maybe they spin tiktok u.s. to shareholders and find a way to sell the business. maybe the chinese government blocks that. the chinese government blocks

it, then it will get banned. if it gets banned, that will be beneficial to meta let's put in context what banning it means to bytedance. over 90% of bytedance's revenues occur outside the united states and over 100% of their profits occur outside the united states. so the consequence to share hold certificates bytedance will go public in a year or two on the hong kong exchange it just won't include the u.s. it does deprive 150 million americans who like to go to tiktok for their content they're choosing i don't use it to consume all of my content my kids do and i don't ban it for them although some of my -- many of my friends have made the case to me that i should that's my view there's a reasonably high probability that this will be either a for sale, if the for sale is blocked, a reasonably high probability this will be banned i think that would be unfortunate, but i'm also a

realist. if that happens i suspect the company will go on and, like i said, ipo without tiktok u.s. and that a lot of those users or all those users will move over to instagram reels, which will be great for meta, and some of those users will go to youtube shorts which will be good for google >> joe has a question for you about another chinese tech company. >> i do, brad. and i'm a big believer that investing in e-commerce outside of the u.s. is a tremendous opportunity. full disclosure, we have ownership in south korea but china was the area years ago where i focused on pinduoduo, now pdd holdings, was a name i invested in. i'm no longer there. very curious how you're thinking about a lot of these chinese e-commerce names, if you think they found the trough, and if we could include china in the theory and thesis that e-commerce outside the u.s. is a tremendous opportunity >> and if you're still an investor in the name he mentioned. >> yeah, so we're actually an

investor in all three names he mentioned, which we likea lot. but pdd we've had to trade around our exposure for all the reasons i just mentioned let's telescope out for a second and really talk about what's going on a.i. -- you know, if you look at 20 years ago, technology really was not front and center in washington, d.c., or in beijing. today it is. the economic cold war, the front lines of the economic cold war, are a.i., and they're based here in silicon valley. the u.s. government banned nvidia chips and now we're going after tiktok and who knows it's not all surprising to me that tim cook and many others are in beijing today meeting with xi because the response out of china would be, you know, some retaliatory actions on apple in china or tesla in china. or many u.s. companies in china. i happen to believe in global trade. i think it's one of the things

that's pulled the world out of poverty and into prosperity. so i'm not celebrating that there's a new cold war, an economic cold war, an a.i. cold war that's developing. xi came here last fall and said i don't want a hot war i don't want a cold war. i want a partnership i hope with whatever administration is elected this fall that we can find our way to a tolerable partnership. i agree we need to have a level playing field. i agree we should not be allowing people to take u.s. data offshore and use it surreptitiously. but i don't think that means we need to be in the middle of a new cold war with china. >> all right and lastly, since we're talking about china, a company that's lost market share in china, a company that has continued to cut prices in large part because of lagging ev sales, is tesla, which you bought it's been a terrible performer, as you know. certainly the worst of the mega

caps if you want to still call it that year to date why did you buy tesla, brad? >> well, scott, you start with probably the best product engineer ceo on the planet, a stock that sold off a lot, right, and when everybody else is negative, negative on google, negative on tesla, we start getting excited when they're run by a founder who is as extraordinary a product leader as elon musk but there was a second catalyst and a little plug for my podcast. we went into this in-depth three or four years ago. but tesla, kind of when everybody else was asleep, launched their new generation of self-driving model on their car. i described it on twitter as when i took a test ride in it as a chatgpt moment i think michael dell said something similar on twitter why is that? because they totally scrapped

their prior deterministic models and moved to a learning model that really, for the first time, unlike wamo, which is still a deterministic model, feels like a human driving the car. so i think they're making massive progress at an accelerating rate. he's now pushed that out for free throw to all tesla owners so that they get to sample, see what it feels like if a meaningful -- or even just a small percentage of those agree to pay them $200 a month, all after sudden this goes from razor blade -- razors to razor blades, right, where people are paying for services. think about that services transition at apple that occurred in 2015-2016. and it's the type of thing that other people can't easily copy he has 5 million robot cars on the road collecting data that's training this imitation model that makes it demonstrably better and almost impossible for all the traditional oems to

replicate. so we like that for tesla, but we also stipulate china's messy. we think a lot of the negativity is priced in we think they could miss their delivery numbers next week so this is not for the faint of heart. you have to size it appropriately, be willing to buy more if the stock goes down. but betting on elon musk particularly in the age of a.i. where he is building market leading a.i. and market leading models around these cars, i think is a bit of a no-brainer >> we are going to leave it there. i appreciate you being so generous with your time with us. brad gerstner, thank you so much. >> thanks for having me, guys. >> we will see you soon. coming up, so brad is not the only one making new moves. sarat has ma ade couple. weiss has made a couple. we'll detail them next [sfx: wind, rain and rolling thunder] nobody's born with grit. british announcer: rose is really struggling. it's something you build over time.

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>> they're helping companies with a.i., and they basically said there's no really extra money in people's budgets to do that so they weren't really getting too much of that the stock is at 30 times earnings it's done everything we want it to do. so looking for other opportunities to put the capital to work. >> so weiss was talking about defense stocks, rtx, right >> yeah, it's up 15% for the year but year on year, it's flat. two years, it's down 14 times earnings. they're fixing on what's going on at pratt whitney and secular growth in defense. so cheap valuation, restructuring, doing the right things i think you've got some runway here >> i have some breaking news with kate rooney what do you have for us? >> amazon just announced it will invest another $2.75 billion in ai startup entropic, this comes as it looks for an edge in this technology race, following the initial $1.25 billion check. this brings the total investment to $4 million.

amazon had said from the outset it would invest up to that number this is amazon's largest outside investment rivian was the largest before this this highlights the spending blitz we have seen on the cloud providers on ai. even at $4 billion, amazon is still a minority investor and they don't have a seat on the board either sources tell me that entropic pass valued at $18.4 billion, one of the front runners in generative artificial. microsoft, of course, has chatgbt. the founders split you hoff from openai amazon needs the ai exposure, and an tropic will use amazon chips to train and build ai models >> the ai arms race continues.

thank you very much for that you want to add anything on rtx? >> i just think given where we are, in the world, you want to be in defense companies and you want to have companies that have growth ahead of them i think raytheon at 15 times forward earn sgs a great place to be. >> weiss, you made it clear when you got into boeing late last week, maybe friday, that it was -- you were going to be in there for a minute and you have sold it now. we don't need to go through the whole thing. i do want to talk about the fact that you trimmed some microsoft. >> i did >> so we talked a lot about ampx -- ai today >> the position just keeps growing and growing. you have to cut it back. you know, it's a double digit side position. so it's up there but i think it's going to do quite well it's just portfolio management, that's all it is no reflection on the company stlz's theto sck at $420 we'll be right back.

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"closing bell" at 3:00 eastern. we have morgan stanley analyst on to talk about there victoria fernandez and our friend, the ceo of ifi ai.

he'll be with us with rob thomas from ibm we'll find out how ai is powering stock research, fundamental and technical signals. i hope you'll join me for that conversation at 3:00 eastern time let's do some "final trades" here before we get out of here steve weiss, what do you got for us today >> i would be a sell of tesla. you can't say i've got problems with the ceo of google and on the other hand say hey, i love elon musk. there are major, major governance issues. yes, he's a brilliant investor, but the governance issues you can't get over in my opinion number two, the board is still complicit. number three, you're flooded with evs prices are coming down you don't want to be a u.s. company in china so all the headwinds i'm not a buyer, i'm a seller. i'm short. >> okay. you are an investor in the joe t. etf which is not short. >> that's my hedge

>> we're on the level. s sirat? >> free port >> stephanie >> next terra. utilities rates are going down >> don't fall asleep on bank of america. >> "the exchange" begins right now. see you on "closing bell." ♪ ♪ that it does scott, thank you welcome to "the exchange." here is what is ahead. india is on top, where the biggest opportunities are there and the names you should be buying in india. plus, ai and the banking analysts said there's one clear winner he's here to tell us what it is, what makes it stand out and why you should be buying it right now. ai, there are four names well positioned to lead the charge the analyst behind that call i