how to do that in a better and more efficient way. >> all right. they got nothing. >> i love this, around the world. >> you got -- you're, like -- you're not worried about anything. i'm worried about everything. >> let's talk about after november 5th. we'll talk again. >> that might worry you. thank you, mona. >> fantastic. that does it for us today. join us tomorrow. we'll be back here. right now, it's time for "squawk on the street." ♪ good monday morning, welcome to "squawk on the street," i'm carl quintanilla with sara eisen, mike santoli at post nine of the new york stock exchange. cramer and faber have the morning off. futures, a bit soft on this holiday-shortened week after the nasdaq's record close on friday. s&p now up 7 of 8 weeks as more strategists raise their targets over the weekend. our road map begins with wall street's bullish expectations. the s&p getting a new top target of 6,000 and eyeing its 30th record of the year. plus, big tech's dominance.

17 of the top 20 performers coming from the i.t. sector this month. goldman-sachs saying a.i. continues to fuel the boom. and shares of autodesk rallying on news that activist fund starboard value has taken a $500 million stake in the company. we've got a lot of color on that one. let's begin with the markets as we kick off this holiday-shortened week. of course, the news over the weekend, goldman, upping their year-end target and evercore isi at a time where we were getting a little antsy about narrowing breadth. >> i think we're still antsy about it, but what's interesting is the targets are all the market cap weighted s&p 500, and we were in a position which was somewhat interesting which is, even the most bullish street target was not particularly bullish in the grand scheme of things and in fact, going into the weekend, the average and median sell-side target for the s&p was below where the index itself was, so that creates this sort of catalyst for somebody on the sell-side to say, do i want to, you know, essentially capitulate a little bit or acknowledge the underlying strength, or do i want to fight

it? we have a couple targets go up. 6,000 on the s&p is up 10% from here. when the most bullish target on wall street is 10%, it doesn't seem to me as if the brokerage community is completely bulled up and is saying everything is great and don't worry about anything. on the other hand, it does show you that the index itself has kind of left behind not just the psychology but anybody trying to beat it or keep up with it, and i think that's the source of unease in this market is the average stock out there has been languishing relative to the s&p. does that tell us something about the economic outlook and what is being discounted, or is it just a.i. momentum kind of consuming all the fuel? >> well, if you read some of these reports, goldman-sachs, let's hit that one, because david kostin will be on this week to talk about it, but they didn't -- he didn't change his earnings expectations overall for the market. 2024, 2025, unchanged. but stellar earnings growth by five mega cap tech stocks have offset the typical pattern of

negative revisions to consensus eps. they didn't change their outlook for real yields either. this wasn't a call on, oh, we're going to view the market better now, necessarily. it's that, what's happening with big cap tech and how that's influencing the earnings picture. >> exactly. it's giving higher conviction of the achievability of the earnings because it's in these small number of names that have tremendous earnings momentum. david kostin also resorts to, what if you look at the equal weighted s&p 500 and look at how the valuation there is more modest? that is true, but it's still just taking the outsize profits of the, let's say, top eight or ten growth stocks and spreading them across the entire index. the earnings are still there, even if you dice up the index separately, and so the median forward pe on the s&p 500 is probably 19-plus. it's not 16 like the equal weight said. my point is, you can't get away from the idea that the way this

market plays defense is by buying the most high conviction nam names, the highest quality names, the largest names, the ones with the best earnings momentum and their all the same stocks. everything i just described is like eight or ten stocks in the market right now. >> this was the subject of bank of america's note last week where they talked about the fact that we have this shock from covid, shock from the gfc, big piece in baron's over the weekend about gen z and their risk tolerance. you wind up in some of the most aggressive growth names. >> semis in particular look super overheated. the flows into the etfs has been massive. there's a lot of just, like, upside stampedes in nvidia and some of the related stocks, and that would make you say, wow, you know, the public's getting a little bit overexcited here about the stocks, but they're not getting overexcited about stocks. they're getting overexcited about those stocks. you see penny volume go up because you have the lottery

ticket players involved. but everything else is just sitting out there. here's the thing, and sara, i've talked about this a lot of times. if the defensive -- pure, traditional defensive stocks were working really well, aside from walmart, you can't really find it. >> like consumer staples. >> and big pharma, aside from lilly, of course, it's not happening. >> we did have that environment for like 20 minutes in the last week. >> yeah, that's true. >> campbell's and hershey were at the top. >> yeah, that's right. you see -- once you see a little bit of downside momentum in the rest -- the other piece of it, though, is credit spreads, everyone keeps talking about, they've widened out a little bit, but from microscopic increments from super strong levels. >> the question, then, is what do you do with a market that people still complain about the fact that it's poor breadth. we just talked about. volumes have been pretty low as well, and there are some -- okay, defensives aren't working that well. you know what else hasn't been

working well? transports. cyclicly tied in stocks to the economy that have started to underperform, leading to questions about whether we are in for a bigger growth scare. >> i think that that absolutely has the market's attention. transports have been actually a laggard for a while, for several months, but it shows you this isn't really an economic momentum market or even a broad equity momentum market. it's just kind of a grind that's sort of digesting loose financial conditions and really strong secular a.i. trends and not much else. >> to sara's point about cyclical weakness, we did have the earnings preannouncement from nucor. that notion of the economy slowing is something that neal kashkari did address on cbs over the weekend. take a listen. >> we need to see more evidence to convince us that inflation is well on our way back down to 2%. we're in a very good position to take our time, get more

inflation data, get more data on the economy, on the labor market, before we have to make any decision, so we're in a strong position, but if you just said there's going to be one cut, which is what the median indicated, that would likely be toward the end of the year. >> he did say one would be a reasonable assumption. >> he's also on the hawkish end now of the fed. hard to keep track. he's been on both sides, but now, yes, and the fact that he is talking about one cut by december, i don't think, is surprising at all. look, it's about the data as much as it is about the fed rhetoric. i know we're going to get a lot of fed speakers this week, but what might be more important is the retail sales number we're going to get on tuesday because last week, the fed put out in the median one cut for the week and the week ended with fed funds futures pricing in two cuts because the inflation data mattered more. >> absolutely. >> more than the fed, i would argue. weaker cpi, weaker ppi, weaker indications on import prices and other factors, and that is

what's leading the fed ultimately. retail sales will be interesting. last month, they were disappointing. they are set to raise 0.3%. strong consumer could put more pricing pressure on for the fed. indications are that it actually should have rebounded in may, consumer spending. we look at sort of data like bank of america's credit card numbers and that sort of thing. so, i think how they're going to tackle the growth issue right now is almost as important -- well, not as important as inflation, but it is important to the market, because market's still trying to figure out that relationship of growth and inflation. >> interestingly, even the inflation clues have been helpful. you mentioned not just the data last week but even the new york fed, manufacturing numbers, prices paid and prices taken were lower, and i totally agree that the fed rhetoric and the dot plot last week was seen as somewhat more stale and backward-looking. kashkari is on the hawkish end.

i'm sure cbs didn't ask if he was wasn't of the dots that was unchanged by the end of the year. he also doesn't vote until 2026. he's kind of able to define the hawkish edge of the debate without it necessarily directly filtering into what they do. >> yeah. meanwhile, looking in the corners is the labor market, and morgan stanley late friday did have a note, risks to employment growth have risen. she's looking at continuing claims, year on year. obviously, we had initial claims up three straight weeks. even with the last nfp print, more discussion about the rule and what happens when you're up 0.6 on unemployment with the si cycle low. >> we saw the most americans filing unemployment claims since, i don't know, 2023. several months. it was a notable move up. you have had the ten-year yield lower for the last -- ten of the last 12 trading days. that's been the trend, buying bonds. it's reversing a little bit today, but as long as we continue to get inflation numbers that are either

consensus or a little bit below, potentially more weakness in the jobs numbers, and even powell himself sort of dismissed the last hot employment report where we got a really big jump in non-farm payrolls. people are passing around a lot of charts about how much the labor force has grown in the last few years, non-native americans -- native american labor force has been unchanged in the last few years, so people are -- we're using a lot of those charts and adding it up to say, okay, there's still enough of a picture of a labor market that's cooling. >> it's worth also reminding everybody that the fed really fixates on unemployment rate, even though they're looking at the monthly payroll numbers from the different survey, the business survey. you know, they're predicting 4% year-end in the unemployment rate. that's where we are. so, you have to be attentive to those dynamics. i think that's where the market

is. it was always going to be, you know, wading through an ambiguous set of numbers on the way, even if we get a perfect soft landing, so it's always going to look slowing too much or inflation's not cooperative enough, andthat's what we've been all year. meantime, if you own the index, you've been fine, because it's been really animated by other things. >> couple things on the big tech dominance that you mentioned, mike. one is that kostin does address it in this move up to 5,600. the other is that citi closes their positive catalyst watches on both apple and nvidia. we have gotten wwdc under our belts, got the split of nvidia and computex under our belts. now what? isn't that the concern >> at least that's the takeaway of we got what we thought we might get in a best case scenario. apple, back up to 30 times forward earnings. the earnings estimates haven't started to move on whatever new order cycle might be helped by a.i. that might happen, but at this point, it shows you that it's kind of fully valued on its own

terms, and nvidia, it's such a common talking point for everyone to say, you know, nvidia's pe has come down, even as the stock has gone to the moon because a year ago it was at 50 times earnings. but you know what? it wasn't at 50 times earnings a year ago. the earnings that actually happened in the year after that made it a 22 multiple. so, it was 22, and if you have perfect foresight today, it's twice as expensive. obviously, the numbers can keep going up, but how much? i think that's where we are with nvidia. >> by the way, today, i think it's $160, nvidia, the street high. they're doing 51 times, 2025, which is the median group in the 28 range. >> yeah. what is it, $160? >> yeah. >> yeah. >> that would be a street high. >> i'm just trying to do the market cap on that. i think -- yeah, that's a $4 trillion market cap, basically. so, yeah.

no big deal. just add a -- >> they're just racing ahead to get to the street highs. dan ives, who's been bullish all along, says it's only 9:00 a.m. at the party, and the party is going to go all night when it comes to the a.i. revolution and some of these names. he obviously calls out nvidia, the microsoft breakout, which also is notable, apple joining the crowd. we're going to talk to him in the next hour. but since we're in early, early hours of this late-night party. >> parties that start at 9:00 a.m. don't go all night. >> i was going to say, what party starts at 9:00 a.m.? michael dell is going to be on with us. >> i guess we're tailgating and then going to the game, going to the party after. >> there is this question about -- if the winners in the a.i. revolution, the picks and shovels, the semiconductors, who's next? the server companies, like dell, have been tremendous. hpe has been in there. super micro has been one of the

best performing stocks of the s&p 500. and then what? i think that's one thing that we want to talk about with michael dell, how much of the company -- of his company is going to be transformed by a.i. and is it going to be profitable? remember, there were some questions about that after last earnings when the stock dropped almost 20% on earnings because the margins missed. >> there is a huge debate that's developing about just who's going to be entitled to this massive profit pool. what points along the food chain? so, yeah, kind of the sort of the installers, the resellers, and then software, because that's been sort of left out in the cold, largely, meaning non-nvidia software. >> it's a good day for dell. at least to have them on. morgan stanley reiterates a top pick on that name as well. when we come back, boeing once again in the capitol hill crosshairs when it comes to the company's safety issues. we'll get to disney. got some news on autodesk. calls on best buy and stellantis as futures are split. stay with us.

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boeing safety issues in the spotlight. u.s. senator chuck grassley says he's launching a new congressional oversight inquiry into boath the jet maker and th faa. the a.i. lawmaker announcing that probe after the 737 max-9 incident. clearly, all these issues have weighed on the stock. it's the second worst performer of the year, down 30%. >> and you have had just complete waning confidence that there's any kind of an upgrade new order cycle that's going to kick in, keep deferring that moment when they're going to get back to really being a strong free cash flow story, and i guess this also just underscores about, you know, it's bipartisan. it's everybody who wants answers out of boeing. there's definitely a, you know, a or the -- a reflexes that says

when the ceo is being called on the corporate to congress and it seems like this company is friendless, then from a contrarian perspective, maybe we've gotten to a point where, could there be more negative news? >> also what's at stake? is it just more fines? what are they looking at here? i think that's one of the questions. >> or more scrutiny on the manufacturing process, which seems very well under way in terms of boeing itself trying to revamp that process. >> there have been some that have been trying to stay constructive. b of a last week reiterated neutral, went from 180 to $200, and employed what we're calling the dupoly defense. there are many other suppliers to go to, but did argue that it would take time. >> you're down to arguing it's an indispensable company. it's not going to -- it's not going to be a point where you're really going to compromise the business model. it's much more about, when can we get back to feelings -- if they could take advantage of what should be a very strong aerospace cycle.

>> page one of "the ft" today has a story about the defense sector at large hiring at levels we haven't seen since the cold war because there are so many flash pots. >> boeing has gotten almost no credit. they had some problems in their defense unit as well, but yeah. it's been one of these tricky spots that i don't know. it's not at all representative of how overall industrials have done. i mean, that's been one of the stronger groups, but it's a totally different stream of revenue and profits, which is kind of capex, manufacturing, chips >> to carl's point, i wonder the industrial strength, how much has to do with cyclical, and how much has to do with structural issues, like defense, for instance? which is clearly going up as geopolitics get worse around the world. infrastructure building in the u.s. with all these subsidies and industrial policy. there's a lot -- >> it's far beyond that. definitely.

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take a look at some nasdaq 100 gainers premarket. autodesk up as we get news that starboard has a large stake in the company. autodesk responding to cnbc saying, board and management maintain open dialogue with our shareholders and welcome constructive input from them. we'll talk about that in a minute. get the opening bell in about six minutes and you can catch us any time, anywhere, just listen to a flondolw the "squawk on the street: opening bell" podcast.

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. it appears that tesla is getting some positive news out of china, a source telling bloomberg the ev maker has been granted approval to test its advanced driver assistance system on some shanghai streets. that would mark the next step in rolling out that feature to chinese drivers. last week, we had "the times" story about some 16 cities in china doing some form of testing on public roads, probably the most aggressive stance of any developed country.

>> they've clearly prioritized evs, and elon musk, that visit to china a few weeks ago, when he miet with premier li, clearl paid off. eunice yoon has been saying tesla has been granted the ability to do these tests so more evidence that's happening. on the other side, he now has this s.e.c. investigation into the twitter disclosures. so, remember when he was buying up -- buying shares of twitter? this goes all the way back to 2022. there are some questions about whether he disclosed it after he had as much as a 5% stake, which is the rule on the s.e.c. he might have waited until he had a 9% stake. >> we said it at the time, too. it was unorthodox. >> the question is what implication could this have? twitter is a private company. "the wall street journal" with a piece that, you know, if this amounts to something like the s.e.c. asking a court to revoke his privileges of being a director of a public company, that could have some questions around what's going to be

allowed for his tesla role. >> it's pretty significant. of course, he had previously had this s.e.c. settlement related to his public disclosures related to a potential tesla buyout, and that was, you know, he's supposed to buy back certain agreement on that score. obviously, tesla shareholders gave a huge endorsement last week to that pay package. that was tied, in large parted, to the stock getting up to really tremendous levels from where it was initiated in 2018. on the other hand, to me, the part of that that was a little bit uncomfortable was, he had such incentive to jack the market cap up by a certain date, and he has an ability and a willingness to basically hype the stock publicly, and sort of put out these aggressive targets about what's going to happen, including robo taxis and in terms of when that was going to be a reality. and so, it seemed as if he had this unusual ability to get those targets met, even though all above board and obviously shareholders say that's fine. >> it's not his first fight with the s.e.c. either.

remember? they had a problem with the funding secured about tesla, which ultimately led him to have to step down as chairman, pay a fine, and settle with the s.e.c. so, there's history. >> we're going to keep an eye on it today. there's the opening bell on the cnbc realtime exchange. at the big board, catholic charities of new york and the archbishop of new york. at the nasdaq, it's china's la largest online recruitment platform as once again, mike, we sort of eye this split between the s&p and the russell. >> yeah. >> that ratio now, a new cycle high for the s&p. >> yeah. i mean, it really has put a tremendous amount of air underneath that ratio. the bad news is that, you know, it suggests that there's very slim pickings in terms of the stocks that are working. another day, at least, at the open when you have negative breadth on the new york stock exchange, almost two to one to the downside. on the other hand, in a weird way, in aggregate, the 2,000

stocks in the russell are less significant, because they're a smaller part of overall market cap. if you look back at past cycles, whether it was 2000 or whatever, at some point, you get mean reversion here, but it's only when the cycle changes when you do get either into and out of a recession or, of course, if we get, you know, the fed ease, they eventually should get some relief, but not in anticipation of the fed easing. usually, it's when it happens. >> should we talk autodesk? top gainer on the s&p right now. i can give you a lot of color on this one, but the story with autodesk -- we talked to the ceo on earnings all the time, carl. this is the company that does software for architects, really, and design, and the news is that activist investor starboard value, jeff smith, their leader, has taken a stake in autodesk, and is about -- is going to, today, on track to file a suit to delay the annual meeting, the shareholder meeting, which is actually set for the mid part of

july. and the company raises some -- starboard, that is -- governance concerns about autodesk, and it relates to an investigation tied to accounting that the company has disclosed, but it really goes back to the way they bill and how their upfront billings work, which is what they were doing for years and transitioning out of that, and that was going to sort of set new free cash flow targets and diminish free cash flow, and then, they pivoted the company and again, the company disclosed this in 2023, and it raised some questions about what the free cash flow actually looked like and whether there was a true apples to apples comparison. of course, that free cash flow being tied to executive compensation. the upshot of it was they didn't have to restate or anything, but the cfo of the company was moved out of her role, and they created a new role for her as chief, i think, growth strategy officer, raising, again, some

questions about who knew what when and are there governance issues so that investors were misled, ultimately, about voting this late? you know, and this was all disclosed, again, in april. there were questions about whether the company knew as early as march, because that's when they filed with the s.e.c. that they're going to look into this accounting. here's the letter that starboard writes to shareholders today. "despite our leaf in the strong long-term prospects of auto tesk, we have significant concerns with the company's operations, governor narngs oversight and accountability to shareholders, given its lengthy history of missed commitments and underperformance from an operational and financial perspective." i did speak with jeff smith this morning, guys, and he said, look, it's a great company, that he -- they have a lot of experience, starboard, in splunk and salesforce and godaddy, others in this group, and improving the operations, and the margins, which is clearly an issue here. they also need to work on some of the governance issues as well. so, speaking of delaware, we

were talking about it with tesla. now starboard is asking a delaware court to postpone that meeting and reopen this late so that either starboard or others can nominate new directors. autodesk also gave a statement to cnbc.com, saying their board and management maintain an open dialogue with shareholders and welcome constructive input from them. "we are confident in our strategic direction, significant margin opportunity, and our corporate governance." clearly, starboard disagrees with that -- >> interesting that the stock is getting a little pop, there might be an extra set of eyes here from starboard. >> well, they underperform their peers. >> standard activist response from a company. what is also good is the reminder that free cash flow is kind of in the eye of beholder. it's always defined as gapped cash flow minus some stuff we think it's okoay to exclude, an software accounting is notoriously also a little bit tricky. you have to know what they're telling you this stuff is.

sometimes, as us, it's bookings-based, subscription-based, so we'll see what the true underlying long-term earnings power might have been here and see if they get to any answers. >> clearly, starboard wants to hold their feet to the fire, both on the governance front and the operations front. they were probably looking at it before all these governance and accounting issues came up. >> it's an underperformer. >> underperforming some of the peers, potential for margin improvement in a growth business. the company has still grown. we've talked to the ceo a lot, carl, about how that designed business is actually a good one. it's recurring revenues. they have a plan for a.i. and all of that. but clearly, going to be under some pressure here with starboard. >> some of those subscription products, adobe is a good example, have sort of been through the mill in thaerms of questioning the business model. it's interesting, too, the -- i

don't know if i would call it a trend of activism. but we had peltz-disney, elliott-love, and now this. speaking of disney, "inside out 2," we've been looking for something to rescue north american box office and this is the best opening weekend since "barbie," best animated opening since "the incredibles 2." >> did you see inside out, the first one? that movie is genius. my kids don't like any movies. they only want to watch sports, except for "inside out" and they're dying to see "inside out 2." i know if that's my story, a lot of other parents -- and it's also one that the parents love too. i know they say that about a lot of kids' movies now, but this movie -- i don't know if they won any awards, but they should have when it first came out. >> my daughters, now 20 and 16, remember the first one fondly, went to see the new one with two friends of the same age, and you

know, and loved it. but the fact that they were motivated to go and see it on opening weekend. >> appeals to various ages. >> that was interesting. i mean, you know, you got to make the call. it's about a, you know, a girl going through puberty, sara, so you see if you want to bring the kids. >> they sort of teased that at the end of the first one about puberty, but look, disney's adding the most to the dow right now, adding ten points to a -- >> and the narrative as to whether movies alive or dead basically changes every weekend. you have to just more or less take it on, you know, as the releases come. >> yeah. meantime, chips, obviously, once again, with their hand on the steering wheel. broadcom is the number one s&p'er. micron, not far behind as b of a goes to $170. now surpassing the weight of software in the indexes. it's incredible what chips have done this year. >> they're breaking out, and this is partially why the nasdaq 100, the nasdaq, the s&p, and the semiconductor etf all broke auto last week. this is the story of the market,

mike, and one of the debates -- there was a good note from matt over the weekend that it's a bubble. if it's a bubble, are there signs that it could burst? >> i think the -- most of the evidence comes down to, first of all, all bubbles are based, at their core, on something genuine, real, and new. >> but how much hype is there in terms of -- >> on top of it, you have people overextrapolating that trend and paying too much for it and feeling as if the valuations don't matter. so, i think it's more about, this is a leadership group in the market that's probably gotten a little too extended in the short-term, especially when you have people looking for the next one, as with micron, which wasn't really its business at the core of what the main trends were in a.i. >> i'm looking at some of these social media stocks as well, increasing scrutiny. to put health warnings on social media. i thought that was an interesting story. meta is down a little bit today, not having a huge impact. alphabet is down 1%.

>> yeah. big piece in "the times" looking at the warning at -- the impact that social media has on teens and kids. meta is an interesting case study because it did fall almost 20% after q1 earnings and i think is back within about 4%. >> it almost recovered all of it and is sort of hesitating at this level. >> the only thing working -- so, it's information technology, thanks in part to what's happening in autodesk and broadcom. that's it. every other sector is down. utilities, giving back 1%. but we're coming, what, one week out from the half year, so from the end of the quarter, and i don't think anyone expected -- look, technology, obviously, the best-performing sector, up 30%. communication services. utilities, right there. number three, up 8.5% on the a.i. trade, i guess, and then financials, too. and in part, you know, i've been hearing from shareholders, look, the financial fundamentals are good, but also there's an a.i. story here. all these companies with labor as their top expense as they

continue to spend more on a.i. i just wonder how far that goes. does it go until we have a downturn, and then we start to see the layoffs at companies like big banks and that's already been priced in? >> also sort of the high-profile stumbles of product out of microsoft and google the last few days and then mcdonald's turning tail on this ibm partnership in which they were testing chat bots in d drive-throughs. >> i think that exacerbates the semis over everything story line. what we know is the linear demand trends in those areas and companies feel compelled to invest heavily, whether they know they're getting the payoff on the other end or not, and for now, that does benefit the hardware. let's turn to tech dominance today and mag seven performance. our next guest is interested in a line-up change. let's bring in steve sosnick. good to have you in. >> great to see you in-person,

carl. >> what are you looking for? >> in january, i proposed that the mag seven really change its roster and that was to add broadcom and ditch tesla, and i think i feel vindicated. the reason was that broadcom captures the whole zeitgeist of the moment right now. it's an a.i. stock, much more so, even though tesla may be one more in the future. broadcom is one in the frequent. >> does it say something more about broadcom that be tesla? >> yes, it does. broadcom is part of the whole movement and what we're seeing now is this great combination of momo and fomo driving the market higher and broadcom is part of it. tesla is not right now. >> to me, part of the premise of some group like the magnificent seven or the old f.a.n.g. is these are the companies that have a long-term enduring advantage and you don't have to overthink it beyond that.

if we're going to be shuffling all the members all the time, what's the point, in a way? >> it's a fictional character anyway. so, we can do whatever we want with it. and i just felt that would represent -- and it does represent us better right now in terms of what's going on. >> sure. >> but is it also worrisome that the breadth is so poor and that the concentration is so high? >> extraordinarily so, yes. because i think what we have had here is essentially a pair of binary outcomes. either we're going to keep getting driven higher by tech and momentum or this fails, and because we're so stretched right now, there's not a lot of room. it becomes sort of like everybody trying to crowd out of a fire exit or something like that. and that really -- that really is the problem. that's why i look at this as, if you want to get the -- if you want to follow the momentum, go ahead, but this is where -- when volatility is low, when options are cheap, this is where you want to be looking for insurance. >> i wonder about the dynamics of that in the sense of, people want to complain about the fact

that the index maybe isn't reflective of the typical stock, so let's say the big ones that have been driving the upside do get tired, do break stride, do correct hard. does that mean that target and bank of america and all the stocks that haven't been participating are going to go down more? because they -- the median stocks underperform in the s&p quarter to date by like 8 or 9 percentage points already. >> it depends how the exit, if it occurs, happens, because remember, any time you buy, let's say, spdrs, the generic, basic etf, you're putting 25 to 30% of your money in tech, whether you want to or not. if you get a bit of a rout in the tech sector, my fear is that people get out of spy, out of qs, and that drags the other stuff down, creating probably better value in the value stocks, but in the short-term, that could get nasty if it occurs. >> i had a question about sort of behavioral economics. we mentioned this barons piece over the weekend looking at gen z. they've grown up either in a

pandemic or being told the planet is going to end because of climate and as a result, their risk tolerance and fomo is extraordinarily high. do you see that cornered in a part of the market that's not material to the broader market? >> yes and no. as the parent of gen z people, my kids have an understanding of what's real and what's kind of fake. the one thing i will say is when you're very young, you can take more risk. you can chase gamestop. you can chase these other situations. i don't think that's, you know, like part of a healthy, balanced diet, so to speak, but this is the age where you can eat junk food and get away with it, so they give it a try, but i would like to think they come back to what i would consider more established type of investment themes. >> kind of related question, that interactive brokers, what do you see in terms of retail sentiment right now? >> our customers love volume and volatility. that's basically where we see the action. so -- >> but we're not seeing either. >> but we see it in individual

names. so, nvidia, gamestop, amd, tesla. these are, like, the perennial leaders. every so often, we'll find on our top 25 most active list some name that i have to look up because it went up tenfold in two days and everybody jumped in. >> are they losing money on those meme trades? are they doing well? >> i don't have insight into whether they're making or losing money. the fact that they're still here means they're -- >> it's zero sum sonon some lev. to carl's point about gen z, one of the arguments is that, you know, if you feel like housing is chronically unaffordable, and i feel like i'm never going to be able to have that orderly accrual of wealth, lottery psychology might as well take over. and you know, i can either sort of look for the long shot and bet it, and i'm okay if i lose, or you know, i can maybe hit the score, and i'll be one of the

lucky. crypto, too, is kind of fed into that. >> crypto is entirely part and parcel of that. one of my gen z'ers basically does social media for a range of crypto companies, and my comment is, what do your customers get out of it? but he's doing rather well doing this because that's what they respond to. >> attention is the product. >> exactly. >> before we let you go, steve, really quick, are you seeing election-driven hesitance creep in? >> not yet. although, we do see it reflective in the vicks futures curve. bearing in mind that vicks is always looking ahead 30 days, so mid-october vicks is looking at the election. it's not there yet, but i think that bump is going to get more pronounced as we get closer to the election, because i think the range of potential economic outcomes stemming from the election is quite wide. >> all right. we'll be talking about that more in the months to come. steve, great to have you in. thanks for coming by. >> thank you. >> steve sosnick.

let's watch bonds today. as you know, fed speak is back in action. we will get some today with harker at 1:00. meantime, bonds got -- yields got a little bump as the empire survey came in a little bit better than expected. we're back to 4.28%. stay with us.

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but i did manage to steal the moon. that moon? [ laughter ] i'm coming for my revenge gru. who's the loser now? loser loser. -loser, loser. one of cramer's favorite names in the last few weeks, had a very nice call. best buy going to 90s which it did and today, ubs follows up to buy, a target of 106. interesting play on a cycle refresh for pcs. by the way, a great topic to bring up today with michael ve" 100.meaerjoins us on "money morsat1: a. stn time. you need clem. clem needs benefits. work with principal so we can help you with a plan that's right for him. let our expertise round out yours.

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of protein was one of the most recent drivers with the menu addition being steak. the company's dinner business grew more than its lunch business with pointing out that $15 for dinner right now feels reasonable for consumers in an environment where fast food is feeling more expensive. cava getting in and raising its full year due in part to an anticipated tailwind from offering steak. this will likely appeal to dinner time customers something that cava managed to grow significantly during the pandemic and has been a leader on. dutch bros, another great example. offers specialty coffees and introduced protein infused coffee as a limited time offer. but the ceo says younger consumers are drinking it and some are using it as a meal replacement. they decided to add it as a permanent fixture to the menu. bros added 10% same-store sales, the strongest quarter in three years. i spoke with manfree

investments, a private equity firm investing in the health an consumer space. the desire for more protein is stronger than it's ever been according to steve young. consumers are willing to spend a bit more on something perceived healthier or adding more fat and protein to their diet. sweetgreen and cava we should note both up more than 100% year to date which is quite impressive. back over to you. >> kind of reminds me of the grief that chipotle has gotten for the servers that are giving you food if you whip out your food, they feel under pressure to make the serving size larger. >> yeah. brian niccol has said that's rude to the servers and they want to give you what you want and, in fact, chipotle says it has not changed its serving sizes, so again, this gets back to the trend where people are spending more cautiously, perhaps, they want more from restaurants in this environment and everyone is trying to keep everyone else happy, right. >> is it a fad, do you think, that people -- protein now, or this is a long-term story?

>> i think as it a long-term story because remember, health comes and goes and chipotle was a leader on this one. remember, a few years ago, made the whole 30 partnership popular and that also helped grow both their lunch and dinner business. people wanted something that was healthier and kind of adhered to some of these different dietary shifts and changes they were making. this is here to stay. it takes different formats as time kind of evolves, but i don't think this one is going away any time soon. >> appreciate it. hopefully we can catch up and talk about mcdonald's ai and another interesting story on your beat. kate rodgers out west. >> thank you. >> when we come back we talk mega tech and ai with dan ives raising his target on microsoft as the week enops soft. s&p down 9. don't go away. (man 2) i have people i can count on. (grandma) and a million stories to share. (vo) the key to being rich is knowing what counts.

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good monday morning. welcome to another hour of "squawk on the street."

i'm sara eisen with carl quintanilla. david faber off today. we are live from post nine of the new york stock exchange. take a look at stocks. we're down just 0.1% in the s&p in the last half hour of trading. we opened lower, came back, and now a number of sectors have turned green along with information technology, which is, of course, at the top where it has been lately. we have consumer staples, industrials and energy consumer discretionary in positive territory. the nasdaq 100 also has gone positive this morning. again, it's been a huge outperformer for the quarter, up 8% for the year, up 17% and that strength thanks in part to the chips stocks. today it's broadcom continuing its rally off last week. nvidia up, apple up, tesla doing well. micron, auto desk we'll talk about in a moment as well. take a look at treasuries. the trend lower treasury yields and reversing a bit today but we're still sharply off those highs that we got just a few weeks ago, which when the 10-year was 4.6. we're below 4.3.

the 2-year yield 4.74. here are movers we are watching this hour. more bullish calls when it comes to mega cap tech. microsoft, apple and nvidia continue to battle it out for the title of the world's most valuable company. more on the key names to watch in just a moment. shares of dell technologies rallying. the stock reiterated overweight at morgan stanley. $155 price target. shares up 80% so far this year. a big interview coming up in the next hour with ceo michael dell on "money movers." also watch shares of auto desk. activist investor starboard value has taken a stake in the name. much more on that story and what investor wants and how the company is responding in just a little bit with the stock up almost 4%. carl, it's not going to compare to last week when we had cpi and the fed, but there are important data points this week. retail sales is going to be a highlight about tomorrow, industrial production as well. the market closed on wednesday here in the u.s. for juneteenth,

but we will get british inflation, jobless claims on thursday, takes on even more importance after we got an elevated read on the number of americans filing for unemployment claims this week. see if that trend continues. and then home sales data. what i will also be watching is central banks around the world, just because the fed is out of the way, we also have australia, bank of england, minutes from the bank of japan, a few other central banks in focus as well, and the reason i bring this up is because, you know, we've been following the inflation numbers so carefully in the u.s., but it really has been a global story. the elevated inflation that we got in the last few years, and now the disinflation that we are seeing. there's a great chart that we made from bank of america that shows the global cpi, which has dipped below 3% from last year. there's the spike up, right, coming out of covid. we certainly got high readings in the u.s., as high as 9%, and it has come down. we're not quite as low as the

median global number yet, below 3%, but we could be getting there. that phenomenon is worth watching as we wonder what global central banks are going to do. >> what powell said in the presser about how we look at inflation versus, say, our trade partners. rsm with a nice chart looking at harmonized cpi-pce and the argument is if we measured inflation the way our trade partners do, we would be looking at a 1.95 handle and the fed would be talking about cuts. >> owners equivalent rent is overweighted, shelter, as a component our cpi report. why the fed pay morse attention to the pce, which it is not as weighted, but, yeah, that could be one explanation for why we're seeing lower inflation. talk about divergence of central banks and sure, they're not all moving at the same exact speed, but they are all moving toward lowering interests instead of

tightening interests where they were. the other chart i pulled out shows the turn has happened. this is percent of central bank tightening. ran up, right. everybody hiking, the fed, bank of england, canada. the easing cycle has begun. so even if it's happening at different speeds, it's still happening. now there's a debate about june and july and august and september. but the debates are all about when the central banks will ease and again, that's just -- it's an important underpinning because markets are global, liquidity is global, and when there's easing in multiple places that does potentially offer a system laytive effect for global markets. taylor swift coming to the uk in august might set them back acord to cowen. maybe they will cut in august and wait in september because they will get a hot reading. things like that that we have to debate country by country. the point is we're debating the next. >> indeed. her impact is felt a lot, more

strongly felt in smaller economies. >> sweden that hot read. goldman sachs raised its s&p forecast to 5600 over the weekend. ever corp raised it as well targeting 6,000, from 4750. for more on what's next, chuck schumer chief investment strategist liz ann sonders joins us now. are you feeling more optimistic at this point, given what we've seen from stocks, especially big tech, leading the market? >> well, it's the specialty part that's the operative word there. the market has done quite well, but most stocks have not, and that kind of divergence and concentration can go for a while. it's difficult to try to pinpoint at what point you start to get convergence there. but on pretty much every breadth metric including the fact that you're in low double digit percent of stocks that have outperformed the s&p within the s&p over the last one month, three month, one year, in the case of the nasdaq, the average

member maximum draw down year to date is 37%. a tremendous amount of churn and weakness and rotation going on under the surface. you just wouldn't pick that up if you're only focused on the index level gains which are increasingly driven by a smaller and smaller handful of stocks. that's a risk. timing when it comes to fruition is the tricky part. >> i was going to say. what do you do with that risk? do you have more exposure to the tech stocks or do you reduce exposure overall to the market if you think that is problematic? >> it depends on what your exposure is whether you're a passive investor in index funds or an active investor. you need to do your best to make sure you develop the kind of concentration problem that develops in your portfolio that exists in the index. rebalancing, a lot of investors will do rebalancing based on the calendar and that's how a lot of institutions do it, mutual funds rebalance during the last week of each calendar quarter. there's an opportunity for

portfolio rebalancing where you're given the opportunity to trim back where gains have been most significant. the beautiful thing about rebalancing is it's a trim and an add. it is not a an all-in, all-out try to pinpoint the top in terms of a sell which nobody can do that. i think it's that discipline rebalancing that can help keep concentration from becoming a big problem within your portfolio. >> curious about your thoughts about consumer in light of retail sales tomorrow, but the story the white house is going to be fairly aggressive in managing gas prices and spr as we work our way into the summer. that's on top of what wholesale prices are already implying about retail averages. historically at a time where we actually get prices rising, not falling. >> well, it's hard to say what government policy can do to truly effect energy prices, whether it's on the oil front or the gasoline front.

i think it can work on the margin. it's demand fundamentals that drive that and more broadly on the consumer you have started to see cracks in the consumer. in fact, even prior to some of the concerns that have recently developed and what has triggered a lot of the big retailers to announce pretty aggressive cost cutting, has been the fact that the differential between nominal consumer spending and real consumer spending is significant, such that, you know, we have $19 trillion of consumer spending in aggregate in calendar year 2023. that's an all-time high. but in real terms, per capita terms, meaning a population adjusted terms, it's actually been flatish since about late 2021. this sort of booming consumer story, if you dig under the surface, there's a difference between nominal and real nonpopulation adjusted and population adjusted. it wouldn't surprise me to not see a beat on the upside. you know, i'm not trying to forecast individual economic

numbers as they come in, but it wouldn't surprise me to see some weakening in consumption data more broadly, and it's brought out by a broader consumer metric like consumer sentiment which really had a lot of weakness in particular within the categories of consumer sentiment. >> just back to the overconcentration that we talked about with the mega cap tech, where are you on the ai hype? do you buy it? how do you look at the valuations of these stocks relative to what they're actually planning to earn? >> yeah. >> whether they're overstretched? how do you characterize it? >> >> i don't cover individual stocks, so i can talk about ai, and its enthusiasm. i think that's legitimate. whether the stocks have gotten over their skis in terms of valuation, now at this stage in the game, the trajectory of earnings, you could argue, is supportive of valuations and a

momentum is a factor has been very powerful. the important difference to the bubble question -- because there's a lot of comps to the late 1990s into the peak in 2000 given that momentum was a dominant factor. obviously, tech and the internet boom at that time -- but the interesting difference between the late '90s and now is that the fundamental factor most highly correlated to momentum in the late '90s was negative earnings. that is the complete opposite in this environment. the fundamental factors most correlated to momentum in this case are things like strong free cash flow, high interest coverage, high return on equity, profitability streams. so there's arguably much higher quality funds that are going along for the ride. valuations are stretched, but valuation, like sentiment, is a terrible market timing tool. it's good as a backdrop, particularly if you have a very long-term time horizon but there's no correlation between multiples and say a one year

performance by a group of stocks, by an index overall. so that's just one word of caution when looking at admittedly rich valuations. >> to that point, liz ann, last few days, citi upgraded u.s. stocks, goldman went to 5600 year end and as you know evercore went to 6,000. does that feel chasy to you? >> well, again, maybe not at the index level. if you continue to see this concentration, you can have index level gains that are extraordinary. and, you know, i cited the average maximum draw down of 37% within the nasdaq. it's not as extreme within the s&p, but another example, the s&p has had no more than a 5% draw down year to date, but at the average member level, it's 15%. so i think, somebody at the beginning of the year up until this point, said i think the first half of the year, the market is going to rip. and another person said i think the first half of the year there's going to be really ugly performance. both of those views would actually be accurate whether

you're looking at the majority of stocks and what they're doing or just what the index is doing courtesy of a very small number of stocks. and i think that type of bifurcation could persist for a while. >> all right. liz ann, thank you. always good to check in with you on your latest views. liz ann sonders charles schwab chief investment strategist j our road map for the hour, the new price target hike from microsoft we're going to talk to the analyst behind that one. >> energy hitting correction territory down 10% from recent highs. what's ahead for that sector from here. >> and meme mania. gamestop holds its shareholder meeting after postponing it last week due to technical difficulties. we'll help get you ready. "squawk on the street" will be right back with the dow down 96 and the s&p continuing to recover and climbing toward the flat line. ♪ in any business,

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welcome back to "squawk on the street." talking about it, the tech rally marches on. it is the best performing s&p sector this month, quarter, year, today. let's get to dom chu with more on the names we should be watching. >> good morning. it's important because of all those superlatives you threw out there. it is also 30% weighting in the s&p 500 making it the single most important sector to the health of the broader market overall. if you take a look at the xlk, the spider tech etf versus the

qs and s&p 500 overall on a year-to-date basis, again, that out performance very prevalent. so let's take a look at some of the charts and the technicals that may talk a little bit more about that tech state of tech trade if you want to look at it that way. the tech sector spider is the 50-day moving average, 50-day average price on a rolling basis. where we are right now here is roughly 9% above that trend line. that more medium term trend line. this is a relative strength performer so far important for the biggest sector in the s&p. with regard to the stocks that are seeing seeing the biggest mow momentum move. check out these three names. they underlie the moves. nvidia no surprise there, broadcom, ticker avgo, and first solar believe it or not at 40% gains for over the last year. the reason i want to highlight this is because, guys, nvidia is

currently about 34% above its 50-day moving average. broadcom is roughly about 27% above its. and about 26% above its for first solar. these are some of the real underlying power movers with regard to the actual price performance. now of course it really doesn't matter because the mega cap names, as we know, drive the performance. looking under the surface, a lot of interesting names, mostly in semiconductors driving that trade, in tech. i'll send things back over. >> we had an argument for broadcom to replace tesla in the mag 7. thank you. dom chu. >> our next guest says the strong will only get stronger with ai and throughout the course of the year the race to a $4 trillion market cap will only heat up between nvidia, apple and microsoft. joining us is dan ives, wedbush securities managing director has an outperform on microsoft and raised his target from 500 to 550. so goliaths win. >> in my opinion the ai party

it's 9:00 p.m. in the party. it goes until 4:00 a.m. everything we're seeing from a software and demand perspective, the use cases, it's going to play out. what i can tell you from microsoft partners and customers they're lining up and that's bullish for microsoft and second derivatives, servicenow, palantir and others, led by godfather of ai jensen and nvidia. carl, in my opinion, it speaks to our bullishness. this bull market continues well into 2025. >> where do you think the biggest threat is? is it from regulation or something else? >> the biggest threat is china. because when you think about u.s.-china cold tech war, i mean that may be longer term as the biggest threat. for someone who spends a lot of time in asia i view it as a contain threat. it start office as semis and led by jensen and nvidia, but what's starting to happen is the demand

in the use case is the multiplier. for every dollar spent on nvidia gpu oil or gold there's a 4 or $5 multiplier across tech which i blibl believe the fourth industrial revolution the 12995 moment is playing out. i think it will last another two to three years. >> i cited you this morning 9:00 a.m. party. >> i think it's 9:00 p.m. going to 4:00 a.m. >> we were questioning what kind of party started at 9:00 a.m. >> look, because to some extent when you look at where we are, this is just now starting to play out from a demand perspective. i think the important thing is that, of course, it's been led by nvidia and what we've seen, but now, what we're seeing across our checks around the world, that ai revolution is playing out in software and i think ultimately it's going to play out in numbers. the numbers are going to go higher for 2025. >> are you referring to this notion that hardware is being beginning to eat software or

make it easy to start a software start-up with minimal engineering. >> i think it speaks to -- if someone told you dell was an ai play six months ago, what are you talking about? look where we are now. look at oracle. i think what you're seeing now is, it's hardware, it's software, but it's being -- it's really creating a renaissance growth through all these install base. look what's happening in oracle and what na dell and redmond. i view those as air pockets in an ai revolution. >> are they all ai winners? >> not at all. i think you will have winners and losers. i think over the next six, 12 months we sit here and be winner, loser. do they get acquired? does the board have to ultimately -- as the clock struck midnight, you're going to see clear winners and losers playing out. the "game of thrones" arms race

playing out, it's helping in tech from dell to cisco to oracle. >> who is the loser? >> when you look at losers, where does cisco play? cisco does splunk. that's an aggressive deal. sap versus oracle. for now oracle is. for now, we talk about losers, the niche software platforms, as the strong get stronger, those are really the ones that ultimately start to actually see i think demand erosion and they're going to be face something tough decisions. do they consolidate or where are they? >> was the adobe scare for real? this last few weeks, questioning the model? >> i think we're heading into -- i think there's definitely unknowns and i think for a lot of the big software companies, you look at adobe and oracle and microsoft, they're going to have

to adjust, pivot, but when i look at adobe, you saw some air pockets and then saw strength. i think we're going to continue to see some of these ups and downs. many salesforce.com look at that air pocket. i view that as an air pocket and benioff will monetize that install base. that's why install base is important. many skeptics valuation. as i say many are trying to find this ai revolution in the tenth floor of the new york city office building or in their spread sheets. you got to see it around the world, that's what we do. >> you are a road warrior, i will give you that, dan. it's good to have you. thank you as always. dan ives. up next, check out this mystery chart outperforming over the last couple years but hitting correction territory. it's down 10% from a recent high. is it a buying opportunity. we'll tell you what it is and take a look at what the street is saying, next.

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high back in april. now energy has pretty closely tracked the price of oil, although more recently that relationship has started to break down. now matt over at mayher taback noted a similar setup when oil outperformed the energy sectors. it led to breakout to the upside for both and we're at a key inflection point with all eyes on $80 wti. now in terms of a stock specific call evercore saying industry consoledation means a narrow set of producers with resources to compete and favor exxon, bp and diamondback. bank of america saying that quality is under priced when it comes to upstream players with -- and they added, though, range bound oil means that the number of retractive opportunities is limited. top ideas concocoa, coterra eog and permian resources thanks to growth in the permian basis.

they did call devon a turnaround story noting the stock is down about 18%% from its recent high. >> thank you. pippa stevens. turning to some activist news, starboard value taking $500 million stake in graphic design auto desk. jeff smith tells me it's a great company that's underperformed their performance but they will have to improve the governance and performance. a key focus auto desk's disclosures around an internal investigation that led to the ouster of its cfo. she was named chief growth strategy officer. the company starboard the activist says the timing of auto desk disclosure raised some red flags since it came almost a month after the probe started and a week after the deadline to nominate directors have closed. so starboard will file legal action to reopen the nominating window and delay the company's annual meeting set for july 16th.

the governance issues relate to changes in the way that the company bills customers and forecasts its free cash flow as a result, which is the source of the internal accounting investigation. the question here is where shareholders told the full story on this and when, besides, of course, questions about performance and the company missing targets. it's the classic starboard playbook here as far as boosting margins and profitability in the software space. they've done go daddy and salesforce and splunk. this is clearly in that with the added questions over governance. we'll see what a delaware court decides on that one. >> you think it's the expansion and margin concerns first and then the governance? >> i think they're both issues. the governance issues are questions that need to be raised and as it relates to the trust that shareholders have in management and in the board in being told the story because it directly relates to free cash flow estimates and executive compensation as well. so that is a big issue and i

think that will be -- that is now -- there's a light shined on that by starboard. i think at the heart of it is performance and the fact that starboard thinks it's a good company. >> fascinating. another example to watch. still ahead the s&p up almost 14% for the year. and today a number of firms raising their outlooks for year end. our next guest was pretty early to that party. raising his s&p target last month to one of the highest on the street. we'll talk about where he's seeing opportunity in just a minute. ♪♪ ♪♪

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welcome back. i'm kate rodgers with your cnbc news update. israeli benjamin netanyahu dissolved his six-member war cabinet this morning. the move after former army

general benny gantz and his partner left the government last week over what they said was netanyahu's failure to come up with an effective strategy in gaza. a russian court announced today the espionage trial of wall street journal reporter evan gesh cogive is set to begin on june 26th behind closed doors. gershkovich has been behind bars since his march 202023 arrest accused of gathering secret information on a military facility on orders from the cia. "the wall street journal" and the u.s. government have denied the allegations. he faces up to 20 years in prison if convicted. this morning, roughly 72 million across the u.s. are under extreme heat warnings. meteorologists say the sweltering temperatures will be felt from cleveland to boston and could last through friday and beyond. some areas are forecasted to see temperatures as high as 105 degrees. sara, back over to you. >> i know. i saw 90s in new york city on friday. kate, thank you. kate rodgers. we are about an hour here into trading and stocks are down

just a little bit, though. they climbed back to the flat line. nasdaq gone positive thanks in part to strength again in some of the clips. broadcom and nvidia. to bob pisani with more on what's moving. >> it's more of the same. over the weekend a lot of anxiety around the fact that tech is outperforming everything and everything else seems to be taking up the rear. i want to show you the estimates in the numbers are right. technology is far and away out performing. this is an extraordinary year whuf the two tech sectors up in the mid 20% range and everything else financials having a good year, not bad year, up 8%. consumer staples also having a decent year up 8% consumer discretionary sort of flatish up 2%. the stock market on our price basis goes up on an average of about 6 or 7% a year. there's nothing unusual going on with everything else. tech is so extraordinary it's just moving everything along with it in the major sector. so here's the earnings

expectations. this is not priced. these are earnings expectations for the year. look at these numbers here. when you have up 20% in a particular sector that's the second biggest sectors out there and technology biggest one up 20%, 18% you see, that's extraordinary. that's going to drag up overall the s&p 500. but the rest of the world is not that awful. financials have expectations of 10%. those of you wondering on average the s&p earnings growth is 6% a year, that's long term, decades long. so you see industrials up 6%. there's nothing wrong here. there's nothing horrible going on. this is actually an average year for industrials and average year for consumer staples. materials by the way pippa was talking about energy, commodity stocks have a difficult time in a deflationary environment because they can't raise prices. materials and energy have been having a tough time. that's a particular story out there. overall, the earnings expectation for everything ex-tech is not that bad. it's just tech is quite amazing here. so when you look at -- look at these earnings -- these are

earnings expectations for the year. nvidia is up 100%. even amazon these are big established companies up almost 60% earnings growth. alphabet up 30%. these are expectations for 2024 i'm point outing here. even microsoft. all these years microsoft has been around it's going to grow 20% earnings this year. incredible. and even apple which has not been a favorite this year but has come back recently, also 10% gains. when you look at the broader indexes, it's no wonder it's about growth. s&p growth up 23% dragging everything along with it in the major indices. there's the s&p up 14% and we whine ain't the equal weight index up 4%, but that's not even a surprise here. if you look at value, value is actually up this year. remember the stock market averaged 5, 6, 7% a year not a terrible year but just value is looking wimpy compared to what technology is doing. there's your mid cap up 4% and

the russell which has a tough time in any kind of higher interest rate environment was earlier in the year is always subways here. it's true, it's a two markets. one is extraordinary. maybe once-in-a-lifetime and everything else is just kind of chugging along behind it. i guess my point here is, it's not -- we're not having a bad year ex-technology. it's just that this is such a once-in-a-lifetime event around artificial intelligence, akin to what happened in the late 1990s, it makes -- appear like we're having a poor year and we're not actually having a poor year. you see how people are getting dragged in and having to raise earnings estimates. you see how kostin got dragged in and julian emanuel now. julian raised his earnings estimate in the middle of the year. that's how extraordinary caught off guard these people are by the moves we've seen in technology. >> yeah. he's making up for lost time. thanks. bob pisani. as bob pointed out we have target increases. our next guest did raise his

target last month and has one of the highest on the street, claims other strategists are involved in a chase. joining us to you vemo's brian belski, target of 5600. great to see you. >> thanks for having us, carl. >> do you feel pressure to play along and chase further? >> no. no. actually, on a short-term basis we're a little bit worried. on a sentiment basis, we don't begrudge any of these strategists for raising their targets. this is a really tough gig, and we think that, you know, many of these strategists have missed the forest through the trees. they've been focusing on the index level versus the underlying stocks. number two, obviously, they've been focusing more on macro variables in terms of their models. you know, how we explain that is, we don't know exactly their process, carl, but there are models you can take a look at with respect to how we look at the market. we look at dividend discount model, cash flow model, pe model, but then also a macro

model. so if you look at the macro model, the macro models are always negative because they're backward looking. if you look at the macro data it's been decelerating. those models are behind what's going on in the market. but i think lastly, you know, i'm going to quote bill murray for part of the lost generation, we're amongst the last strategists that look at stocks in the industries in the sectors and the market. remember we run almost $8 billion of real live money portfolios, so we have to put our money where our mouth is. we talk about our clients about investing. strategists have missed that because they want to make the big market call. we don't begrudge them from raising their targets. it's a tough gig. they're late. >> meantime, you continue to like tech, but you also like financials. can you walks through more of the second? >> yeah. we do. it's in my notes, we think very, very thematically, first off, i think the broader theme for

financials is scale number one, but i think the easier way to think about it, carl, buy the really big ones and the really small ones. why is that? let's start with the really small ones. i think financial services and banking in particular is a relationship business and there are several very attractive small mid banks with clean balance sheet, very strong cash flow and very clean loan portfolios, that are really built on strong relationships like let's call it -- let's say glacial bank corp in montana or a rollup of strategies like first citizens, a great management team that have proven they can really own a lot of great assets. and then on the other end of the spectrum, the really big ones. what does that mean? bank of america, citigroup, jpmorgan, goldman sachs, morgan, they had the balance sheets necessary to get through some of these storms. we think the regional banks are still in trouble, loan portfolios might be messy and there's going to be massive

consolidation within the regionals, but we don't buy stocks because they're getting bought out. we buy stocks because they're performing. >> don't you think there's a big ai play with the big banks? >> we do. nice to hear your voice. we think of ai and financials kind of like we think of clean energy and energy stocks. you buy the really big banks because the big banks are the 1 ones investing in ai and buying out great companies that have the ai component to it. i think ai is still coming on. remember, a lot of the banks, sara, as you know, have been really reserving, over reserving, so they're going to have a lot of extra cash because we're not having a banking crisis in the united states and with that excess cash share, they're probably going to be seeing some increased consolidation, buying back stock and paying dividend. we think the ai play is strong in financials. >> that's good stuff, brian. nice to keep a level head.

look forward to chatting soon. brian belski. >> thanks so much. still to come, "squawk on the street" heads to china for an inside look at the country's ev capital, plus fresh news for tesla there. what investors need to know when we come right back. we invent them, we design them, we build them. and one day, we have to let them soar. ♪ i'm always coming home ♪

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with a long track record of outperformance. alamos gold. invest with us. our growth sets us apart. welcome back to "squawk on the street." chinese state media reporting that shanghai is allowing tesla to carry out the tests of the company's most advanced autonomous driving software, which would eventually pave the way for its full rollout across the country. carl, as we know, that elon musk

has done some of his own diplomacy there in the country. he sat with premier li and had what appears to be a warm relationship with the chinese leader, despite what's going on ween the u.s. and china overall. >> speaking of china and the ev, the industrial strategy does include becoming a dominant player in ev manufacturing. with one chinese city now home to five car plants. let's get to eunice yoon in beijing with more on what some are calling china's ev capital. hey, eunice. >> reporter: hey, carl. this weekend the g7 nations criticized china for what they described as its harmful overcapacity and as i found out in southwestern china, you can understand their concerns. if you're interested in a chinese ev, you might want to visit china's southwest. this city of 4 million people in the province of gaungchi brands itself as an ev capital. last year produced half a

million electric vehicles of all types. some made at this new energy factory managed by 30-year auto veteran. very competitive as a city for energy vehicle manufacturing, he says. first the cost of manpower is very low. second the logistics cost is low. third, the industrial foundation is there. it's home to 5 major state-backed carmakers including this auto. we're on our way to another automaker famous for making a car used by the government elite. about a mile away is another company making evs. dongfung. and the joint venture that produces a popular $4,000 ev. the stated aim has been to produce more than 3 million evs a year by 2025. it's fallen short. data from japanese auto research firm mar markline, shows the city's factories could have the capacity to produce roughly

three times as many evs as they are. they hope to rev up exports at 1% of production. the company set up an overseas department despite international criticism of china's overcapacity. it's groundless, he says. if your cost is low thanks to your scale and your price is more competitive, anyone can compete, right? what chinese consider as competitiveness, many other countries see as unfair trading practices. in fact, the u.s., europe, turkey, as well as other countries have been raising tariffs for chinese evs and the chinese are not very happy about it. in fact, they've been threatening tariffs or other retaliation. >> you know, i'm thinking back to a note that wells wrote last month. no substitute for your reporting but it is called "the dragon has awakened" and they said tesla is no longer the disruptive threat to autos. it is the chinese, just like they did with steel and just

like they did with solar. >> yeah. that's right. i think that the chinese are hoping that the evs that are made here, would be disruptive because they are seeing it as a very important pilar in their own strategy from a technological point of view as well as from an export point of view. in fact, the numbers from the data that we saw today, it really showed that the chinese are really pushing ahead with that export strategy. >> i do wonder what kind of growth market lies ahead for them, though, if they can't export to the u.s., there's what, 100% tariffs and now europe has put as much as 38% tariffs and that was a growth market. clearly they can sell to the rest of the world, including china, which is a huge market, but i do wonder if that stunts the growth? >> yeah. and i think that they probably are wondering as well, which is why you're seeing the chinese government really pushing back

on the idea that they have over capacity. their argument has been that this is competitiveness, this is good for the world because of the way that it's going to help with clean technologies and really clean up some of the environmental issues thank you see around the world, but at the same time, they scared that th as many buyers of their products. >> yeah. it will be interesting to see if china retaliates on the european front. eunice, thank you very much. interesting report, as usual. after the break, gamestop hoping second time's a charm when it comes to their annual meeting today. kicking off in about an hour. we'll give you what to listen for when we come right back. ♪

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one of the best performing stocks on the s&p right now is a autodesk, the software company that caters to architecture firms and other design purposes after news that starboard the

activist is taking a stake. we did get a long response from a autodesk is saying, starboard is seeking to leverage a now completed internal investigation that resulted in no financial reinstatement. autodesk board considered the request from starboard and determined that reopening the advance notice period would not be in the best interest of autodesk or its shareholders and they write a number of paragraphs about why their strategy is working and producing growth. at the heart of this is starboard is filing some legal action to delay the shareholder meeting, scheduled for july 16th. the company confirms that's still going to happen today. they want to reopen that ability for shareholders to nominate other directors because they feel that this disclosure of the accounting internal investigation was not disclosed in time for that period to be able to nominate and make changes on the board.

now, it didn't result in any financial restatements of accounting but did result in the cfo no longer being able to do her job. that's part of starboard's case here. it gets interesting. stock's up 5%. clearly, the pressure on company from investors, whether it's on governance or performance, both of which are at issue here, is something investors are getting on board with. >> right. i wonder if we're seeing any seasonality issues in activism in general because it happens to be annual meeting time. >> it can happen around that time. certainly they look for that. and, you know, winners and losers. it hasn't been april market where everything has gone up. so, there have been underperformers and so easier to pick that when the market has been all-inclusive. we're about an hour away from gamestop's second attempt at an annual meeting. kate rogers joins us with that. >> this is gamestop's second attempt at an annual meeting. the first was derailed after

online shareholder demand crashed the website. the last meeting in 2023 took only 15 minutes. there was a statement from ceo ryan cohen so we could hear from him again today. we may get more details on how this company plans to deploy its new cash pile. the video game retailer has been taking advantage of this meme stock rally, issuing more shares, bringing in about $2 billion in the last round. shares have been wildly volatile as the now famous online booster of the stock, keith gill, aka, roaring kitty, his posts have sparked this stock. he does appear now to be the fourth largest shareholder in gamestop after posting a screen shot of his e-trade account showing he holds more than 9 million shares. he appears to have sold his call options that expired this week. the latest on gamestop's financials came from earnings that exposed 29% drop in sales. so far no real sign of

operational turn-around, guys. back to you. >> yeah, i guess investors should be listening for that as well. thank you, kate rooney. watching gamestop. don't miss the chairman and ceo of dell technologies, michael dell. we'll talk about how transformational a.i. is for his company. of course, for the broader tech industry and for the world. that's coming up in the next hour of "money movers." stay with us.

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good monday morning. welcome to "money movers." i'm carl quintanilla with sara eisen live at post 9 of the new york stock exchange. coming up, are more record highs ahead? the s&p just notched its best weekly advance in over a month. we'll talk about which stocks and sectors to target to keep the rally going. a rare and exclusive interview. michael dell is here at the new york stock exchange, talking earnings, the a.i. boom at the bottom of the hour. celsius ceo john fieldly has taken on the consumer and more ambitions globally. the s&p has gone positive. it's been an improvement, a slow, grinding improvement since th