♪ good afternoon, everybody. welcome to "power lunch." alongside kelly evans, i'm tyler mathis. glad you could join us. forget the magnificent seven. it's all about the big three. you have apple, microsoft, and nvidia, nearly $10 trillion worth of market cap right there. nearly a quarter of the total s&p 500. so which of these three is best positioned from here to get to

$4 trillion? maybe beyond? we have three bulls standing by to make their case. >> excited to hear that. plus, we've got bryson dechambeau. he pulled off a dramatic victory in the u.s. open thanks to two very difficult shots on the final hole. he'll join us to talk about his victory and the current state of golf. first, let's get a check on markets with the s&p hitting new highs. dom pointed out last hour, and it is worth repeating, semiconductors are breaking out to new highs again. traditionally leaning in to cater. the dow erased earlier losses. shares of adobe are lower after the company and its executives were hit with an ftc complaint. it accuses them of hiding fees and preventing consumers from easily cancelling subscriptions. the company will fight those accusations in court. let's begin with the three stocks we mentioned at the top there dominating the market and attention and dollars invested. apple is the current market cap king at a little more than $3.3 trillion. microsoft and nvidia trailing very close behind.

could be a change by the end of the day for goodness sakes. what are the market leaders, which one is best to bet to get to $4 trillion first and to lead the markets beyond? we have three bulls to make their cases for the one name they're most bullish on now. making the case for apple, we have senior software analyst for da davidson. making the case for microsoft is joel fishbine of truist. $600 price target is the highest on the street for that stock. and making the bull case for nvidia is chris roland. semiconductor analyst. l apple made a lot of news last week, closed at some record highs. why do you think the wind is so much at apple's back right now? because it hasn't been. >> within a year, most generate i have a.i. will be gdone on an

apple device and apple chips. they introduced compelling features and functionality that is not backward compatible, which will drive an iphone upgrade cycle. the stock works when you have iphone upgrade cycles. last time the stock worked was iphone 12. we're just getting started in terms of that outperformance. there's still a lot of runway because this feature functionality is going to be rolled out broadly. generative a.i. will go from hundreds of millions of users to billions of users because of apple. i'll set up your other guests by saying they can't both be right. because if chris' numbers for nvidia for 2026 are right, joel's numbers for margins for microsoft are probably 5 percentage points too high. apple doesn't have to deal with all that. >> well, i was going to ask you something different there, gil, but let me turn to joel and chris and get you both to respond to what gil just provocatively laid on the table. joel, go ahead. >> gil, that was a great

argument, but as you know, apple is very consumer centric. where the real minds are going to be made is in the enterprise. microsoft has 53,000 customers that are using their azure a.i. platform right now. they're paying for this service right now. we think this is on a $4 billion run rate, and it is going to be maybe a $14 billion, $15 billion run rate the end of next year. that's where the profits are in the industry, and it'll drive the stock higher. >> respond to gil's challenge, that you and joel cannot both be right at the same time. you're talking about -- you're defending nvidia in this cat fight. >> sure. i think we can all be right. in the end, the processing, the true processing from a.i. won't be on device unless you're talking about some cartoon emojis. if you want real, real performance, it's going to have to be done on data center

hardware through the like of, for example, openai. but openai is only one player in what will be many, and the application layer has not been decided. the hardware layer has. everyone is coalescing around nvidia. >> gil, he says you can all be right. >> well, first of all, the models are getting smaller so fast that i'd argue that, again, by the time we're talking about this next year, almost all inferencing is going to be done on device. then in terms of the usage at microsoft, it is microsoft customers that matter. the fact that microsoft can sell capacity on azure doesn'tmean anything unless their customers generate revenue based on a.i., and they are not. there's probably single digit, billion dollars of revenue from a.i. applications right now, in spite of the fact that microsoft, amazon, and google have spent close to $60 billion on nvidia chips this last year.

for that spend to be sustainable, microsoft's customers are going to have to generate more than $100 billion of incremental, annual revenue this year or next year in order to justify that spend. since microsoft is continuing the spend, they'll have to generate another $100 billion of incremental revenue the year after that. until that happens, there won't be an incentive for microsoft, amazon, and google to continue to spend on these data centers. because if they do, again, microsoft's margins will shrink by 5 percentage points, 500 basis points. >> right. >> that's not sustainable. >> joel, so how would you answer that? >> it's simple. gil presumes that nvidia is going to be the only chipmaker in the world. >> exactly. >> number one. number two is that this is a cyclical business, right, supply and demand business. there's not infinite amount of demand out there. microsoft has the best buying power out there out of anyone,

number one. number two, if 1.2 billion users of microsoft office 365, all of those users right now, i think 20% of the fortune 500 are actually using a.i. on this and paying a premium for that service. i think that's going to be pervasive in the enterprise, and that's where the money will be. >> joel, is there any way you and chris can gang up on gil? it's amazing how, and it is always painted as microsoft and nvidia cannot both reach $4 trillion in the next year. something has to give. if nvidia hits those numbers, it comes at microsoft's profit. if microsoft hits the numbers, they are doing it at nvidia's expense because they're using other chips. is there any way in which he is wrong about apple sitting in the cat-bird seat here? >> in the near term, i'm in line withposition. they all win in the near term. this is a multi-decade opportunity. right now, it is the wild west. everybody is building huge models right now. models are getting smaller. apple is going to have a very

successful rollout, probably, of the next generation iphones, ipads, and devices that are going to handle some of the models. i think chris is right, that nvidia has a massive amount of pricing power right now and is the go-to player in the gpu space. >> chris, let me turn to you. i know you wanted to jump in there and get an answer in. i'll let you do that. but i also would like you to answer the question that i believe gil mentioned at the top. that is, how deep or wide is the mote that nvidia has in this space? i mean, they can't be as -- well, maybe they can -- as dominant as they are forever and ever and ever. somebody else will come in and nibble at its heel. >> the first point -- i'd like to make three points. the first point is models are not getting smaller. they're getting larger. in fact, chatgpt 5 is going to have trillions of parameters and

will require 32 gpus just to load one instance into memory. so these models are not getting smaller. they're getting larger. broadcom is talking about a million connected gpus to fire up a model. >> wow. >> that's the first point i would make. the second point is, microsoft will 10x or perhaps 20x the amount of users on co -pilot an on a.i. that is their opportunity, and that is how they can win. in terms of nvidia, it's not the nvidia hardware, per se, that is locked in here. it is cuda. think of cuda as the operating system, just as windows is the operating system for the pc. cuda is the operating for large language model processing and/or training. as of right now. now, inferencing might fragment in the future, but large model

training is -- that die has been cast, and it is cuda. it belongs to nvidia. >> that's like going back decades when it really was two different computer languages. the language apple spoke and the language that microsoft spoke. is that a basic sort of k correlate to what is going on, chris? >> yeah, that's fair. but, you know, pc was really on the back of innovation at microsoft. also, the community that was created around that. that is exactly what's happening with a.i., with nvidia, with cuda today. >> gil, you began the conversation talking about how this new a.i.-driven software that will be in the next generation of iphones is not backward compatible. meaning, you can't load it onto your own iphone. you have to go out and buy a new one. what is going to be so

compelling about this that i'm going to get off my fanny and go out and spend $1,200 for a new iphone? what is it going to enable me to do? i'm not just talking about sharper pictures or photographic effects. it's really going to be the compelling use case. >> well, everything you've gotten excited about generative a.i. this last 18 months you'll be able to do on an apple device, but it'll be integrated into the experience. you won't have to go to the side for a co-pilot or chatgpt or gemini. within your experience, within your text messages, your emails, within your photo editing, all these magical capabilities are going to appear, auto complete, auto correct, summarize, everything generative a.i. will be done on an apple device. by the way, it's because the models we'll use are 3 billion parameter models. those are the models that are efficient, fast, and easy to develop and customize. the frontier models with 5 trillion parameters are going to

be the purvey of two, three companies. openai, google, maybe meta, and they'll only be for the most cutting-edge uses. everything you were going to use, including in the enterprise, is going to be a small language model that's going to be on device, whether an apple device or, by the way, a pc device. microsoft just introduced the pcs that do a.i. it'll be done there. a vast majority of inferencing will be done there. the largest language models will only be frontier models to handle the most complex tasks. only those will really reside in a data center. >> chris, what about the three companies we haven't mentioned, amazon, alphabet, and meta, in the race to $4 trillion? >> amazon, the a.i. strategy is a little less clear. it's unclear how aws, you know, they'll be able to provide

commodity gpu compute to people. beyond that, we're finding a.i. applications a little less clear. meta will, similar to apple, have a.i. experience that is they'll be able to integrate into their program here. i'm sorry, the last one was? >> meta, i believe. >> sorry -- >> alphabet, amazon, and meta. >> alphabet is this search functionality, essentially going to be driven on the back of a.i. so this is the biggest defensive move that google can do to maintain their monopoly, near monopoly in search. >> joel, the thing i notice about microsoft is its just incredible scale in so many different parts of this universe. 1.3 billion devices uses windows 10. over 1.2 billion users of

microsoft office. 756 million users of linkedin. 145 million active teams users daily. that is the kind of mass and scale that seems to me would give -- it feels to me, in a way, like it's microsoft's ball game to lose. >> 100%. that's why the microsoft team invested so much money in this space. i think gil makes a good point. they're spending a tremendous amount of money on capex, but this is in front of the storm. they're going to build so much of a platform that it's going to be impenetrable. they have the eyeballs that are actually going to be using the a.i. at the end of the day. the only other pushback i'd give you on gil's comment would be, you know, he talked about a.i. models working on an iphone, which are great. i'm not sure the battery capacity can handle the compute capacity that is necessary in order to do the compute he's

talking about at this time. >> you know what i'd like to do, guys, this has been a fascinating conversation. >> very good. >> i'd like all three of you guys to promise to come back in six months, we'll repeat this. sound like something you'd do? >> sounds great. >> absolutely. >> tyler? >> yes, sir? >> i'll give you one more claim six months from now. >> okay. >> all of the big cloud guys we talked about will raise capex to accommodate more gpu purchases over the next six months than right now. >> november 17th, 2024. >> we'll see you november 17th, guys. >> post election. >> thank you, gil, joel, chris, appreciate it. >> thank you. >> that was great. >> thank you. coming up, the record rally that few are enjoying. investors in general seem to be having trouble embracing the strength given this extreme narrowness and mega-cap dominance we were just discussing. we'll talk about the market fallout next. i couldn't have done it without you. honestly, i don't do a whole lot here. i'm really just here for the at&t internet, it's super-fast

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lunch," everybody. we talked about the three big behemoths that have been dominating the stock market. microsoft, apple, nvidia. it's the best times. for the other 197 s&p 500 stocks, it's the worst of times. the worst, mike? >> on a relative basis, they've been left behind. i mean, the median stock in the s&p 500 is up a couple, 3%, on a year to day basis. the separation between a relative handful of anointed winners and the rest of the market, especially smaller stocks, has been pretty stark. i would say today, it's a little bit of a broader rally to the outside. even here, you have the equal weighted version of the s&p lagging the headline megacap driven version by, i don't know, almost half a percentage point. i think the question one might ask is, why is everybody complaining so much about this? in other words, what is the objection? why does it make people uncomfortable? for one, it makes the s&p 500 extremely difficult to beat or even keep up with if you're an

active stock picker. i understand if you're a professional or fund manager, it is tough to watch this happen this way. you'd never construct a portfolio as concentrated as the s&p is right now. if you're an indexinvestor, passive, maybe a third of the investment is driven by the hot a.i. theme and that's how it moves on a day-to-day basis. sometimes when you have weak breath in a market making new highs, it catches up. they've been sort of resting, the majority of stocks, the last several weeks perhaps. as long as you have the visibility toward benign yield, soft landing scenario, you would think you might have them find their footing. the other piece of it is it's sort of maybe a source of instability if you have those big stocks, get more and more overbought, and maybe the overall index a little more fragile to a short-term tracker. wish there was a way to tell one from the other in advance. >> you know, we're going to talk more about this, mike, but just based on your experience of the '90s, i don't know if you heard what we were talking about

earlier with rich bernstein, you know, is this going to be a moment where people say, ah, i piled in at the top and it is all going to crash, and the leadership is too narrow, this is all froth, and there is no real sense to it? >> it doesn't feel like a really close comp in all respects, mostly because, as i always say, there were 500 ipos in 1999 and, on average, they almost all doubled in the first day. what we have right now is a market that views defensiveness, quality, earnings momentum, and strong balance sheet as all the same thing because they're in the same stocks right now. it's really following the path of longer-term earnings expectations. i know you could have said that about sysco in '99 or 2000. >> right. >> you're not yet paying as much today as you were there for sysco. >> the only quick follow-up, is the ipo data relevant? if the argument around a.i. is that it is only going to benefit the platform incumbents, then people say, i don't even need, you know, a startup. i'm not going to make the big money on a startup.

i'll stick with the three biggest horses in the market or whatever. >> it may not be relevant in the sense of kind of forgiving the concentration or forgiving the valuations being assigned to the top stocks. what i do think, though, is it creates less of a sense of, hey, this is an easy game. we all should be plague it as aggressively as possible. that's what you felt like in the '90s. right now, i see the complaints about overconcentration as generating its own wall of worry. that's always a good thing for the market. people are not comfortable to just take on a huge amount of new risk. >> great point. stay right there, mike. we want to bring in our next guest who says excessive valuations could leave room for di disappointment. consumer staples, health care, and industrials. jason, don't spoil the party here. we love the fab five, whatever you call it. you're not a believer in that story? >> look, it's more about controlling the risks and having an investment discipline. if we want to invest, we need to

take advantage of valuations where they do exist. quite, you know -- right now, those valuations, you know, mike pointed it out, they are expensive in those areas. are they at the absolute peak we saw in 1999? no. probably about two-thirds of the way there by our measures. but if you look across the broad market, there are a ton of opportunities to get decent growth at a reasonable valuation, good profitability, good investments for a longer-term timeframe. so we'd recommend investors take an approach of, if you have the winners, great. that's wonderful you have them. pair back some of the winners back to reasonable levels. put your money into the rest of the market, parts of the market that have similar profitability, growth stories that you can actually get behind and own over a longer timeframe, be a little more comfortable with the valuations. that doesn't mean -- >> let's go to what used to be called -- >> m-- manage the risk. >> these stocks used to be

called garb, garp, growth at tt price. where are they? >> consumer staples, industrials, in the large cap space. there's opportunity in smaller capitalization stocks. you have more reasonable valu valuations. abroad, there's interesting opportunities abroad, even ones that attach to the a.i. theme, particularly within japan. japan is a market that even today is still undervalued, is driving earnings higher, has that profitability behind it, and is trading in more reasonable valuations. poised t there's opportunity there. i have no doubt there is. there are a lo them. but why haven't they been able to get any traction here, what do you think a catalyst going to be to make that happen, other than just, well, it's been a long time and, suddenly, a light goes off and people start to buy

them? >> look, i think part of it is it's small cap is a catch all sort of category, capitalization. there's 3,000 stocks in that category that span everything from very unprofitable companies to good profitable, solid businesses, that are just smaller capitalization. many of those businesses, on average, have a little bit of debt. i think we've been going through a cycle here where, because of the floating rate nature of the debt they have on balance sheet, they've actually been facing an earnings headwind. that is changing as we go into 2024, and it is going to be changing materially in the back half of this year, to the point where earnings growth from small cap stocks will likely surpass that of large cap stocks and perk the interest of investors. >> small caps came up last hour, as well. what do you make of the arguments looking there, that we could have a leadership change,

'99 to post.. dot com. >> it was the dot com crash. i don't think those transitions necessarily happen on the fly. if there were a way to look back at an example when that did work, it would be '94 into '95. that meant a slow and orderly fed easing cycle. after an internal correction in the broad stock market that hurt small caps a lot. when investors got confidence that the fed was able to ease into an expansion. a lot has to go right. i think the one thing i always would draw out of the recent action is that we shouldn't assign small caps any special presentations about the macro. we don't have to say, russell isn't performing. must be bad for the economy. it's been years now, the economy has been fine. the russell 2000 has been dead money. >> indeed. we'll leave it there. mike, jason pride, thank you, both. >> thanks for having me. further ahead, heat waves on the way. drought alerts climbing. acts as simple as mowing your lawn can lead to significant

waste. i was going to mow my lawn this afternoon. we'll look at one company solving the problem in today's clean start. the bond report is brought to you by --

welcome back to "power lunch." quick check on the nad sdaq. up 219 points. 17,908. getting very close to 18,000. another record high, on pace for a six-session winning streak. chip stocks leading the way. broadcom and micron among the biggest gainers there. meanwhile, natural gas falling once again today, even as a heat wave is predicted. pippa stooevens joins us to explain. >> the market got a little bit ahead of itself last week. basically, over the weekend, the weather forecasts were revised.

we still have expecting record heat, but it is not supposed to be as much of a record as previously expected. prices had run up, and they -- you know, top three dollars, hit a five-month high. it's come down a little bit. henry regional benchmark down south is what you see. mid-atlantic and new england, prices have risen because that's where the heat wave is supposed to take over. also, eli ruben noted that we've seen production come back in the marcella shale region, parts of appalachia, and that's because we are coming off this unique period where demand was really weak. some of the production was sidelined. that'sonline. if we have record temps throughout the summer, no longer an easy fix, could it be supported? record inventory levels, five-year high. moving over to oil, that is higher today on a little bit more optimistic demand projections. i did want to note we saw over

the weekend some attacks on vessels in the red sea. that still does impact oil prices. you see there, so far this year, flows through the -- sorry, i should say flows around the cape of good hope have risen about 50% for oil and oil products compared to last year to avoid the region. >> i'm glad to hear it is going to be 97 instead of 98. >> you know what? it makes a difference. you probably don't notice but the utilities notice. >> i bet. let's get to see ma for our update. >> elon musk is fighting to reclaim his pay package after shareholders voted to reaffirm it. in a letter to the delaware judge in charge of the case made public today, musk's lawyers say the recent, though, quote, significantly impacts to the ruling originally avoided the pay. attorney for shareholders who opposed the pay says the vote holds no legal effect and is expected to explain the argument in a brief due friday.

as war wages in ukraine, russian president vladimir putin fired four deputy foreign ministers today, replacing one with a relative. it's the latest reshuffle in the military ranks after he removed the long-serving defense minister in may. putin fired five other deputy ministers in the last few months, all of whom have been arrested and charged with taking bribes. and an online personalized vitamin company announced it will cancel all subscriptions as of today and no longer accept new orders. the company did not close the door on a return, saying it is exploring options for the brand but does not have anything definitive to share right now. kelly? >> seema, thank you very much. after the break, we'll talk about best buy's big year. it's up about 20% since january, getting an upgrade to buy at ubs today. we'll trade that one and others in three stock lunch. [crowd chanting] they ignored your potential, and mocked your ambition.

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welcome back. three stock lunch. wealth executive vice president and cnbc contributor, malcolm, welcome to you. we want to start with dell

technologies today, which is soaring as morgan stanley reiterates it as a top pick after management meetings. shares are up 6.5% now. what do you do with the stock? >> yeah, kelly, good to see you. i consider dell to be a buy here. shares are already on the move, but i think, you know, expectations just got way too high for this company, right, with the share price tripling in about a year. i definitely think dell has found their place in the a.i. conversation by embedding some of the newer a.i. features into many of their hardware devices. so i think apple even validated that model at wwdc, right? following the 30% sell-off that came from the most recent earnings call, because of that sell-off, i guess i should say, the shares have gone from overvalued to now having created a buying opportunity for dell shareholders. up next, we have best buy. we mentioned it a moment ago. shares are higher following an upgrade to a buy from neutral at ubs, saying new products and appliance upgrades cycle could

strengthen the stock. what's your trade on best buy? >> tyler, you took the words out of my mouth, right? it's kind of -- i consider best buy a buy. it's kind of a continuation of that dell story in some ways. the consumer electronics market is due for a complete refresh soon because of people who are looking to replace devices they bought during the covid boom, that maybe they weren't able to buy exactly what they were looking for at the moment. they had to buy what they could find. plus, couple it with the fact that folks are looking to get their hands on the newest and greatest a.i. innovations. i think best buy is poised to benefit from the demand. the one question their management team is going to need to answer going forward is just how long it'll take for a.i. to make the jump from being an enterprise-focused technology to a consumer-facing one. but if they can make a compelling enough case, shareholders will reward them long-term. >> so this is a buy for you? >> yeah. >> got it. >> sticking with it. let's get to union pacific. they got a downgrade.

don't talk about the rails much. they're at a hold from a buy at loop capital. shares are down on the year by 9%. would you be a buyer here? >> i would actually consider this one a hold. i think this company is still in recovery mode, right, with regard to the struggles they had last year and the jury is still out on whether the new ceo will be able to deliver. but for current shareholders, it is probably worth hanging in there a little bit just to see if the tailwinds their competitors have been touting can actually materialize, right? they're bragging about their ability to add a little bit of cost, to pad the stats a little bit on the operating margin side with energy prices being what they are. they can add a little bit to the customers' bills for energy surc surcharges. plus, norfolk southern, for example, pivoted into what they were considering truck-only markets once upon a time. now, they're picking up some of the shorter routes. i would imagine union pacific wants to follow in the same footsteps. there hasn't been a lot of talk about it yet, so i would say it is a wait and see. >> all right.

a wait and see on union pacific. malcolm, thanks for joining us and for all the trades today. we have news out on apple right now. steve kovac has it. >> apple is killing the buy now, pay later product. apple pay later. it was launched a little over a year ago, back in march of 2023. just like so many others, it lets you through apple pay make interest-free payments toward products. we see affirm. it was negative. it went positive when this news hit. now, it's down about a percent again. i would note, affirm also last week at the developers' conference with apple in cooper tau cupertino, it was mentioned as a partner to allow its buy now, pay later service in apple pay. apple is a you hoffloading that third parties. apple was funding its own buy now, pay later out of its own cash pile, so that was kind of interesting move there, too. looks like no more apple pay

later now on u.s. phones starting now. if you have a loan, they do say you can start paying that off -- you can continue to pay that off, but the feature is going to go away for everyone soon, guys. >> do you know why, steve? >> they weren't saying why. there is no reason why. other than they're really highlighting the fact that they opened up more ability for these third-party partners to come in. that also includes banks and so forth. affirm is the big partner there. >> all right. bryson dechambeau winning his second u.s. open in dramatic fashion. we'll speak with the golf superstar about that and more when "power lunch" comes back.

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remember it as the open mcilroy lost. i call it the open dechambeau won. and you won it despite, hey, man, you did not hit many fairways, did you on sunday? >> no. >> you were scrambling all day. >> i was. thank you for having me on. it's a pleasure. i can tell ya that i was hitting good all week, too, with my driver. i striped my irons, hit really well. but the last round, i couldn't get it in the fairway for some reason. my iron play was beautiful though. wedge game was awesome. putted it well. rory, man, he was fighting for every shot. you know, unfortunately for him, didn't make the putts. >> it was kind of like a match play down the stretch here. here is this shot on 18. you had an impossible lie. you were underneath a tree branch. you hit it into the trap. you had a 55 foot shot from the trap that i'm told had about a 2% chance. here's your shot. about a 2% chance of getting as close as you put it. how'd you do it?

>> oh, it's been a lot of practice. i actually practiced a lot of bunker shots going up from 50 yards. certainly didn't expect to have that to win a major championship. when my caddie and i got to that lie, he told me, bryson, you've done harder shots before. you can do this. >> never a better one. >> that's true. it was my best shot. the best shot of my life. >> bryson, not that you are doing these amazing things to, you know, get endorsement deals, but, listen, there's so many fans who want to see you as part of the traditional pga. i mean, what do you tell them? they say, we don't like this rift at the heart of golf. come back. let us adore you. what do you say? >> hopefully this bridges the gap a little bit. it's unfortunate, the landscape that it is. obviously, being a part of liv, i understand people's perspectives. i have respect for it. but i hope this transforms the ideals and the narratives that have gone on in the past and we're now in a place where we can start to heal and hopefully come back together. i know they're in talks.

i hope this great game comes back together quicker than, you know, it's been. it's taken too long. it is what it is. >> this was the second major that -- i was watching with your friend, reid dickens of the pga, where you almost pulled that off. this was your second one. as you were standing over the 3.5, 4 foot putt, what goes through your head there? >> i've done this before. i've hit this putt thousands of times. right center putt. knock in the 4 footer, and that's all it took. >> with confidence and pace. the celebration was awesome, man. congratulations, bryson. appreciate it. >> thank you, guys. >> bryson dechambeau, thank you. coming up, let's test the waters, shall we? we'll highlight a startup revolutionizing, yes, lawn sprinklers to cut down on wasted h h2o. this is a big deal in my town. diana olech is going to tell us about it. "power lunch k" is back in two.

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welcome back, everybody. summer's here. temperatures are climbing. you're probably watering your lawn a little bit more, but traditional sprinklers are anything but accurate, leading to significant waste. but what if there were a better way? diana joins us with the latest in her continuing series on climate start-ups. hi, di. >> hey, ty. climate change is accelerating water scarcity and drought, and as a result, water prices are going up dramatically. it's time for a smarter sprinkler. you see it all the time, the sprinklers are watering the lawn but also watering the driveway and the sidewalk. whatever the system, it's generally not very accurate, but new technology from companies like rain bird, rachio and minnesota-based irrigreen are changing that. irrigreen likens its system to

the precision of an ink jet printer. >> it's a digital robotic sprinkler that pops up in the middle of the lawn and basically traces the contours of your landscaping, and it's putting down a completely even layer of water. >> he claims the single-head system saves about half the water dlooip used but it's not just the precision. of course, there is a.i. involved. >> we use the cloud data and information we have about your soil and what kind of crop you're growing, like, what type of grass, like cool weather grass or warm weather grass, how much shade and sun you have, so that we can design patterns that follow the weather so that every single zone in your house gets an individualized watering pattern. >> it's not watering when it's raining. all of this is controlled by an app, kind of like a video game, moving the sprinkler head to water around corners and in patterns. the company has already installed a few thousand systems across the country and is expanding quickly, which is a big draw for investors. >> it was an extraordinary market opportunity.

there are 80 million lawns in the united states, and this is an innovative technology that not only saves money but dramatically reduces the amount of water a consumer uses. >> in addition to ulu ventures, irrigreen is backed by sage hill investors, burnt island ventures, mfv partners, and sum ventures. total funding to date, $15 million. now, irrigreen says it has already saved about 200 million gallons of water in the systems it's installed so far. it also has a tool on its website where consumers can type in their address and see how much water they're wasting, and they do that using, of course, satellite imagery, kelly. >> do you follow me on instagram, diana? all spring long, i have been trying to save water, mow the lawn myself and less often. this whole thing. and it's very difficult. it's very difficult, these grass lawns, they're costly. they have a lot of runoff. they have a lot of problems, and i can't quit it. i don't know how to quit it.

>> and imagine if you lived in california where there were restrictions. it would be even harder. >> we have restrictions too. yeah. how much do these systems cost? >> no, i don't, but i'm sure you can find out. >> i'm on the website right now. put in your address, get a quote. diana, thanks very much, as always. still to come, playing defense. nfl commissioner roger goodell is taking the stand in the league's sunday ticket trial. remember, you can always hear us on our podcast. just follow and listen to "power lunch" wherever you go. we'll be right back.

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♪ all right, folks, let's give you a quick check on the markets as you see there. the dow industrial is up about 0.5%, or 182 points. 38,770. >> and the trial in the class action lawsuit against the nfl continues today with the biggest name witnesses yet to take the

stand. julia boorstin is there at the courthouse in los angeles and brings us the latest. hi, julia. >> hey, kelly. that's right. nfl commissioner roger goodell took the stand this morning with as much as $21 billion in damages at stake in this class action lawsuit, alleging that directv's exclusive distribution of "sunday ticket" inflated prices for consumers, the commission describing sunday ticket as supplemental and complementary to cbs and fox's broadcast of games. he called it a premium product, additional content not meant for every fan. commissioner goold noting that before "sunday ticket" launched, there was no way fans could access all of sunday -- all of those sunday afternoon games. now, goodell stressed that he is focused on reaching as many fans as possible and that the league has recently expanded its fan base from 175 million to 210 million fans. now, there's one other thing

that goodell stressed. he noted that the nfl had zero control over directv's pricing of this sunday ticket package, said that sometimes directv offered promotions and gave the package away, which the nfl did not like, but that they couldn't do anything about it. so, right now, goodell is being cross-examined by the plaintiffs' attorney, and tyler and kelly, i have to point out that earlier this morning, the judge admonished the plaintiffs' attorney for wasting time and being redundant. >> remind me, julia, because i've frankly forgotten, is directv still a carrier of these games? >> it is not currently offering sunday ticket, so directv did offer sunday ticket for many years, but currently, it's youtube which is offering sunday ticket. so, that sort of distribution right has switched from directv to youtube, which commissioner goodell explained was because

directv changed ownership. it was ultimately acquired by at&t, but that youtube developed the streaming capabilities, and it was only when youtube -- when they saw that youtube did have the streaming capabilities for live games, so many people watching at once, did they switch over their distributor. >> julia, thanks very much. julia boorstin reporting from that nfl trial. "closing bell" starts right now. >> welcome to "closing bell," i'm mike santoli in for scott wapner. this make-or-break hour begins with stocks levitating into a new week and on track for reco. we'll discuss this big run with our experts, including blackrock's rick rieder in just a few minutes. the usual strength continues in semiconductors. today, led by broadcom. also, though, joined by a broader selection of stocks. the nasdaq 100, have to say, still at the center of the action here, up about 1.5% and not too far from the 20,000 level, which is not somethin