the tell. that stock down as much as 3%. came back, jon, a little bit. heading back towards session lows and dow still near session highs. >> microsoft doing better than earlier. some influence, too. >> indeed. outsize, might say. >> thanks for watching "power lunch." >> "closing bell" starts right now. guys, thanks so much. welcome to "closing bell." scott wapner with you. getting into whether biggest names gone too far too fast in tech and what might happen next? we'll ask the experts. ed yardeni joining us in a bit. 60 minutes to ge in regulation. the dow up near 1% here. a little bit of a late-day surge as names like salesforce and caterpillar, mcdonald's, travelers, chevron having a pretty good day. dow up more than 440 points if

not for apple and microsoft. where we want to zero in the nasdaq. up earlier. rolled hard as well mid-day. i said apple but nvidia rolled over, too. that stock lower. watch both of those over this final stretch. about a 6% swing in shares of nvidia today. interesting, because at one point it was up 3%. only adding to its place as the most valuable company in the market. apple, five-week win streak in jeopardy with that move down 2%. chipotle, another stock to keep an eye on. major reversal as well. front and center. down near 7%. watch it, of course, over the final stretch. "talk of the tape." too heavy? founder with me of a search company. money coming out of big names going into some more cyclical plays, industrials, energy. get to that, but what about this

mid-day rollover in the nasdaq. did it mean anything to you? >> i don't think so. i think some people collect profits when things rip higher. huge moves in the a.i. trade in the last month across so many names. you know, it's not like these stocks have, given up 3, 4, 5% every day? >> nvidia did. >> well, you know, so i'm not totally surprised you can get consolidation here and there. funny. a lot of investors conversations this week. >> i bet you have. >> yeah. you know, beginning of a -- everyone seems to think two things are incon grutous. the consensus view. hard to believe they can get this much appreciation, you know, unfettered for this long. a bit of a debate. a lot of my questions from people have been will we rotate from semis? if industrials from -- to something that, other than, you know, the a.i. semiconductor.

>> does the move in nvidia, starting to make you a little nervous? do you think it was too much? start to get -- was it starting to get silly? you know, stacy rascon by the way, replaced you at bernstein. >> right. >> made the argument today that, you know, before nvidia had its big breakout it was at 60 time. now it's like 40. and it's justified. >> yeah. two revisions. i think medium to long-term view probably can. most of my conversations have been about who will benefit from, which profitables from a.i. where will the return on the a.i. investment first are realized? and therefore jufrstified. so is it the power space? health care services? where are the profitables will suss out. i think -- i know, so it stacy,

semiconductors are cyclical. >> is this one? >> tsm set end of '26. can't see that far into the future. say middle '25. negative on semis a year in advance seems early to me. i don't want to say the tradal over. it's not my call at all. i'm saying that's where the conversations applied. my view we'll be higher on the a.i. tree by year end. >> if you discussed the valuation, we did discuss it with keith meister, corevex, yesterday, this to say on that issue whether too expensive, gotten a little crazy. let's listen. >> my take on nvidia is, you know, people come on and talk about the pe mode. that's the wrong thing to focus on. the question is are they over earning or not? if they're not over earning, they deserve a really high malt pull and it's an amazing business. >> things like, do they have a

real moat or just, you know, a pull-forward? this is the same type of power in this business, pun in tended, five years from now? ten years from now? how would you view that as somebody so in-depth covering this space and stocks like this including this one? you covered this. >> keith is an incredible smart guy. talked to him earlier about something else. he processes information way faster than i do. i think probably are over earning. that doesn't mean they won't grow gdp plus high singles from here. but pricing hauer more now than three, five years from now in the system. from that standpoint probably over earning. i agree valuation -- all valuation paradigms aren't going to be effective. talk about that a lot on the show. to say buying because cheap on sales. doesn't work. shorts are expensive. i wouldn't short nvidia. you have to want to be unemployed to do that.

to me not the right call. i think the right -- the right call is where else can we see beneficiaries? where can there be more multiple expansion? the point, maybe not expensive in absolute terms but can i get multiple expanse from here and just playing for the underlying cash to offset slow multiple erosion? more that view. appreciate a much less rapid rate going forward. >> do you feel the market's in a pretty good place? a lot would be made of a slide in nvidia but if the money comes out of the nvidias and goes into other areas, that's -- not just okay. that's preferred. it's healthier? >> yeah. look, the three things that the market -- why is the market going up? financial conditions are easy. that's number one. two, as we talk about a long time i still think margins are going up a lot. businesses. and, three, a dream, this awesome dream of a.i. productivity that 0 could last five to ten years and all of a sudden sketching out higher

earnings growth. why the market is soft. a really good dream. bear case is something unrails. kind of screws up financial conditions. is it a real bad consumer that's slows and big -- delinquencies in credit cards? something really bad out of china? real estate? something has to cause you to have a resaulation of the financial system and right now it's innocent until prooven guilty. if you believe it's there, or get something you are over earning, then keith is right. if you get confident your over earning at some point in july guidance or october guidance then i think you'll get a reset. for now, innocent until proven guilty. >> and keith lerner is with us and a cnbc contributor. start with the nvidia question. the an interesting reversal mid-day. said about 6% swing.

>> uh-huh. >> what do we just make of the whole phenomenon of this trade at this very moment? >> i liked the conversation you're having. i agree with the premise that it's okay if we see the growth trade have a much-needed correction. i think that's unfolding. first look at other areas in the market. are they behaving today? is credit behaving? yes, it is. crypto? yes it is. other sectors stepping forward and performing nicely? like health care, yes, in fact, they are. so i'm okay with that. never been one that said, look, with nvidia you have to buy it here. i don't believe that's the case. i think nvidia has been sp susceptible the last ten years for corrections. a day nvidia is down 10%. >> sure. you could have said, and would have been perfectly reasonable to say, at $900, would i recommend you buy here? no. at $950, recommend you buy it

here? no. $1,100? no. stock keeps going up. right? people look stupid when they feel like they, they passed these opportunities up and the stock keeps going up. >> yeah. well, here we are at $135. the other day saw -- >> a split. >> right. sold half of my xlg position. intuitively looks feels reached a crescendo. it feels that way with me. i agree with adam. don't sell the stock short by any means. also think it's important. coming up end of the quarter. end of the quarter matters. remember, this has been a volatile quarter. friday is triple witching. nearly $5 trillion worth of options that will expire. an index rebalance friday. and the following week the russell that's going to rebalance. coming into play. >> volatility? >> it's coming into play, churning a lot of growth trade and i think you have to understand you're probably going to see that over the next week

or so. >> you believe that? >> yeah. a lot of shorts, makes sense to me. i think the challenge, like you said. look, number pun exhibit we have the most on, a year ago called the nvidia god trade. okay? it was a -- plastic lightning bolt. said the problem with not owning it now, you say you know you're near the top. don't want to -- buy it again hold it all the way up. i don't know when the top is. that's the problem. i think my view is i have to acknowledge that when it goes down 10, 15, 20% maybe in a few days i made more money on the way up to offset that. i have to have so much profits i'm willing to deal with 20% down before i trim some. my mental mind-set. >> keith, do you feel the growth trade in general is long in the tooth? we don't have to focus just on these technology stocks to have this conversation. we can show an intraday of

chipotle, for example, cmg. now down more than 6%. that's part of a growth trade. >> way more expensive than nvidia. >> of course. >> slightly more. >> those types of growth stocks. the ones we really need to pay attention to, more so than the growthing mega cap names? >> first, good to be with you guys. great conversation. i think it's an overall momentum trade, but big picture, i think take a step back. s&p technology sector out performance the last month is about 11%. you have to go back to 2002 to see something similar. i think we're somewhat stretched and we're due for a pause. i also think the time frame for investors matter. interesting, look back last year at the same time going into june, s&p technology sector was up 40%. off a much lower base coming off that 2022 correction. what happened after that? coming into june trading sideways three, four months

before making another move higher. longer term overweight tech. think that's where earnings momentum will continue to be. short term, realistic we've had extreme out performance. rubber band is stretched, and we think more likely this overboard condition, overbought condition, works itself out by a choppy range, landings earnings up and lasting momentum coming here over the last few weeks, every day look at the first thing and you see a nvidia up 3%. don't like the changes. see a bit more rotation outside of that. again, looking at this more than just the next three months. the next 12, 18, 24 months and still think tech likely overperforms. we'll a little less bullish. >> signs, joe, the energy trade is maybe, waking up, perhaps. you like that area. >> that was -- >> yeah, liked that.

>> good hands. >> olympic. >> dropped the pen. like doing a tightrope on the mic cable. those not here to see it. >> the gym jnastics of televisi. go ahead. >> oil bouncing on inventories. saw it draw down inventories. you know we've had overweight exposure to energy since april of 2022. last several quarters difficult. very conflicted looking at energy. looks like it's starting. then stops looks like it's going in the other direction. energy was $73 just six weeks ago. playing a little catch-up now in the near term with energy equities. see where the momentum goes with this. better names i like, npc, one oak and my favorite name above all diamondback, temple silver phang but has to prove itself. above 85 in spot oil and we need consistency of earning for a lot of these energy companies as well.

>> meetings i do one observation is, funny. every tech team talking megawatts, concerned about powering the a.i. trade. >> among other reasons. meister was yesterday. >> yeah. makes sense. you're seeing gates talk about new -- buy some power. you know? illinois's government -- a lot of focus on this area. so if you're s&p index and energies, and 6% for that cam bow i don't know why you can't own 9%, 10% in the portfolio. not a massive risk and feels asymmetric upside if it was gdp growth in the past maybe gdp plus four, five now. that's certainly not in the price yet. >> let me ask you. positions is always important. when you look at this, how many have left the energy trade, which the evidence statistically will tell you the oil trade, the natural gas trade, that we've seen exits and gone into the utility trade?

>> i think two or three utilities stocks we know up a lot, but more broadly, i don't think so. i don't think guys are buying that yet. range resources on high er natgs or whatever. >> selling energy names buying utility names? >> i don't know. guys i talk to don't do energy at all. it's tricky. don't want to make a commodity price call. >> so, keith, what other areas of the market are exciting to you? or not so much? right now. >> yeah. well, i'm not all excited about, updated equities. 8, 9% move. more on consolidation. utilities kind of boring, but trading lowers valuation since about 2009. we think rates likely come down more. i think as a place we're getting yield and some pick-up, that's actually an interesting place i think on a short-term basis because of themeda cap stocks

going, haven't seen that in the trade. that indention und are performed five, six months. a reversion. is that a longer-term place to be? not necessarily. kind of go through the chart, shorter trader where i would be looking. i also, talk about commodities. we actually like, we like some of the areas like gold, consolidating, also commodity index itself. hedge risk people see. we have over 40 elections going on this year and going to start seeing things in the u.s. heat up as well on the election front. >> you guys know that if yields continue to come down and money may look like it wants to move out of tech we're going to have small cap and russell conversations again. it's only natural to do that. you make the point repeatedly i think, still stay large. whatever stocks you like from whatever executors you prefer,

to stay large? >> i think there's, like, a thing that cross assets really high. macro people do. say, large cap looks expensive versus small caps. recommending to our field small cap. but the devil's in the details. when you actually look at small cal growth universe, it really is just, inferior universe than large cap. right? way less profit margin expansion. way more companies lose money. way lower quality and quality works in growth. its sector constitution is inferior. i think small cap growth is an inferior asset class. if you mess there you've got to hope your stock picking. should have more stock opportunities for sure. a little bit more aristocratic but make that to offset underperformance of the asset class. >> one more thing. you alluded to. asked, sort of threw a question, open question out as to whether well is money going to come out of chips go into software?

reminded me of a note you put out within the last week or so which suggested, don't be tempted to buy the dip in some of these software stocks. do you still feel that way? >> yeah. my general view, the equity market especially a.i. stuff, innocent until proven guilty. you want to own these a.i. semis until you get something that makes you guilty. with software a lot of the -- maybe adobe last friday changed mind on some, i ask you, salesforce by the way leading the dow, right. it's up. salesforce and now and workday had a bad three-month stretch. looked like late february early march until a week or two ago they were down, what? 30% or so i would say on average. i think people really are thinking through software differently. to say i like them because they're cheaper versatile and increase in sales seems -- disingenuous to me. i think that part of the market is really going to be more, despite today's trades, more

guilty until proven innocent, if ever prove's innocent. i need accelerating revenue growth. not buying software until it's accelerating. exposed to humans head count like workday, humans, structurally in trouble, i think. see where it flushes out's we need to understand next couple quarters is growth going to be same as you thought? not as optimistic on that human sea count software. >> before i came on last check of momentum indicators. outside of a.i. and technology, strongest momentum in the near term i see now, health care. merck, am gen, mckesson, added n of the last week. health care. something's golden there. >> leave it there. anythingto say about kohl's today? >> no. talk about the celtics if you want. awesome. >> good for you.

>> go celtics. >> yes. >> keith, thank you. joe's going to come back in the "market zone" and adam, talk to you soon. and a look at the biggest names moving into the close. pippa? >> gilead on its way to best stage of the year. the drug showed 100% efficacy preventing a virus in women. gilead one step closer to broadening its hiv division. s&p best performers to the worst, apple supplier jaybell sinking today. company beat earnings and revenue estimates in its latest report. the point, softness in automotive and transportation markets. that stock down 11.5%. >> pippa, thank you. back to you in back to you in a few. looking beyond nvidia for a.i. upside. that's is how ankur crawford is approaching it. she's here next with her best ideas.

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nasdaq you see there down by 1%. nvidia is pulling back from its earlier gains as well. the a.i. darling has led the trend of late, up nearly 200% over the last year. my next guest finding other ways to play the a.i. boom outside of the mag 7. joining me at post 9 is ankur crawford. welcome back t. i know you're looking at ways outside the mag 7, but you own the entire mag 7, correct? >> we do. >> are you nervous now or how are you feeling about these stocks? >> i feel fine. i feel great, actually. >> you should be because the gains have been great. >> the gains have been great.

>> but now what? >> let's put it in perspective. nvidia over the last two months is up over 68%. as of this morning. if it gives up 3%, i mean, that's to be expected. a stock can't keep going up every single day. >> is it justified, though? it's like it's so -- it's amazing to me how easy it just rolls off the tongue, nvidia is up 68%. >> it's crazy. does that make sense to you, though? >> it does given where the numbers have gone. if you look at the whispers for nvidia, they're approaching $5, which used to be $50 in the split adjusted. $5 in earnings. which used to be like 350. so, as the market gets more confidence that they're not overearning on 2025, the multiple necessarily goes up. so, then the question will become, is it overearning on 2026. >> well, we're not going to be able to answer those questions for a while, correct?

so, is that somewhat of a safety net in this trade for now, that, you know, we've got to wait for earnings, weeks away, several weeks away from that, so what happens to the stock in the meantime? tread water, keeps going up? >> i would like to see it tread water, to be honest, because it's not healthy for a stock to just keep going up. it gets frothy. i would like to see everything rest. i would like to see the market rest and pause and let's see what happens to earnings season. i expect earnings season for the mag 7 will be pretty good. i don't think that's the case for everything in the market. and given that our economy is on slightly shakier ground, i think, you're going to end up getting consolidation into mag 7 as they put up the numbers -- or the mag 5. >> you feel like the economy is shaky? >> i do think you're starting to see cracks in the economy. i mean, the consumer isn't great. you see the transports are a little weak, they have been weak

for the last six quarters with negative volume growth. and so it's not all is good. >> are you getting less positive on the market itself because of that? >> if you look at the rest of the market, the rest of the market hasn't done that well. i would say i have not been super bullish on the market its itself. what i have been bullish on is the secular growth in a.i. and technology is going to pull along many of the stocks the market is composed of. >> we teased this segment as, yes, the mag 7 seems to be everything, but there are other stocks that can capitalize on this trend that you talk so positively about that are outside the brightest lights in the market. like what? >> so, one of my favorite names over the last couple of years has been tsmc. and they're the supplier to the supplier, who is a supplier to the world. so, you know, i think it's

really interesting name and, in matter, because i think it's one of the most strategic businesses on this planet. and, you know, there's a lot of geopolitical tension and geopolitical noise around it. if taiwan gets attacked by china, we have bigger issues than owning tsm. >> so, you told our production team that you watched the interview we did yesterday with keith meister and you agreed with a lot of what he said. specifically what stuck out to you that you said, you know what, i agree with that point of view, because he addressed the market, suggested rate cuts could not be good for stocks because they would happen for the wrong reason, he's been buying the energy trades, utilities, and also spoke about nvidia. what specifically -- >> i feel like he took a lot of the words out of my mouth in that the fed can't cut, so it's higher for longer. i've been saying that for quite a few years. he talked about nvidia and

making sure they're not overearning. and he talked about the power transition trade and owning -- we are thinking about things in a lot of the same ways in that you have to look beyond -- a.i. right now is affecting the chip sector but what goes beyond that. >> you think utilities, for example, are a legitimate and not too late way to play that trade? >> so, i will -- i will say we own a utility called constellation energy. it's a nuclear utility. i am a nuclear bull. and in part because we need clean energy and we need nuclear to be our baseload power. so, everything surrounding nuclear, i think, will benefit over the next decade, whether that's a company like camecoo with uranium or constellation that gets to price their capacity at a different level as

we move forward. so, i don't know about all of the utilities, because i think they're all very nuanced, but at least for some of the nuclear assets, i'm pretty bullish. >> quickly on the point that he made that you mentioned at the top about the fed can't cut, his idea on that was they -- you don't want them to cut. rate cuts will be bad because if they do that, it's going to be because the economy has kind of rolled over and that's going to be bad for stocks. so be careful what you wish for kind of. >> right. my view is they probably cut in q1 when we get the softest data. >> you don't even think we're going to get a cut this year? >> no, i don't think we get a cut this year. i hope we don't get a cut this year. >> and the market's going to be all right? >> i think the market will be fine. >> make that the last word. good to see you. coming up, the valuation situation. edgar denny is back with us. why he is expecting the rally to broaden out beyond big tech.

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♪ ♪ we're back. nasdaq pulling back this afternoon, did hit an all-time high earlier in the session. the index trading around highs valuation now since mid-2021. let's bring in ed yardeni. nice to see you. welcome back. >> thank you very much, scott. >> you point out the tech sector at large has a valuation at near

31 times. what do you take fromthat in terms of a strategy or how i should be thinking about the market in the here and now? >> well, i think, yeah, there are clear signs we're at the early phase of the melt-up. that one swing of the signs is i expected to see the s&p 500 at a5400 by year end and here we are at 5500, it's basically midyear. i feel like the bull market has left hoof marks all over me because it's been so powerful. same thing happened last year. i thought we would get to 4600 the middle of the year. we got there -- by the end of the year. we got there by the middle of the year. i would say this is a mult-up led by earnings led and valuation led. if it was all valuation led, i'd be very concerned about too much speculative excesses. the reality is, these tech stocks are moved on better than expected earnings and lots of

news that suggest that the a.i. revolution really is boosting their earnings. >> there are valid questions that have been asked today, yesterday and in the days prior for nvidia, for example, whether it's overearning. you've heard those words used. i find it interesting that you said we are in the early phases. this looks like the early phase of a melt-up. some would look at the activity in nvidia and say, that doesn't feel like the early phase of a melt-up. this feels like we're in, you know, the later earnings, we're about to bring in the closer. >> i feel like the comparisons being made are to the late 1990s. we saw cisco go straight up and then straight down. back in those days, there were a lot more excesses than there are today. back in the middle, late '90s, companies that made telecom equipment, many of them financed their buyers. in other words, there was seller financing, which is a very

dangerous way to run a business. there's also a lot of dotcoms that got a first round of financinging, bought a lot of equipment for the internet and didn't get financing. this time around nvidia is getting purchases from very rich technology companies that can certainly afford to buy its tips. look, i think the gpu chip is basically a fast computer. i think while everybody has been trying to figure out what artificial intelligence is all about, i think it's really big data on speed and on steroids. and i think the whole idea that we're going to be moving in, having some quantum computers, i think gpus are the quantum computer. so, we've got a technology here that, look, we just saw acce accenture, for example, report some of its earnings were boosted by using a.i.

>> everybody is going to claim that, ed, you know that. >> the stock is up on legitimate news. they can't just make that up. >> no, i get you, but a lot of stocks are up over a significant period of time because if you've mentioned a.i., but they're going to start saying hamburgers are made more efficient because of a.i. and that's helping french fries be crispier. >> you have some companies announcing solid information. dell is going to be providing some a.i. related technologies to elon musk, and elon musk is going to put a lot of these technologies together to build a super computer. he has more often than not delivered on what he's said he's going to do. i think he basically views gpus a computer computers when they're all put together and i agree with that. >> i'm not suggesting there aren't legitimate gains for these stocks, but at some point, i think it's okay to sort of lean back and say, are all of

the gains we've seen justified. that's all. we also -- you know, we also haven't really talked that much of late about rate cuts. i feel like the market's kind of moved on from the daily obsession with that concept because i think we figure we're in a decent enough place where we don't really need them. we like them and we think we're going to get them but it's not essential at this moment. i have referenced my conversation several times already with keith meister, who weighed in on the idea of what rate cuts would mean to the stock market. i want you to listen and react on the other side, please. >> sure, absolutely. >> i think rate cuts will actually be a negative for the market. >> you do? >> yeah. why would we be cutting rates? we would be cutting rates because things are rolling over. so, if we can stay with short-term rates at 5.25, 5.50, longer term rates at 4.25 and full employment, i think that's a healthy back drop.

>> what do you make of those comments? >> the economy has demonstrated it's very resilient. i think interest rates have normalized. i think there's no particular reason the fed rushes to lower interest rates, but if they lower it, it's because inflation has come down to its target, which i think they'll achieve before the end of the year, and also because they see signs the economy is slowing. we just saw signs, for example, in the housing market that it's continuing to experience what i've been calling a rolling recession. if they cut interest rates, the stock market is going to go higher. it's not going to go lower. the economy is not in bad shape. it doesn't really need interest rates. if it gets them, it will be because the fed is trying to avert a recession and will probably succeed. scott, you have to give the fed credit here. the past two years they've done a pretty good job. >> many people we've spoken with give the fed a lot of credit here, including meister himself. people fairly criticize the delay in starting to fight inflation.

i think that's fair. >> there's also the risk in the chair himself has alluded to the two-sided risk of waiting too long. there's no guarantee they're going to cut because inflation is tamed completely. they could be patient too long. i think part of the point is they could be late to react like they were late to react in the front. >> well, look, i think that, as you know, scott, 2022-2023 we were among the few who thought there was not going to be a recession at all. no hard landing, no soft landing and there was no landing at all. i think the die-hard hard landers say there's going to be a recession. that doesn't make sense. a lot of the interest rates --

it's not interest rate sensitive. i will say this, if the economy starts rolling over, i think the fed will respond pretty quickly and i think the economy will respond pretty quickly to that as well as the stock market. we have a huge wealth effect that's occurred in the stock market. defense stocks lower interest rates, the bond market will be another source of tremendous wealth -- positive wealth effect. so, i'm not terribly worried about the economy rolling over in a fashion that resource recession because, oh, my gosh, the fed was too late. >> ed, you make these conversations fun. i always look forward to them. we'll see you again soon. ed yardeni. up next, we're tracking the biggest movers into the close. pippa stevens once again with that. what do you see? >> the skies are looking kind of cloudy for one sector. we have the details coming up next.

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less than 15 from the clocloese. back to pippa stevens. >> solar stocks are under pressure after germany-based sma cut their solar guidance. jpmorgan cutting its targets on the two stoblgs noting solar edge has the largest presence in europe. penn entertainment popping

after boyd reportedly approached the company with interest in acquisition. the potential merger would be the biggest in the space since 2020. boyd is the smaller of the two and would need to win over disney, which has a partnership with penn through espn. we did reach out to both companies. you see penn up 7%. scott? >> interesting. a lot of talk about penn over the last few weeks. thank you for that. still ahead, concentration concerns. one major wall street firm further boosting the tech weighting in their model portfolios. it does raise the question if individual investors are getting overexposed. maybe they want to be more exposed. 'lbrk dn xt. with nurtec odt, i found relief. the only migraine medication that helps treat and prevent, all in one. to those with migraine, i see you. for the acute treatment of migraine with or without aura and the preventive treatment of episodic migraine in adults. don't take if allergic to nurtec odt. allergic reactions can occur, even days after using.

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both here to break down crucial final moments of the trading day. m i'll get your take on what we've seen today. interesting reversal. nice move in the dow. what did you see? >> whipsaw. definitely an unwind of what we've seen being the extreme. we have near record levels of divergence within the indexes. you've this this real upside stampede of leverage trade upon leverage trade and the winners. it's trying to relieve those extremes, the market is, through rotation rather than just everything goes down. because that's been one of the questions out there. we haven't settled it, but for now it's been this move from stuff that got super stretched and overheat into things that hadn't worked. energy up 2% and energy up 1%. it wasn't just tech. downside reversal sharply in lilly, in cmg, in all the things that have been bullet proof recently. we also know, we tagged 5500,

strategists have been tripping over themselves to raise targets. whether it's real or not, the week after junes options expiration, next week, has been stormy. >> a story today that caught my eye that i want both of your takes on, because i think you'll find it interesting, too, is that morgan stanley wealth management has boosted the tech holdings in their model portfolio. presigned portfolios for people that don't know how these work. unless you're an uber high-net worth person who is getting super specialized in portfolio construction, many of our viewers, who are clients of whatever firm, are getting put in a so-called model portfolio. the fact that the tech holdings in nvidia, alphabet and broadcoms are being boosted now, what is your takeaway on this? >> two things. one, this is a growth portfolio by definition. therefore, what you're working

with is the growth universe. to me what it says is there is a scarcity of fundamental conviction in reliable growth stories. that's wind of where we've been for a little while. that's why you have the divergences. i'm sure they have to have the sell side analyst part of the house endorsing these stocks and it feeds into a basket of things we can buy. it does seem as if you're kind of raising your exposure to what's already worked. that's the question whether you're sacrificing diversification. >> that's why i bring it up. the point was made by josh on "halftime," joe, look, this is what the customers want. they're calling up their advisers and saying, hey, why don't we have more nvidia? why don't we have more exposure to these types of names? i'm tying of pushing my nose up to the window saying, where's my turn? >> this is momentum ahead of its purest form. i had financial adviser say to me, your etf provides me the

solution to the phone calls i get from my clients who say, hey, i heard about that stock on krnks. why don't i own it? josh is right, this is exactly what this is, but this is chasing the momentum in the market. it's growth. it's 49% exposure to technology, 12% exposure to communication services. tell me s there any other area of the market where you get that type of growth and momentum? >> the question is, people raise, like you said, alluded to it at the very least of, this type of stuff doesn't necessarily happen at the beginning. it happens once moves have taken place and then the momentum to joe's point takes hold, and then the phone calls pick up from the clients. >> we have a market, though, that is somewhat unusual in that if you want quality, i keep saying this, if you want quality, if you want earnings momentum, if you want price momentum, if you want good balance sheets, high returns on capital, all those things, they're getting you to the same names. that gives you mega cap over

small cap, growth over value, tech over most everything else. you have to decide on a different set of variables if you want to avoid big tech overexposure which means i want to go value, contrarian or bull. >> this is not a criticism of morgan stanley. >> no. >> this is a process about model portfolios in general, how things happen along the way, after big moves or in the midst of big moves. who knows where we are in the cycle of an nvidia move. >> it's a reflection of where we are today. you almost have to embrace the concentration if you want the exposure to the growth, to the quality, to the momentum itself. because that's the only way you're going to be able to capture the full performance. if you go equal weighted, you have to underperform. >> the other point that's worth making, i know we don't have hardly any time, is just how much people want to be in these

model portfolios because of the immediate exposure. you grow your aum that way. >> aso we're getting some kind f filter. >> rwe're red on the s&p. >> mixed picture for the major averages. the dow having its best day of the month but the nasdaq snapping a seven-day winning streak. the s&p finishing slightly lower. that's the scorecard on wall street. welcome to "closing bell: overtime." i'm morgan brennan with jon fortt. >> energy is the outperforming s&p sector thanks to wti crude hitting the highest level in nearly two months. tech, the real drag on the market. semiconductors a big part of that story. reversal of fortune for nvidia, a big part of that as it