tight market. >> apollo, kager, 18% kager through 2026. >> devonn, it's been an yound performer and i think it will be a winner the rest of the year. >> goldman sachs ready to make a new all-time high again. >> i'll see you on the bell in a couple of hours. "the exchange" is now. ♪ thank you very much, scott welcome to "the exchange." i'm kelly evans and here's what's ahead stocks are mixed with tech underperforming. as you heard it's one of the only sectors in the red with the chips, super micro, amd and nvidia, the biggest laggards and where should you put money to work now we'll discuss and do bargain hunting and while the ai names are under pressure today, that technology is just starting to have a massive impact across sectors and we'll get the retail names morgan stanley could benefit from this technology the most can barbecues and beach trips save the snack aisle

>> bank of america is declaring a strike on salty snacks the company is losing share and what it means for the bottom line dom chu is back to walk us through it welcome back >> it's good to be back. if we talk about this mean reversion trade, what we are seeing right now is the dow jones industrial average and he's trying to play catch up a little bit and it had a great week last week and it's having an outperforming day again today. the blue chip average is at 39,453 and that's .75% the broader s&p 500 is the bigger, more breadth-type gauge for the index is at 54.72 and it's up eight points or .2%. at the heights of the session we were up 26 points at the low and remember the high watermark so far for that average is 5505 and that's the intraday record high for the s&p 500. meanwhile, the tech-heavy nasdaq composite is down one-half of

1% the chips and the composite at 17,597 there is a pickup and chatter around wall street these days about whether or not it's a trade happening with regard to maybe not just the magnificent seven, but everybody else. take a look at the s&p 500 etf versus the equal-weighted etf which is up 5% that gap has gotten bigger over the course of the year and it's gotten fairly wide in the last couple of weeks and there's a move higher just a little bit for the broader kind of equal weighted index and whether or not there's a broadening out that remains to be seen and that's a trend that some folks are trying to see if it plays out. let's give you a market cap check right now on the big three. the $3 trillion club that is microsoft, apple and nvidia in terms of market cap they are in that order, first, second and third because microsoft's market cap is just around $3.3 trillion and meanwhile, you have apple at

$3.2 trillion and 3.1 trillion for nvidia shares and again, if there's a broadening out is there a mean reversion taking place. kelly, i'll send things back over to you. >> dom, thank you very much. our next guest says the rule of motion in physics is a body in motion tends to stay in motion and that's the same for the markets and mag 7 leadership and maybe we're calling it the mag 6 or fab five. that gives investors the opportunity to snap up good companies at a discount. joining us is chris grisanti at ami capital management welcome. >> good to be back, kelly. >> it sounds like you're saying it's both things and also that people should look elsewhere >> think both will happen. so you don't know when the market leadership will roll over i think we're seeing a headfake right now, frankly. >> in terms of declines? >> right the mag 7 will continue to lead the way. like you said, newton's first law of motion is a body in

motion tends to stay in motion and i don't see anything that derails it the fed will sit and watch and second quarter earnings will be decent just like the first quarter and i think investors want to follow and the fear of missing out is still strong, so i think that continues. >> so you're talking about it already, but why do you think this peak to decline turnaround that nvidia, is nothing more than just that >> boy, nvidia's come awfully far, awfully fast. so a little consolidation is not just normal, but probably healthy for nvidia, and i look back at the late 1990s, and i see a stock like nvidia which everybody says it's come so far, but it hasn't come as far as some of the market darlings did back then like cisco >> is that the comparison we want or the comparison we don't want neither. it's the comparison that we have and the reality will play out like it plays out, but things can get much more expensive than

investors think. >> this is exactly, yurin was saying people feel this way and they jumped into the trend you have looked at names and united health and hershey's, obviously. by the way, would you even include tesla which a year ago you said wouldn't do that well in the mag six or mag seven. >> as you correctly point out the mag seven is losing members and the fundamentals matter, but the important thing is not to chase the mag seven, but to realize that capital is being sucked towards them leaving some other really good stocks high and dry. so you get to united health group or you get to hershey's. these are terrific companies trading at ten-year low relative valuations to the s&p, and i think that's the attraction for a long-term investor that wants to take less risk. >> i take your point about less risk if you say united health and

apple are both going to outperform i guess you don't have to choose >> why would you go with apple apple is at almost 30 times earnings and absent the fact that people will keep buying it, that's not a real reason to go long term with it and it's hard to imagine apple getting a p-e boost to 40 times earnings which juiced the stock price, but it is not hard to imagine united health group going from 16 times to 23 times which it has often in its history and that's the kind of role i want to play in the next two or three years. >> is it possible we're underestimating apple's earnings i actually really love the new ai platform that they're rolling out. they'll build -- the best thing, ai is a really expensive thing to do and apple is getting it for free to put on the platform with chatgpt and others. >> it will be exciting, in other words. this is what yuri was speaking about that we're having accelerated earnings growth and we talk about the mag six, if

you want to call it that, up 84% year over year at this point in the cycle, it's extraordinary. it's totally extraordinary, and i'm not saying don't own the mag seven, but i am saying being discriminating and don't buy it just because it's going up so we like some of them and we think some of the other ones are too expensive. >> a year ago people might recall you had this amazing call and horizon and it worked out great. >> and it worked out great. >> tesla is traditionally in the mag seven. would you say it's been through a bump in the road and leave it in the mag seven or in your mind is tesla a stock that deserves to be left behind by the market? >> no. it used to be the faang stocks and now it's the mag seven i do think that tesla at the end of the day is a car manufacturer and that's a very difficult business so i think the bloom will probably stay off the rose there, and i would think that the mag serven would become something else >> i heard people who are

bullish in the long run talking about full self-driving and how incredible it is that these cars can literally drive you from the airport back to your house that's the play on tesla for the long run is actually they'll figure that out in a way that's meaningful to drive higher making it part of the ai revolution >> that's entirely possible, but the other possibilities are waymo from google or the chinese who are now doing that in spades, as well. it's far from clear that that will map and it's far from clear that tesla will be the leader. >> would you ride this wave through the election and the post-election and not worry about it one way or the other and in other words, what were the signs that now it's the 1999 or march 2000. >> first of all, i always worry. i'd be worrying all of the time and checking valuations and second of all, i would start getting off the ships once earnings growth starts to slow as you mentioned, it's unbelievably strong right now and there are no clouds in the sky and value investors are scared when there are no clouds in the sky because the next move are clouds

so what i would do is pick and choose and pay attention to valuation, but stay in and don't go to cash and i'm not saying this is a crazy market i'm just saying, watch it. >> when you talk about earnings growth slowing would that be from what to what, for instance suddenly there is a big miss bial by alphabet and nvidia comes out and says remember the potential we had. >> i guess the real answer to that, kelly is take that news and compare that to where the stock is selling it. if nvidia is at 80 times and you're starting to see marginal slowing that would worry me more than if it was at 26 times because clearly, nvidia and apple, these are going to be players for the next ten years, but remember, i asked viewers to remember in the 2000 top, amazon wants 90% of its value great company and obviously still a player, but those stocks can go down so i would be

careful. >> amazon is the company, and not left for dead, but it was emblematic with the bullishness and what not broadening it out when people say to you, now is the time to buybonds and what about real estate and look at how home prices continue to hold up what about cash where i can still make a pretty juicy yield. what about other alternatives? >> i don't mind long-term bonds. i don't think the fed will raise rates and i think we're at a standstill in the economy and i think we'll continue at these rates and i'm in the camp that they'll not get a fed cut this year and it's a hawkish interpretation and if you saw the ten-year bouncing back toward five and i like the bonds. >> you think we've already missed the entry point >> i think second-quarter earnings will come through well and we've had several entry points and i don't think that game is over >> that would be an entry point for bonds and for stocks. >> maybe, but we've seen it

before. >> absolutely. chris, thank you appreciate your time chris grisanti with mai. not everyone has taken part in the recent rally, but that doesn't mean there isn't some opportunity. let's look at some of these oversold names in the beaten down edition of three buys and a bail v victoria is here and she's a chief founding partner and cnbc contributor. good to see you. we'll go bargain shopping. let's go to mongo. it is coming down a steep loss last month after the disappointing guidance it's down 43% year to date this is a buy for you? >> for me i look at it as a way to dollar cost average in and they had to reprice the likelihood of slower growth and if we see a pickup in i.t. spend which is the point as they have to do data operations and the mongo can help them digitize the

platforms which can be intimidating and no one likes to migrate their data and they're looking at how are they simplifying with more systems and for me i look at it as a buy and get back above 30 on rsi and i see it as upside potential as more companies continue to need their database solutions >> the packaging and they're the ones that make the mason jars, right? who doesn't see an opportunity they're up three straight down weeks and reduce the investor day on slowing beer and energy drink demand what's going on here why do you like it >> i actually think the second half will see recovery i see there's upside momentum for them they also have big share buybacks coming and they want to have the free cash flow and yes, they did, they make aerospace cars and they work in the aluminum market a lot, and lots of free cash flow and looking at potentially buying back 10% of

the common shares and that could be a huge catalyst and you're seeing a nice bounce off the 200-day moving average and you can see the near-term momentum, absolutely >> the final one, columbus mackinnon. where do you -- and the technology firm on pace for its third straight down month reducing volume expectations outlining new cost reduction initiatives last month cmco is a buy for you? >> it is i see this as a shift. i started the shift from just shifting things to moving things and intelligent movement not only are they hoisting cranes and all of the things designed to lift now they're moving things with conveyance and robotics and automation about five years ago when they had a new executive staff come in and they shifted to higher margin businesses and we've seen the margin expand in three or four years and continue to any 80% and now they're 60% on the lower margin lifting and i've seen upside on the stock assuming they have a soft landing and i see it as a great

discount buy as we see the industrial moment up >> three buys as you search through the discount rack here the next one here is the bail. it's american airlines and on pace for its fourth losing month after cutting items on weak domestic revenue expectations and the chief commercial officer is leaving now look, the heavy debt load has been a problem for the stock since the pandemic and it's down 18% year to date and you say stay away. >> it's not worth it it isn't because they're the least favored domestic carrier of the mega guys and they're lower margin and their capex spend has been terrible and they tried the let's reinvent corporate travel and they're trying to walk that back and say please, the high dollar, high volume corporate travelers come back and delta and united are better in that area and there's a cap both across the airline industry in general and specifically with american airlines, they just don't have the growth drivers that they see delta and united have because they're losing the corporate travelers and yes, the debt load

is huge because if they can't refinance without having to refinance at a higher interest cost and that's more to spend on perks whereas delta and united are spending to make the travelers more comfortable i just can't touch it, not even at 11 and not even at nine >> is it time to pick up the rock bottom, bargain basement poor, unloved stock. >> no one has known of it and i love nvidia. i know there's concern that this is the end of the tech bubble and i don't think it's a bubble and i think this is going to persist and we'll see further and further growth i will admit that your last guest said it right. stocks go down and nvidia isn't immune to gravity and ok carolly you'll see drawdowns and the technical supports and revenue guidance and they can't keep up

with the profit growth for me, this is a long-term hold talking 10+ years because i see it as a revenue driver victoria, thanks for your time we appreciate it g squared private wealth. coming up, the journal also reporting it might be making frenemies with a competitor. we'll dig into all of it next with apple at 210 on a rally today. plus retail margins are set to explode as a result of ai. oh, yes. we'll look at the names that could be best positioned including this blue chip that trades at record highs and could still have more than 50% upside. as we head to break, here is a broader look at the market with people possibly rotating out of the chips and into the stocks. the nasdaq down, and the ten-year up that much. we're back after this. ♪ this is "the exchange" on this is "the exchange" on cnbc welcome you to our community.

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welcome back tech is underperforming today, but shares of apple are still higher they're up about 1% despite being charged under the eu digital market's act the company is the first issued under the new law and it could be fined as much as 10% of the worldwide revenue if it violated antitrust rules. apple has been in touch with longtime rival meta about collaborating on ai. joining us to discuss is ed lee, assistant editor at "the new york times" and cnbc

contributor. good to have you here. welcome. >> thanks. always. >> the european news is fascinating from the point of view of whether apple cares and intends to do a significant portion of its cutting-edge business there maybe -- maybe it's fine and those who are pro-regulation say they'll just pay the money and consumers there will benefit and others say i forget who put it quite this way, but they said something like cutting-edge technology in europe is over [ laughter ] >> you know, it's to that point. apple their new apple intelligence update, they've actually sort of not released it in europe for this very reason it is unclear given the dma what is allowed and what isn't allowed and meta didn't launch its threats out there. so that could be a faint, though, right? i see this, the likely scenario here is this is sort of the start of negotiations, right the eu was with the dma and apple responded and made its changes and now that you say no,

i don't think so it's not enough. it's just more back and forth. ultimately, if it comes to some kind of resolution and some kind of an agreement between them apple moves closer to opening up that app market for, you know, competitors whether it's a spotify or others in terms of apps being allowed to more directly able to access its customers. i don't know that apple wants to really get deep into the game of we're going to fight this all of the way and take it entirely to court because the u.s. is engaged in this, japan is engaged in this in a few way they're getting hit from all sides and i think they want to get a resolution and create a blueprint for how this might apply across the regions and they're also looking for antitrust. >> the investors don't seem too concerned and they're excited more broadly and just in the last hour they were raising the question of how this curbs apple's selling market because some of these markets might be

accessible later on than investors had hoped and it's not going to be that big of a deal >> yeah. i mean, it's been baked in you know, i think everyone has been anticipating some kind of clampdown not just on apple, on all tech, all big tech amazon, facebook these guys will face it one way or the other and apple is the test case and the most influential in terms of owning the platform that is very pointed on the part of the eu to go to apple first and just set the tone for everything else, but as i said, it's been baked into the price it will come down negotiations and they will open it up more and that is the most likely scenario and how much of it dents their revenue. it's not going to be 20% it will not amount to the fines that the eu is being looking to do, but europe is a big part of the market the second largest market for apple and it's over a quarter of its sales. they'll want to play ball in some way >> let me pivot and ask you

about llama and meta the large language model from meta that apple is reportedly discussing a partnership with and this is what they tell you is going on here >> so they cut a partnership with open ai and they announced it in their developer's conference and what was really interesting about the way they announced it is they referred to this sort of, you know, outside facts, right in other words, they'll partner with open ai because chatgpt is good at sourcing all of this information outside of your own personal ecosystem whereas apple owns the personal ecosystem, your contacts and your friends and your calendar and your email and all of the different apps that you use so siri has always been functioned as kind of like a loose, personal assistant and the real sort of killer app here isn't so much just getting more information. it's being able to coordinate all of your data, all of your information, change your dinner

reservation and whatever it is and that's what apple owns and they have access to that chatgpt doesn't. so partnering with a meta, google and open ai and it's a way of signaling you still need us we have the actual more crucial information. you have also this outside data, let's create a partnership >> it will be fascinating to see how the power dynamic plays out. thank you. we appreciate your time today. >> coming up, we're pulling back the curtain on consumer staples. oh, yeah p & g, colgate-palmolive, walmart are hitting new all-time highs today and coke and kimberly-clark are -- lower spending on salty snacks and we'll tell you what's driving that decline and look at one name bkiucng the trend "the exchange" is back after this ♪♪ ♪♪ chewy, a citi client, uses citi's financial expertise

to help drive its growth and keep its supply chain moving, so more pet parents can get everything they need... right when they need it. keeping more pets, and families, happy. ♪♪ for the love of moving our clients forward. for the love of progress. okay, team! oh, thank you so much 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 so, any pre-launch concerns? what if nobody buys them? that's mean or, what if everybody buys them? oh, i hadn't thought of that that's probably not gonna happen can we handle that kind of traffic? the network can handle it! i downloaded eight hours of true crime stories just during our last video call i'm learning a lot

♪ ♪ welcome back to "the exchange," everybody i'm tyler meathisen with your cnbc update. 22 people were killed at a lithium battery plant. workers were examining and packaging them and this

according to officials an investigation into the cause is under way severe flooding in the upper midwest threatening a dam in central minnesota showing signs of, quote, imminent failure. county officials near mancato says the dam is accumulating debris from flooding over the weekend while officials don't know whether the dam will completely fail or remain standing they are advising residents in low-lying area to get the heck out of there if you're looking to travel to paris for the summer games now one month away, it's not too late to find a deal. digital booking site hopper shows flights to paris during the opening ceremony week are averaging $877 per ticket. 27% lower compared with last year hopper says it won't last. the closer the games gate, the fares will likely surge. getting there is one thing, finding a place to stay, kelly, another. >> true, but youwonder, we started to watch the trials and you get invested in the narratives and you think, yeah

i'll go see it in person. >> the running was awesome and the diving was really cool. >> tyler meathisen, you can't spell retail without a.i. and the margin expansion over the next five years. up next, we'll talk to the analyst about who stands to benefit the most and as we head to break cnbc is celebrating pride month throughout june and here is the project manager sarita tiagi >> in today's workforce the lgbtq+ community brings creativity and resilience. by embracing visibility you unlock potential and at the same time the lgbtq+ employees can thrive by creating community within the organization and focusing on development. it's a win-win

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welcome back to "the exchange." artificial intelligence is expected to impact everything from salads to shopping. morgan stanley writing in a note that the new phase of tech diffusion in retail is under way

and that the big are poised to get bigger, naming seven companies where ai will drive faster growth and on-air margin expansion. joining me now to discuss is simeon gutman an analyst at morgan stanley it's great to have you here. >> thanks for having me, kelly. >> i don't want to say retail is the new tech or semis, but you start talking about this profit margin expansion you'll catch people's attention what exactly do you foresee? >> first, it's okay if you want to say retail is the new tech. that's good. it's been a decade, margin erosion and it's a lot of investment in e-commerce retail is getting its groove back and it's for those who have been taking share and seeing the pendulum shift back and margins are coming back for those that are winning and a lot of it is tech-enabled and they're seeing those things >> are you seeing companies that you see in the immediate near-term, 200 basis points of profit margin expansion? >> walmart is the one that comes

to mind first. 200, let's just say will be a slower process a couple of years or several years, but walmart, you're hitting the nail on the head with several of these aspects of tech diffusion. in terms of tech diffusion, ai is easy, one of them big scale, a lot of data and a lot of opportunity to go through their data and enhance the front end of the business and drive more sales to customers and makes things easier and improve the back end you didn't talk about automation which is an element of tech diffusion and has ai sprinkled into it. they're updating a lot of their dcs to be more automatic eighted and more times digital media to me is the recapture of all of the investment we've made online for getting the dollars back and high-profit margin dollars back through advertising. >> a lot of people have been excited about the prospects for

retailers to use this data and it's kind of the gold mine for advertisers especially kind of with linear tv not being that so much so walmart stands out as being able to capitalize who else >> so think about the largest platforms and think about the size of data and the breadth of data and the size of businesses. that should be first and foremost costcos, targets and we mentioned kroger we talked about home depot and lowe's given their size and scale and in terms of category they're more narrow and the amount of dollars and advertisers spend won't be as much with the walmart and it will aspire to the size of amazon any that's how we think about it and there should be winners and by the way, every retailer should benefit in some form or another and how many of these opportunities do you have and that's what we're trying to do with this report and we're trying to identify the greatest bounce >> exactly let's give the example of target which has been struggling and getting the lost in the middle

problem and its had customer issues and could it all of of a sudden turn on a lever like ai to help it get back to the kind of growth that would make people love the stock again >> it could. >> it could be a help. for target, the question is market share and i think you mentioned in the middle and you're in the middle of walmart and amazon and when they're taking market share and when they have their style and whether their products are being recentive and when they get the target and the cheap sheet going that business and the market will expand and ai will be an amplifier. i don't know that it by itself gives you the manufacturing credibility that it earned as a retailer and that's when target has a right to product and ai will be the amplifier when it happens. >> ai for retail is basically two ways and it's automation and advertising. >> go ahead, yeah. >> sorry, kelly, yeah. i think it's two ways and i looked at the front end and the back end and by the way, this is

shaping up in real time and we're watching this evolve and the top end, streamlining functions at company and it will be universal and every retailer will benefit from automating certain functions and for walmart it includes automation distribution centers and at the front end it's mining data and how much data do we have some of it might be data that we'll have opportunities across all of their meetings and online, online digital with the vizio platform when the acquisition closes and there will be data through different revenue, and who data to be able to analyze it and sell it as much as many different product categories and in walmart's case they're trying to become the everything store and a number of opportunities that they have should be greater than everybody else. >> it's fascinating, to your point, it finds it benefits the

incumbents and maybe the big getting bigger and will we see ai enabling disruption in retail may be down the road for now, simeon, thanks for joining us. >> thank you >> simeon gutman with morgan stanley. speaking of walmart, it's partnering with hoodie maker american giant and it will discuss going direct to consumer to directly to the world's largest retailer at 4:00 p.m. today. let's turn to ai and how it's disrupting the travel space and julia boorstin, she booked her hawaii trip using ai here's how it went >> i'm here on vacation in hawaii, and i used ai to help plan my trip >> ai is playing the role of travel agent with a range of new tools using the cutting-edge technology to offer customized recommendations. before i left i logged into my trip ai which uses ai to suggest itineraries and activities based on your profile and preferences.

aggregating ratings and reviews from google along with trip adviser and priceline which users can book through you can ask for recommendations and add plans to your trip, read reviews and share your bookings with friends and family. when i was there it was helpful to pull up addresses and find restaurants nearby >> if you use chatgpt today you have to go and google everything and you have to look at all of the different places that it recommends and do all of the work you have to do before when we're trying to do is make sure that happens like a travel agent would have done, and do that for you and use ai to actually take all of the effort out of that. >> it's not just start-ups we're seeing the travel giants invest in generate of ai tools, as well. the two biggest booking platforms both introduced ai-powered chat bot assistance and expedia's is called romi and airbnb is penny. it brought game planner.

ceo brian chesky says it will learn about users over time and enhances their experiences google is also moving into this space. >> the end result is a personalized vacation plan presented in gemini's new dynamic ui >> recently announcing it's gemini chatbot can research flight times and offer hotel booking options to create a custom multi-day vacation itinerary in a matter of seconds. we haven't yet seen these new digital tools impact travel agent jobs as recently as december, a record 47% of travelers surveyed say they still used travel agents >> we're seeing ai tools customized for different use cases and whether it's planning a road trip and creating a customized travel itinerary for people traveling with their dogs they will be able to give you specific information or recommendations based on where you are standing and that will be like having a customized tour guide in your pocket

>> kelly >> this would be amazing >> basically, i hate traveling because i hate to figure out the itinerary and go book everything can the ai not only say hey, here's a cool thing to do, but go ahead and buy and arrange all of that for you? >> yes some of this you can buy through these different platforms. obviously, if you're looking at airbnb or expedia, the fact that they're incorporating the chatbots and that's designed to make it more conversational and easier it can ask you a question and you answer it and it can book that platform. for ai which is the platform i used you can book hotel and the like through the platform. i had book my housing and my flight so i wasn't looking to book anything through these platforms and i wanted to know where to go, what restaurants to go to and what hikes to go on with my kids >> here's what i want to do and do all of it, please

and also on the cheap and not too expensive. also about privacy, will people start to go, wait a minute, do i want to type in my exact location and family details and all the rest of it >> look, we are already sharing so much information through our phones there is so much information about where you are that's being captured by so many different apps in this case they want people to opt in and say i'm going to get value out of sharing my information. i'll get specific, customized recommendations based on where i am and it seems like people are really willing to trade privacy for all of the value that comes from customized benefits >> what's the name of it again >> the one i used was my trip.ai, but expedia, booking and airbnb are also investing in ai and offering their own ai tools. >> could i ask it if i don't know where to go can i just say what are your recommendations? >> you can say this is how many kids i have, this is my budget

and i want to go this time of year and i don't want it to be that hot and it will give you recommendations. >> we will see >> julia, thank you so much. julia boorstin quick programming note, the ceo of arm holdings will discuss and rene haas will be on at 3:00 p.m. eastern it announced positive top line results and it's an incredible move shares of hertz are up 20% after upsiding in an effort to improve liquidity and they're using the proceeds to pay the offerings and a portion of the credit facility and hertz shares, by the way, are down 63% so far this year. we'll have a check on the day's other big movers next. ♪ ♪

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welcome back to "the exchange." the s&p tells you that the broad market is pretty flat right now

while we see the high-tech areas, the semis down today under some pressure and the dow is now up 245 points some of the other movers we're watching include the breathing tech suppliers, inspire medical and resmed is rebounding after it is helping obstructive sleep an me. they submitted it as a treatment for sleep apnea and that has shares of inspire down 10%, and eli lilly for its part which has rallied strongly is up 1.5%. elsewhere, ups is selling its freight brokerage business, coyote logistics to the trucking firm rxo the sales price tag is a billion dollar, but remember ups paid 1.8 to buy coyote nearly a decade ago the ceo who has been trying to streamline the company's structure for some time says the sale allows for greater focus on the core business. the stock has been a big underperformer down 12% this year and rxo investors are

loving the deal. the shares are having their best day since the spin-off in 2022 it's up 22%. here's what the ceo told money movers about the current state of freight >> we've been able to grow volume on a year over year basis for a while, but the industry has had volumes down mid-single digits for a couple of years now and right now you're expecting to see similar numbers coming in for the second quarter for the industry and the volume is being down mid-single digits on year over year basis and still ahead of where they were and pre-covid levels >> today's deal catapults that company to become the third largest freight broker by revenue. the shares are up 18% over the past year. coming up, heavy promotions are not enough to spark sales of salty snacks for pepsi and mondelez, but this company is still gaining share. we're not talking semi, actual salty snacks we'll dig into it next stay with us

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space and our stock performance. it was our mystery share from earlier. it's outperforming pepsi and mondelez, but things are starting to go from salty to sour with bank of america declaring a buyer strike on salty snacks as sales lag way ynd the average growth rate of the past three years and it's going to take a lot more than promos to attract new customers. joining us is senior food and beverage analyst at b of a securities is this a glp effect what's going on here >> no, i think we're still a little bit too early for glp effect, but, look, we've had 20% or greater price increases over the last four years across, you know, all of the different subcategories in salty snacks. and it just feels like right now, we've gone maybe a price point too high and so i think it has more to do with price points than it does with like healthy choices. >> i think you're absolutely right. when i walk in, a bag of tortilla chips and $4.99 and i

think my dad complained about the price of doritos the other day. so consumers are taking notice >> yes and these are products that are, you know, sold at high velocity. people know the price points you kind of know when you were paying $4 for a bag of doritos and now it's $7, or in a convenience store, it was $1.99, now it's $3.99 i think there's been some sticker shock related to this. and consumers are also economizing a little bit more. i think those two forces have kind of pushed together. >> and i think at the end of the day, people buy chicken, they'll buy eggs, whatever it is, but they know this is a purely indulgent item paced on what you're seeing in volumes, this seems like it's a pretty sudden and clear break. although utz is outperforming. >> right so it's interesting, you know, utz sits in a price point that's, you know, below the highest price brands, but above private label. it's a regional brand, good

product. it's actually perfectly priced for this environment and i think that's part of the reason why they have gained share. and i do think that, you know, if this persists over the course of a summer, they ought to have a very good summer, as well. >> they being utz. but if you're pepsi and mondelez right now, what do you do? should we looking for coupons, buy one, get one free deals, that kind of thing >> right, so, an interesting story line over the course of the first half of the year is that these companies went into the year expecting to promote more like that was going to help sort of stabilize volumes the promotions didn't work and so didn't drive the incremental lift basically, just rewarded your everyday users, but didn't bring any incremental into the category it kind of leaves you with three options. one, wait it out and see if consumers begin to adjust. the second is to price promote deeper, which has some negative consequences in terms of margins and it's not a sustainable

strategy, or the third would be to maybe consider rolling back prices in general, and maybe have to cut some costs in order to subsidize that. >> that's amazing. so, they offered coupons, but the coupons weren't big enough, basically? >> right, exactly. >> that's interesting. are you sure, and you would know, again, from where are broader coverage space, that there's not a glp-1 effect here. >> it's -- you know, we cover the food companies as well, and at this point, the number of people on glp-1s in the u.s. is still relatively small to have that much of an impact and frankly, we're seeing this volume weakness not just in salty snacks, but across all packaged foods and even in the beverage/alcohol, to a certain degree this seems more as consumers economizing as other costs in their household budgets have gone up, verse this being a real health concern >> so for pepsi, for mondelez, you mentioned that in order to

bring the price point down to where the consumer is ready and available, they might literally have to do layoffs this is a big -- from an economic shift, this is kind of a big deal here. >> right i mean, whether it's layoffs or reducing other costs, i mean, if you get -- in the hypothetical situation, where you know, prices are just -- would get rolled back, you know, across the board, unless you're quoipg going to give up margins, it would have to come with some kind of belt-tightening again. it's not an easy decision, and not one that would be made quickly, but you know, i -- it's in the range of considerations >> and finally, what are your favorite names in the space, if maybe it's a couple of these names that they can turn things around i think you still have a buy on pepsi, for instance. but which ones do you think are best positioned? >> so within the space, utz, definitely, you know, again, as we describe before, has performed really well many this environment. right now, coke over pepsi,

just, coke doesn't have the volume issues that pepsi does. and i think as we think about pepsi and mondelez, the stocks have lagged, but you need to see the volumes to turn before you start getting more aggressive with those i would say it's more coke and utz. >> thanks so much. i love your job. thank you for joining us today we really appreciate your time we should do a taste test next time speaking of the consumer, va quick look at shares of affirm that are soaring 10% after goldman initiated coverage of the buy now pay later, and sees shares rallying 40 protect from friday's close for more on that call, head over to cnbc.com/pro. that does it for "the exchange." tyler is gtietng ready for "power lunch." i'll join him on the other side of this break. ♪♪ citi's industry leading global payments solutions help their clients move money

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welcome to "power lunch," everybody, alongside, kelly evans, i'm tiayler mathisen. as apple done it again is the company's new apple intelligence enough to drive an iphone refresh cycle and make it an ai leader >> plus, we'll get a check on the regional banks with the ceo of wafed that bank and several others put on downgrade review by moody's the dow up 200 points, getting a boost from goldman and a couple of health care names