down 3% of the year. i'm a big fan of animal health, $59 billion industry. it was done at $24 a share, stock is at $12. >> see you on "closing bell." "the exchange" is now. ♪ ♪ here's what is ahead. consumer confidence might have dropped this month, but the market guest isn't worried. she is betting on a strong consumer and strong economy, and a group of stocks positioned for gains and will join us with her picks. plus, the first list is out. ten drugs targeted for medicare priced negotiations. a former fda commissioner dr. scott gottlieb says there will be a lot of unintended consequences of this. he joins us ahead as we look at

the impact. and on the heels of the latest housing report, we have the findings and what clues they may offer about where home prices are going to go from here. we begin with today's market. bob? >> what we care about these days is inflation and the jobs issues. we have an important data point. we had a weaker than expected jobs report for the month. so this is supportive of the soft landing, job growth slows down, that's a key component. and the market responded very quickly to that. the s&p is in an upswing. we were 4369 just a week or so again. look at us how, 4485. the s&p 500 is above its 50-day moving average for the first time since the middle of august. that's true of the dow and nasdaq, above their 50-day average.

goldman sachs is leading. the only laggard is staples like coca cola and proctor and gamble. take a look at some of the big cap tech stocks. most tech opened plat to down. nvidia is moving quickly. intel is up, microsoft is up. amazon is on the upside. again, big bay, once we got the report at 10:00. another sector is most of the regional banks. co-america, pnc, zion's, all moving on the upside. and we had a big piece of news in the middle of the day. a d.c. court challenging that s.e.c. decision to deny them the right to convert their bitcoin trust to an etf. that's a big, big push for the potential of a bitcoin etf. not happening immediately, but a big ruling in favor of the direction of approving of the bitcoin etf.

some of the other sectors, crypto stocks, marathon, coi coinbase, all up in the mid teens. john, back to you. >> thank you. my next guest says the market will continue to improve as recession fears ease. joining me now is the senior portfolio manager for multiassets solutions at global investments. margie, risk appears to be on this morning. coinbase is up. you know, c3 ai is up 6%. nvidia. you say that perhaps the concerns about reits and the markets have been overdone? >> yes, i think so. people have been really hoping for a recession, because historically, you would expect with such a big increase in short rates would be on the brink of one. but the economy keeps on

chugging along. third quarter looks pretty good. you can see these economically sensitive sectors, so clearly the market does not think we're in a regular recession. so that is what is lifting those parts of the markets. >> how much more of a lift are we going to get? we have the jobs report where i think wage data will be in focus and, you know, we have united auto workers, perhaps about to strike. so even if it looks like wages are under control for now, maybe not for long. >> well, i think those are all rather small factors influencing the market. but basically, the economy is good. there's no sector that is out of bounds. and really, we have seen over the last year the economy, consumers and business is rather insensitive to these increases in short-term rates. the other parts of the economy, they're only bothered by the higher rates. so i don't think a small change

in labor rates, something like that is going to change. plus, really, unemployment is at 3.5%. it's hard to be negative about what is going to happen to wages. i think we'll continue to move up modestly. >> let's get more granular. in this environment, you like semiconductors. how do you slice that? because nvidia, it's almost living in a world all its own. maybe you can put amd in there, as well. but what do you like about s semiconductors? >> they have one of the best growing characteristics of any part of the economy and will continue to benefit and accelerate with artificial intelligence. so we think they'll continue to be one of the best performing parts of the market. even though it's true that all the semis have been extremely volatile stocks, just because they're up isn't a reason to not

like them. we think they still have room to move up, because the earnings move up. >> you also like industrials and some of the diagnostics within health care. why is that? >> industrials because we think that having that sector is sluggish for really decades. the u.s. industrial base has turned a corner. our industrial companies are very competitive. we have seen them reshore, so companies will increase the expenditures. that will help the companies as they continue part of this trend, and particularly the strong economy, we think that the industrial outlook, they will do very well. in health care space, lots of value there, but we don't think we will see big moves in that sector, because they have government regulation problems with generics, problems with

acquisitions and bankruptcies. so they're a great value, but we don't think they will be performers this year. >> we'll talk about some of that a little later in the show. margie, thanks for kicking it off. for more investment ideas, dune into a spashl "back-to-school" edition of "mad money" tonight at 6:00 p.m. with jim cramer. consumers pulled back more than expected in august on inflation concerns. the next guest says there's one trend she's watching that suggests the consumer remains resilient and savvy. joining me is katie thomas, lead at the carney consumer institute. what is that trend you're seeing? >> well, we're just seeing consumers embrace the op optionality they have. while it's a complex picture from increased inflation to increased wages and trying to make sense of it all, the consumer is exploring their

options and they're ultimately still spending. they really figured out where they want to spend and save and how to make that work. which is why we have seen retail sales do well. some thoughtfulness around growth rates, so they can buy a taylor swift ticket on the pumpkin spice lautw latte for t first time this year. >> smartphones are not doing well, it was best buy's attention to cost that have allowed the stock to be rallying today on their profitability. that seems to be a bit of a trend. retailers, you know, paying more attention to the bottom line. not having loose return policies, being very strict about who gets to watch your netflix subscription, right? >> yes, absolutely. one thing we are seeing is a lot of -- yes, strictness with

subscription offerings from netflix, costco, some other retailers, to tighter return policies. that's where it's going to be an interesting interplay for consumers, and where they choose to spend. so if you're a retailer that's tightened up your return policy, trying to reshape behaviors from ordering a lot and returning a lot, it could still be alienating to a core consumer base that is used to those practices and behaviors. that's a great example of something that i would keep an eye on, as we think about which retailers and which manufacturers may do well. >> you said over half the consumers that you recently surveyed, think their financial situation will get better moving forward. square that for me with what we heard from macy's and some others about the impact of a higher interest rates on credit usage, and the restricted availability of credit to a lot of consumers who are going to

have to start paying student loans again before too long. >> absolutely. i think that's where you just started to see the complexity of the picture, and who exactly is impacted by what. so exwhile we saw 50% of consums are optimistic, we talked to them how impacted they are by interest rates. only a third felt like they were directly impacted. so it's about sectioning out these different consumers and how they're impacted. >> are those people who don't need to buy a house any time soon, maybe who are sitting on a mortgage in the sub-4% range and who don't have over extended credit? >> yes, exactly. so you do see a set of consumers, we talk to them about how financially stable they felt, a lot of consumers across income segments said they felt financially stable right now, which means many people do know how to live within their means, and that's what they are doing at times like this, and they are

focused on what they deem to be necessities and purchasing that instead of things that are more discretionary. >> yeah, at the individual level, it makes a lot of sense to save. but then at the macro level, we want the consumer to keep spending, which is always tough. real quick, you say consumers aren't trading down, they're trading off. what's the difference? >> so i think we use this blanket term often times, trading down. usually it insinuates they're going to a cheaper product. when we talk to consumers directly, they tell us it's about that price value equation and where they feel like they're getting the best bang for their buck. it's not just trading down to a cheaper item. if it does not deliver, it will go back to buying what they did before. so it's how they are spending across the wallet. 70% of consumers will save in one category to spend in another. so it's not a simple linear equation of every product, every category, consumers just looking

at the next option. >> they're still getting those tickets. >> "barbie," you name it. coming up, pricing pressures front and center with the first ten drugs for medicare negotiations. we have the list, next. plus, home prices keep climbing with the latest index now only two basis points away from last summer's all-time high. but could the fed put an end to the housing gains? we'll have the index's co-founder professor robert schiller when "the exchange" is back after this.

welcome back. the biden administration releasing the list of the first ten prescription drugs that it will target for medicare pricing negotiations. this is the first time medicare will be able to directly negotiate prices with pharma companies as part of the "inflation reduction act" and lower drug prices for 60 million older americans enrolled in the program. but it doesn't come without criticism, and according to dr. scott gottlieb, a lot of

untenduntend -- unintended consequences. we're joined now by evan seegerman and sharon epperson has a closer look at how this could impact the cost of care giving. dr. gottlieb, starting with you. we're sort of saying negotiation, but it's kind of like that scene in "friday" about who's bike it is. i don't know how much of a negotiation this is, and prices are coming down, and that's going to make people want to make other drugs. >> yeah, look, it's not really a negotiation. they had to create the guise of negotiation to make this sustainable legally. it's been challenged in court right now. i expect the prices are going to be on par with what they extract in terms of discounts in the veterans administration. so it will be on par with v.a. pricing. they're due to send the first tranche of the proposed prices. i suspect there will be little give or take and then they will announce those.

there is a lot of -- there's a big gap between how much is afforded. this is really a synthetic loss of exclusivity on these drugs once they come into these price regulations. so that gap between the returns on small molecule drugs and biologics are driving manufacturers to develop biologics, and rethinking going into invitations that are predominantly medicare. i suspect you won't see a lot of new business development. you won't want to take a small molecule drug into a medicare population, and that's unfortunate. >> some countries seem to already get these drugs, the last time we paid for them here in the u.s. why do we get the unintended consequences? >> look, the medicare part d program itself is quite competitive. if you look at the price

concessions afforded to the government in the program, a lot of times the discounts extracted are greater than the discounts extracted by european price setting authorities. we created the medicare part d program. i was there in the early 2000s to create a competitively bid structure on the assumption you would extract savings but you would also make sure that the capital got allocated to hopefully the best public health endeavors. so the companies chasing returns on capital on the whole, the places with the best returns on capital are the places you would have the biggest public health impact. that was the reason to create the competitive scheme. now we're coming in with price controls, so we are up ending that scheme and saying the government can pick and choose winners more effectively, which will cause a lot of misallocation in capital. >> how long before we see that? >> you are seeing it right now. you saw statements from the ceos

of navaris. i see business plans, you're not seeing business plans come through for example for small molecule solutions for alzheimer's. i haven't seen a business plan in years at this point. you will see people pull back from the market that is a primarily medicare market. there's certain things like intercellular targets and targets on protein pockets that you can attack only with a small molecule drug. if more of the investment switches to large molecules, those are harder to make generically. >> let me rephrase the last question then. not how long till you see it, but how long until the electorate feels it and has more of an opinion about it? >> probably within five years, i

think it's hard to glow what you don't have. so i think in some respects the costs of this are hidden. but you will see capital come out of the markets and then the government will step in and subsidize certain things. as soon as you see the government stepping in, that's an indication that investment capital has left the market. >> thank you. now to the impact on drugmaker stocks from the biggest revenue makers from bristol myers, squib, pfizer and merck are on this list. evan, what is the impact? how long before we see it here? it looks like it's a margin hit. >> i think it's a margin hit, but the list today that came out was not a huge surprise. for what it's worst, that's going generic around 2027. to dr. gottlieb's point, it's the investment upfront changing now. drug companies are focused on

biologic. i see an increase in rnd up front for cancer drugs. they'll front load that. >> so what are companies more likely to invest in or less likely to invest in, even technology wise, as a result of just the possibility oh of this thing continuing to happen in the future? >> i see a lot more investment in biologics, which dr. gottlieb said, less investment in oncology drugs. so i know some companies are rethinking how they pursue and develop this, and that's a great way to get cancer drugs to patients easily. unfortunately, things like that are likely to be deprioritized. in addition, weight loss drug also be prioritized, because medicare does not cover things

like weight loss. >> we talked a lot about weight loss drugs lately. so what is the impact here on weight loss drugs? >> so remember, medicare does not cover weight loss drugs at the moment. if they were to cover weight loss drugs, it would be a different story. but wagovy won't be up for negotiation unless they figure out a way to do it. i expect you could see a bifurcation between diabetes and weight loss drugs. lily has a drug that can get around negotiations. >> what happened under the "inflation reduction act" for insulin? >> insulin is capped at $35 per patient per month, which is great. i'm really talking about non-insulin products or the small molecules like jardian.

those will be negotiated, but insulin is super important and that's a great part of it. >> what happens to the pipeline for innovation as a result of this, types of companies as dr. gottlieb was saying, that might not be getting funded, and maybe even types of companies that might have less competition now that are already in the pipeline? >> well, companies that are in the space are going to be a very interesting investment, because they're not subject to negotiation at all. they're not really in the medicare segment. along those lines, if you are looking at a medicare population of 65 plus, a large molecule biologic drugs are going to be far more interesting than a small molecule. small molecules are going to be relegated to the nonmedicare population. so to prevent that nine-year clock they keep talking about. >> all right, evan seegerman, thank you for joining us with that perspective.

and we were talking about the cost of care. about 48 million americans are caring for someone over the age of 18 with many of them caring for an aging parent or relative. and the value of that unpaid care is around $600 billion a year according to aarp. sharon epperson is with me with more on that. >> out of pocket costs for health related and long-term experiences are far greater than expected. i met three siblings who are taking care of their mom at home. we talked about the emotional and financial strain of being family caregivers. >> after she had a stroke four years ago, her daughters stepped in to take care of her. >> they've been so good to me. >> reporter: daphne and the older sister took the lead. >> it was all a learning process. >> reporter: with sheila and debbie, who are also retired, the three sisters worked together to provide their

87-year-old mom around the clock care, creating spread sheets, managing medications, tracking her progress, and navigating expenses. >> we have been up and down, around and about buying things that someone would suggest that you use this, this can help do this. so thousands of dollars. >> reporter: they've paid out of pocket for medical equipment, transportation and supplies, not covered by insurance, including a $5,000 hospital bed. nursing home care costs over $100,000 a year, a home health aide, $60,000. and when a family member provides the care, the average spending is more than a quarter of their annual income. in the last year, what financial sack rifices might you have mad? >> i'm sorry. it's been hard. >> it's so complicated.

when you start trying to figure out even just in what we might -- she might be entitled to, we can just pay off our bills and stay afloat, that's a good thing. that's what we are trying to do. >> reporter: barry glassman says planning ahead for long-term care can reduce some of the financial strain, but he understands few families actually do it. >> it's tough, because a person in their 80s doesn't really know when they may need help or what help they may need, if at all. >> reporter: family caregivers can get spade through medicaid plans and may receive assistance if a loved one is a veteran. but you have to apply for these programs. >> we are trying to take care of our mom 24/7. there's just no way in the world that we have time to figure this all out. >> reporter: piecing together finances for their mom's care has been overwhelming. but these sisters say family and faith offer the support they need on the most trying days.

experts say it's important for family members to talk about the what ifs and discuss who will make health care and financial decisions if an elderly parent is unable to make those decisions themselves. knowing who will take on those responsibilities can alleviate some of the stress. >> this is so important, because it affects just about everybody. it seems in a way like elder care is the new college, right? it's this cost that maybe there is some assistance for it. maybe people can plan and save for it. but maybe they can't. it affects retirement and your ability to pay for things. what about the people who aren't wealthy, who can't easily afford this, the people in the middle. what are the steps they can take? >> it is something that is a multigenerational problem that people are trying to figure out. trying to find that financial assistance can be difficult. there are programs that can help if you are a veteran, there are programs that can help. there are also some neighborhood programs, community service programs that may be able to provide some assistance, maybe

some respite care. so a family caregiver can have a break. but it takes time to find what you can get assistance with, and finding the tax breaks that you may qualify for, whether that is through your employer, a health savings about, a flexible spending account or if you can declare that parent as a dependant. so there are ways to find that. but you have to piece it together. and that is something that can just be so overwhelming. >> we are a country with an aging population. fewer young people coming in, maybe we need a 529 for elder care. >> absolutely. 2034, there will be more people over the age of 65 than under the age of 18. coming up, another day, another company rolling out another ai feature. but could this one have a head start? "e chgeegahd he straty ea onthexan."

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good afternoon. i'm tyler mathisen. here is your update at this hour. the mayor of miami is suspending his campaign for president. suarez is the first primary candidate to drop out of the race. the decision comes less than a week after his campaign failed to qualify for the milwaukee primary debate on the gop side. the justice department today announced the takedown of a malware platform called quack bot. investigators say it deployed ransom ware that caused hundreds of millions in damage with more than 700,000 victims around the world. researchers say they believe the

hacking network originated in russia. and a 127-year-old new york water main broke under times square, flooding subway stations and streets there. the state's department of environmental protection said crews found the source of the leak in an hour and shut the water off. three subway lines were suspended and the intersection closed to automobile traffic. >> tyler, thank you. coming up, home prices are back to last summer's levels almost. but will further rate hikes derail their momentum? professor robert schiller joins us with his take next. and let's get some show and tell before we go to break. the longest win streak since june after posting an earnings beat and raising profit guidance. here 's what the ceo said. >> we have been very focused on

making sure if we pass along inflation, we do it in a very peru temperudent way, and do so that's cost justified. our brands have been able to hold this pricing and densate llmotrdoar and volume growth during this time period. ! rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. i go through a lot of pants. before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com. (fisher investments) in this market, you'll find fisher investments investment objectives, risks, charges, expenses is different than other money managers. (other money manager) different how? aren't we all just looking for the hottest stocks? (fisher investments) nope. we use diversified strategies to position our client's portfolios for their long-term goals. (other money manager) but you still sell investments

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welcome back to "the exchange." the latest reading of the case schiller index is showing a slight uptick in home prices of 0.7% in june from the previous, as demand continues to outpace supply. but looking at a year over year basis, prices were flat, indicating housing might be nearing a bottom. but still, mortgage rates are at multidecade highs. the rate on the 30-year fixed mortgage currently at 7.29%. housing supply is now at a near 25-year low. let's bring in the man behind the case schiller index, robert schiller, a professor of economics at yale university. what do you make of this? this is a weird time where inventory is so low, prices remain high.

>> yeah, and as you showed, the mortgage rate has gone up a lot. and yet people are still pushing in many cities, pushing prices up. overall, our one-year estimated change was exactly zero percent. so like half the cities are going up, half are going down. overall, nothing. in spite of news about the mortgage rate, which is quite dramatic. >> is it really employment and wages that you think are fueling this? because people are making more money, even though inflation is hitting a significant portion of the population, and as long as people are making money, they seem to be spending it on rent, on perhaps new mortgages, feeling decent about it. is that sort of that last jeng

ae piece that is keeping this from falling down? >> maybe. it's kind of a rejoicing, or it looks like covid is behind us. and i liken the mood to maybe after world war ii. the war is over, let's celebrate. and people thought that there would be a huge demand for houses as we got back to normal. >> well, about five years after rates were this high, we got the financial crisis and a mortgage crisis. how much pressure builds up in a system like this, and does it cause more volatility eventually in a housing market, or does it not work that way in relation to the macro? >> the moral of the story is that of a speculative bubble. prices start going up, and then

they become talked about, as maybe it's crazy. and people don't sell right away, you know, it's hard, especially with houses. the big deal is to put your house on the market. so it goes longer than you think. and right now, people's expectations don't some to be extremely high. but they're acting as if they're hanging in there, and sort of -- well, maybe above all situations, maybe it's going down from here. >> are you tracking at all the impact of airbnb and kind of the secondary home rental market? right now in new york, of course, there's a crackdown on that. there's probably a bunch of housing inventory that's no longer rentable on that kind of platform. and maybe that causes some more inventory to come on the market when people decide i can't get crash flow like i thought i could. i'm going to put it up for sale.

are you seeing that at all across other markets? >> i haven't been studying that, but i think you're absolutely right about that. airbnb is part of the computer revolution, part of the dominant story right now is about airbnb and chatgbt and other innovations that have to do with the internet. so we think we're in a world which is changing. not we, everyone. lots of people are thinking it. and at this point, it's -- the prices are holding. they haven't fallen like they did, home prices haven't fallen like they did after 2007. >> all right. in a world that's changing, that's going to change, too. robert schiller, we just don't know when. appreciate you being with us. >> okay. coming up, shares of this social media company popping

after announcing a new ai feature and a new way to make money. the name and details, next.

welcome back. our mystery chart was snap. shares are higher after the company announced a new ai feature and plans to monetize it. julia joins me now with that story. snap has a way of doing this, julia. >> yeah, ai also gets people's attention. snap announcing a new ai feature in a new way it is trying to make money with ai. snap dream, that's what they are calling a new photo that turns photo into ai generated photos. and snap encourages users to share these ai generated images with their friends. perhaps most interesting, the first ai selfies are free, and after that, it costs 99 cents

for another eight selfies, following the $4 a month plus subscription service, which hit 4 million subscribers as of the end of june. all this shows snap's big push to diversify its revenue stream, with subscriptions and now one-off purchases, as well. the question is whether all this is enough to help mitigate concerns about the weak outlook for the second half of the year that snap shared in the last earnings report. stocks had been down 20% in the past two months before today's gain. 73% have a hold on the stock, 12% sell, 15% have a buy. john? >> this reminds me of a couple of things. one is when some of the dating apps having these packages unlocked for certain features. is there enough volume on snap to create the kind of network effects that would keep those

purchases going and make them significant? >> well, look, there's a lot of volume on snap when it comes to communication. that's one thing that is so interesting. for the most part, snap has been monetizing around the entertainment. you send a message to a friend. you go watch some content on snap that maybe is professionally generated. then you go back and respond to the message that your friend just sent back. so it's all about the entertainment and the advertising in between with the communication with friends. what they are doing here is trying to directly ly monetize communication itself. they want to make money and giving you lots of tools and reasons to keep sending your friends selfies. a selfie in front of the restaurant isn't interesting enough, you can send it as a mermaid. so it shows this interest in broader diversification away from advertising, which investors seem to think is a good thing. >> if i remember correctly, last year snap was one of the first

companies to do a major head count cut when they saw the slowdown in advertising spend and revenue. is your sense that they sort of stabilize enough to have a platform on which to grow from here, or is revenue still shaky enough that there could be more volatility ahead? >> well, i think the reason we saw the stock drop so much after the most recent earnings call is because investors and analysts hoped things would continue. we have seen a lot of optimism out of meta about their growth trajectory, and that sent that stock higher this year. i think there was some concern about wariness about the second half of the year. we have seen quite a turn around from talk of what they called an advertising winter. now it tseems like it's much moe stable than that. it's too soon to say whether or not snap will be lagging in that

department. snap is much smaller than meta. so far this hasn't helped them, and meta's scale has been a huge advantage. so we'll see what happens after this quarter, and we'll see if it's just as bad as they warned or if they are starting to turn things around more. >> i know you will be watching. julia, thank you. we have a rare and exclusive interview with google cloud's ceo, fresh off of google's cloud next event today in san francisco. going to talk about the company's latest push into ai and a whole lot more on "overtime" at 4:00 p.m. eastern. still ahead, near-term options in pvh apply an 11% move in either direction after earnings. hewlett packard hasn't missed estimates in five years. we'll get the action, the story and the trade on all three next.

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exchange." tech, the consumer, and the tech consumer. so that's what we're watching in today's earnings exchange. looking ahead to reports from pbh, hewlett packard, and ambarella. let's start with pbh, own erof brands like calvin kline and tommy hilfiger. analysts see a weakening consumer and higher promotions as a biggest risk to pbh. you're not touching it here, though, why? >> this is danger signs. you know, anything is obviously possible surrounding an earnings announcement. especially with implied high volatility. this looks like a value trap to me. if you look at the company from the fundamentals, it doesn't look that bad, selling seven

times forward and looking to grow those owearnings about 11%. it's trading below book value but do iiving into the balance sheet over the past year, you can see the company has diminished the cash holding and significantly increased its inven inventories, which is a big red flag talking about fundamental analysis. so this one is just a no touch for me until i really see the business turn around and the consumer turn around and that inventory level starting to drop considerably. >> i contrast this chart with abber com bee. is pbh not as cool? >> you know, i don't have style it's been a long time since i was in the cool camp so i couldn't tell you. >> yeah. well my kids are not buying from pvh right now. >> the chart's not as cool i'll tell you that much. >> that much we can see. next up, hbn, it's enterprise

centric cousin hewlett packard enterprise, shares of both are higher for the year with hpq, pcs and printers, the consumer side, up 18%. and barclay's expects pc demand to stay in line, staying more pessimistic. expecting a.i. to be the long term revenue driver. you on too are buying the k enterprise? >> yes. the legacy, the more computer driven segment is a no touch for us.

when you dive in, the fundamentals top down look okay. they're relatively the same earnings multiple, growth rates aren't that attractive but the balance sheet is a huge differentiator for us. the enterprise side is the dar lirng with the debt on the hpq side showing a negative book value and not something we want to touch on the hpq side. i can see the enterprise side with the a.i. develop they're seeing do well. we'd be a buyer of the enterprise and avoid the legacy side. >> there's a shift towards accelerators the likes of nvidia away from more cpu driven hardware and hpe makes more cpu driven hardware. are they going to be able to weather that? >> i think they will and i think like a lot of earnings reports they're going to focus on the

a.i. driven side we'll probably hear that a lot in their earnings report. obviously a buzzword now. i think like an ibm, a legacy computer driven service business, i think you're going to see an up tick there and the opportunity is there. it's a fundamental, healthy balance sheet with modest earnings growth and an attractive valuation. so i think there's some upside there. >> finally chip maker ambarella, shares are lower by 10% in august as semiconductors took a hit. but morgan stanley is staying bullish saying autonomous vehicles andgenerative a.i. are growth. and they see revenue starting next year. is this a big chip player now? >> yes. and i want it to be. in full disclosure, i'm going to be a big band wagon. i don't yet have a position.

i'm not a big buy ahead of the big earnings kind of guy. but this company has all the makings of an ancillary a.i. that's not getting a lot of attention. the leading semiconductor manufacturer chips for cameras that go in everything from autonomous driving to smart infrastructure. they have no debt and trying to turn the corner of profitability. they just need one good quarter, i don't think you need to get ahead of it, meaning yes, you might miss that initial pop if the quarter is now and all of a sudden they turn the corner, i would suspect that would have a bump up. but i think once they do show their true path to profitability, the buzz surrounding this name it's going to be a momentum stock and one you more than likely will want to jump aboard after the earnings report. >> that's the challenge as we

saw from best buy's earnings this morning. the consumer not so much buying the devices right now. we've seen that from qualcomm as well. a lot of things that tech is going into. when does the ai shift from the data center into the consumer story might be a while. const quint thank you. that does it for "the exchange." "power lunch" is next after the break. (vo) make the switch. it's your business. it's your verizon.

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everyone's financial goals forward. pnc bank. good afternoon, everybody. and welcome to "power lunch," i'm tyler mathisen along with contessa brewer. glad to have you here. today we're watching several stories at the intersection of business and politics. president biden about to speak about drug prices. the fdic plans to force banks to protect themselves. and the s.e.c. losing a court case and potentially clearing th