>> energy. you have supply constraints and supporting stocks. >> josh brown? >> don't tell anyone, but uber is taking out a new 52-week high, even with tech in the doldrums. i like it. >> so we'll get to apple, less than ten seconds away. i'll see you on "closing bell." the recap there. "the exchange" is now. thank you very much, scott. and welcome to "the exchange." i'm kelly evans. right now, out in cupertino, california, apple's big annual product launch event is just getting started. one of our guests calls it the most high stakes event for the company, believe it or not, in years. because of apple's size, this makes it a high staking event for the market as a whole. we'll from a front row seat to all the action. steve is live in cupertino to bring us the major headlines as

we get them. and instant reaction and analysis from paul meeks and kim forest. welcome to all of you. steve, kick it off for us. the iphone -- why did they name the event wanderlust by the way? >> reporter: that i don't know, but it's just now kicking off. maybe he'll get a hint as to why they're calling it the wob wund lust event. i just heard a bunch of cheers, i think tim cook just hit the stage. here's what we are expecting, kelly. four new models, two base models and two pro models where apple puts the most advanced features in there for the cameras, processors and so forth. and then everyone will be talking about this, that new plug at the bottom, changing from that lightning connecter that you are so used to using for the last decade or more, changing over to a new standard

measure called usbc. so if you have an android buddy and you want to borrow their charger, you can do that. and pricing is another bigamistry. analysts have been chattering. the iphone pro would start at $1100. >> so we have -- as i understand it, steve, there might be a lot of razzle dazzle around the cameras. a lot of consumers can't differentiate these products from one another, so maybe the camera with the super cool lens might help draw them 23in a lite bit. i think it's interesting to see what's happening to smartphone sales every year. are we talking about a market that's matured so much that sales are declining so price hikes are their only option to keep the top line growing? >> reporter: yeah, that is what investors are looking for. we saw apple shares punished last month when i was out here, when they reported their third

quarter earnings. we're in the fiscal fourth quarter. apple said sale also be down for the fourth quarter in a row, that means a full fiscal year of down sales. tim cook told me himself, smartphone demand has fallen in the most lucrative markets like the u.s., china, western europe, japan and so forth. so if they raise prices on this phone, they will have to make a big sales pitch as to why it's worth the higher price point. >> exactly. steve, we'll check back in with you shortly. how much is at stake for apple and the tech landscape? let's bring in kim forest, and paul meeks. so kim, you think this is a pretty high-stakes event, don't you? why? >> sure. well, i think the reporter steve called it out four, count them, four quarters of lower revenue. and this is not a good thing for a market leader. and certainly the largest market cap stock in the s&p 500.

it's a problem. so they have to make a case and the panda in the room, not the elephant in the room, is china. there might be decreasing sales from china, so how are they going to make up those lost sales and drive-in novation to make us want some more apple to spend on? >> right, exactly. paul, we haven't even talked about china as a risk going forward here. already, the company is coming off its third straight quarter of year on year revenue growth. that's garnering comparisons with, yes, ibm. >> yeah. i'm worried about apple. right now, it trades for about three or four times a reasonable long-term growth rate for either revenue or earnings per share. i think going forward, maybe a 5% grow on the top line. maybe a 10% grower on the bottom line, only through stock buybacks. in the meantime, you have a

stock trimming at 30 times. so among the f.a.n.g.s, and any of the other mega cap stocks, i would say i own it, because if you are a tech investor, you have to trade around a core position in case you are wrong. but i would say, adamantly, it's the at least favorite among the f.a.n.g.s, the least favorite among my large cap tech holders. >> apple had 25 billion shares outstanding a decade ago, and only 15 billion today. so they are doing a lot of financial engineering, but is that a reason not to love it? >> the nice thing about apple is it has explosive free cash flow. there's been no company in the history of the planet that has generated this kind of cash flow, well over $1 billion per week. >> wow. >> however, we also have no growth. and at some point, you have to reaccelerate the growth. so i concur with our other guest, they have to show us

something. i don't think they'll show us anything today. but over time, they'll have to show us where does the growth accelerator come from? i actually think that they should probably change their culture, which has been wrapped around it's no good unless it's built here and consider making an acquisition, and a quite large acquisition. they have a strong balance sheet, they could easily do it. but in the past, they have been hesitant to do so, and i think they have to do something bold. >> when you say something bold, and we are looking at tim cook taking the stage. we'll get to steve in a second, but when you say you want apple to do something bold and not obsessed with products built in cupertino, for instance, what kind of acquisition are you talking about? a product acquisition? they have a bunch of media acquisitions have been floated with them over the years. >> over time, they would probably consider, because it's been in the media, acquiring tesla when it was down and out. that would have been a big move. they could have also done

netflix. probably should have. i think going forward, among the large-cap tech names, they've been the most silent on artificial intelligence. if indeed that is going to be a mega tech trend, if they can't do it internally, or they can't exploit it enough internally, that is where i would go with a large deal. >> who is that acquiree in ai right now? do they buy nvidia? do they look at a software play? i don't know if open ai is a possibility. >> that's a very good point. open ai is definitely not a possibility, because of course, it's bankrolled by microsoft. and i don't think nvidia would be either, right? if the manufacturer of semiconductors, even though nvidia is a fabulous semiconductor company, probably doesn't jive with apple. i don't know what it's going to be, but they somehow have to better embrace that theme. that's probably your best opportunity for accelerated growth, and they badly need it.

>> yeah, it sounds like they might not know, either. kim, quick comment? >> i disagree. i think this feels a lot like microsoft when everybody thought it should be broken up into operating system and other stuff, you know, to show the growth of the other stuff like office. and they really have demonstrated that was not the right thing to do. or bring in an outsider. that was also wall street's favorite idea. i think apple is an innovation company. it is not a favored stock, but i'm going to give it credit that they have innovators, and i want to see them innovate their way out of this problem and earn that multiple. >> this is going to be good having you two all hour. let's start with another tech giant while we wait for more headlines from apple and while they are busy refreshing their product line, google is in court as the u.s. takes on the company's search dominance in the biggest anti-trust trial in

two decades, and it could be years until we know the outcome. amon has the latest. >> reporter: hey there, kelly. there is no jury in the courtroom today, so attorneys representing the doj, a group of state attorneys general and google made their case directly to the judge this morning. he's also been handling years of pretrial hearings in this case. lawyers for the department of justice arrived here this morning to present their case, alleging that google got to its 90% market share by breaking the law and engaging in anti-competitive practices. the doj is alleging here that google effectively purchased that market share by signing billions of dollars worth of revenue sharing agreements, paying the likes of apple for default positioning on their devices. now, the google attorney ken walker arrived at the courthouse today in support of google. josh smitland argued that the government is wrong about how google built its dominance and

wrong about who its competitors are. he's arguing that the competitive pressures that google faces today have never been more varied. his point is that people looking to shop, conduct searches or amazon, walmart, a whole host of other competitors to google. now, the judge has not been shy about can interrupting so far with questions. at one point earlier, he asked google's attorney how he would define the competitors in a situation where the product itself, search, is free to consumers. so this is just the first day of what is expected to be a months long process with the final determination coming sometime, kelly, in 2024. we don't know exactly when. >> exactly. that's right, we don't know when. it's going to take some time. paul, turning back to you for now. i'll give you the choice. you can have google, oracle, adobe ahead of thursday. which of the other tech giants

do you feel more comfortable having exposure to at this point? do you think this google trial is a big deal? >> i think that google will prevail. however, i think they may have to change their business practices, particularly their deals with hardware suppliers, including apple. as far as my view on tech, i don't know if i want to jump into tech right now, because it's gone fairly negative since we stepped into the month of august. i want to see it settled, and then, believe it or not, when i come back, and i will, my favorite idea is still nvidia. >> it is still nvidia, wow. 30 times forward earnings, what about oracle's trading action today, why not adobe? these are some other names, especially adobe, that people hid out in for years. >> i like adobe long-term. i think oracle is probably a buy today, down 9%, 10%. i think their problems are transitory, not secular. i think they're doing the right things with ai, and they will be one of those players. the thing i like about nvidia

is, we have about a 40 times pe next year. yeah, it's expensive. it might be aagegregiously expensive. so unless you think that all of a sudden there is going to be a stoppage in training large language models for ai, nvidia should have a couple of good years. so on a peg pe-to-growth rate basis, it's reasonable. on a pe-to-growth rate basis, apple is unreasonable. >> nvidia at $451 today. you sound like you're waiting for the trading to be better. would you recommend this as a buy here or what price level are you waiting for? >> i'm not looking necessarily at a price level. it's hard to do that when you have had a stock that so quickly tripled. i'm looking for a stabilization for a couple of sessions, maybe a couple of weeks in price. maybe it holds while other tech stocks go down. maybe the volume drives up a

little bit, so it looks like the selloff is exhausted. and then, yes, i want to re-up on nvidia. >> kim, same question to you. you can have google, nvidia, oracle, adobe. where are you most inclined to go today? >> well, i've been loving just semiconductors in general. and nvidia's on the bubble. i'm opposite of paul today, but we'll get to that in a second. i love software companies, but looking at oracle, i think their biggest strength is also their biggest weakness. they love to buy companies and then pore over the product to use oracle's database. and thus, you know, kind of get a little leverage and a little more income from that acquisition. however, they are very, very much an enterprise software company, which i love. but it also limits them, and

they have told you this is limited by the amount of acquisitions they've been doing. i don't know, for the past 15 years. so oracle is in that. nvidia, i understand everybody's love of the large-scale language model ai. but i think ai is much more than that. it's going to play out over the next 10, 15 years. this is just the first hot spot. i think people are kind of leaving chatgbt aside for a while. it was the hot thing, right? and the promise is going to pay out like every other tech trend. what happens is this -- everybody jumps into one thing, thinking this is going to be it, it's going to kill every other tech thing in the world. and then it doesn't come to fruition, i don't know, think autonomous self-driving cars. and then like, five to seven years later, we realize there was a really better use than we originally anticipated. in this case, autonomous cars, i

think it's autonomous long-haul trucking, because it's actually solving a problem. then we're like, oh, wow, that technology really did do what it said it was going to do in the beginning, just not in the way it thought it was. so i don't know that i like nvidia, because it's just that one trick pony, as of now, not that it can't be. but that's why it's white hot now. >> we'll live it there for now, take a break, come back. we appreciate it, kim and paul. my next guest says if you want to be in tech, he says skip apple and the rest of the magnificent seven and go smaller. he was just crowned cnbc's top financial adviser. he joins us next, with this name and where else he's seeing opportunity right now. plus, a day after that super bullish call from morgan stanley's adam jonas, tesla shares soared 10%.

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welcome back to "the exchange." ten-year notes just went up for auction a few moments ago as we await cpi data. rick, how did it go? >> it went parelly well. we had 35 billion ten-year notes up for auction. we're adding to it as we opened up fresh one month ago. the yield 4.289%. that is the highest yield for a ten-year instrument at an auction since november of 2007. let's go through it. this is the second leg of a three-leg issuance from the treasury. this 35 billion tranche, well, it was pretty well bid for. we saw all the metrics and are above ten auction average. they're priced exactly on top of the one issue market, so there was no pricing issues whether it added or subtracted from the

grade. considering we have cpi tomorrow, it doesn't surprise me that the range today has been similar to yesterday, as we hug up towards the high yields of the session, which were just a whisker below 430. we haven't clicked off 430 yet. i will continue to monitor how investors look to the rest of the afternoon with regard to the fixed income and treasury markets, because tomorrow is a very important number, especially considering how many fed officials seem to be wanting to take their foot off the accelerator of rate hikes. back to you. >> some are arguing the high free agquen >> some are arguing the high free agcy data matters more. is it true that cpi data is taking a back seat? >> there's more investors and economists and analysts that are questioning fed models and some of the fed assumptions within those fed models. so of course, when those things occur, especially in the cycle that's getting to be a bit long

in the tooth, to took towards other areas to get that final bit of information made sense to me. in the grand scheme of things, i think tomorrow's number is huge. >> all right. rick, thank you for now. my next guest says ten-year bond yields are peeking and will fall to 3.5%. joining me is michael shoemaker. a nice counterpoint to the argument we heard yesterday from morgan stanley who thinks that yields could go much higher from year. >> yeah, it's interesting, kelly. yields have gone up a ton, we have seen that. yet we call it a turning point. it's the fed, the european bank, all these central banks are done or close to done hiking. when that happens, markets typically rally. so you have yields go down quite a bit and markets get ahead of the first-rate cut. so we think there's quite a bit

of room for yields to fall. >> if the rates cut by a full percentage, the ten-year could end up yielding more than it does now was his argument. >> i don't buy it. when the fed does come in to cut, unless something breaks badly, it probably goes 50 basis points, maybe a bit more. when you think about the huge downward pressure, a big cut like that would signal, people would grab for whatever yield they could get. so 4.30 today or whatever it was, that will look pretty good in my terms for anybody who is buying bonds. >> i've also heard, and again, we are dwelling specifically on the longer end of the curve. i've heard big investors say, why shouldn't we see the long end continue to normalize by historical levels? and he's talking upwards of 5%, 6%, 7%. >> i think you have to ask yourself, from the standpoint of

the u.s. government, and government budget deficit, would it really tolerate something like 6%, 7% on the ten-year. that's a budget record. from our perspective, we think the answer is no. and think about all those investors globally that look around and say these yields are pretty good in the u.s. so whether it's for investors, u.s. domestics, they would put a stop to that quickly. >> how much, you know, not to get too wonky about it, but how much do you think is going on in japan is driving where ten-year yields go from here? >> i think it's making people wonder. the bank of japan has been a bastion of super easing policy for decades. the messaging has been tough to interpret, but people are getting the hint, maybe of the bank of japan will allow rates to go up. if that happened,le it would

send shutters through the bond market. but we think that's quite a ways off. but it does inject volatility, no doubt about that. >> all right. maybe a buying opportunity. your call is clear, michael, your explanation is, as well. thank you for joining us today. we appreciate it. back to stocks. my next guest calls this a highly unusual market, but one with plenty of upside if you know where to go. he's turning to small caps for opportunity from tech to energy. and he was just crowned cnbc's number one financial adviser. for more, let's bring in mason king. congratulations. so you guys ranked highly on these ten criteria. cnbc used this, particularly your 44 years in business, $25 billion under management, more than any other firm. >> we are fortunate to take that top spot. thank you very much for inviting us up here to present.

i'm honored to be the one representing our firm and clients. we don't have a firm if you don't have clients. so we owe a lot to them in the years they have been with us. >> i don't think you've been running this for 44 years. >> no, i'm one of many of a big team that's out there, 93 professionals within the firm. 63 investment professionals, and nearly 1500 years of cumulative investment experience. >> so with all of that said, and we teased this earlier with apple and google and all these big names in the headlines, you are looking a little more idio sin democratic, aren't you? >> we certainly have a place for the mega caps and apple is a wonderful company. they're having a great day today, well, not from a stock trading stand point, but certainly with the announcement of the new products. and they have a wonderful system they have been able to build for the years. we still believe there's a lot

of opportunity down cap, so a lot of our portfolio's bias, a little bit smaller on the blended market cap within that. >> how do you guys balance the kind of research necessary to do that kind of stock picking with trying to keep fees down and costs reasonable in a phighly competitive business? >> very good question. it's difficult and challenging, but we have invested heavily since the '90's in our own independent research. we have publishing analysts of 14 on the public equities side, and they cover all sectors. like i said, they're all published. we have forced rankings, buy/sell ideas. and they're all responsible and we track them. and then those ideas are fed through to portfolio managers. >> a couple of companies may tremble, we don't talk about, you like permianresources, and

it's interesting, every stock might not be the right fit for every client. >> absolutely. one of the most important things you need to do as a client service individual and professional is to balance the risk with the client. you know, if you have a risk aversion that's higher with the client than the risk that you put on the portfolio, often times you prompt them to make bad calls at bad times. ultimately, we're simply acting as an agent and they still have the custody. so they can override any decisions that we make if they get nervous. so the best thing is to match the risk appropriately. >> did i read that you are -- i mean, not everybody does that. >> we're set up a a c-court, as well. a lot of them are lls, et cetera. we are a c-corps, and we continue to reinvest those

retainers in our own strategies. even when we introduce a strat jishgs typically it's -- strategy, typically it's already been incue baited. -- incubated. >> that's fascinating. you have some quick thoughts before you go, i have to ask you about the fed. i see a milton freeman quote about lags. you're singing a different song than forecasters, who say the lags are over. you sound cautious. >> some of that is probably looking through into the senior loan officer survey data and showing that you're still going to see a lot of restriction coming forward. we don't believe that this is different, we believe that's a cautionary statement. so we're going to want to recognize the fact that historically, 12 to 18 months has been the typical lag before the full impact is felt. and so we don't want to get too

sanguine too early when we recognize there's still a little pain ahead. >> mason, it's been a pleasure. thanks for making the trip. nice to check in with you. mason king joining us from luther king capital management. join cnbc's financial adviser summit october 12. we'll have a full slate of discussions how to navigate this market uncertainty. just scan that qr code on your screen or go to cnbcevents.com/fa to register. still ahead, the apple phone launch, the apple watch 9 series has been unveiled, including 18-hour battery life, and a double tap feature. still waiting on price. we'll bring you all the headlines as they come in. dow is upsession highs, up 178. ckn mont.

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matching your job description. visit indeed.com/hire welcome back to "the exchange," everybody. tyler mathisen here, and here is your cnbc news update. many survivors of morocco's earthquake slept outside for a fourth night as search and recovery efforts continue there. the death toll now over 2900, and the number of people injured jumps to 2500. the 6.8 quake was the country's deadliest since 1960, and most powerful in over a century. fda fpanel concluded a key ingredient in many medications doesn't get rid of nasal congestion. i could have told you that a long time. the oral ingredients are said to be taken are ineffective.

and astronaut frank rubio holds the record for the longest u.s. space flight. he arrived tat international space station last september expecting to stay for six months. the astronaut beat the previous 355-day record held by astronaut mark mandehi. he's set ho return to earth at the bend of this month. coming up, we'll get back out to cupertino for the latest from apple's big event. shares are still down, but a little off session lows, down 1%. will the latest iphone be dazzling enough to drive revenue growth? platformers casey newton weighs in, next. ( ♪ ♪ ) ♪ this just in ♪ ♪ got the keys to what you want and what you need ♪ ♪ something new something sweet ♪ ♪ moving to a different beat ♪

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welcome back to "the exchange." we're getting some headlines and pricing from apple in cupertino. hi, steve. >> reporter: hey, kelly. so the new watches are here, this is the apple watch series 9, along with a new version of the ultrawatch, the more expensive, advanced version. so the series 9, not a ton of

changes here. it starts at $399, goes on sale september 22. most of the advances here are under the hood. there's a new processor in there that apple says can do more seri capabilities and machine learning capabilities, meaning you don't have to connect to the internet to use seri. and they have -- you can double tap your finger like this, with your thumb, that is, and it can select things on the watch without you having to use that little dial on the side or touch the screen itself. and also, just now happening, they're showing off the new iphones. they're starting off with the base model of these new iphones. those phones are getting that dynamic island they call, that cutout they introduced last year in the pro line of the iphones. this time it's coming to the regular sorries of the iphones.

so cutout there, no more notch at the top. you'll see a little cutout that gives you info, like what song you're playing. so the theme here is, over the last couple of years, apple taking the pro features from the year before and bringing that down to the base level iphones. we'll have more as they announce it. >> i know the pricing is whatever, but let's go back to the double tap, which is not a tap at all. what is really happening, i've got an older watch, they're saying i can just do this with my fingers, and it senses -- so if you're running and you want to stop or start the watch, i've never seen a physical device so far where we could trigger its response without actually touching it, and we can just move some part of our body. >> reporter: that's right. and apple is really crediting that new chip on the inside.

so, again, if you have your hands full, you get a phone call and you want to answer it or send it away, just do that double tap gesture on the same hand, and it will recognize that because of all these new advances they say are possible with this new processor. so if you want that feature, you will have to upgrade. >> did that just show that whatever they're calling it, starts at $799? we're approaching iphone level pricing here. >> reporter: that's the same price as last year, too. so this huge battery life, bigger screen, you be go scuba diving with it. this is not for your average apple watch user. they're really catering it towards the gardening users who are obsessed with more advanced gps and things like that, they're going after that high-end fitness market opposed to what you can get from like the iphone se, on the way other end for just $249. so there's a broad range there, kelly. >> and did you mention the iphone pricing? >> we have not seen an iphone

pricing yet. they are currently announcing it. they wait till the end to do pricing. apple watches will be available on the 22nd. >> we'll come back in a moment, steve. thank you. now reaction from cnbc contributors. casey, what do you think so far? >> so far, the event is proceeding as expected. some nice little incremental upgrades for the watch and fairly incremental upgrades are coming to the phones. the big question is, how much are these things going to cost, particularly the premium models and how much new revenue could that drive for apple? >> what else? we have seen, casey, apple shares trade lower after a product launch. it's coming you have three quarters of year on year revenue declines. it's doing buybacks and it's garnering comparisons with ibm. where does it go from here?

are you excited about the vision pro? that's the only bullish narrative i can find, bullish on the vision pro, and maybe that's where we're going. >> you know, i'm bullish on the vision pro. at least over the long run, right? i think that there is a good chance that the version 1.0 is really only for a small number of early adopters. but when you think about the war chest apple has and the competitive pressure it's under to invent that next generation platform, my expectation is this is something -- look, if they can give you an i-max screen that you can throw in your backpack and take with you, there will be a lot of interesting uses for that. >> kim, we talked earlier this hour. do i describe you bullish on the shares or at least, you know, kind of -- maybe you can find the right adjective. >> i'm normally favorable, you know, not like super excited

about it. but i will say this, when i first saw the watch, i thought it was the most ridiculous thing, like why would we ever need a watch with a phone? and yet, apparently, we do, right? i am the most reluctant user of apple products because of my software engineering bias, that they're overpriced and bla, bla, bla. but, you know, they hooked me. i like the phone, i like the watch. and i think the ar stuff is going to allow them to reach a whole lot more people in the world and give you another reason to have more mobile computing. and i don't think that there is a limit to the appetite on mobile computing. this is just a new way to get you information when you are out in the world. and let's see if this works. again, this is a company that innovates in kind of unknown ways. and i'm willing to take a shot

on them. >> i don't know, casey, if they have got on the this part of the presentation yet, but they are reportedly also selling made in india iphones on launch day of the iphone. that feels more significant to washington than to anybody else, or to india as well, obviously. >> and obviously, india is a huge growth market. that is a country whose government really wants to see things being made within the country. but of course, apple itself is under a ton of pressure to diversify that supply chain, particularly that the chinese government is saying iphones will be banned for government workers. so lots of good reasons for apple to make iphone as many as where else. >> what about the potential for those sales to go somewhere else? do you really think they will be under pressure? i think china is about 20% of sales. >> yeah. you know, my distant understanding is that iphones have been a real status symbol

in china, and that the chinese government is proud that iphones are manufactured in china, because it shows that the most premium smartphones in the world are some of the most difficult to manufacture are made in china. so my understanding is that does evoke national pride. but apple will not be the first company to be caught in the grinding gears of geopolitics here. so we should expect a lot of change there over the next few years. >> very exciting times. let's get over to dom chu for breaking news now. what's happening? >> we are looking at the oil and gas industry, specifically british petroleum, bp. this is coming from headlines from the financial times that bp chief executive bernard looney is set to step down, resign as ceo. he's been in place as ceo since 2020. put in there in place to kind of help guide bp through an energy transition phase to turn it more from an oil and gas company into a diversified integrated energy

company. this is, again, a source report citing people familiar with that decision for bernard looney to stand down. we have reached out to bp for comment around the move. we have not heard back. we will get back to you when we do hear something. but bp shares were volatile over the last 15 minutes or so. they were already up ahead of that, because of the rise in oil and gas prices. so we'll keep an eye on those moves there. but bp shares a little volatile now in afternoon trading on these headlines. back over to you. >> a big move. dom, thank you. our dom chu. still ahead, speaking of energy, one etf is back to prepandemic levels. tcus, a package, a deal, and a bioin bifurcation all coming up. "the exchange" will be right back.

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exchange." dow is up 182 but we're well off the declines we saw earlier on. the s&p is down 12 points today and the nasdaq is underperforming with a 2/3 percent of a drop. apple shares lower, but of course, that's still able to buck that and stay positive. energy is helping, the best performing sector today. crude back near the 90 level. 89 for wti. we haven't seen these levels since november. and the vanek oil services level is at $363 with a 2.5% pop today. and a merger in the packaging business, which has been under pressure post pandemic. smurfit kappa is combining with westrock. smurfit investor also bet one new year. westrock holder also get a new share and $5 cash.

another check on bitcoin, which traded below $25,000 yesterday. back above $26,000 today, but look at the coinbase, warning again today there is a stark and likely unprecedented bifurcation forming between and coinbase are rebounding. coming up, adam jonas named tesla a top pick yesterday saying its valuation could soar. that sent shares soaring 10% but another firm expects growing pains ahead. we'll talk to the analt ysbehind that call, next.

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here's why you should switch fo to duckduckgo on all your devie duckduckgo comes with a built n engine like google, but it's pi and doesn't spy on your searchs and duckduckgo lets you browse like chrome, but it blocks cooi and creepy ads that follow youa from google and other companie. and there's no catch, it's fre. we make money from ads, but they don't follow you aroud join the millions of people taking back their privacy by downloading duckduckgo on all your devices today. welcome back to the exchange. shares of tesla giving some back today after a big boost yesterday on a bullish note from morgan stanley's adam jonas. rbc also staying positive writing in a note today that tesla should be able to capitalize on ira tax credits more than any other automaker.

but needham says not so fast. they say fully self-driving cars are still a ways off. the firm lowered their estimates to 15% below consensus and joining me now, the analyst behind the note. chris pierce. welcome to the program. would you describe yourself as a tesla bear or is this more of a tactical call? >> i would say more tactical than not. i do think tesla deserves a premium multiple. i think they're going to sell a lot of evs in the next two years and beyond but given the price cuts we're seeing, the price cuts in fsd for the first time, looking at raw material input, at potential for future price cuts, legacy mass market operating margins, i just struggle to see tesla being able to beat those expectations. >> i look at what's coming out of china and i would be really worried if they do to evs what

they did to other consumer products, there could be a lot more downside ahead, couldn't there? >> yeah. tesla's cut prices for the model s and x by a decent amount this year. mercedes-benz dealerships, i live in northern california, we're seeing the high-end dealerships in california over 50% of their deliveries have been evs. we're seeing similar stats in southern california so what's going to happen as we see competition at the mid and lower end. we're going to see tesla have to take further price cuts to get cars on the road. so i just struggle to see margins moving back at the pace that consensus expects them to. especially next year. >> yeah, the headline of your note is lower for longer which all of our viewers will appreciate. a little bit of a nod to what we've been saying opposite about the fed. i don't know i note a read on dojo, just put that in context.

they just cut the price of full self-driving. how big a market and opportunity do you think they really have? >> i didn't read the note. i think we're making similar calls. he's saying what, not to put words in his mouth, but he's saying there is this goodness about what could happen if they put all these pieces together. we don't have a lot of points they can put those pieces together. that feeds into why they would cut the price. they need to get more vehicles on the road with this package so they can do more video learning to kind of shift from a code based program to kind of a video capture program. so they need to cut the price of full self-driving to get more cars on the road to gather more data, but he's saying this goodness may not be recognized in the stock for the longer term. i'm saying it's not versus what might happen. he's just taking a longer term view and saying people aren't focusing on x. that may happen but on the road to x, people aren't focusing on

y. i should reverse those letters since y comes before x but the road to get there is going to be choppier. >> is it v? what comes before x? they're telling me i've got to go. a great note. appreciate your time. before we go, let's get steve kovach with some pricing headlines on the iphone. >> yeah, so the iphone 15 is going to be priced the same as last year. this is the regular model. 799 for the base model then 899 for the plus. the one with the bigger screen. these are not the models we were thinking there might be a price increase on. they just announced the 15 pro model though. still going over the feature of that but they did show off this new titanium casing for the pro model. so hopefully in the next few minutes, we'll see what that's priced at. >> i think the question is whether that's going to be 999 or 1099 if i'm not mistaken.

thank you. yes, next on "power lunch," you may not like it but our strategist says investing in the consumer space is hard to avoid. we've got that, more apple headlines and we'vegot tyler mathisen getting ready. i'll join him on the other side of this break. coach saban, this goat done took over our office. and he's using it to send out medical bills. good hands! hospital bill for prime?! gaaaaap! did you just say gap?! he's talking about expenses health insurance doesn't cover. good thing coach prime knows about...say it one time! aflac! because aflac gets you money to help close that gap! now how do we get this goat outta here? (whistles) aflac! meet one of my new homies! gaaaaap! get help with expenses health insurance doesn't cover at aflac.com. elephant would've been scarier.

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good afternoon and welcome to "power lunch" alongside kelly evans, i'm tyler mathisen. coming up, apple's big event is still going on. unveiling the iphone 15. we'll bring you all the latest announcements as they happen. plus, the government taking on big technology. the antitrust trial against google kicking off a senate hearing on regulating ai and senator elizabeth warren continuing her feud with elon musk. a lot to talk about. >> and we'll get to that, but first, a check on the markets. shares of up -