>> i spoke about it, i think, on the show around 220. it's now like 150. i think it's still up 89% for the year. >> wow. okay. we'll watch it. joe? >> consumer denver broncho their name. it looks like it is moving now, too. >> consumer discretionary, urban outfitters. strong momentum. >> i'll see you on "closing bell" at 3:00 eastern. "the exchange" begins right now. >> thank you very much. scott and welcome to "the exchange." i'm kelly evans. the fed is expected to cut rate this is wednesday but it is a kroefl cut and one of our guests said there is a chance they might hike rates. and bank of america just made nvidia one of its top picks for next year. the stock has been stalling out, it is down 10% and our tech investor said there are other

names to consider carrying less risk. you're looking at one of them. our mystery chart. tweet me if you know it. and from cruises to football, hallmark is inventing the brand. we'll talk to the media officer about that. but first back to dom chu with the market numbers. >> you'll have to forgive me as i'm staring at the board. because what i'm seeing it 20,154 for the nasdaq is a new record intraday high. so i'll put the star up there right off the bat. so again we're watching this near session highs level right now, up about 225 points or north of 1% gain for the nasdaq composite. the s&p 500, is still trying to keep back up to the 6,099. and it is up 27 points, 1 half of 1%. and the dow, it is eight straight down days.

if today is negative, like it is now, modestly so, it is eight straight days worth of losses for the dow and the dow is at 34,772. one place that we're watching that we don't talk about often and maybe the companies are coming into focus now are drone related companies. this is interesting here. red cat holdings is up about 11%. that is half of its gains. it was up north of 20% at one point today. this is about a $700 million drone company. it just signed a partnership deal to use technologies from palantir, and that has driven that upside there. axon enterprise, also makes drone technology and cratos defense and aero environment and so watch what is happening through. and if you see the lights on, the lights are flickering on and

off right now. you could now see me again. let there be light. let's take a look at bitcoin prices because we're again near the record highs. north of 107,000 per bitcoin right now up 3.5%, and the bitcoin rally continues. we'll see if there is any slowing f momentum. it seems as though the ceiling gets higher each time an the consolidation drips higher. and i'll send things back over to you. >> i thought you with going to say that red hat had something to do with the drones -- >> not red cat. today's flash pmi data painting a bit of a mixed picture. services hit a three-year high and on the back of last year's hotter than inflation data. it is all a sign the fed cut rates too soon and too quickly

and could be forced to raise them next year. joining from apollo global management. it is great to you have. we love your morning notes. this is one of them. but this is a view a few people hold out of consensus right now. but how quickly do you think they might be forced to pivot? >> i think this is an important discussion. it you look at gdp, it was 2.8 and gdp in the fourth quarter will be 3.3. that is all wedget office estimatef 2%, meaning the economy is still growing very strong. likewise, as you just highlighted, inflation last week, cpi 3.3%. and a number of other measures of inflation, the sticky cpi and the cleveland fit median cpi, they are all in the range between 3% and 4%. and why is this important? because they began to raise

rates in march of '22 and we still get good current economic data and policies coming on immigration and tariffs and domestic manufacturers, it points in the direction that inflation is going to be plor sticky and it could run the risk that inflation would be higher next year. >> and our next guest is to make the case that rates are still too restrictive. what do you make of that? >> the problem with that argument and with the feds -- the way they're communicating, they say they are starting to mean the level of interest rates at which the economy is neutral, not too hot or too cold, it is around 3%. if monetary policy was restrictive, why is the incoming data so strong and gdp still at 3% and the cpi data still so high and above the 2% target. it could only bring you to the conclusion that monetary policy

is not restrictive and what might be coming on the policy front. it just runs the risk that we are misinterpreting and being misguided that the data is strong because the economy is strong and if we add some tail winds to inflation and coming from trump, that would argue that t f will have to hike rates in 2025. >> i don't mind throwing out the models in favor of what the market and the real world is telling us and it feels like if we ignored that theatet cal neutral rate, we have stocks soaring and maybe it is an election induced euphoria and restrictions are loose right now. we have economic growth and over heating inflation. ignoring there might be a neutral interest rate in those conditions if you said, would the right move be to hike, hold or cut, i certainly wouldn't think cut. >> so i agree, that is why it is becoming a bit of a difficult

decision for the federal reserve here including even this week because if they have already cut 75 basis points and they're going to cut again, it is problematic because that is another issue which is the residual in the cpi data, covid happened in march of 2020 and when you run your seasonal markets over covid, the data is for far away. so the conclusion is that there is some upward risk to inflation outside of the strength of the economic data and outside of what trump might be doing. we remember that from 2024 and earlier this year inflation was high. so taking ittal al together, w love the models but let's put them aside for a minute and look at the incoming data and i'll argue that we should think about the risk that rates could be moving higher next year. >> or maybe the model is not capturing the impact of massive

deficit spending. but the model is right, we're still in restrictive territory and the point steve liesman and barry nap and others have been making is that high rates are affecting businesses who have to borrow the spread of 5 plus or up to 10% and the rates with ray lower, so from a long-term vital point of view, the fed would be wise to lower rates to even financial conditions across the economy. and small businesses, that is generally the engine of job creation. >> that is true. so 80% of view of smaller businesses, and the problem with that argument if you look at the recent nfib data, after trump goat elected that, has gone up. so at least when it comes to sentiment and confidence, then certainly we still have a lot of positive news comes from small businesses. the challenge for small business is that when rates go up, it particularly hits companies with

low coverage ratios. meaning companies with low and weak earnings and it is smaller businesses, they are more sensitive to rate hikes because they generally have higher bit interest rates. 40% of the russell 2000 have negative earnings so therefore it is the case that yes, we should be watching small business but the good news after trump got elected, we've seen small business sentiment go up and that does point to that maybe that small business problem that we worried about for the part of year is getting smaller going into 2025. >> i'm going to put all of the points to my next guest. thank you very much. so while he's talking about the potential for needing a rate hike next year, the odds being higher now. many economists still expect the market expected feds to cut before taking a break. an my next guest said the policy will no longer be blatantly in the race. joining me is cnbceconomic

reporter steve liesman. i did my best paul with that interview. how did i do. >> i think you did wonderfully. i think he's making a good argument for the fed to temper expectations for 2025. back in the september dot plot, they had four cuts in '25, down to 3 and 3/8. and that is following what he was laying out, i think in the dot plot, the fresh dot plot really temper expectations for '25. from four cuts to two cuts. but the whole notion that somehow the fed will need to tighten in '25 simply is not sensible to me. for the simple reason, if the fed is more hawkish in their rhetoric, then the market will do the tightening for the fed.

because we're starting from an inverted yield curve. so, yeah, kelly, i think you did a good job. you're an economist. >> not just any economist. i want to raise a point that john spellan makes, is that is central bank the bank for the world and everyone where it is looking economically and we might be looking okay here in thu.s. but global growth is slowing and that could lower a funds rate. >> i think that is a pret yes loose connection to global economic activity. but to the extent there is that configuration, with the united states strongest horseradish versus the rest of the world, the dollar is going to want to go up and that is a disinflationary influence particularly in good. so i understand the argument. but it would be a bank shot, not

a direct shot. >> steve, come on in here and tell us how you think fed officials, and i think about what powell has said and he remains in the driver's seat and he said he's been affected by things he reads in the previous weekend or the few days. so these things are live. we're going to get the pce data. >> there is no absolute right answer here. and i don't think there is an absolute wrong answer either to the extent if the fed were to cut a quarter point, i don't believe it is the end of the union as we know it. if they do, i like paul's reasoning a little bit more. you get a little bit tter, closer to a neutral rate, if you look about range of neutrals out there from the september dot plot, they're all higher than the fed. by quite a bit. 50 to 75 basis points, you are still asserting some pressure. let's take a look. there is the range of neutrals,

it going from 2.4 to 3.8. and the hawkish person on the committee. and look at the five-year. and paul and i have a series of discussions offline here. look at market providing and taking up away stimulus from the economy. just looking at the five-year. there it is. imparting in the january, february, march of this year, it was very high. then it again provided some stimulus as the fed was going to cut. now it is taken some of it back. so all is well in that regard, kelly. in regard to what -- what we're talking about here is what is the stimulus being provided by the market to the future. >> sure. >> to the future, the market is taking some of that stimulus away. so that is still fighting inflation. i think that is the one thing that bothers me about torsten, it is a tricky moment for the federal reserve to be setting

policy prospectively on what the fiscal side will do. it is a very difficult call right there. >> paul, i'm going to bring this back to one of your favorite topics with your words inging in my ears, when the policy rate that the fed is segment, which is now high fours, restoring a positive yield curve, the mother's milk of bank credit creation. over to you. >> yes. i buy in to chair powell's thesis that neutral reveals itself by its works. how the economy is performing. and i also buy his view point that we don't know where our star is. but we can observe the yield curve. and textbook economics tells you that a positive slope yield curve is normal. so if you're in an inverted state of affairs, as we are now,

then for me, that's definitionally restrictive, because it is a tax on bank credit creation, because it is a tax on maturity transformation which is how banks make their money. so, i can't get to the fed definitively reaching a trough with the trough being associated with an inserted yield curve. i need to see the policy rate which is an overnight rate be the lowest rate in the land. now, you could obviously get there with the two-year note going up, so i'm not excluding that. >> true. >> but assuming that the two-year note is in and around where it is now, then by definition, to remove restriction, you've got to collapse that spread and go positive if you will from the policy rate to the two-year.

so that is my essential thesis. >> and mr. leaseman a final word. it sounds like a hawkish cut. that is what it is anticipating. >> yeah, a hawkish cut and then a pause in january and maybe 50 bips next year maybe. but i want to close that i found from bnp paraba, that sets upper for debate all week and they said beneath the surface of powell's press conference will be one of the greatest communication challenges the modern fed has faced in our view, how to position monetary policy for a new trump administration without exposing it self-to criticism for doing just that. and i think step number one begins with today's cut, or tomorrow's cut, and then the forecast of a pause and a kind of wait and see. and then, kelly, there is a fabulous debate to be joined about when does the fed respond

to fiscal policy? as paul knows -- >> apparently never. the last couple of years, that he did nothing. >> that is really the question. >> they did nothing when we were doing all of the fiscal stimulus. >> to maybe a question that a reporter might ask the fed chair is the extent to which you have drawn from the recent history and maybe the mistake you made by not responding to fiscal policy fast enough. maybe you should have responded faster last time, and are you ready to respond more quickly this time. >> well, i know a reporter that could be in thatand that could maybe -- >> who? >> but it is hard. you have to pick one question. maybe a follow-up. >> you get only one. >> steve, thank you very much. and we will wait to see what is the most important. wednesday, right. wednesday afternoon. steve and paul, thank you very much for joining us today. always a pleasure. don't miss loretta mester joining us on "power lunch" today, it is interesting to get

her thoughts ahead of the hawkish cut. we'll check in with her just past 2:00 p.m. eastern. four of the mag seven stocks are hitting record highs. but nvidia is noticeably absent from the recent rally and more than 10% below the record high. our next guest said the clock is ticketing on motetizing. and netflix getting a downgrade while another firm hikes its price market. we'll have a bull bear debate as we look to close out the best year in a decade. up 90% since january 1. we're back after this. >> announcer: this is "the exchange" on cnbc. y bed. in the past, he would not have been able to do any of those things.

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welcome back to "the exchange." on friday we explored broadcom and today that stock is continuing momentum. up nearly 10%. making it up more than 35%, 36% since ernst last friday. nvidia is stalling. down 2%, but 10% below the november highs. my next guest said broadcom is the safer bet for next year. that was our mystery chart. katie gonzalez guesses it first. let's bring in tom hancock. are you wading into the whole chip thing here. now marvell is the hot new

thing. where are you at for next year? >> well, we like a lot of these companies from quality of business point of view. i think if you're asking me broadcom versus nvidia, we could come down on the side of proud -- of broadcom here. one of the reasons that broadcom is gaining some ground on nvidia, they are winning on the networking side if you scale the number of gpus, it is an end square versus end problem to connect them together and that is where broadcom and marvell play. and also broadcom is strong in the custom chips. so for the big hyper scalers like meta and alphabet, coming up with the chips that they need to do their specific work load, we see that as a more proven commercialized space. but i think broadcom is a little bit more tail winds behind it and that is setting aside some of the businesses outside of a.i. that are in a cyclical trough that we think could

rebound next year. >> you say that the nasdaq has turned into an a.i. index. is that a complement or a insult. >> that is become a single bet. so it is a very risky thing to invest in. it is not what i think you would want from a sort of diversified i've. it is probably going to give you more volatile returns and would you be worried that the a.i. rally has extended itself so those might be uncomfortable. >> and maybe i feel more comfortable investing in a broader index and maybe the leadership is transitioning to nvidia to broadcom. isn't that better if this bet only had two companies and if the thing doesn't work out and we're all forget. it but if it is maturing and if it is now potentially going to offer a lot of different companies, customize ability,

don't you want exposure to the most innovative and fastest growing part of the broad market and economy. >> you absolutely do. and i think you shouldn't just own broadcom or nvidia and for a.i., it is great to play it through the downstream companies, like apple that is a big weight in the nasdaq. but i also think you should pay attention to the old economy stocks out there. pay attention to investing outside of the u.s. for that matter. areas that lagged that still have long-term growth. and a.i., because it is become such a hyped trade at this point, not to say that is not real, but in little hiccup in the economy and these stocks could fall pretty hard. >> although, if taiwan semi is the example of investing outside of the u.s., we're right back where we started from in terms of themes. >> you want to invest in a.i. and tmc make all of the nvidia and the broadcom a.i. chips.

the broad end of the funnel goes down through tsmc and now more so that intel is falling behind and had to have their ceo change. they're one of the most intense companies in the world. you get great businesses like tsmc out there. but tsmc is not all there is out there, too. and if you want to diversify outside of tech, the u.s. market has become so tech heavy and that is a good thing of course. but it is not as diversified as global investing. >> and finally i want to ask you about apple. which is getting attention that revenues were only up 1% and doing massive buybacks. it is coming off a great run here. there is news how they might launch an ipad that folds again but they're the only maker who doesn't have a foldable ipad yet. this is one of your stop names and you're sticking with it, why? >> incredible stock and incredible company. and people think about devices and how many iphones or ipads

they could sell or how they could grow from here. but it is a serviced story. run the reasons that the stock has done well and still looks a little expensive, is that it is an a.i. in the story and that is all in the com. we care less about people upgrading their equipment, but whatever a.i. applications could be used out in the end market will be used on apple devices. it is not just a tech company, it is a luxury company too. and because it has that sort of dual personality, both staple innovative tech company. >> and i know we have to leave it there. but you say you're optimistic about recovery in mad memory and industrial and automotive tech. and i know micron is about to report and is that a me you like. >> we like the memory stocks which are more consolidated, the industry has. the way we like to play the

memory is less through micron and one of its suppliers, lamb research. there are three companies that make d ram and they all use lamb's equipment to do the deposition and etch that is important for memory. so that is our preferred choice. but micron is a solid company. >> tom, thank you. i think we covered a lot there. appreciate your time. especially on a day like this. tom hancock, portfolio manager at gmo. and now nvidia is the most important stock on wall street and in a new propiece looks at what it means for the broader market. for that full story scan the qr code on your screen or go to cnbc.com. don't miss the ceo of marvel tonight at "mad money." matt murphy will join jim cramer tonight at 6:00 p.m. eastern. and coming up, soft bank's massa son is at mar-a-lago alongside president trump

announcing a investment in the u.s. over four years. where the money is going and what it signals about the rest of the tech landscape. we're back after this. sent! okay, oop! even bigger. sent. [sending swoosh, notification alert] still bigger. okay, yeah i'm not doing that— [typing noises, sending swoosh] i think it still looks good! [notification alert] oh — even bigger.

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tyler mathisen with your latest news update. a fbi informant accused of lying about president biden and his son hunter was indicted for claiming two the bidens accepted $5 million from a ukraine energy company and prosecutors say those allegations which became a centerpiece of a republican investigation into the bidens were fake. germany is heading toward early elections in february after olaf schultz lost the confidence vote in parliament today. the three party coalition fell apart last month after he fired the finance minister for violating the chancellor's trust. and his reports of drone sightings on the east coast continue to mushroom. two massachusetts men are due in court today after they were arrested for flying a drone dangerously close to boston's logan airport on saturday night. authorities said the man face charges of trespassing and could face additional charges while

the case is still searching down for someone else. >> the drones owe-r out there. >> at a mar-a-lago event, massa yoshy son will invest $10 billion over the next four years doubling down on the original $50 billion he pledged in 2016 citing increased confidence in america. deborah deborah -- deirdre bosa joins us. >> make it $200 billion. >> that would only work on massa son. well massa son has a few more high-profile wins and losses under his belt. but none of that has done anything to dent his enormous risk appetite. when the president-elect kelly just referred to live negotiate the deal up to $200 billion, massa son replied that because it is trump as president, he'll have to double down and he will try his best. and that kind of sums up how

massa son has approached all of his investments. more is more. he will not hesitate toward his own company. but what is different it-s how he spreads the billion dollars of dollars. massa son and soft bank will be more focused on a smaller universe of companies with an explicit fit with arm. which is now the crown jewel of the soft bank universe. that could mean a more operational role for soft bank focused on a.i.-related infrastructure and there is hints that was under ware. soft bank was the first to receive the nvidia chips and telecois planning to build the largest computer and massa could produce his own a.i. chips which is an interesting new chapter. now as open a.i. likes to say, infrastructure is destiny and that is where massa's angle may be.

if you want to talk about where he's going to get that money, that is fascinating also. >> so did he actually invest a bunch of money in the u.s. the first time around? >> he did. through the vision fund. and you look up at the makeup of that $100 billion fund, i believe soft bank contributed about $30 billion of its own money. you had a lot of involvement from the saudis. and smaller investments from the likes of larry ellison and apple. and that was sort of spread out amongst start-ups. i mean, you could see how that was deployed, the job's question is a lot trickier, because nearly half of that was invested into we work and those jobs were gone along with the company. >> exactly. >> so i didn't realize that the vision fund was the vehicle. when i think about investing, he's going to build a new plant or do something -- he's going to roll out a giant vc firm, but that cedes new businesses. >> that is what he did last

time, but this time it is more likely that he's going to help build the infrastructure. whether that be data centers or even new plants to sort of power the generative a.i. push but with investments through other companies. but, by the way, kelly, these investments were pegged before the announcement with trump, most last time and this time. massa yoshi was hoping to and why not stand beside the president-elect and say he will do it with him. that is going to allow massa son to go out and raise more money. that is kind of what happened last time. >> true. great point. agree. certainly taking advantage of a moment here that is presenting itself. deirdre, thank you. coming up, hallmark is in the midst of a massive transformation, trying to target through cruises. inside of their holiday playbook

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welcome back to "the exchange." hallmark is not just cards. it is not even just tv any more. the company synonymous with christmas is venturing out in cruising and started a new streaming service as some media giants are cutting back. joining me now with more on the growth and expansion is darren abbott, the chief brand officer. it is great to have you here. welcome. >> hi, kelly, thank you. merry christmas and happy holidays. >> and tell me about the cruises first and foremost because this feels like the biggest departure from walling hallmark movies on tv. >> we have a brand that is synonymous with the holidays. people wrap their gifts in our grift wrap and in our keepsake ornaments and watch our movies. this year we thought what could we do to create a 360 degrees experience around the brand and we thought one of the best ways was to launch the new cruises. we did two cruises. sold them out in a day.

2500 people on each of the cruises. and every day the programming on that cruise you were basically immersed in a hallmark holiday environment. we have talents from our movies and from our new original series that launched on hallmark plus. we had exercises around decorating greeting cards, making ornaments, christmas cookies. it was like every day was christmas on the cruise. it was a great time. and we've already sold out our cruise for next year. so, seeing a lot of proof points that this idea of dimensionalizing the hallmark brand beyond just our products and our programming is something that our consumers and fan base is looking for. >> so give us, if you can, a little preview. what might be next? what is the portfolio, in the pipeline for the next couple of years. >> the oath thing that we're doing is we've launched what we call the hallmark christmas experience here in kansas city,

four weekends starting on thanksgiving and we have people coming in from all 50 states and 14 countries similar to the cruise, this is an experience that you're completely surrounded by the holidays. we've got talent from our movies here. every night there is a tree lighting. we have got the country's tallest christmas tree right here in kansas city. a pop up shop and a christmas market and the thing that we're loving most, we've been monitoring the social media commentary like all businesses and brands do, our fans and guests are loving spending the time together. they aspire to a caring and connecting life and that is something that the hallmark brand stands for, for them, and spending time in kansas has been a great experience. i think we could go even bigger on this. we've got the cruises and the kansas city experience and we have some other ideas bringing to life, making the new experiences bigger, but adding on to them and really starting

to position in the hall mark brand as a lifestyle brand. >> like. >> we don't see ourself just making prords or content, but creating a lifestyle that people could -- >> and you're based in kansas city and that explained the chiefs love story. >> we were very excited to partner with the nfl this year. our movie over thanksgiving weekend, holiday touchdown, a chiefs love story, first time we've done anything. it was the number one rated movie on cable on any network for the entire year across every demographic. super excited about that too. >> as someone in the media world, do tell. so you guys have a couple of channels which we've seen on linear tv. now you have your own streams service, do you sell into or partner with other options like a youtube tv, lika hulu, like

one ever those in the future. that is still tbd. how are you thinking through that? >> we see our business as iversified across the media landscape so we are still leaning in on linear with our network that you just mentioned but we did launch hallmark plus this year. the world's largest library of holiday content. but it also has unique content. so new movies, new original series, we got into some new genres like unscripted and finding mr. christmas was one of our most popular series this year. so we're doing this a little bit different than anyone else. >> yu on netflix? >> we did have a couple of movies on netflix this year. they were interested in partnering with us and we did release and license ten movies with them. but we're leaning in much harder on our direct to consumer business and what we're doing with hallmark plus. we're going at this very different. a very specific kpur consumer t looks for this type of content and that is why we're launching

hallmark plus this year. >> you are a great case study in how to navigate from 1.0 to 2.0 worlds in media and world experiences. thanks for joining us to talk about it. >> coming up, a cup of hot chocolate might be the perfect pairing with one of the hallmark films but it could cost more this holiday season as cocoa prices hit a record high. amid new renewed supply concern as they deal with crop disease. cocoa prices have tripped this year and newly planted trees take a few years to bearfully cocoa pods with prices up 25% in december alone. and that is got some of the chocolate companies under pressure this month. nestle, monda lease and lind all lower. "the exchange" will be right back. in more than 60 u.s. based facilities,

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exchange." the nasdaq is at another record high today with a 1.25% gain. but look at the dow. down 35 points but it is notable. it is trying to avoid the first eight-day losing streak since 2018. so it is been six years since we've will a stretch this bad for the dow and it continues to buck the broader market trend. the s&p is up half a percent and the russell is up. the 10-year yield at 440. more in the streaming place. luke capital writing that netflix has never looked better ositioned while oppenheimer sees monetization in subs but one of them downgraded them today. netflix is up half percent and 90% in year. don't go anywhere.

welcome back. the magnificent 7 garnering much of the recent attention this year. last couple of years. but remember faang. the one name that is not in the mag 7 is outperforming the other four and it is netflix. those shares were up 90% so far this year and the gains have the street divided. oppenheimer had a $200 hike writing it is the only

investable mainstream media stock but loop did raise the price target to 950 from 800, big upgrade there as well. but they downgraded the company to a hold. saying that while they've never looked better positioned, the shares have gotten too expensive. joining me now behind these calls, jason healthstein. and allen gold is the managing director of loop. appreciate you both joining us to talk this through. you have similar things with different outcomes. jason, you're not worried that the shares are over valued here. >> on headline estimates, it is trading pretty similar to amazon on an earnings basis. you could say there are other companies in the market trading at a similar level. but the reason for our enthusiasm is threefold. number one, the street has not factored in what live events will do to estimates. so we already have $2.5 billion of ad revenue from the ads here in 2026 but they we there is

potentially another $2 billion that could come from doing live events as we learned that they could do with tyson-paul fight. so, we have that. and they beat operating margins by 400 basis points this year is where it will work out and we only have one point of verage over the next few years. so you to argue unless there is a structural change. netflix is going to continue to treat estimates for the oreseeable future. >> what are the plans with ive events? >> we don't know. all we learned is that they probably had somewhere between 2 and 3 or 3 and 4 times the number of people tune into this boxing match, or boxing night. >> got it. >> and ultimately, they've proven they could do something that they probably want sure they could do.

but we'll learn. but this is something that they could unlock going forward. >> and allen, you also raised your price target considerably but with a cautious view because you think they're overvalued. so just talk us through that especially in light of what jason just said. >> yeah, hi, kelly. i think thaur fully valued in here. it has its ups and downs and it is hard to predict when you might have some -- slight revenue risk. it doesn't take much when you're trading at 9.5 times revenue trading at 40 times earnings. we're back to what has been pretty much a historic high multiple, 9.5 times revenue. i have built into our model, 13% compounded revenue growth going forward from now until the end of the decade. advertising seems like it is starting to gain some momentum in here. and i have margins going from 27 to mid-30s.

now last year operating margins went up by 600 basis points. it is one of their largest jumps in operating margin they've had. that is why the company has given fairly conservative, i would say, operating margin guidance this year of only up 100 basis points. they say think strive for accuracy and not conservatism. but they look long-term. their goal is to build a $600 billion tam and they're looking to build it, they're not looking to build it quickly. so i think if revenue comes in stronger, they spend more on content, content spent $17 billion this year and i think it is $28 billion by the end of the decade with sports. but i think there is more of a moderate growth rate in earnings. >> i take your point, that it is at the high side of where it usually trades. but what jason's argument that it deserved that because it is in such prime position, such poll position. what events related to disney or

other players that could make you think, well, it could be maybe competition comes back to the fore in a way we can't anticipate is. >> the one streaming is youtube. it is ad driven and not subscription driven. and let's not rule out amazon in there. i don't cover amazon, it sounds like jason does. but thursday night football is going pretty well for them and they seem to have an indefinite amount of spending if they want to. and apple. in terms of the traditional companies where i am more familiar, disney is actually finally turned profitable. the four traditional major studios are still losing almost a billion dollars in streaming while netflix is earning $11 billion. but next year, the four streamers are probably starting to make money. there will be consolidation. that probably benefits netflix. but it probably makes for a more viable competitor. so long-term down the road, we

see netflix and amazon and disney and some combination of peacock, paramount plus and max probably driven by peacock, because comcast has the strongest balance sheet, your parent company. >> so then, jason, quickly answer that in terms of a more formidable competitive landscape. >> sure. so putting on my former media analyst hat on. i mean, look, i think the trump administration is a wild card, i think many people think that the fcc is long overdue to figure out how to deregulate the media and the broadcasting industry. could you put together more viable competitors via m&a, it is possible. but it is also really messy. and we sit here and we say, netflix is probably going to be needing subscribers in the fourth quarter and a good chance you'll see the momentum continuing in the first quarter.

and there is only about four or five companies who have opportunity to leverage live on a basis and this is one of them. >> gentleman, that was fun. i appreciate it very much. that you both joined us today. and that is it for "the exchange." i'll see you on the other side of this break with tyler for "power lunch." stay with us. ♪ whether your phone's broken or old, we've got you. with verizon, anyone can trade in any phone, any condition. it's your last chance to get iphone 16 pro with apple intelligence, on us. and, ipad and apple watch series 10. all three on us. that's up to $2,000 in value. only on verizon.

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