>> mr. weiss. >> look, we didn't make it yesterday because it was only up 60%, my other winners. >> liz. >> cybersecurity, long-term start still intact, pullbacks or opportunities. >> shake shack, not just a stock, it's a lifestyle. >> all right, i will see you on the closing bell. i look forward to that. we will take you to the final stretch. a lifestyle? for delta, it is. welcome to the exchange, everybody, i'm kelly evans. elon musk is a man of many titles, and now he can add one more, the ultimate bond vigilante. that comes courtesy of dan clifton, who wrote about the latest d.c. drama, and why what comes next could be earth shattering. what is still to come, he thinks. dan joins us in a moment. on top of that, the fed wrapped markets yesterday. we are digging into the wide, when there were expectations this would happen, and we will

talk about whether fewer rate cuts next year means you should reposition. one of our guests called this company an underappreciated a.i. play for its ability to quickly scale data power centers. the stock is up 51% this year. it is our mystery chart. we reached out to the ceo and he will join us ahead with what he anticipates for the new year. >> let's start with the markets and don two. >> to your point, we are green across the board. we are losing a little bit of momentum but i will show you right now, it is green, but we have a lot of ground to make up. the dow lost over 1000 points yesterday, but we are getting back a modest 140, so we are up one third of 1%, 42,004 63 is your level for the blue-chip index. 5889, up 16 points, one quarter of 1%. a level that some traders are watching, which we breached below yesterday is 59.24, the soda -- so-called moving average. we are trying to see if we can

get above that level to see if there is any kind of recovery that could be momentous in that way. the s&p at 57, trying to figure that out. the nasdaq composite, one quarter of 1%, 59 points, 19,004 48. a couple of stocks going opposite directions today are both earnings, food, and both consumer. the best performer in the s&p 500 is olive garden and longhorn steakhouse, and capital grille, darden restaurants, up 15%. a better earnings report. they raise their full your outlook and they are saying that people are coming back, especially, on the casual midscale dining side of things. that is a good sign, although, the capital grille is seeing a little bit of a tail off, but lamb weston, a food processor most well known for potatoes, french fries. a ceo change there, as well as disappointing results and a lowering of their full your outlook because of sluggish demand, slower volumes, and some of these higher

inflationary pressures weighing on lamb weston, so food very much in focus, and we will end what kelly mentioned. the tenure is showing something. we are up about 10 basis points today. we are going to the highest levels, going all the way back to may of this year. again, with the 10 year going higher in yield, bond prices are falling. you wonder whether or not the growth and inflation story and everything else percolating is manifesting itself headstrong in that 10 year note yield. that is the story on wall street right now, for sure, kelly. >> lamb weston, one of the best stocks to one of the worst stocks in the last year. let's begin with the top stories moving the market. investors are keeping an eye on congress, which now has less than 36 hours to strike a deal to fund the government. we have team coverage from wall street to washington. emily wilkins is on capitol hill with the latest. dan clifton is looking at musk's influence on policy.

steve winston is here following the path forward, and andrew slim and has interesting ideas about how to transition into next year. emily, kick things off, what is the latest? >> reporter: we are still waiting to see exactly how lawmakers want to move forward here in preventing a government shutdown. speaker mike johnson is huddling with lawmakers, he has been for hours, trying to find this path forward on a stopgap measure and it could include a couple different things. we are hearing that disaster aid could be included, we are hearing that the debt limit could be included, and that has been something that, honestly, has some bipartisan support. there are democrats, including elizabeth warren, who say, we should eliminate the debt limit. we don't actually need it and they would be supportive of working on republicans with it, but a lot of individuals feel it should be a separate conversation. it should not be something squeezed in in the 11th hour into this government funding package. the minority leader in the house, hakeem jeffries -- >> emily, we will come back to you, but we are watching live

as luigi mangione, who is facing murder charges, has disembarked from the helicopter where he has landed from long island, where he was flown after leaving pennsylvania this morning after agreeing to extradition charges. he does face four charges in new york, two of stalking, and two of murder. these are the first images of luigi mangione arriving in new york by helicopter work he does await further charges. i will have more in that story as it continues to develop, as we are watching him walk across the tarmac where he is just landed, to the courthouse in lower manhattan. emily, back over to you. apologies for the interruption. resume where you just left off. >> reporter: a powerful image, right there. over here in the house, there has been a lot of discussion about trump trying to get a debt ceiling agreement into the spending bill, and you are seeing democratic house leader, hakeem jeffries, pouring cold water on that idea. he posted on blue sky today saying that gop extremists want house democrats to raise the

debt ceiling so that house republicans can lower the amount of your social security check. hard pass. that could even complicate things. remember, republicans are negotiating a lot right now, but anything they agree on is going to have to have democratic support, because democrats, of course, still control the senate and still control the white house. meanwhile, there is frustration in the halls of congress that a deal that took weeks, if not months, to put together, and have bipartisan agreement on, got scuttled so quickly, in part, think -- thanks to elon musk's campaign tweet against it. we chatted with the top democrat on the appropriations committee. listen to what she had to say about her frustrations. >> i support what we did. i worked very, very hard. very hard, as the other appropriators did, in terms of creating this agreement. we lost something they lost some, but we put together a good agreement that people could support and we were there to support it, but for, but

for president musk. >> reporter: a lot of frustration there, as you can hear. lawmakers are trying to plow ahead, come up with some sort of deal, and kelly, as soon as we have details on that, we will let you know. >> if you could, emily, based on the sense you are getting down there, would you say it is better than 50-50 odds, or less at this point that we get a government shutdown come friday? >> reporter: i would say it's better than 50-50 odds. it is more likely that we get a government shutdown. remember, this process takes time to come out with a bill, to give lawmakers time to review it, to get it to the house, the senate, to get it through the senate process. these things all take time and the fact of the matter is, lawmakers do feel kind of comfortable going into a weekend shutdown. they know it does not have that many impacts, but you are beginning to see more lawmakers get comfortable with the idea of a longer, prolonged shutdown, potentially, even going into mid-january when

trump's inaugural is. of course, that would take a heavy impact on the economy. millions of federal workers would go without pay. a number of federal services would be curtailed or stopped, so some really huge impacts. lawmakers say they're still confident they can get a deal, they are still confident that something can go through, but the clock is ticking, kelly, and if we are not seeing some text soon, it's hard to imagine that we are not going to have a shutdown that goes into the weekend, that could potentially go into christmas eve. >> emily, thanks. emily wilkins. our next guest says what happens in d.c. is potentially earth shattering and he is calling elon musk the ultimate bond vigilante. let's bring in dan clifton, along with steve liesman. dan, i will start with you. why is it such a big deal? >> first, let's take a step back. we are very close to a government budget getting past, the continuing resolution. it had the votes to pass with more than two thirds majority

to get through, and as you started to see opposition reading the text and the provisions that were going through, you began to see more and more conservative angst, and that led to the elon musk tweets. forget the day today. i think emily's reporting is excellent. how that gets resolved this one story. i think the larger story is that congress has been put on notice that they are ot going to be able to sneak provisions into bills in the future, but there is always going to be someone watching, and that is showing with the trump administration, there is going to be a laser focus to say, hey, let's not use a hurricane emergency to be able to put your pet projects in there. i think that, number one, is a very, very big deal. we used to remark that elon musk is the bond vigilante, but it's more representative of what we went through in the process. what becomes earth shattering kelly, is if donald trump, who really only wants the debt ceiling up before he gets into office so he does not have to deal with it next year. if he is able to convince

conservative republicans, who have never voted for the debt ceiling before, to actually do it, that is a sign, not only to congress, but to world leaders around the globe that he is in charge and really in charge, and that is something to watch for. i'm not sure he's going to be successful in doing it. that is why this morning, you see them talking about getting rid of the debt ceiling entirely. that might wind up getting democratic support, but we have never had a clean debt ceiling increase with all republican votes in modern history, and what he is asking for is a very big deal. if he pulls it off, it shows you he has the republican party under his thumb. >> ironically, he could lose the bond market. what is still happening is that he is a very expensive tax package he wants to extend, and all of this will cost money. this plays into the very fiscal worries the bond market has the whole reason why musk and others are trying to come in with a chainsaw. >> absolutely, kelly, but as you know, we are very out of consensus.

the consensus on wall street is for $2 trillion deficit this year, and the belief is these tax cuts will rip open the deficit. what we see right now is that the deficit is going to come down by $300 billion this year, before we even get to those tax cuts, and that is not priced into the market, so you are already going to see less issue -- issuance happen. most of that is being driven by higher tax revenues because the stock market is up $12 rillion this year, and that becomes taxable next year. you are going to get just as much tax revenue this year with all the tax cuts in place, then with the congressional budget office is saying you're going to have in 2026, when the tax cuts go away, and what we are arguing to our clients is that you will have greater fiscal capacity when dealing with those tax cuts before you even begin those tax cut discussions, and i think the market is in for a very big surprise once we get to april, may, and june, tax collection, how fast the deficit will start coming down.

>> i hope you're right, but i'm looking at a 10 year of 458. it's the bond vigilantes on the physical side that can't buy the argument that dan is making, yet. it's also some of the inflation. the 10 year tips were at 222 this morning. we have only been higher earlier this summer, and in 2023, that includes going back during the pandemic. you are seeing the sense in the market of inflation coming back into the discussion, and i don't know if that is because of the rate cut yesterday, but it now feels like the reaction to what the fed tried to do, and i'm not even talking about the projections. it is almost this -- >> i don't think you can divorce it from the projections. what dan is saying is really interesting. i will offer that for the past several years, i have expected the revenue situation to improve, because of inflation and the better growth numbers we have had. i don't quite understand why that is not the case, at least, on the revenue side, which has maintained its own. the bigger story has been the spending side of the deficit.

if dan -- is a big number the bond market may not have considered yet. i do think what happened was the bond market woke up a little bit yesterday. certainly, the stock market did. there are two sides to the trump administration, and perhaps, a real big dissidence in timing, of when jekyll appears and when hide appears. i will try to put it this way. the implementation of the bad stuff, let's call that immigration and deportation, when it comes to inflation, the president can start to do that on january 20th. the good stuff, the tax cuts, it's going to take a little more time. it has to work its way through congress, then it has to get into the economy, so you have this problem of timing of the good stuff and the bad stuff, and i think what the fed might have been yesterday. i'm interested in dance thoughts on this, you heard powell say it as well. the fed did a little front running on incorporating some

of the policy changes from the administration, the incoming administration, into its forecast. that was expected more in march. i think what happened to the people on the committee was, i can't take a picture of this room and leave the elephant out. >> can i ask you something? before we dive into this, do you think those policies, do you think they think hose policies will be inflationary, when there is evidence they could be dis-inflationary or contractionary, to some point? >> listen, here is what we are going to have to do. we are going to have to have a two tiered way of looking at the feds inflation numbers. i think the fed believes that they will push up the rate of inflation on a temporary basis. what you want to do is, you will have to look at what the fed says, in terms of the one- year pop, and see if that is continued in the next year. i don't know about them being this inflationary, i think

there will be one time price hikes. how much? i don't know. >> look back to the first administration. they ended up cutting rates by 2019. it was not inflationary, whatsoever. >> i don't think what was done in the first administration carries over to what is being considered in the second administration. i know that dan and -- has a forecast that canada and mexico don't have it. china is another aspect. i don't know how he thinks, vis- @■vis, europe, but i think the president wants to use tariffs. i may be wrong about that, dan. >> again, we break it apart. china, a billion-dollar tariff increase, probably going to happen in may or june. it's exactly what happened in 2018. it did not have an impact on inflation. it did have an impact on margin to companies that were going to be impacted by that, but i think the market is trying to price in a global tariff, and that seems unlikely right now, and that's where you would have the bigger effect from that.

i would also note -- >> -- i want to cut you off and ask you a question. if you were a committee member, what would you do? would you go with, this is not going to matter and not going to happen, or would you preemptively say, i have to worry about this, and perhaps, condition the market for this coming? >> well, again, in 2018, the inflation rate was 2.2% when trump was raising tariffs. one year later, it was 1.2%. you can look that up. this could, actually, be deflationary and not inflationary, and i would look at that example if he is just replicating the same ones that he did. i would also look at the money supply, which is beginning to accelerate. which, has led inflation, and that is not a trump problem overall. >> dan, i want to come back at you and say, i believe that the things that were tariff to were not in the cpi. you want to be a little careful there. >> that could be true, but we are going to wind up doing the

same thing all over again. to kelly's point, the fed kept rates higher in 2018, and they were forced to cut immediately in 2019. they made the wrong assessment of the impact of the tariffs on the deficit, and they are going down that route again and they have to be very, very careful about it. but, the larger point that i think is happening right now is, we were expected to hit the debt ceiling on january 1st. it would have prevented any new debt issuance, and there was going to be a lot of money coming off the fed balance sheet into the financial markets, as the government spent on the treasury general account. now, you have a more hawkish fed based on the events of this week, and less liquidity coming into financial markets in january. all else being equal, that will lead to higher bond yields and we will have to work through that. i think it is different than just saying, these are trump policies. there are true, fundamental factors happening here that are outside trump and trump may add a little to it, but what bothers me about these studies is that there is no impact of

liquefied natural gas terminals being built, once he waives the rules on building those factories the first week of his administration, and we do think those factories are going to get built and they are going to build x and improve the supply side. a lot of these studies tend to be one-way. in practice and reality, they tend to mix themselves out -- >> we have to go. steve's head is exploding. >> i think dan is incredibly smart and really thoughtful, and forward thinking, which is wonderful. i just don't see how the explosion at cap ex is this inflationary, and i think that is one of the things the fed is reacting to, that all of these business surveys that are out there, they come along, perhaps, with the possibility of an increase in cap x. rates would go up for that reason. that would not be, initially, this inflationary, long-term, perhaps, it is. >> we were not worried.

if we get true growth through productivity, that's a great thing for america, and it's only when it's not productive and you get inflation that results from it that it becomes problematic, it's all. i'm just saying that the balance here, the good and the bad is little more balanced. they tend to go with their biases one way or another, and a lot of people believe that trump was inflationary. he was not inflationary in his first term. he maybe this time. if you are building it based on the policies he has put forward, it's not going to be as inflationary as other things going on in the economy right now. >> dan, thank you for joining us. consequential date on both sides of what is happening in washington. dan clifton. stocks are recovering after yesterday's big selloff, which my next guest says is good news for long-term investor. andrew, i wanted to pick up on the discussion we were just having, because you have a take on how stocks are behaving, and the ones where we are seeing weakness are the ones where the response is to some of what is

happening in washington. >> i have to agree with dan. sorry, steve. if you look at the stocks that would be hurt by tariffs, in other words, they have high products coming out of china, they are not doing that badly. the stocks that are doing badly are the ones that would be hurt if there are big cutbacks in federal spending. >> can you give us some examples? >> the i.t. consultants, obviously, the defense companies. more of those, then companies that produced a lot of their products in china. >> like retailers? >> retailers. i think it is an interesting commentary that maybe the market is telling you that people are overestimating tariffs, but maybe they are underestimating doge. and, don't forget, the market started rallying in mid- october, and trump stocks started rallying in mid-october. the markets accurately predicted the election.

>> the head of the national retail federation told cnbc that he thinks retailers have 40% less exposure to china, than they did in the first administration. sketchers, there have been some individual examples. could this next round go to stocks, or places that we don't anticipate? will they look different? maybe it's less about the retail supply chain. is it text, is it chips? >> it could be. we have not seen that yet. i am watching the consumer product companies and they have not been hit as much as i would have thought, versus these government companies that have high percentage of their revenues coming from the government. they have really been hit hard. >> it's hard to see that if you say, the defense companies, we really think they are not going to have a tailwind, but look at what is going on, globally. those who are contractors, for existence. the last time we have seen pressure on government employment, they have done more contracting, so i can't quite reason through some of those moves either.

i don't know how that fits in for you, because you were very bullish this year, and correctly so. >> it's fairly interesting. i have spent the last couple of days in new york talking to advisers, who are investing in our strategies, and two years ago, they were lamenting to me that all they could do, all clients wanted to do was buy treasuries, one year treasuries and money market, and i would come to see you and say, kelly, people are too bearish. the pessimism is rampant, and now, those advisers are nervous because their clients are calling up saying, -- >> i want to be in fort coin, or something. >> that reminds them of 2021, and what happened in 2022? although stocks got destroyed. to the extent that you have selloffs like yesterday, it reminds people, be wary of what you are doing here. i think that is really healthy for the market, because there is too much speculation. we talk about value growth.

since july, the more risk you took the better you have done. that is not a healthy thing. but, unfortunately, it does not take one pullback. people will step in and buy, so it takes multiple shots. >> are you bearish? >> i am bearish, but i think you have to be aware of the fact, i am not coming to see you saying, hey, it's lonely over here in the bullish camp. it's getting more crowded now. i'm hearing a lot more people that are previously bearish, and now they are bullish. >> i have a comment on a question i want to add. the first comment is, i don't know what happened to conservatism, when you would say, if you put a 20% tax on something, it's bad for you. if that is not true now, we should tax the wealthy a lot more. all of a sudden, we are going to put lots of tariffs on, and it's not going to matter. that's my comment and you can comment on it if you want. the second question i have is this. yesterday, think about being out of the water, and you have the wind at your back, and all

of a sudden, the wind shifted. how much of a head went down to the stock market is the federal reserve, potentially? >> the key difference to 2022 is the fed was raising rates. now, they are just going to go slower. that is still a good time to be invested in equities, but we need more volatility to remind people that you have to control your risk. i have not seen that. the better part of this year, so far. i think that is healthy for the market. >> the rethink has been as follows, postelection, before the election to the peak, we were up 6.85% on the s&p. as we peak right now, hold on, i knew my glasses, 3.18. we have lost about half of that. where is the right valuation? >> that is not the key. the key date is the july date when the fed said, we are going to be cutting.

that is when risk came back aggressively into the market, and that is the thing that is screaming -- >> july, encumbered, or envisioned a whole series of rate cuts, which are now -- i don't know. if you have that december 25 contract, the market can't even get it's brain around -- it has one, and a little bit. one and 30% or 40%. >> i would argue, steve, if the fed said, we are cutting, cutting, cutting next year, and you have $7 trillion sitting in the money market, and you have trump with progrowth policies. my head would explode, go in, oh, my god. it's going to be a great year and we are back to 2022. >> you think they know that if they had talked about more cuts, they would have overly juiced -- >> actually -- exactly. >> do you think they come back

in and do these? >> that is your job. >> the interesting thing was the comment about the timing thing. you could get tariffs and deportations next year, and not tax cuts until 2026. how do you play that? >> that is economics. i'm talking about the stock market. i looked at stocks that have underperformed since the trump election, that are doing very well. financials have run up and they have run down. the only thing that has been consistent are these very speculative, what i called junk growth stocks. that is the only persistence, until yesterday. companies that are not earning money, rocketship, quantum computing, all that stuff. there has been too much speculation about the same people that only want to buy treasuries a year ago. >> does and that ring true? andrew, thanks for joining us, as always. andrew slimmon from morgan stanley up it steve, thank you as well.

let's talk about one other knock on effect from yesterday's cut. mortgage rates are searching. >> kelly, after a 21 basis point jump yesterday following the fed meeting, the average rate on the 30 year fixed moved even higher today to 7.14%, according to mortgage news daily. the latest low was 6.11% on september 11th, so for somebody buying a $400,000 home with 30% down on a 30 year, principal and interest is $218 more than it was just back in september, and that low september rate is why existing home sales rose nearly 5% from october. the count is based on closing, so contracts signed in september when rates were low, and october when they moved higher, rising inventory helped on the margins. the supply of homes was up nearly 18% from the year before, still, historically, tight, pushing the median price in november to $406,000, up 5% year-over-year, and on all of

this, you can see the homebuilders stocks all taking it on the chin. the building etf, off close to 3%. lennar is off today, 6% after reporting disappointing earnings and guidance yesterday. it's going to be a rough start to the new year at this level. >> finally, we areding out where the homebuilding sector, that had been so strong, the stocks are really feeling it could >> it is seven. >> absently, above that level. diana olick. we appreciate it. norwegian cruise lines are riding a 40% wind street, now upgrading their fleet to meet demand. we will check in with the ceo, exclusively, about that, and their newest line of guest a bk ences. wereacafter this, on the exchange

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welcome back. it has been real smooth sailing for the cruise stocks. the major players riding three or four month win streak's. world caribbean is up since january 1, with carnival, royal, and norwegian lower on the month. >> it is the best-performing sector within travel, even with the small pullback we have seen in december, it has been an incredible year for the cruise operators. check out royal caribbean, on pace for its fifth straight quarterly gain, 5%, while carnival has gained double digits in the past three months, higher by 40% this year, as we await quarterly earnings tomorrow, and then there is

norwegian cruise line, of another 30% in 2024 by 5%, still up for forming the benchmark with more capital. norwegian is investing a lot of money into upgrading its current fleet of ships and bringing two new ships to the market as demand continues to grow for new cruise experiences. still seen as a cheaper than average hotel vacation, which is incentivizing americans to book more trips, and that seems to be the outlook for 2025. >> a lot of traveling, coming up. come on over. for thesuite view, we are joined by harry sommer. harry, it's great to have you here. >> thank you for having me. >> while we have been focused on postelection at all this drama going on, and all the stocks in crypto that have been flying, you guys have been part of this party, but maybe it is not for policy reasons, not for federal reserve reasons, is it just good old-fashioned demand? >> yeah, i think the marketing message that we are sending out into the consumer world, that cruising is a wonderful

vacation experience for people of all ages, is really resonating. especially, in a world where the alternative options around hotels, perhaps, the experience is not quite as good as it was in 2017-2018, 2019. cruising has taken a step up. great value, great experiences for guests, and consumers are flocking to it. >> did you guys also partner with the hallmark channel? we had the brand officer on the other day. >> yes, we did. we had a walmart christmas movie cruise. that cruise sold out in 15 minutes, so we are doing another one next year. it's a wonderful, wonderful experience. >> i'm thinking of all the podcasters out there, i am thinking that everyone could have their own cruise. >> we run a division called six man, where we do about 25 or 30 of these experiential cruises each year. hallmark. we have the savannah bananas baseball team on, we have all

different types of singers, dancers, things like that. we have an electric dance music cruise. it is really well received, tremendous value, tremendous experience for our guests. >> harry, we have seen one of your competitors, royal caribbean, come out with two new private island experiences. they have a new beach club that is hitting the market in 2025. i wonder what you make of the investments happening, not just into ships, but actual real estate, and what norwegian's plans may be on that end? >> yes, guests absolutely value the destination experience, and norwegian cruise line has two private islands. we have one in the bahamas and one off the coast of belize. we continue to invest in those islands, as well. we are absolutely upgrading the guest experience. we just invested $115 million. we are going to be building out other amenities over time, as well. it's one of the highest rated ports that we have in the world.

we will bring something close to 1 million guests there, once it is fully built out in 2026. we are very excited about that. >> your outlook, clearly, very strong going into next year. we are in a unique period of time where demand is outstripping supply. there are still a low supply of cruise ships on the market, at the same time, all of the major players, you have new ships coming to market in the next 12 or 18 months. are you worried that it's going to get too crowded? >> one of the fundamental things that is a great tailwind for the industry, is there are only three shipyards, all based in europe, they can build ships. we are inherently constrained that we can't get more than as an industry, more than five or 6% capacity each year. compare that to hotels where there are tens of thousands of hotels being built around the world every year. it is really a tremendous tailwind for us. if we can focus on the right ships and get great amenities to our guests, we believe the demand will far outstrip the supply for years and years to come.

>> i guess that is one great job out there, having a shipyard. there are only three that help build these new customized ships. one thing we are also looking to next year, is understanding what president trump's policies will be. he has been seen as an ally of the cruise industry, when i think back to 2018, but have you had discussions with him and his transition team, and what are you asking for? >> we have not had any substantial discussions with the trump transition team yet. quite frankly, we were very happy with cruise policies and demands in the trump administration, but quite frankly, we were also happy with the biden administration policies, as well. we seem to have an underlying product that does well on both the left and the right, both camps, and we will continue to focus on the consumer experience. >> as long as the consumer stay strong, i guess. harry, we appreciate your time. harry sommer of norwegian cruise line. kelly, we have to get you on board.

>> i don't want to say never, harry. cover your ears. >> you guys, every -- anytime you want. >> convince me, have you done it? >> i have done it, many times. it is a unique experience. >> with kids? >> not yet. that will be a new opportunity. >> we have two new ships coming out next year. we would love to have you. >> harry, thank you so much. let's get to tyler for a cnbc news update. >> i am norwegian, by the way. north korean hackers have stolen more than $1.3 billion in cryptocurrencies in 2024, that according to a report today from block chain data platform, chain analysis, which said it was over half of the total 2.2 illion stolen from platforms this year. the report also found digital thieves linked to north korea used sophisticated methods, such as taking advantage of remote work vulnerabilities.

the faa closed its safety review of southwest airlines and found no significant safety issues. the agency opened the review in july after a series of close call incidents, including one where a flight flew at a very low altitude over florida. southwest said there was nothing more important to the airline, then customer and employee safety. the national football league announced today new additions to the upcoming pro bowl skills competition in february. some of the challenges new this year, a game show that will test players on their knowledge of their teammates, and a punting contest. i can't wait for that. >> i always enjoy watching the pro bowl. >> i like the contest of, the competitions. the pro bowl is kind of flag football with pads. i don't know. >> they do a benchpress competition? >> it's good stuff. see you in a bit. coming up, nvidia is at risk of snapping a four month winning streak, but our next

guest says we are in the midst aarigshift that could have big consequences for big tech. we will get into the details, next -mobil it's on them. at t-mobile, it's better over here! families save 20% every month. what a deal! to all you new and existing customers, trade in your busted old phone, and t-mobile will give you a brand-new iphone 16 pro with apple intelligence on us. plus, families can save 20% when they switch. t-mobile is one of none. go get that. what he said! ehh... hmm. oh, that's very, uh... - right? - mmm... this store doesn't have agentforce, so an ai agent didn't tip off the stylist as to what i might actually wear. - yes. - oh.

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(♪♪) welcome back. nvidia is down 10% since reporting strong third quarter results, but ceo jensen huang

warned of headwinds for chips that could allow competitors like broadcom to move in. my next guest sees opportunities for different players of a different kind in the a.i. space. more efficiency and innovation. joining me now is the general partner at legendary firm, benchmark. deirdre bosa is with us as well. it's great to have you both here. i would be really curious, if it's getting more active in the vc world, you are starting to see more smaller companies on the forefront of a.i. coming to the office. what is driving that? what kinds of things are they up to, and how might we expect them to affect to the a.i. world in the next 12 to 24 months time? >> absolutely. thank you for having me. as benchmark, we are primarily focused on series a companies, and in the last six to eight weeks, we have seen a

tremendous amount of innovation, especially, at the monolayer, and for the last two years, at the application layer, taking advantage of all the advances in the a.i. models. what is happening at the monolayer is, as we move into an inference time or test time compute paradigm, we see a lot more advantage to entrepreneurs and technical founders that are able to push to the frontier with algorithmic innovation. for the last two years, a lot of this investment has been with billions and billions of dollars of capital x, essentially, scaling to get advantage on a i, and we are starting to see a lot more on the algorithmic side. >> deidre, build on this, if you will. what else are you hearing, in terms of the shift that might be underway? >> to break it down, there have been two phases in the generative a.i. race. that pretraining or training phase, where the technological advancements were sort of exponential.

each large language model, whether that be from chatgpt, gemini, cloud from anthropic, they were getting exponentially better each time, but now there is an acceptance that we have hit the scaling. there is not enough data to continue the pace of these advancements, so it brings us to a second phase, which is post training or inference, and this is very different. you can do more on the existing models, which is what chetan is referring to. you have more applications. we start to look for those killer apps, where we are building use cases on the technology that is already out there. in that sense, you see the focus go from hardware, nvidia gpu's to software, and potentially, much smaller companies that are more investable, versus mega caps with billions of dollars on their balance sheet, to invest in a company that maybe one or two people building on top of the existing models, and being able to do a lot more. part of that too is the rise of open source models, like

meta's, llama. it enables entrepreneurs, new startup companies to challenge the incumbents, because they can get access to the frontier models in a very specific vertical, to compete, and maybe even create a better product. >> can you give any examples of what you are seeing? you mentioned that you are a very early on stage investor, so it could be a while before these companies come to market. >> that is absolutely right. on the application layer, i will give you an example of a company named, sierra, that we were lucky to be involved in from the formation. they started the company in early 2023, and what they are doing in terms of revolutionizing customer service for enterprises is simply remarkable. they are leveraging, not only their own proprietary technology and models, but open source models, also models from the latest model companies, and as a result, the applications they are delivering are not just incrementally better, it

is a completely different experience. what they are doing is not only consuming software bits and making workflow more efficient, as was generally the trend in software for the last decade plus, but they are automating so much of the task itself, that an enterprise could simply say, we are going to outsource this entire function to this application and the application not only makes the company better, but it makes the underlying business much better, and the consumers that are dealing with that business now have a much better experience every day. think of the sierra a.i. agent, if you will, delivering the best customer service agent experience every time, replicated an infinite number of times, and that is an experience that was previously not possible without a.i. >> that is really interesting, especially, as a customer experience skeptic, myself. a 15 second answer, he came from salesforce, the street

goes back and forth on whether -- it does not sound like you would be very bullish on these existing software companies. >> they have lock in, in the sense of their data, but there are a ton of opportunities for these new startups like sierra and many others that are going after large, incumbent markets with this a.i. first approach, and they are being accepted and pulled by customers today, unlike we have ever seen in software over the last two decades. >> we know what that means, for potential applications. thank you for joining us, chetan puttagunta. deidre, thank you as well. deirdre bosa. coming up, we will speak to a ceo of a company powering all of this a.i., but first, college playoffs start tomorrow, and cnbc has ranked the 75 most valuable college athletic programs. we will reveal which school tops the list, next.

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those conferences also talked cnbc's new list of the most valuable college atlantic programs. >> hey, kelly, good to be with you. as we look behind me, you can see the most valuable college athletic programs are, typically, those schools with the best football programs, those that are in the college football playoffs, and that is because football dominates the tv ratings in the pros and college, and tv money is the biggest single source of revenue for college athletic programs. in fact, if you look at the top of our 75 most valuable athletic programs list, it is dominated at the top by s.e.c. and big ten schools, those conferences get the most amount of money for television, and that gap is expected to widen greatly over the next 10 years

between the sec and big ten at the top, and the acc and the big 12 at the bottom. and, that is why our sec schools and big ten schools are much more valuable than the acc and pac-12, or big 12 schools. >> don't talk about the pac-12. my husband is still reeling from everything that happened with ucla and some of the other schools. mike, you brought up an interesting point. let's compare these valuations to what we know about pro sports, because the money pouring in is going to be top of investors minds. >> exactly, and we expect this to happen sometime in 2025, private equity to move in here, all the nil spending now, name, image and likeness. >> they are trying to shake down boosters, and they can't keep up at the big schools. >> a top rated quarterback went to michigan, instead of lsu, but these programs in general are valued at about four times

revenue. contrast that with the pros, where it is eight to 10 times revenue. more riskier, more uncertainty. how are they going to deal with title ix? how are they going to deal with the nonprofit status? exactly how much money is going to go to the athletes? those types of issues have to be settled, but private equity once in, these top colleges, kelly, want the money. >> ohio state was number one at -- what? >> $1.13 billion. >> mike, thank you very much for bringing this chapter to us. and, our mistry chart today was bloom energy. the shares are up more than 50% this year, thanks to a 50% gain since november, when they announced american electric power would buy their fuel cells to power data centers. stephen byrd put bloom energy on our radar, saying it is an underappreciated beneficiary of the rapid growth in data center demand globally.

kr, everyone suddenly wants to hear about your company. welcome. >> thank you for having me. >> what is your key innovation? how did you get to be bloom? >> we always said, there is going to be a future where the digital economy needs digital electronics. what do we mean by digital electronics. they need to be reliable, they need to be clean, and you need to divide abundance of them right where you need to use the power. the power needs to be generated. then, the power needs to get used as an addition to transmission distribution. you see the amount of highways that bring electrons, which is the transmission. this country has about 250,000 miles, that is all the way from the earth to the moon, if you were to think about it. that is the distance. now, as these large data centers require significant amounts of power, if you can

generate some of that power right where you need it, you can reduce the condition on those highways, and we are able to do that reliably and cleanly, and future proof it for zero carbon one day. >> when i see fuel cells, i can't help but think of elon musk's derogatory term for them, as pool cells. that was years ago, and this is probably a different application. do you think there has been a tremendous amount of growth in this space? talk through the science of it. why is he wrong? >> the science of it is very simple. you are going to require a molecule, and convert that molecule to electricity. there is no more efficient way to convert a molecule, natural gas to electricity than a fuel cell. period. that is science. that is technology. number two, if you can generate that power where you need it,

then, you are not losing transmission distribution efficiencies, and you are not investing in capital for that. number three, because it is on site, it is a lot more reliable if our hospitals, if our data centers, cannot power, transmission distribution in a climate changed world, were hurricanes and flooding and earthquakes and wildfires happen, that is not the best way to do it. this is a solution against that. it is a perfect complement to the transmission grid that we have. we need all of the above, and the most important thing, kelly, is, the world needs a lot of power. this country needs a lot of power for us to be the number one a.i. leader, and we don't have enough power, and bloom is able to supply that now, today, very quickly. >> your customers include aep,

intel, home depot, caltech. in the very limited time that we still have, you mentioned the tremendous power needs we have. that is why your name is on investors radar. how much more quickly can you bring more power online? how supply and capacity constrained are you? >> if someone places a gigawatt order to us today, before they can facilitate is the data centers, we will be ready for them. that is the pace. we have built this company for this moment in time, and we have copied exact scalable factories with supply chains, through which we can provide this, and we are not dependent on any radar that is not available to us right now. >> we will be following your company with great interest. thank you for joining us today. we appreciate it very much, the ceo of bloom energy. that is it for us, for some of

us. tyler is getting ready for power lunch and i will join him on the other side of this break. ♪ (vo) whether your phone's broken or old, we've got you. with verizon, trade in any phone, any condition. it's your last chance to get iphone 16 pro with apple intelligence. get four, on us. on any unlimited plan. only on verizon. ehh... hmm. oh, that's very, uh... - right? - mmm... this store doesn't have agentforce, so an ai agent didn't tip off the stylist as to what i might actually wear. - yes. - oh. that's a commitment. [glass knocked] hey bud! whaddaya think? you know, people can see you out here. ha ha ha ha, yeah, yeah, right, right, ha ha. love you, too. agentforce helps retailers prevent fashion fails. it's what ai was meant to be. ♪♪

to go further, you need to be ready for what's down the road. as energy demand continues to rise, we're harnessing breakthrough innovations to increase production in the u.s. gulf of mexico. our latest deepwater development, anchor, produces previously inaccessible oil and natural gas, allowing us to deliver the energy we all need today so everyone can follow their own road. that's energy in progress. ♪ and welcome, everybody, to "power lunch." alongside kel ly evans i'm tyler mathisen the dow seems likely to snap its ten-session losing streak but the markets are coming to grips now with the likelihood of