>> still own it. good size. >> big position. >> all right. >> stephanie? >> morgan stanley. when they report on the 16th, it's going to surprise on the fee growth. could be 70% for equity capital markets. >> see you on closing bell. we were all just checking the charts on the ten-year. thank you. welcome to "the exchange." here is what's ahead. zuckerberg almost fought musk in a cage match. now he is taking a page from his playbook. meta eliminating fact checkers. it's the latest step away from the left and toward a more trump-friendly future in big tech. details and a look at the bigger battle that may be brewing. there's been a lot of apple news. a lot has been bad. that comment courtesy of craig moffett. a rare downgrade to sell the

stock. he makes his case just ahead. morgan stanley called cyber arc a beneficiary of the treasury act. the ceo joins us with how they are hoping the footprint will expand with a new administration. let's check on the numbers. >> the reason why you and i and everybody talking about the ten-year is because it's the highest level since open is one of the reasons why you see markets under pressure right now. the rising rates not good for valuations. look at the dow industrials, down 70 points. 42,641 is the level for the blue chip. broader s&p 500 is now back below that 6,000 mark. 5,934. two-third of one percent decline. look on 5,950 the medium term 50-day moving average. below that level and just to

give you perspective here, at the highs of the session, we were up 25 points and down 56 at the low. keep an eye on the particular ranges today. the nasdaq composite, tech heavier side, down 1.5%. the laggard, that's 289 points to the downside, 19,576 is your trade on the composite index. one of the big things we are watching today is also the opposite move in the positive side of things for vaccine makers after the u.s. had its first death linked to bird flu that we saw from an elderly patient who may have had pre-existing conditions down in louisiana. moderna got a grant from the u.s. government to develop a vaccine for bird flu. other companies that have early stage bird flu-type product vaccines in development, they are up big as well. you get the idea, health care with vaccine makers doing well today on bird flu concerns.

the cdc says the risk to the general public right now is relatively low. the ten-year note yield, it's a huge point right now for traders out there. 4.679%. you have to go back to april over here when we saw some of the levels. keep an eye on the ten-year note yield, big move there. we will see whether that has lasting impact. by the way, remember all the bonds that banks hold? you might have to look at those again. >> that's right. that keeps coming back as well. they have made some adjustments. we are less than two weeks from inauguration day. the trump 2.0 agenda is taking shape. as we heard from the president-elect himself, renaming the gulf of mexico to gulf of america may be part of the agenda. we will talk about it. emily wilkins is in washington with the latest on what lawmakers plan to tackle in the first few days. joining us with the implications is joe lavorna, a former chief

economist. let's start with you, emily. what's the latest? >> we are getting more details right now about how. >> reggie:s are planning to tackle the first 100 days. we are now hearing that there is going to be one package, one giant package. it's going to have tax, energy policy, border security. yes, it is also going to have that debt limit. the breakdown at this point, because house republicans have a very ambitiousagenda, in february, next month, they will vote on a budget. that's going to unlock the process that's going to allow senate republicans to be able to pass this bill without any democratic support. in march, we will get more details from committees as they put together the details in this package, what comes, what goes. of course, early april steve scalise said before easter is when he wants to see a vote on

this on the house floor. of course, to the senate soon after. of course, this is going to include the debt limit. the thing that held up that government funding bill just a couple weeks ago. speaker mike johnson, he in a press conference acknowledged today that it would be a bit difficult to do that a lot of members have opposing opinions. listen to what he said. >> there's a broad range of opinion on that in our own conference. we are working through that. it will be having deliberate whiteboard sessions with our members. >> of course, the big things is a question around the debt ceiling is cutting spending. it's something physical hawks are demanding. at this point, it's not clear exactly how congress is hoping to cut spending. you heard mike johnson in that presser say that he did not want to touch social security, medicare, medicaid. he wanted to continue those benefits. leader steve scalise told me that tariffs are not going to be

an option for paying for some of the tax cuts. that really leaves a question as to what the spending side is going to be. of course, anything they go with has to get donald trump's approval. the president-elect will be on the hill tomorrow meeting with senate republicans. then we will see dozens of house republicans going down to march allah go over the weekend for discussions with trump about their path forward. >> what did scalise mean when he said tariffs won't be part of the pay for. >> they are leaving this in trump's hands. trump is the one who go ahead and set what tariffs they want to see. of course, when congress passes these bills, they talk about what can we do to pay for things like extending tax cuts or what can we do to pay for revoking tax on tips or other things they want to do with border or energy? there are fiscal hawks who are saying, it's great that we want do this stuff, we are on board. but it costs money. we need to stop adding to the deficit. what they're going to use to

offset is a huge question right now. >> emily, for now, thanks. on that note, go out to chicago where we had ten-year option on a day where yields almost kissed 4.7%. rick is here with the results and the moves. how did it go? >> it went pretty darn average. yield of 39 billion reopened tens hits 4.68%. spot on with the when issue market for the most part. if you look at all the metrics,ed by to cover 2.54 exactly the ten auction average. if you look at indirect and direct and combine them, very close to 10 auction average. the dealers took a little bit more than normal. 15.6%, the highest since august just of last year. a straight c on the 39 billion second leg. tomorrow will be 22 billion reopened 30s. maybe the most interesting aspect of this auction is how

much yields have moved on the long end as you pointed out. we have the two cent spread knocking on the door of 40 basis points. that's basically a fresh wide going back 32 plus months. right now, 4.67, you are up four on a ten-year. you are down one on a two-year at 4.27 which accounts for some of the two-ten spread. the other issue we want to talk about is how great technicals were. the 30-year bond closed above 4.81. immediately, a ten-point basis points of quick profit. monitor where these breakouts occurred so we know when we come back where the yields may hold. they are guns hot. it looks like we will test four and three-quarters on a ten year and 5% on a 30 year. back to you. >> is it true after we got the ism data the services data was stronger than expected? job openings above 8 million.

we expect one rate cut this year in the market? >> i don't get involved in rate cut roulette. it doesn't matter to me. i'm a market observer. i look at the same fundamentals as investors. the market popped on the long end. the service sector numbers improved except for the employment, which was the own one that wasn't sequentially higher. >> it's amazing how it's an indicator. rick, thanks. we appreciate it. all of this goes back to the trump agenda and what to expect in the early days. our next guest says it will take time to roll back biden-era regulation and cuts like e promised might not hold up. to tobin, it sounds like it is your

line. >> it's part of the policy mix. we are going to see de-regulation. when we think about pace, the statutory, it's as cumbersome to roll them back as to put them in place. the same way it took years to get some of the rules in place with the threat of litigation if they cut corners, the mirror image is what some of the trump appointees, agencies like epa will look at. if they try to do a big bang de-regulation, i don't it's going to hold up. >> do you have a point of view on what's going on in the markets? what do you think it's telling us about the debt and deficit situation, if anything? >> look, the long-term deaf and deficit situation is dire. that would have been the case no matter who won the election in november. when we look at the fiscal plans for this year, there's questions. i think conservatives will push for some real spending cuts and offsets as part of the tax bill.

that's far from a settled question. from a bond market perspective, i think it makes sense to be concerned. we don't think it's acute, but we have expected secular upward pressure on the long end of the-year-old. that's where we expect. >> joe, do you think it makes sense to be concerned? >> about what, the market? >> no, the market is concerned about the debt and deficit. >> the market sold off a couple of reasons. number one, the treasury made the decision to shorten the average maturity of the debt. what we have in january is the biggest rollover month of the calendar year. the market is repricing supply, longer end -- a lot more supply rather than will the rest of the year. seasonally, the first quarter is a difficult month. that's one factor. second factor is term premium. it has risen dramatically. that's a function of the fact the fed isn't easing. the fed eased rates in november and december which made no sense.

i think the market is adjusting to that. once we get the trump agenda in place, a combination of de-regulation, lower corporate tax rates that increase the supply side of the economy, you will have a stronger dollar in part because growth prospects in the u.s. will be better. that will -- inflation will come down. good growth. you will see market yields move to 4% where we put fair value. >> i think you and i would concede the economy has been stronger than we expected. i was sympathetic to the 50 basis-point cut, but the market reaction was immediate. the data started turning. we went -- we erased the slowdown. we are in the other boat. there's going to be one rate cut this year while you have trump talking about how rates are too high? >> look, the fact is the fed did not -- they cut 50.

i understand their rationale. i argued for 50. they didn't need to cut in november and december. the reason the economy has done well in part the fed has fuelled some real strong asset appreciation because they have kept rates lower than they should. the fed ease rates with financial conditions easy. let's not forget the fact that the current administration has spent a lot of money in the economy. we have had seven quarters in a row in which government based gdp, if you want an oxymoron, has grown faster than private. that's one of the reasons why the economy is stronger, because the government is using so many resources. that has helped push inflation higher. if we can get the government at the margin out of the economy, it will free up productive capacity and you can have an environment as you had under trump 1.0 where you had good growth, very good growth, and low inflation and low interest

rates. >> rate cuts by 2019, which we talk about the impact tariffs may have, this time around the sequencing could be different. back then the corporate tax cut first, then tariffs slowly started to be applied. now both the size sequencing could be different. >> yeah. crucially, you don't have another 14 points to cut the corporate rate. trump talked about a conditional 15% cut. that would be nice for companies that benefit from it. it's a different scale than the corporate tax benefits we saw the first time around. in terms of things to get the private sector, they have reacted well to de-relation. that will play out. spending cult ing cuts will no right away. deficits aren't falling right away. those are going to be persistent problems. looking through the course of the year, i tend to think some of the bigger moves on tariffs, which he has not made complete

decisions about what he will do, we think that will take a little longer to play out than some expect. probably not going to see massive worldwide tariffs on day one. if we do, that would be a downsized to market. >> look on the de-relation, people have to realize the increased energy output is very important for the agenda. the president is going to do day one with opening up federal on and offshore exploration and drilling. that will help. to get that extra 3 million barrel per day output which is doable. also changing the permitting process, which is one of the reasons the energy sector has not spent as much on capital investment to try to be able to increase output more. we have an absurdly arcane and lengthy permitting process. shortening the permitting process, working on changing national environmental

protection act, also will allow other industries to build. that's part and parcel of a very comprehensive, holistic re-industrialization agenda. it will benefit u.s. output. >> tobin? >> look, i think permitting reform is a huge problem but not that's solvable by the president. i'm optimistic about the continued bipartisan conversations in congress on nepa reform. i think that's longer term. when it comes to energy production, capital discipline is probably here to stay. the u.s. upstream sector, i don't know folks will be excited about recklessly expanding production into de-regulation. i think everyone is happy to have additional sales and so forth, but i wouldn't necessarily expect that to move domestic production dramatically in the short term. >> who can change nepa? >> it's congressionally enacted. it requires congressional reform to fix. i think there are smart things that the trump administration will do to provide a unified

federal point of contact, shorter time frame for federal decisions. the big problem with nepa is litigation. you can't solve that problem, which is a problem in the courts, unless you get congress to change the statute. we have years of bipartisan conversations that have led to the point of possible changes in the next few years, but that's a slow moving process. >> joe? >> the chevron case is important. it's going to help the incoming administration take a more prudent pro-growth, pro-business friendly agenda. i understand the litigation side of it. but it doesn't mean that we shouldn't move forward. i think the administration having the experience of what worked the first go around will be very successful in implementing and look for a better second go around. >> i was nodding along. joe makes a good point. tobin makes a good point. i would love do this again. appreciate your time. joe and tobin. the president-elect weighed in on meta's changes today by

saying, it's come a long way. the social media giant announcing it is removing restrictions on certain topics, echoing a move by musk when he bought x. lena khan discussed it earlier. >> what the rules are for speech online is an enormously important question. a world and an economy in which those rules are being set by a single company or even a single executive is deeply at odds with why we have the antitrust laws and anti-monopoly laws. this is an economy that has thrived when we have fierce competition. i have heard a lot of concerns, including on both sides of the aisle, about what happens when you concentrate control and have gatekeepers over who gets heard and who gets to speak. >> you are a fan? >> we should have an economy where decisions of a single company or a single executive are not having extraordinary impact on speech online.

>> let's get some thoughts and reaction to this news from sam lessen, a general partner at slow ventures. i didn't tell you we were going to play that sound bite. you can react to her comment there or what you think of this -- these pretty big and major moves by meta today. >> i'm thrilled to see them is the upshot. i think the reality is that free speech on the internet is a critical thing to uphold. there was a period in the last few years where for a lot of reasons we saw a lot of content moderation and investment in that. the reality is doing content moderation on a central platform is dangerous and impossible to do well. seeing this moment where meta is able to step back and say, look, we're going to move toward a world where just like the post office, like a phone, we route messages to the people who want to hear them. we're not in the business of moderating is a great step. >> do you think it's a final

step or four or eight or 12 years from now when obama 2.0 character takes office, is facebook going with the times once again? >> here is what i say. from a first principals perspective, i think mark has been clear and he gave a great speech about this many years ago, that he is a free speech advocate. the reality is that when you operate a company like meta at scale, it's impossible to not have to manage politics to some degree. politics is part of the game when you run a global platform. you can have strong principals. having those be clear and transparent. giving people tools to hold you accountable to those are critical. i think we're in a good moment. will there in the next 50 years be times and places where you have to kind of deal with political reality and operate in the political climate that exists? >> of course. >> i give him a lot of credit for the speech five years ago. it was at odds with delf platforming trump at the same

time. to ask you the pointed question, because you know him as well as anybody, is zuckerberg a liberal? what is his -- who is he? >> i think the reality is that the moment we're in, which is an interesting one, we are seeing personal brands become more and more important. people standing up and saying, this is who i am and believe in more than organizations. i think the reality is, one of theteresting is you see for large companies, large universities, this move toward people saying, i am me, this is how i tell my story, hold me accountable to my principals and what i put out there. you will see that more and more from people versus an earlier age where there was a mentality of people take a backseat to organizations and organizations are kind of a unit of trust. i'm not going to comment on mark's personal -- my personal relationship or personal politics. what i will say is i think you will see this era not just at

facebook, not just trump and elon have demonstrated, but a switch towards people saying openly and transparently, this is who i am, these are my principals, hold me accountable for those. >> all of that said, he talked at the end of the video today about how he was excited to work with the u.s. government and protect, i think he said american companies kind of free speech. as you and i know, there is not an american -- the american internet is still the global internet. you could have european officials upset with musk he is broadcasting an interview on x that europeans might see. that's why i'm asking, how serious is zuckerberg about who he is in and what he believes? is this a fight he is willing to take at the expense of meta if they start butting heads? they are banned in china. >> at the end of the day, the internet was born as an international platform. it turns out that in that single international platform, large american platforms did

spectacularly well. there are obviously global companies that aren't american that are a big part of the internet. the united states and the internet are aligned. china was balkanized. i think if we -- there was an era of large platforms trying to be present everywhere and placate everyone. we will see a new era of companies saying, this is who we are. leaders saying, this is what we believe. you can opt in or out. that's how it's going to be. >> if the next european leader says, i don't want your platforms operating in my country because people like musk are sounding off on my political history, what would zuckerberg do? >> this is an interesting -- this is not a new question. this is way back in the days of germany and faith recognition and things like that. different countries will have different laws. could you see a world in which facebook doesn't have a presence in every country on earth? sure. could you see a world in which

facebook says or meta says, this is our principals and how we operate and if you want us to be present, these are the rules that happen, i think that could happen as well. >> exactly which way it goes is going to dictate the next five or ten years. it could be very different from the early era of the internet. thanks. appreciate you taking the time. >> thank you. coming up, we are sticking with silicon valley's divided politics and what it means for google. could it be a prime target for the new trump administration? we will look at how they might get ahead of that and what it means for investors. the call of the day on wall street. downgrading apple to sell, seeing more than 20% downside on an unattractive outlook. shares are lower and coming off their worst week since april. craig moffett joins us next to make his case.

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supercycle it was supposed to. we have craig with us on the phone. very few people get to be phoners. whatever you are doing, thank you for making the time to join us. welcome. >> thanks. i'm glad to be here. >> this is -- when is the last time you had a sell rating on apple? >> this is the first time i've had a sell rating on apple. you said in your intro, i want to underscore, this is not a call that says apple is a bad committee. it's not saying apple is broken. it's a call that says that the valuation has run too far and that there are legitimate risks that simply aren't being discounted in the stock today and that it makes sense for people to be more cautious. >> is it trading at an all-time high valuation? >> yes. you are looking at apple trading right now at 33 times earnings. what i think particularly jumps out is, remember, apple is no longer a brisk growth company.

when you think about its peer group among the mag 7, among amazon and meta, for example, or alphabet, the peg ratio, the ratio of the multiple to the growth rate is above three. all the others are around two. if you look out even a year or two years, the valuation that is implied here starts to be ridiculously stretched relative to the rest of its peer group and the rest of its peer group is not cheap. this is not a moment when anybody would say that the mag 7 are trading at bargain multiples. >> right. we were surprised when it started to take off last year. there were five straight weeks where it rose 2% or more on no real news or developments that i could discern. >> yeah, that's right. let's actually retrace a little bit of what happened in 2024.

we started last year with this narrative that apple was behind in ai. it lagged pretty badly during the early part of the big ai rally last year. as we got closer to the worldwide developer conference in june, the market started to anticipate what the strategy was going to be. by and large, got it right. loved the strategy and rightly so. it's a capital light strategy. they have all kinds of advantages in ai that can schedule for you using your calendar and contacts and email. all of those things are true. the market figured out they were coming and the market started to price them in. when we initiated coverage last year while we really liked the strategy and thought that apple was really well positioned, it looked to us to be fairly fully valued. >> right. >> the market started to come back to a view that, wait a

second, apple is behind in ai. the market was a little more sober. to be honest, during the last part of the year it mostly traded in line with the market for the last part of the year. although, over the last part of november and december, it started to rally strongly. as you said, what was supposedly no news, but in fact there was quite a bit of genuine bad news that should have actually made the investors more cautious. >> on that front, if i were sitting at home and holding my apple shares, i'm not sure i would sell them. i'm not sure that's what this call is geared at. if i said, it's trading at 33 times, i don't know -- it's a buyback machine. maybe it's extended. it's going to drop 20%. maybe you want to take a flyer on that. there's probably people out there who are like, i'm hanging on to this thing. >> look, for a lot of people, they have enormous capital gains

they would have to consider. that's not what we are doing. i wouldn't want to suggest that a retail investor who is thinking about capital gains and that stuff should be thinking about research that we write for institutional investors as the way that they make decisions. what we are saying is that -- let me kind of take a slightly different tack for a second. when someone like myself and my co j co-author, we make estimates based on the most likely scenario. there are real risks here that are more than just tail risks that make them sound highly improbable. they are more than that. they are real risks associated in particular with the antitrust case against google where the judge in that case has said specifically that the payments that google makes to apple are

illegal. that's 25% of apple's operating income that a judge has said is illegal. we don't know what's going to change there. it would be insane to suggest that there's just no risk. there's obviously risk. it may not be your base case that says the risk is the single most likely outcome that that goes away. you don't make that the basis of your model. it's not reflected in anybody's models that there's a very real chance that that either goes away or gets materially impaired. the same thing with tariffs. you may think it's most likely that both apple will be exempt from tariffs itself, which i think is quite likely, but that there won't be any retaliatory tariff damage from countries that are responding to tariffs on completely separate products, whether it's automobiles or something else, and they target a company like apple and that

affects its overseas sales. that may not be the most likely outcome. so you don't put it in your model. but it's a legitimate risk. there's also a risk of what's happening in china where the chinese government for obvious reasons is not going to be amenable to western large-language models. almost certainly, apple will have to do a revenue share of some kind with domestic chinese companies in order to do ai in china. that changes your expectations about margins. they are facing a much stiffer competition from stronger chinese companies in that market. china is the -- or greater china, the second most important market. those are risks that aren't reflected in most people's base case models, because they may not be the most likely outcome. but they are still very, very significant possibilities. they ought to be reflected in

the application of a more sober multiple. they simply aren't. >> super interesting. that's true, the multiple would be one way of reflecting that. i didn't realize those payments were 25% of operating income, which is -- it's a massive number. >> by the way, there are also antitrust cases against apple itself that we're not talking about and cases in europe against apple that we are not talking about. that's just from the case -- the antitrust case against google which a lot of people would say ironically the risk out of the google antitrust case is greater to apple than to google or alphabet. >> i was thinking that same thing when we talked about that. craig, having said all of that, i will see if other of your peers on the street are going to make the same move. we appreciate you joining us to break it down and get into what some of the risks are. thanks for the time. >> my pleasure. it's always a pleasure to join you.

let's get over to brian sullivan. >> thank you very much. u.s. district judge cannon temporarily barring special counsel jack smith from releasing his report on donald trump. that's until an appeals court can act on a request from trump's co-defendants in the case. it will lay out how he tried to overturn the election. an investigation after two people were found dead in the landing gear compartment of a jetblue airport after a flight from new york to fort lauderdale last night. they were discovered during a routine post-flight maintenance check. president biden will create two new national monuments in california to protect native american land. the white house said the president will sign the proclamations which will keep drilling and mining away from nearly 850,000 acres in the

state. i will see you in a few minutes. >> thanks very much. some breaking news on the ai startup anthropic. >> we hear anthropic is the middle of a funding raise at $60,000 valuation. this is the amazon-backed ai player. it was valued at $18 billion on paper. a major step up, threefold in valuation. the source telling me light speed will be leading the round. no comment. but it's the latest mega round we see in this space. another signal of just this investor demand that we see in silicon valley for high quality ai. we talk a lot about openai. anthropic in that topic.

>> i try to -- >> it's known for enterprise. it's their bread and butter is working with big companies. they are making moves in consumer. you are using all the ai models. >> i give my husband the ideas and he figures it out. thanks very much. coming up, we talked about apple and meta. but alphabet has antitrust risks ahead of the incoming administration. will google and youtube follow meta's lead on sfthiing censorship policies? that's next. ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ at state street, we know everyone's trying to get somewhere. ♪♪ take the next step toward your future,

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trump's fcc chair who threatened actions against a censorship cartel. meta's changes are what they asked for. google has the most to lose from an antitrust lawsuit perspective. the search business has been ruled a monopoly. remedies could redefine the core business and determine its position in the generative ai race. trump's doj can steer the case toward harsher remedies and or the dial the pressure back. a lot at stake. the trump inaugural fund, racking up donations from big names in the tech world. google looking like an omission as we get closer to the day. it's possible that google have donated and they are not publicly saying so. even that could suggest that google isn't as willing to publicly align itself. alphabet also has to balance a more progressive workforce that

supported democrats in the last election. all of this to say, alphabet here is facing maybe more delicate balancing than some of its others. keep many mind that mark zuckerberg has more control over his company. he is a controlling shareholder. they have different workforces. >> wasn't trump happy with sunder? >> he loves the attention. he recently said that maybe we shouldn't break up google. there's maybe signs of hope that that stance is softening. it's interesting to note that as zuckerberg goes on this charm offensive, it kind of makes the lack of one from google more evident. if trump is looking for a punching bag, google is right there. we know from comments from who he appointed at the fcc that they are looking to clamp down on big tech. >> absolutely. i agree.

he would will see if that tone starts to change. thanks. now, you have heard all the risks. despite that, my next guest believes the group will lead the market this year as the monetizing phase of ai kicks off. rginouheam his t nese taetg next. you founded your kayak company because you love the ocean. not spreadsheets... you need to hire. i need indeed. indeed you do. our matching platform lets you spend less time searching and more time connecting with candidates. visit indeed.com/hire

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tech is the laggard today. the nasdaq 100 down a percent and a half. nvidia shaving 90 points off that with shares slumping 5%. my next guest says it's an entry point. he expects tech to lead the way this year saying that ai monetization will begin in ernest. the rally we have seen is child's play. he does see the s&p topping 7000. this was sounding believable until we got to 7000 by midyear. >> that's what they said when i launched into ai is the greatest investment theme. good thing i got a thick skin. we will get there. the amount of capital that wants to go to work is going to look to the united states. we control the dominant share of ai, the world's best companies and profit margins.

long story short, i think it's going to come running. the economy for those companies is stronger than people expect. >> what do you say to -- i -- you have been right. i hope you are right and continue to be right. >> so do i. >> a lot of people say, when valuation is in the top 5% of its historical average, average annual returns are 2% or whatever. what do you say? that's been true over time. >> it has been true. pe ratio, despite what everybody believes and what's taught around the world is that pes are not a causal relationship. they are something that happens anecdotally. my view based on the regs is that it's a misleading picture. if you talk about a digital company where return to scale matters, pe ratios are high. that's what you want to see because the cost of adding an

incremental customer is almost nothing. >> you are not phased by this soft patch? >> no, not in the least. i have been doing this 45 years. i have seen this come and go. it's a technical sell-off. big traders moving money around. technical moment. if you understand the mechanics, but you look at the long-term fundamental picture, the long-term expansion, the way ai is expanding, trillions of dollars brought to bear on this, the game is just getting started. >> you remind me of dan ives. it's just past midnight. get the popcorn. if ai can make a fixture shot, it is like you are squeezed. >> i need to gain weight. something about the camera. >> when you do -- >> i don't know cameras. >> you are yes on tesla? >> that is absolutely correct. it's another one of the stories. the broad misconception is a widowmaker trade.

mugs musk is clear about what he wants to accomplish. he may drive me nuts that the markets may be challenging. i think three to five -- we have doubled off the summer lows we talked about. >> my goodness. maybe i need to think bigger. thanks for your time today. >> thank you. still to come, cyber arc shares are up. morgan stanley expects that to continue to benefit as it was one of the major competitors that was compromised in the breach. we will speak to the ceo about that and why the rise of ai as we were talking about means more attacks. that's ahead. it all started with a small business idea. it's a pillow with a speaker in it! that's right craig. pulling in the perfect team to get the job done. i'm just here for the internets. at&t, it's super-fast! you locked us out?! and when thrown a curveball... arrggghh! ahhhh! [crashing sounds] we had everything we needed. is the internet out? don't worry, we have at&t internet back-up.

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welcome back to "the exchange." the government saying no other federal agency was compromised in the treasury hack by the chinese government affiliated actors. with cybersecurity to remain a critical issue, morgan stanley says cyberark could benefit. shares are up in the past year. joining us now to discuss in an exclusive interview, matt cohen is the ceo of cyberark. >> good to be with you. >> i know it's tricky trying to dance on a competitor's -- it's

not a gravestone, but there have been a historic number of breaches against u.s. infrastructure and targets. what are the implications for your company? >> that's the important thing to understand what exactly has occur and how can we help harden the industry against these type of attacks? the competitors aren't really other cybersecurity companies. the competitors are the bad actors and adversaries working formation states or cyber criminal yndicates. when you look into this recent hack of the treasury, you understand when you look at the attack factor, that it came down to exploiting a vulnerable in software and ultimately stealing an api key, a type of machine identity. ultimately, we at cyberark which protects human and machine identities is focused on educating the market on the need to secure those machine

identities, those keys, if you will, to make sure that these type of attacks can't continue to occur, because there are vulnerable things around the world. >> would your technology keep this from happening? is it more about identification and response? >> the proper implementation of this type of technology where you secure your machine identity or api keys would have made it much harder for the bad actors to get involved. this all started with a vulnerability within the software. the software supply chain securing of that is critical for all of us in the cybersecurity industry. we are obviously focused in to make sure that this type of attack can't happen with cyberark. but it's our approach to securing human and machine identity that puts our customers in a good place as they try to protect themselves against these attacks. >> we have seen ports infiltrated. different kinds of infrastructure systems.

according to sources with the government, it might be as china is testing what our response would look like to a taiwan invasion. given the way your company operates, do you think that you would be able to protect a lot of these key national assets if you were implemented that way? >> i think that when you see this heightened threat environment that we are living in, most of the adversaries, whether nation states or cyber criminals, are going after identities. the identity is really the life blood of an organization. if they can find an identity, whether it be human or machine, that has the right level of privileges, then they can take over those enterprises, take over a government agency. ultimately, there's a new front of cybersecurity. it used to be about protecting the perimeter or the end point. now at the forefront is protecting identity. we call that identity security. cyberark is the leader in identity security, has a role to play in making sure these

adversaries can't get into the deepest part of these organizations and get secrets and other aspects of critical data that we don't want to get into the wrong hands. >> of course. it's sew if sophisticated. do you use encrypted apps when you text? it does make a person wonder. >> i think that all of us have to take an extra layer of security and let's say hygiene in our approach to communication and our approach to how we secure information and data. ultimately, what we have to do is make sure that the most important assets we have, whether us at cyberark, our government institutions or enterprises are following and deploying the right cybersecurity best practices. that starts with making sure we

lock down each identity. make sure we have good policies in place to take credentials out of the play of these attack . >> sorry, we have to leave it there. a top priority we hope for the incoming administration with everything else going on. thanks for joining us. "power lunch" is after this. ♪ ♪ 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.