rhetoric that's been coming out, but it's not at clearwire's expense. so now you get to buy the stock with a 7% yield. >> thank you very much. you're welcome. josh brown. >> nasdaq successfully retested the breakout level and is now on the rise once again. keep an eye on this name for the ipos that are to come this year. primary beneficiary. >> all right. we've been up 6 to 7 days. we'll see if we can notch another positive day on the s&p and maybe a record setting one i'll see you at three. >> thank you very much, scott. and welcome to the exchange. and lots of news to get to this hour. president trump. >> speaking to bank. >> ceos out at davos. >> and throwing. >> some punches as well. we'll bring you that in a moment. plus a look at one group of stocks our analyst says is about to catch a massive tailwind from the stargate announcement. we'll reveal this name and a few others ahead. plus the one risk that blackrock's larry fink says isn't being factored into the markets. is he right that continue to lift here will debate and netflix shares are moving higher again today. after that. monster subscriber growth.

it is putting more pressure on traditional tv. sure enough cnn slashing jobs today as they restructure toward a more digital future. our analyst tells you how to trade this game of thrones. before that, let's get to dom chu with a look at these markets. and how are we? how are we looking? >> we're looking pretty good right now. we're just about session highs right now. we are about a point away, two points away as i can see from the from the from the board right here from record intraday highs in the s&p 500. that's where we're going to start. the large cap measures at 6098. the session high was 6099. so we're right near session highs right now. and you remember the record intraday level was 6100. so we're just about a point away from setting another record level. so we'll keep an eye on that. but about one quarter of 1%. the dow industrials up about 350 points. also again session highs as well. we are now just about a percent and a half away from their own record intraday levels for the dow industrials. we'll keep an eye on that. and the tech heavy nasdaq composite showing some tech under

performance today at 19,956. it's only off about one quarter of 1% but it's still down 53 points. we'll keep an eye on what's happening with the overall spectrum for the major indices. one particular move that we are seeing more thematically speaking develop is the heat, and some of the energy behind nuclear stocks, specifically names like constellation energy and vistra, with some of the larger utility scale players that have nuclear operations up 4% and 3.5%, respectively. nuscale power oklo on some of the smaller companies that have nuclear technology as part of their portfolio. these names have seen a huge surge given the stargate announcement, and all of the other power that's going to be needed to power ai, data centers and everything else. so keep an eye on that trade. i can't help but think about james spader and kurt russell every time i say stargate. but anyway, the last one we're going to look at here is electronic arts, big video game publisher. it's down about 16.5 to 17% after its forward bookings guidance. a measure for its future business came in

short of expectations, due in large part to underperformance in its soccer franchise. those soccer games, fifa and everything else. so keep an eye on electronic arts down about 16.5%. i'll send things back over to you, kel. >> all right, don, thanks very much. let's start with the president's remarks out at davos. well, he wasn't at davos. he zoomed in. but his criticism of bank of america in particular is making waves. >> by the way. speaking of you. and you've done a fantastic job. but i hope you start opening your bank to conservatives because many conservatives complain that the banks are not allowing them to do business within the bank. and that included a place called bank of america. this conservative, they don't take conservative business. and i don't know if the regulators mandated that because of biden or what, but you and jamie and everybody, i hope you're going to open your banks to conservatives because what you're doing is wrong. >> and, jamie, there being a reference to jp morgan and ceo jamie dimon. cnbc senior economics reporter steve liesman standing by with more. our

senior banking and finance reporter, leslie picker, is here as well. leslie, let's just pick up on the reverberations this is causing thus far. >> yeah, there are definitely some reverberations. this is an issue that kind of came to the forefront back in april of 2024. you had a group of 15 attorneys general who sent a letter to bank of america basically saying and alleging discriminatory practices against certain clients who were dropped due to political and religious affiliations. if we want to take a step back here. banks do drop customers. oftentimes those customers are not given a reason. so you had these 15 attorneys general kind of write this letter citing some specific examples and saying that was not in accordance with the law, which prohibits discrimination for banks and doing businesses and issuing and offering credit to a variety of customers. now, bank of america at the time responded to those allegations and said specifically that the customers that they had cited,

some religious customers, were dropped for reasons that didn't have anything to do with their religious affiliation nor their political affiliation, but rather doing business with a sanctioned country. and then also one where they were doing debt collection services, which goes against the bank's practices as well. and so basically, the overarching issue, according to the banking side of things, is that we drop customers. we don't tend to give those a reason, but those reasons typically are in accordance with the law and have nothing to do with the religious affiliation or their political affiliation. >> steve. >> the president also made a variety of other comments, especially his comment about lowering interest rates. maybe you want to pick up on that. >> yeah, i want to just go back to one thing that the president said. i don't think there's any evidence that the banks are discriminating broadly against conservative groups. what leslie said, i've been looking into this as well. it looks like there are specific reasons. in each case, you understand that

there are the movement in the banking sector. regulation has been about knowing your customers. so banks, much more than they have been in the past, are monitoring their customers and what they do. as leslie said, one of these organizations was involved in helping uganda and children and working against sex trafficking, but they also had a debt collection agency. and bank of america said, hey, we don't service overseas debt collection agencies. another did business in cuba. there's a broader question, though, that i think is worth talking about. i'll get to the interest rates in a second. then. that is, some of these companies look like they or some of these organizations did some things that worked against the bank's dei policies. that might be an area where there is some issue as to whether or not the banks. there are allegations they didn't do business with contractors who were doing private prisons. there are some other allegations in the letters from attorney generals. it's different when it comes up against well, we don't do that

kind of business. and that's certainly something the banks do. another thing when it's a dei policy, and that may be why jp morgan is asking for more clarity from regulators on interest rates. kelly. >> well. >> steve. >> i think we could have expected this. >> yeah. before we delve into that, because i just want to we'll sort of stick with this for another second. then. leslie, i think you have some reactions from the companies specifically named here, which would be b of a and jp morgan. and more broadly, it does tell you that probably the regulatory agencies. look, a lot of the big banks have already left the climate coalition. they don't want to be open to future litigation about whether they didn't lend, for instance, to fossil fuel companies. if trump's comments indicate that his administration could now be looking back through things that have happened and saying, is there a pattern here, then if nothing else, this is a salvo that they're going to have to go back and make sure that they're on top of. >> well, and, you know, it goes without saying banking. the banking system is among the most regulated of industries in the entire country. and so in this letter, in response, the bank of america letter, in response to

those ags, they say that the account closure processes established at bank of america, reviewed by regulators and through our own oversight activities to ensure adherence with the law and our own policies and procedures. so you can bet that they do tend to go back and forth with the regulators, make sure that they are on top of the law and, you know, the extent to the minutia of exactly how much the regulators know about the specifics of whose account was closed and why, that that is an open question. but we do have, as you mentioned, kelly, the comments from these two firms who were cited by president trump. bank of america said, quote, we serve more than 70 million clients. we welcome conservatives and have no political litmus test. and then jp morgan also responded to president trump's claims, saying, quote, we have never and would never close an account for political reasons. full stop. we followed the law and guidance from our regulators and have long said there are problems with the current framework we must address. they go on to say we welcome the opportunity to work with the administration and

congress on ways to remove regulatory ambiguity while maintaining our country's ability to address financial crimes. so perhaps it is that ambiguity that they're citing here. that's in line with some of the things that steve was pointing out as well with, with regard to some of the esg related practices. >> yeah, maybe it'll just be a tempest in a teapot for a day. or maybe it could actually now be the beginning of more to come on this issue, steve, because it is a biggie as well. what what exactly did the president say about rates? >> well, he demanded lower interest rates. and i think the story is that the president had been in office for three days and had not said anything about the federal reserve. so here he is. he's doing what i think he did fairly prominently and often in his first term, and that is making comments about interest rates and demanding lower interest rates. i think the federal reserve, i think the people who watch the fed, i think markets have probably gotten inured to this commentary

from the president. and i think it's something the fed, you know, takes into account. well, the president wants lower interest rates and whatever his reasons may be, that he thinks interest rates ought to be lower right now, but i don't think it affects them in terms of their making a policy. what it would be interesting would be in that demand. is there any actual action from the president regarding how he might get to lower interest rates in terms of messing or having any effect on the makeup or the structure of the federal reserve? and we don't hear that at the at this point. as you know, kelly, the last things we heard from the president about the fed was let powell finish. he expects powell to finish out his term. both he and the treasury secretary or the treasury secretary nominee have said that. so i don't think it's a big impact. it's a different regime from the biden administration. in terms of talking about the fed. we should expect this. but the question is whether or not there's any actual action behind the demand. >> it sets up a fight, though, because the market is not on board, certainly with immediate

rate cuts. i'm not saying they wouldn't like it, but they are not priced for that right now. nowhere near. and even ken rogoff said it's as much we might as well get a hike before we get a cut. we'll leave it there for now. thank you both. really appreciate it. steve liesman leslie picker, on those comments from the president this morning and another day, another news alert on open i. kate rooney is here with the details. kate, what are they doing now? >> hi, kelly. yeah, never a dull moment with open ai. they are rolling out a highly anticipated agent tool. so anthropic and google already have similar products that are up and running. so openai is playing catch up here. it's called an ai agent. it's called operator. it's the name of the openai version. you can think of this as a way to use ai basically on autopilot. so it's going to let users automate things that are typically handled through a web browser. so think of tasks like planning a trip for you. and then during a demo right now they're actually making a dinner reservation on opendoor. they're ordering groceries on instacart. in the case of developers, it can also help write code. and

the company says, quote, this is capable of doing work for you independently. you give it a task and it will execute it. the announcement does fit into this larger picture of ai becoming a lot more useful, and then living up to all of the hype around it. the promise is that ai is going to be able to automate more of our lives, help with productivity, and go beyond just the questions and the answers you're typically going to get with chatbots and chatgpt. sam altman, as i said, hosting that live stream as we speak. we'll bring you any updates. kelly. >> is this significant? kate. because there's this war over when we declare artificial general intelligence. and as it relates to the partnership between openai and microsoft and even things like this that seem small, once an agent can go and fully complete a task for you. i mean, i think that the idea is that could qualify as something like agi. >> i think you're right, kelly. and it's sort of lifting the curtain on what agi might eventually look like. it's widely expected. as i mentioned, others have gone in this direction. and openai was sort of the laggard here. they did

not have one of these agents. but i also think it fits into the productivity picture. when we talk about ai and all of the potential upside, that is one of the big things and something the fed might even eventually look at if people become more productive, if us workers become more productive, this is one way they're going to do it. if you can say, all right, i don't need to use any work time to order groceries or make that dinner reservation. or if you're writing code that's going to help, i would think, with time and productivity. so i think that's another big picture macro aspect of this as well, but sort of an incremental move towards that agi benchmark. >> i have never ordered groceries from the just for the record, kate, i would never, never dream. >> of doing that. we would never do that. never. hypothetically. >> no, no. just hypothetically. exactly. kate. thank you, kate rooney. it has been a big news week on the ai front. and while we've seen huge moves in some of the chip and tech stocks after the announcement of supercomputer stargate, my next guest is expecting major moves in energy stocks and in nuclear, especially writing in a note today, we're at the beginnings of a supercycle reminiscent of

the communications revolution decades ago. joining me now is george generic, a senior analyst at canaccord who covers the sustainable energy and mobility stocks. and george, actually, i was looking at some of these names as this announcement came and uranium wasn't that move, you know, some of the biggest uranium names? okay. they didn't move a lot, but anglo obviously has been popping. and today we're getting a lot more reaction. so there's almost like a delayed reaction to this announcement. >> yeah. >> so like. >> you said kelly and thanks. >> for having. >> me on. we are of the strong opinion that what we're witnessing right now is a transformative. >> era in. energy investment that looks and feels a lot like. >> the communications revolution several. >> decades ago. >> that period. >> of. >> time involved significant infrastructure investment. >> and gave birth to companies. >> like google, apple, amazon, and. >> now we need a boatload. >> of capital expenditure. >> to enable artificial. >> intelligence and the. >> sustainability revolutions. you know, that. involves very likely a lot of.

>> nuclear power that you alluded to earlier, because it's clean. and it's baseload. so we're going to have companies. >> like nuscale. >> with their small. >> modular reactors and oklo. >> and also. >> a lot of clean energy investment as. >> well, help harden our grid. and what's really. >> fascinating. >> if you look at the last 20 years, plus our electricity consumption in the united states has grown 0.5% on average. and that's. >> about to. >> inflect higher. we actually saw the beginnings of that in 2024, and our grid is. >> not ready. >> for it. >> so let me just kind of go back to nuscale. that was our mystery chart ticker smr. you say they do small scale reactors. how many projects do they actually have up and running right now? >> well. >> right now they have one in romania that they're working on and one in africa. but we're waiting for what the market is really waiting for is a groundbreaking deal with a data center company, and we think that probably happens this year in 2025. >> so when that announcement comes that tells you that this

technology can be deployed, hopefully in short order to actually support, for instance, something like stargate. but is that a slam dunk? i mean, is it is it are you are you confident that's the way we're going to go? >> well. >> we're very confident that nuclear is the way we're going to go, and that's going to involve both conventional reactors, the very big ones, and some of the new small modular reactors. why those are important is because the traditional reactors need tens of billions of dollars to put in place. and these small modular reactors need, you know, several billion dollars. so that's a lot of money. and to the extent you can use these smaller ones, it'll help enable some of the data centers that we're trying to put in the ground. >> yeah. and a lot of people are in nuscale that stock is up, you know, 1,000% over the past year. so i sometimes just like to say, okay, let's look at what they're actually what's actually been announced and not just speculated upon. that aside, i see that south carolina is trying to bring a big nuclear project back online and so forth, but they already spent $9 billion on it, and it just feels

like a lot of these projects, while we all wish that they could kind of be ready to stand by and provide more power are going to take a long, long time. >> it's going to take a long, long time to put in place. that's definitely accurate. and what's actually fascinating to, to take a tangential view, is that ai is very energy consuming. and so even your smartphone is going to need a lot more energy. so we're looking at a lot of companies that are innovating on the battery side. we cover a small company called innovex that has next generation batteries. so watch out for stuff that's happening on your smartphone and on the grid. we need energy everywhere and we need it fast. so nuclear is going to play a role. sustainable energy is going to play a role. even a ge venmo, a company we don't cover, talked about an acceleration and the demand for gas turbines. so it's an all hands on deck situation. >> for nova has been a great stock. that was supposed to be a wind play. and this this avenue has worked out quite nicely for them. what would you say finally? i mean do you for a commodity like uranium? this was

a big play kind of over the years, people like to get in it for a pop. is that is that becoming passé now? >> look, we think that the tailwinds for nuclear power are very long and so and very strong. so things like uranium, we cover a couple of companies that do isotopic enrichment that are very interesting. and look, you know, right now our country depends on enriched uranium from places like russia. and that's not sustainable. so look for ways to invest in companies that are enriching isotopes in the united states and in friendly countries. >> all right george, appreciate it today. thank you for joining us. thank you george henriques with canaccord genuity. speaking of stargate, let's take a look at shares of oracle on pace for their best week since december of 2021. they're up nearly 15%, all going back to their partnership and rolling out this massive ai supercomputer known as stargate. and now to inflation. while there has been much optimism out at davos about president trump's pro-growth policies, blackrock ceo larry

fink warns there may be a downside. >> i'm cautiously optimistic. that being said, i could. i have scenarios where it could be pretty bad. i believe if we could unlock all this private capital, we're going to have enormous growth. at the same time, some of this is going to create new inflationary pressures. and, and, and i do believe that's probably the risk that is not factored into the markets. i think the bond market is going to tell us where we're going. >> and my next guest has been warning about higher yields for some time. and today, look, we're seeing the ten year hit another recent high about 464 or so. he says five and a half could still be on the table. and the s&p by the way shrugging this off. it just hit a new all time high. as we're sitting here speaking, brian weinstein is head of global markets at morgan stanley investment management. jeff kilburg is ceo of jm financial and a cnbc contributor. welcome to you both, brian. i imagine you share fink's concerns here. >> yeah, i mean, i.

>> think you're going to have pro-growth. >> policies at a time that. >> you have. >> a fed. >> that wants. >> to ease. and we're not really. >> priced for a lot of inflation. we had a lot of talk of it. we got tired of tired of. >> talking about it after the last. >> two years. but the inflation. markets are not pricing anything out of the ordinary. >> and i think we saw when we got towards 480. >> on the ten year note a week or so ago. >> the stock market started to say, well, wait. >> a second, right. the valuations. of bonds matter. so that's my window, right? >> i think 480. >> is the beginning of that buying window. it goes to five and a quarter. five and a half is the overshoot where i think you'll get real pain. >> and part of the. >> story. >> is growth. i think we've covered that. i think the. >> the next part of the. >> story is growth at this point with the fed easing is inflationary. >> so when the president says he wants, you know, lower rates immediately, what would you say the odds are from the federal reserve's point of view, that we get lower rates in the next 90 days? >> i think they're pretty low in the next 90 days. >> zero. >> i don't know if it was zero. >> i'd bet on them easing. >> again, because i think. >> this fed. not because of the

president, but because. >> of listen, there is there are weak. >> spots in the economy. right. and these borrowing costs, it takes a long time and maybe longer than anyone imagined. but high borrowing costs do matter. and so i think the fed, given what they know about weakness in lower end consumer, would love an excuse to ease. that said, they just eased 100 basis points into strong data, into new growth policies, into potential tariffs, which we can argue about the real math behind it, but it's going to make prices look higher. and that's bad for inflation psychology. so i don't think they're going to ease a lot unless we get some outlier data. but they certainly would like an opportunity to ease some more. >> jeff, why is the stock market shrugging all of this off? >> i think we've gotten so excited, kelly, about the pro growth, the deregulation. and we're kind of in the. >> honeymoon with president. >> trump right now, seeing policy. >> after. >> policy. >> executive order. >> after executive order. but i think brian's absolutely. >> right when. >> he looks at the bond market leadership. and i'm. >> pretty sure. >> when. >> today president trump said he wants to immediately see interest rates go lower, i'm pretty sure fed chairman powell said the same thing back in september when he kicked off with the bazooka 50 basis point rate cut like to brian's point. >> it's been. >> 100 basis points. >> since then. and what does the ten. >> year. >> done kelly. >> it's gone up. >> 120 basis points. so i think the 5% target that trajectory

is. >> going to happen. >> because there are inflationary concerns. >> we have not seen the tariffs the teeth of the tariffs really be set in place. but he did tell the eu and not the nicest words today. >> that. >> he's coming for him. >> so kind of staying more tactical. jeff what are you learning as we move through earnings season that tells you whether or not, you know, the markets will sort of have the right underpinning to continue to be able to move through all of these headlines. >> well, we still get twinkle eyes when we say the words ai. artificial intelligence continues to be the tip of the spear. >> we've heard it all over in davos. >> but next week, despite the fact it's not the nfl super bowl, which is actually sunday, february 9th, next week is the super bowl for earnings. >> if you. >> look at all the tech, the mag seven minus nvidia are all reporting next week. so i think the stock market at again new all time highs are hinging upon not just the revenue the expectation, but it's the forward guidance. we're seeing such capital expenditure on everything. i we go back to microsoft, which is for some reason been the only company in the mag seven that's been scrutinized over the last 18

months. what is the actual revenue from this capital expenditure on ai? so next week is just a wild week for investors. i think you have to buck up the chin strap. kelly. >> yeah. well, you know, we get the big the biggest of the big who kind of comprise so much so much of the market cap. so brian i guess on that point there's not much that the bond market is going to take from earnings season unless it all of a sudden comes out and pulls the rug out from underneath the macro narrative. >> yeah, i. >> guess that's a risk obviously if the stock market really corrects. but i don't think that's the story for right now. right. the story is people are continuing to buy every dip. we've got the december swoon from maybe from interest rates, maybe just from profit taking. but you see the buying in corporate bonds, you see it in high yield. you see it more clearly in equities. so i think you're going to continue to make new tights and listen to higher yields correctly. brings out more buyers. and so i think the bond market is going to be okay for a little while longer. again watch that five five and a quarter level for where you start to really get some fear. i think. >> i love how you say watch that level. if we got to that level, everybody would be. everyone would. if we went over five again. >> if we got vix is at 30. in that scenario, if brian's right

the vix is at 30. and what's wild is to see all the correlation. if you think about the risk on correlation there's $3 trillion in structured products. and if we do see the ten year go to 5% institutional investors have to reposition their exposure. that's going to overextend that pendulum to five and a quarter maybe five and a half. but that's where equities potentially have vulnerability because of the overconcentration. so i think 5% like there's some there's some fierce situations and tremors going through the market at 5% in a ten year. >> what settles that down, jeff? i mean, what can get us back below 4.5%, four and a quarter without a you know, i mean, i look at the jobless claims this morning, they're still very good, don't get me wrong, but they're you know, they're creeping a little bit higher. >> yeah. i think if we feel comfortable getting through earnings season growth, profits, if we're comfortable with the corporate america that we're we're not going to get through a 5% interest rate move by any means unscathed. but i think we'll overcome. it'll be a 10%, you know, remember kelly, every 1.84 years we see a 10%

pullback. so i think it'll be healthy because right now it seems everything is very over concentrated. specifically, when you look at the top ten holdings, the s&p 500, it's wildly out of whack. historically speaking. >> every 1.84 years. and how long has it been? how long has it been since the last one? >> since 22. so we're due we're due for a little bit of a pullback, which i actually think would be healthy to really get some breath into the marketplace versus just the leadership in the mag seven. >> all right. thanks, jeff kilburg brian weinstein, appreciate your time today. elsewhere, look at shares of alaska airlines up 5% on strong quarterly results. they're actually at their highest level in nearly four years, more than doubling off their low from last august. and the strength is being seen across the industry. four of the six biggest airlines have reported so far, and all of them beat top and bottom line estimates. for more, let's bring in alaska ceo ben minicucci, along with our very own phil lebeau. >> phil kelly, thank you very much, ben. you heard the setup from kelly there. in terms of what you guys reported yesterday, your guidance for the first quarter, is this an

extension of what we saw last year in terms of demand, or is there something different driving what you're seeing with your customers right now? >> well good morning phil. good morning kelly. yeah i think it is a continuation of demand we saw through the fourth quarter and into this year. phil, i think what's a little different for us at alaska airlines is our acquisition of hawaiian airlines in september. and what we're seeing is a lot of tailwinds as we combine both networks and we're bringing everything together. the hawaiian business is improving, you know, beyond our expectations, you know, so, you know, hawaiian was losing money in 2024. they made money in december. they're going to make money from q2 through q4. so we're very confident that this trajectory will continue for us. and as you see, with our guidance in q1 and for full year. >> what, you know, a big part of your business is separate from hawaiian and the growth that you're seeing there. it's the tech industry up and down the west coast has been for a long

time. we see all of these tech companies making massive investments in terms of growing their business, whether it's through ai or other evolving technologies. are you noticing that filter through in terms of your bookings with the tech industry? >> we have. >> phil on, you know, our managed corporate travel demand. in 24, we saw 10% increase year over year. and we're seeing that now flow through into q1. so this is particularly in the technology and the professional services sector. so corporate travel demand is coming back to where it was in 2019. and so we're pretty excited about that. that's all upside for us being on the west coast. so it's really good for our business. >> speaking of the west coast, you have a lot of business into southern california. any impact from the fires down there in terms of maybe some customers saying we're going to put off some bookings. >> you know. yeah. the fires in la are tragic. i know i had to fly. my son lives in l.a, i have to fly him up for several days. and in terms of the impact on

booking, it's been minimal for us. so far it hasn't been a huge impact. but we're watching it closely. you know, we want to be part of the solution in the recovery there. la is one of our big hubs and so we really want to help, but we're staying close to it. phil. >> ben, if i could just. >> hop in. ben. one other question. oh go ahead kelly. >> phil i just have a quick one actually, which kind of goes back to what we were saying, that all the airlines have suddenly been doing a lot better. she, sheila diallo, made a comment that this might be because fares are going up this year pretty much across the board. there's no real check on that, no reason for them not to. should consumers expect to see, you know, high end climbing airfares? >> well. >> kelly fares have gone up. and, you know, one of the primary reasons fares have gone up, i think it's maybe two things. one, on the cost side, you know, since the pandemic, labor costs have gone up significantly. airport costs have been hugely up across the entire country. and then the second component of that, what we're seeing is people moving in

more into the premium product. so our premium revenues, for example, are up 10% year over year. our first class product is up significantly year over year. so the combination of cost being up and people buying up into the into the little more expensive, you know, premium seats, i think it's driving some of that fare increase. >> ben, you've had to modify your order book given the issues at boeing with the 737. max talked about that a lot last year. and obviously that's going to filter into 2025 as well. you're there in seattle. we're hearing mixed reports from airline ceos. some like scott kirby, saying, look, boeing has turned the corner. others who i've talked to have said they haven't turned the corner. it's one step forward, two steps back. what's your take on boeing right now? >> well, you're absolutely right. i'm sitting here in seattle, five miles away from where the max gets built. so we have a lot of visibility. where there a lot. we're seeing what's going on. and here's what i'll say. first, we have people on the production floor overseeing

the production. and they're seeing an improvement in quality. second, we have audit teams going in every quarter to validate that all these quality initiatives are taking place. and we're seeing sequential improvement in quality. but what i'll say is what we're going to be looking for is as the production rate ramps up to where they are to where they want to be, we're going to be making sure that quality stays at the level and not only stays at the level, but actually reaches a higher level, a higher bar, which is what we're expecting at alaska. so phil, we're going to stay close. they are improving, but there's still a lot of work ahead. >> last question for you ben. you completed the last two successful airline mergers in this country. the trump administration like trump administration number one, is clearly going to be more friendly to the idea of mergers and acquisitions. do you think we'll see more within the industry? >> well, it's tough to say. phil. what? here's what i know. i know that i got to keep my whole team focused on on this

integration. it's all hands on deck. and we got we got a great plan. like like you said, we've done this before. we've done this with virgin america. so we have an experienced team. most of my team that's done. virgin america is here. so i'm quite confident we're going to execute this thing well. and there's so much potential. we're going to start international service here out of seattle to build international gateway. so we've got a lot going on. but but i think the environment is friendly. >> if i could just ask a closing question ben, i'm curious. and this is one that really we could ask of any ceo. but you're on the phone with president trump right now. let's say he's taking office, has a proactive administration. if there was one thing you could ask him to change right now, what would it be? >> well, you know, our focus hasn't changed, kelly from the previous administration. our focus is really, you know, how do we how do we in america have the best, safest, most efficient skies in the world? and i think our focus is going to be on air traffic control. how do we staff up to the controllers we need,

you know, how do we invest in the infrastructure and technology? how do we leverage ai in terms of how we manage the skies? i think these are all huge opportunities to really put america at the forefront of air traffic control, and that's going to be a focus for alaska. >> to make air travel great again. make it. matt. >> got something like that. >> sounds good. yeah, yeah. >> sounds good to me. ben and phil really appreciate it. thank you both for joining us today. on a strong day for the airline space. and speaking of which, take a look at shares of american. now we mentioned that most of the companies have beaten rates. well they're down 8% and going the other way having the worst day since may. in fact, after they forecasted a loss of 20 to $0.40 a share in the first quarter, analysts were expecting just a four cent loss. the airline says rising costs are also pressuring margins. here's what the ceo told phil on squawk box this morning. >> we were able to get labor contracts done with all of our major work groups. that is hitting in the first quarter, probably, you know, analysts

didn't take that into account. but as you take a look out into the future, this is going to be the first time in my career where i'm not going to be at the negotiating table. our team won't be at the negotiating table for three years. that brings labor cost certainty. >> and coming up, spruce point's ben axler. his latest short is ticker rode. shares are down 10% on that report. worst day in a couple of years. he'll be here to make his case, as the short selling business itself has been in decline. >> some people thrive on the edge. we are improving lives by bringing intelligence to the edge. lays edge ai technology, processing. critical data with blazing speed, bringing the most sophisticated ai intelligence to computation at the edge. distinctive efficiency, limitless innovation. make smart decisions with precision and decisions with precision and agility. now ♪♪

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888314 3835. >> i'm brian, stop with your cnbc. >> news update. >> perdue farm on the family that built it. have agreed to pay 7.4 billion and a bankruptcy settlement over opioid lawsuits. more than $1 billion from a previous deal supreme court rejected last year. the sackler family would also have to give up. ownership of purdue. purdue and the sacklers are at the center of lawsuits that allege that the company fueled a deadly addiction crisis in america with deceptive marketing. >> of oxycontin. >> president trump just suffered his first legal defeat over an executive. >> order to try to end birthright. >> citizenship in america, calling it, quote, blatantly unconstitutional. a federal judge in seattle blocked it from taking effect for. 14 days while other litigation plays out. case is the. first of several already filed challenging the order, set to go into effect. >> next month, and paypal will.

>> pay $2 million fine for cybersecurity failures that. resulted in customers social security numbers being exposed. the new york state department of financial services said today that paypal should have. required customers use. additional controls. >> to prevent access. >> paypal now requires to call multi-factor authentication on all us accounts. basically. >> you get. >> a text number on your cell phone coming up on power lunch, we're going to do a deep dive into president trump's speech. we talked about the fed. we talk about oil. we talk about government spending. i know you are. we'll do a lot more of that as well. see you soon. >> looking forward to it, brian. thanks. first we were reeling from the success of china's ai upstart deep seek. now, tiktok's parent company, bytedance has just entered the ai race in a big way. escalating competition between the us and china. deirdre bosa has more in today's tech check. >> deirdre kelly i feel a little bit like a broken record this week, but the momentum from chinese ai players has been unrelenting. bytedance, as you mentioned, now claims that its model duo bo 1.5 pro outperforms

openai's latest reasoning model products. and just days before you mentioned this, an open source model out of chinese ai lab deep seek was released that rivals openai's one on several third party performance benchmarks. but those two have something else besides performance in common that makes it starkly different than our american ones. and that is cost. they were many times cheaper to build and are many times cheaper to access, so developers are really interested in these models. big american players too at davos are taking note. >> we should take. >> the development out of china very, very seriously. >> what we found is that deep seek, which is the leading chinese ai lab, their model is actually the top performing or roughly on par with the best american models. >> if the united states. >> can't lead in this technology, we're going to be in. >> a very. >> bad place geopolitically. >> each of them extremely influential ceos working in ai. they mentioned deep seek by

name. and so we've been digging into this lab that's very mysterious. and also the breakthroughs that has everyone talking will be publishing our long form tech check take tomorrow morning diving into what it all means. so don't miss that, kelly. >> so going back to what tiktok is up to, what's most significant about it, do you think the cost. >> i mean, these models coming out of china are just built at a fraction of the price. when you think about open ai, that's spending $5 billion a year burning through billions of dollars a year. these models, the deep seek one, for example, they say they built it for less than $6 million. bytedance as well, you know, it shows that it was built and you can access it at much, much lower prices. so this really turns on sort of this truth that we have thought about generative ai for the last few years, and that you need hundreds of millions of dollars to develop bigger and better models. what the chinese labs and companies are doing is they're going straight to the frontier. they're building with sort of infrastructure and

outputs that are already out there, built in many cases by american companies and startups. and they're improving on it. they're innovating on it and producing big producing models that are just as good, in some cases at a fraction of the cost. >> so maybe we don't need to buy the nuclear stocks after all. maybe we don't need a million gpus down in in abilene. >> good question. >> interesting. >> and it does raise a lot of questions even about project stargate. right. what kind of infrastructure are we building here? is it for pre-training like we've had for the last two years, or is it for reasoning and inference, which is a different cost proposition? >> exactly. and you almost wonder if that's why microsoft is evolving its partnership with openai as well as these changes happen. deirdre thanks deirdre bosa always appreciate it. coming up construction partners having its worst day in more than two years. after a new report from spruce point capital management. they're warning the company is under greater pressure than it appears. founder ben axler joins us next in studio to make his case.

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greater pressure than is widely understood, masked by poor transparency and aggressive financial presentation methods. the shares are down about 10% on this report. the company has responded, saying in part it is clear that the short seller made numerous false statements and is deliberately attempting to mislead the market. for more, let's bring him in. he's been acslaw the founder and ceo of spruce point capital. matt, isn't this a fun business to be in? ben. welcome. >> it's a difficult business, right? >> and it's one that you have to really be passionate about to survive. right. and you also have to really dig deeper and get an edge. right. there's a lot of information out there. and, you know, with our current report on construction partners, we got some freedom of information requests, getting contracts to look to see, you know, at the underlying health of the company. >> before we dig into that, there was big news in the space the last couple of weeks. hindenburg research is shutting down. that was a very widely followed firm. and a lot of people changed, jim chanos, noted. short seller and others have made the point. this is a very difficult thing to do in this market. the market has been on a tear. it's very difficult to kind of see this work pay off. the regulators are all over

it. a lot of times. look at what's happened with some of these firms. so i am curious about your thoughts in this kind of dwindling industry. >> yeah. well, it's a difficult business. you have to be passionate about it and you have to take a long term view. i mean, we're actually optimistic that the tide is turning a little bit under the trump administration a number of years ago was a great fertile opportunity for shorting. we did very well. why? because mr. trump wants to roll back regulation, right. he wants to stimulate business. and so there's an old saying when the cat's away, the mice shall play. and so short sellers, you know, we fill that regulatory void by calling out aggressive business practices and stocks that we think are overvalued. >> so just to make sure i follow because they had a lighter regulatory touch, they were basically more companies proliferating who might not have been, you know, how do i say it then, who might not have been completely above board, giving researchers like yourself a better set from which to pick from? i mean, i can see that as a great way of the market working, but i can also see that as a regulatory failure. >> yeah. well, i mean, look, you know, regulators have to do

their job, but it's very clear mr. trump's been very clear that he wanted, you know, gensler out, that he wants to stimulate business, that he wants to roll back the tide a little bit. and so that's why we're you know, we're optimistic. we're off to a good start. we've had two short reports this year, one on proceptive biorobotics and then today on construction partners. >> erie as well, was another one i think we discussed. and those shares have been struggling somewhat. okay. so on the issue of construction partners ticker, what do they do? >> okay. so they're a vertically integrated roll up of asphalt asphalt production and paving of roads. and you know, our issue here is that we're the real value is in the aggregates. right. and the company's not transparent about how much proven and probable reserves they have, how much production they have that that's a that's a good business. you want to be in the aggregate business paving roads a little bit more difficult. and a lot of their business is tied to state department of transportation's. they've got a big uplift in florida. you know, we send some foia freedom of information requests to florida. and we see the contract awards are down 22%. so they've pivoted through a big, big bet in acquisition in texas. we have some concerns

with that business and the operations there. overall, we think the value, the business is valued as if it's the best construction aggregate business, when in fact you're really buying a lower margin paving company. >> is there a smoking gun here, or is this an area where you think that it's an opportunity to short, because maybe it's just not going to live up to what maybe the bulls think is really possible here? >> yeah, i think it's part and parcel of what we're seeing in the market particularly, you know, we've had a big move up in the small caps. this is i guess small cap five, $6 billion market cap very richly valued. again, misvalued relative to what we think they really do. we think it underperforms the market. you know, we're long the industrial sector you know as a hedge against it. and so it's a great relative value short. >> so that's part of your strategy. is it like let's say that there's a name in particular in this sector that you're short, you're actually long. the rest of it almost as like a pair trade. >> that's right. i mean we want to produce short alpha right. so we think that this company is overvalued. we think it's got a lot of governance issues, poor transparency. they levered up the balance sheet to buy this underperforming asset in texas.

and so we just think the valuation doesn't make sense. it's the highest valued company relative to its peers. so we would expect it to underperform. >> have you spoken with management. and do you typically engage with the company while you're working on these reports? >> no. all of our research is based on public information. so we review all the transcripts that are put out there, all the sec filings. we do, the freedom of information request, we talk to people in the industry. so, you know, we think we have a good understanding of the business. the company's response is pretty much boilerplate to what we get, that we misunderstand it. you know, we'll let the market decide. and so far, the market seems to be agreeing with us. >> finally, let me turn back to something else that the founder of hindenburg said when he was shutting shutting up shop and he said he might pivot to an open source model. i don't know exactly what that means, but the idea of, like you said, a lot of the stuff that you're doing is publicly traded. maybe just allowing people to be in and be part of that process, maybe adding to the work in a collaborative way. what do you think about that idea? >> yeah, i don't really understand what he means by that. i mean, in a sense, all of our research, we put it out. it

is open source. you can see exactly how we get to our conclusion. you can see our research methods, what we do. so i'm not i don't quite understand, you know, where he's going with that. but i think i think it's good. i think we definitely need more short sellers. there's been fewer for various reasons burnout, difficult business. but we certainly need more. and i think it aids the market and improves market efficiency. >> one final question because you did mention they've been very active, the firm that you're currently put out, the short report on, which is road in texas. and i think to myself, well, there's probably worse times to be long a construction firm in texas, aren't we building out, you know, this massive stargate infrastructure project. and i'm curious if the announcement just a few days ago, would it all change your approach? >> not really. i mean, what's great is because over 60% of this company's business is tied to state department contracts. we can look at open tenders. and what we're seeing is they're losing out. they're being outbid by other competitors. so we can get kind of a real time view as to competitive, competitive situation of this business. and so no, that doesn't really change our our thinking about being short this company. >> all right. and has said the company denies it says you must

understand. you misunderstand. i'm sure you hear that a lot, ben, thanks for joining us. talk about that in the business broadly. appreciate it today, ben axler, spruce point capital management coming up, shares of netflix are up 2% today and 14% since that blowout earnings report. and their amelia perez series is this year's most oscar nominated film, snagging 13 rosenblat's. barton crockett sees more than 50% upside for the shares. from here, 50% will discuss his bull case and what discuss his bull case and what this all means (traffic noises) (♪♪) the road to opportunity. is often the road overlooked. (♪♪) at enterprise mobility, we guide companies to unique solutions, from our team of mobility experts. because we believe the more ways we all have to move forward. the further we'll all go.

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share. they now have 300 million global subscribers 302. actually we learned in their latest earnings report that's in the fourth quarter. my next guest, though, thinks these shares are going to climb much higher from here. he just raised his price target to nearly $1,500 a share. and that's if they don't split. joining me now is barton crockett, senior research analyst covering internet and media stocks at rosenblatt. barton did you literally go like from 680 to 1500 here. welcome. >> yeah, yeah. >> thank you and welcome. >> yes. look we. >> we obviously. >> missed the. >> 2024 run. we have. >> been thinking. >> that there would be a page

here and kind. >> of give back. >> and that hasn't developed. >> instead what's. >> happened is that their content. >> has strengthened. >> and that became. >> apparent in the fourth quarter. >> and you. >> know, we. >> had to kind of. >> move with the data and move with. >> what's happening. >> and these guys are executing extraordinarily well. and. >> you know, while 2024. >> is behind us, we do think. >> that there's. >> a great setup. for more good things out of netflix this stock this year. >> you know, i know that people will talk about squid games and whatnot. i'm i'm honestly we're more of a sports household. so for me i just wonder how much more runway it seems like a lot of runway they could have. they've just begun dabbling with the nfl. they had the biggest quarter for subscriber growth they've ever had last quarter. and crazily enough, for a company of this size $414 billion market cap, it feels like as they build out that docket that they could just keep going and keep gaining share. >> yes. >> you know that's i. >> think especially really compelling what they're doing in sports. they're they seem to be

doing sports better than anyone else in the game. and they've just started, you know, they were able to put on, you know, wwe raw. >> on monday. >> night and brag about twice the audience of what that had on tv. you know their nfl christmas day game audience in the us was not that really better than on tv domestically, but globally it was. and they did this tyson paul spectacle and i call it a spectacle. you know, if you can get more people to stream a sporting event and that's the event, you know, the sky's the limit. you can find spectacles, i think, again, and get big audiences again. so they're going after sports as a driver of events rather than a full season. that seems smarter, it seems more profitable. their margins are growing even as they're doing it. and sports is the main kind of support for the pay tv bundle. and if they're able to encroach on that meaningfully, which it looks like they can, you know, i think there's a lot more share shift opportunity globally, not just domestically for these guys. >> i was looking at the nielsen

viewership numbers, the market share numbers for december. you'd have to take hulu, disney plus, paramount plus, peacock and max, all five of those. barton just to get more of a market share than netflix had. what are those five companies going to do? >> yeah. >> i think that it's tough. it is very tough. i think that the media sector is setting up for consolidation. you know, you see that out of warner brothers announcements of hiring advisors, with the restructuring of divisions. you see obviously comcast spinning off some networks, looking at consolidation. and you know that has to happen. they have to consolidate to have a place at the table. and even then it's not a short because netflix is running away with it. they're big. they' scaled. amazon is big and scaled and investing very successfully. google is a player in this game. you know, it seems to be an area that's being disrupted. and the legacy players have a really difficult challenge. >> and they have a lot of debt.

>> yeah, debt is not your friend. if you need to spend to stay in the game and you know, we'll have to work through that. i think particularly with warner brothers, that's driving, you know, a lot of the discussion there. i think paramount's found a billionaire friend. that will mean that that's not an issue. and i think you're not going to have much leverage on the comcast network spun out. but it's one of the factors to think about. that's not a problem for netflix. it's not a problem for amazon. it's not a problem for google. >> right. exactly. and that's what gets you to a $1,500 price tag. again, maybe they'll split before they hit that. barton. thanks. appreciate you joining us today barton crockett with rosenblatt. and that's it for us. thanks for watching the exchange. and join brian sullivan for power lunch right after this quick break. >> how's the quarter coming along, kate? >> he thinks your name is kate and hates when people. correct him. >> pretty great. >> define pretty great.

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global trade impacts on your supply chain. now is time for us to do modeling, assess legislation and understand the impact on organizations. no matter the policy shifts, ey helps business and government leaders navigate the geopolitical and economic landscape with confidence. >> and welcome. >> to power lunch, everybody. >> i am brian sullivan. >> she is kelly evans. it is a huge. >> news day with a hat trick of headlines, hitting. >> from the world economic forum and one president, donald j. trump. >> he took on the fed saying he wants lower rates and saudi arabia, he wants lower oil prices. he took on brian moynihan, saying banks don't lend to conservatives and government spending, which he says skyrocketed too much in the past four years. well, let's start with the president's comments on rates. didn't name the fed directly, but says he'll use pressure to bring rates down. >> i'llem