(grandpa) i'm the richest guy in the world. (man 1) i have time to give. (man 2) i have people i can count on. (grandma) and a million stories to share. (vo) the key to being rich is knowing what counts. >> hi and welcome to power lunch. i am kelly evans, holding down the fort in new jersey today. and brian, hello. >> i am brian sullivan, as you can see behind us. >> kelly not. >> new jersey. this is our washington, d.c. bureau and we have got a big hour kicking off right now. we're going to look at whether or not spin offs tend to work out a few big chip names getting chopped and inflation. you can feel and taste. the big

thing you all buy that is getting maybe, shall we say. you all ground up kelly. >> looking forward to it. it looks good down there. i'm excited. we got a lot on tap. let's get a quick check on the broader markets where the dow has turned negative in the past hour or so by half a percent, the s&p up eight, the nasdaq up a quarter percent. brian mentioned the chip stocks. and skyworks check this out today. losing almost a quarter of its value gets a lot of business from apple. says the business is shrinking qualcomm and cuervo down as well nvidia bucking the trend though it's up almost 3% back to around 128. we'll talk to an analyst defending that stock. and meta sounds like a broken record higher for the 14th session in a row. now it's the last down day january 16th. it's up 21% so far this year. brian. >> it has not. >> had a down. >> day under the new administration. of the guy that occupies the big white house. that's about two miles down the road. we'll get more on that in a bit, but let us begin. power lunch today with honeywell. now honeywell is a name you know.

well the stock not doing well today. it is down 5%. honeywell announcing plans to split into three separate companies. let's get more details of that spin and what exactly they're doing and why with seema mody. >> seema. >> brian, this is one of the largest industrial conglomerates now splitting into three amid growing pressure from activist investor elliott management, who managed a $5 billion stake in honeywell late last year. wall street is focused on honeywell's highest performing business, aerospace, which makes up about 40% of total sales and will become one of the largest public aerospace suppliers following ge aerospace. the success of ge, by the way, following its three way split, no doubt incentivizing companies like honeywell to use a similar playbook ge spun off last april and is up 160% since then. that's motivated more companies like gm dupont to pursue a similar strategy. and then there's fedex, intel, lennar all on deck to spin off a business in the next year. activists are expected to accelerate this spin off trend. goldman writing that the new

administration may encourage them to push the envelope and pursue bolder demands of companies they hold stock in. the data supports this trend. spin offs tend to outperform the market by 10.2% two years after completion, while parent companies underperform on average by 8%. that's according to morgan stanley, guys. >> all right, let's kick this around sema stay right there. and brian, she's looking pretty good in your chair. i don't want you to get nervous, but honeywell is following ge's model hoping for some of this spin off magic, a trend even our parent company comcast is looking for as well. and there's something to it. check out this data from wolf research. over the past ten years, spun off companies averaged 13% returns in the year after the breakup, while the parent stocks returned 11% or so on the one year average. additionally, and this is interesting, parent companies have a strong tendency of becoming potential m&a targets. let's bring in chris sinek. he's the chief investment strategist at wolfe research. and so that leaves a number of firms to keep an eye on potentially chris. but before even going down that

route, what's remarkable to me, the value of general electric today is four times greater when you add up all the spin outs than it was before they spun out. so that's, i imagine, why we could see more of this. >> yeah. hi, kelly. >> thanks for having me on. yeah. the ge one last year was just a blockbuster. and any time there's a significant transaction where the sum of the parts is greater than the whole, you start to see other companies follow our spin off basket in fact is up 79% since the beginning of 2023. it was up 33% alone last year, beating the s&p 500, which as we all know, is very tech heavy and a lot of spinoffs aren't in the tech sector. and that baskets continue to perform well up 6% year to date. so i think the spin trend is going to continue as long as the performance stays, stays strong. >> all of that said, honeywell is down 5% today. it's not getting much of a lift on this. >> yeah. it's interesting. you

know, i think in addition to announcing this news that they're splitting into three kelly, there's also guidance for 2025 which came in weaker than expected. but i think it's underperformance today does raise the question that how much of a spin off success is tied to the speed at which the deal can be done. because this split is not expected for 18 to 24 months. and rbc capital was saying that, you know, the upside could be limited until the spin is actually we have an actual date. so that's something to keep in mind as we watch shares down about 5.6. >> that's a great point, brian. >> well, i was just wondering, chris, you know, here's the thing. bankers get paid either way. >> and the reality is this. >> these companies, they merged together for. some reason. ge became ge for a reason. honeywell kind of followed ge. pharmaceutical companies have done it. hey, even some of the media companies and i'm winking have also done this. now they've decided for some reason, chris, that breaking up is the better way. what changed? what made getting together so valuable 20 years ago? and now breaking up

is more valuable? >> well, i think. >> you know, generally companies that do a lot of m&a tend to underperform, right? being bigger and growing might help management's compensation or other empire building, but often isn't great for shareholder returns. so i think these simplifying getting back into the kind of bread and butter. and then what's also happened is there's been a dispersion in valuation multiples. right. so aerospace and defense in the case of honeywell is a very much higher multiple business than process automation or the materials business. right. and yet they trade at a multiple. that's sort of probably not a blend of that. so i think the dispersion in multiples for some businesses in the markets now are being accorded, you know, high multiples and others not so much is the reason companies are doing it now. and make no mistake, a lot of these businesses have had activist pressure and activists are pressuring bigger and bigger companies today because they have bigger and bigger funds. and that's certainly is an impetus for the breakups. i'm not convinced that all these same companies would be breaking

up today without the activists in there. >> chris, it's also weird that we're at a point in which we thought we'd hear more about deal making. and again, we're hearing more about corporate breakups. >> yeah, well, you know, a lot of times these businesses have been owned forever. right. and the tax basis in the business might be very low. so it can be very tax efficient to spin a business off. generally it's structured to be tax free to shareholders. and you kind of minimize the tax consequences of those transactions. so i think that's why we're seeing more spins than outright sales or m&a. i think it's an adjacent theme to m&a. i think it's a little bit of a perhaps wimpier theme to m&a, because maybe. >> a precursor. >> or a precursor. right. exactly. like, you know, kind of dip your toes in there and then you see bigger m&a. i will also add that often spin offs become targets of m&a. we found about 20% of spins within five years end up getting acquired. so some of these spin offs that have happened over the last few years

may end up being acquisition targets themselves. >> do you also think, chris, that at some point these companies just got way too big and also a bit confusing for the retail audience? and now there's this emphasis on smaller, simplified stories that are easier to digest. and so you understand exactly what you're investing in. you take honeywell for case in point. i mean, you're investing right now in everything from acs to aerospace engines. >> yeah, i think simplification is a big thing. when an investor looks at a bigger, larger cap company, they might like one business, but then maybe a few other businesses they don't like within that conglomerate or within that, you know, other business. even lennar home builder is spinning off its land business on monday because they want to be more asset light. and investors don't like very volatile land businesses. so there's a variety of them. i think we're going to see more of these. fedex is spinning off its freight business. they announced that in december. and the freight business is a higher multiple business compared to the parcel delivery business.

and that one was one was pushed for activist pressure as well. >> is there an appetite for this in the market, chris? or is everyone just going to be focused still on the same 10 or 20 stocks? >> no, i think the. >> market's going to eventually broaden out. i think this is a this is a corner of the market where there's idiosyncratic, you know alpha that people can earn. and investing in these types of companies. you know there's obviously not like hundreds of them. right. but it's an area where i think there is value creation. and if folks, you know, want to diversify beyond the mag seven in tech, these this is an area that that you can find opportunity where there's a catalyst. right. you know, we always joke that there are a lot of value traps in the market. but these are value with catalysts usually. and the catalyst is the breakup. and can be can be a great, great stock performance. and the proof is in the pudding. these historically over the last ten years have performed very well. as we noted earlier. >> i just love thinking through the different combos. okay, so they spin off this and then they give it. but again ge has showed

it doesn't have to be for any deal making. it really can just be to unlock more value. chris, thanks for joining us cma. thanks as well. chris stanek of wolfe research and seema mody. >> thank you. >> all right folks, we are. >> just getting started. >> and coming up. it is a big name stock that is wiping out one fifth of investor value right now. well there's your name. we're going to talk more about it right after this. >> crypto watch is sponsored by crypto.com. crypto.com is america's premier crypto platform. >> nothing stands still. >> not technology. not the market, and not. >> franklin templeton. >> we've been a firm in motion for. >> over 75 years, always innovating. >> today, we're a leader in public and private markets,

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explain. >> well. >> apple's influence is really just creating a ripple effect right now across multiple. >> chip companies. >> and i say that because. >> skyworks. >> for example, that you talked about. >> supplies, components for consumer electronics. >> and is facing significant headwinds. >> and that's as apple. >> plans to reduce its component orders by 20 to 25%. >> so there's a relationship there. >> industry analysts. >> believe broadcom will. likely capture that lost iphone. >> 17 business. the apple impact. >> extends also. >> to qualcomm. >> another connection despite positive momentum. >> from samsung partnerships. >> and strong premium tier demand. >> that's what. samsung said. >> they had in china. >> or i should. >> say. >> qualcomm said they had. >> in china, qualcomm's. >> earnings suffered from. royalty challenges. huawei's refusal to. >> renew its. >> contract hit. >> particularly hard, as royalties. typically carry higher profit margins. that's why investors cared about that segment. >> and then you've got lastly arm holdings. >> their shares also struggling down almost 4%, though for different reasons. the company, which licenses chip designs to. >> major. tech firms including

apple. >> there's that connection. >> again has seen stagnant adoption of its. advanced v9 technology. >> think of it just like a. >> blueprint for building a. >> chip. >> and. penetration has remained. flat at. >> 25% for the last three consecutive quarters. >> so these. >> developments serve pretty. >> much as a sobering reminder right now. even as artificial intelligence. >> ai drives. >> all of this excitement on earnings call, and especially in the. >> semiconductor space with nvidia. >> chip makers. >> still remain vulnerable to. >> traditional demand cycles. >> and customer. concentration risk that we saw with skyworks and its relationship with apple. >> i would imagine, christina, just another lesson that we've got to know what these semiconductor companies do. and what i mean by that is we always refer to them kind of in a lump. the chip stocks, the semiconductor stocks. here's the reality. what skyworks solutions does, i think is very different than what nvidia does than what intel does. and we have ultimately you can buy an etf, but you still have to know what these companies do exactly.

>> but unfortunately with a lot of the retail investment audience, they do focus on the basket of chips. >> in the etfs. >> therefore, you're lumping these names from analog that maybe have exposure to, you know. >> the auto. >> sector to something like nvidia that has exposure to large language models across the globe. so they're two totally different worlds. yes. they are creating. >> the hardware. >> for a lot of every electronic that we operate. but the technology. needed is very different. the exposure is very different. the markets are very different. >> and so it makes. >> the job complicated too. when you're talking about it, because you've got to explain. it all to our audience and know that everything varies. and that's why you see fluctuations in different stock prices for this chip sector. >> i would say down 25% or 23% is a pretty doggone big fluctuation for skyworks today. christina, thank you very much. all right. so we just talked about nvidia. not a mistake i mean nvidia stock has been hit hard out of late as well. in fact nvidia is down 14% in just

the past month. a lot of that follows deep seads deep seeks large language model announcement. remember that. but despite the recent decline, your next guest thinks this could actually be a buying opportunity to get back into or into nvidia. joining us now to talk about it all is joe moore. he is semiconductor analyst at morgan stanley. joseph, we've now had what, a week ten days to actually absorb and try to learn about deep seek after it kind of came out of the blue and hit us, a lot of us very hard and very quickly. what have we learned and what makes you a little more optimistic about nvidia? >> yeah. >> well, look, i think it's a very impressive. >> model that was. >> created out of china. >> but the. >> space here. >> is one that. >> has a lot of innovation over the course of any given year, any given month. and i think, you know. >> we've we. >> see this as more of an evolutionary. >> gain where. >> deep seek. >> was able to. >> get a little bit more. >> out of a small. investment

than we've seen in the past. >> but our. >> checks would say. >> that investment in. >> the space remains. >> very robust. >> we're not. >> seeing people rethink. >> the. larger kind of cluster of what we call large. >> cluster of training models that people have been talking about. >> they're sort of. >> very clear evidence that that persists. >> so we still quite like. >> the stock. and i think, you know, jensen has. talked about providing a million x performance in kind of ai capability in the last decade and doing it again in the next decade. you're going to get deflation along the way. >> you're going to get. >> indications like this where, you know, people are doing things cheaper and better. and we think that's that's part of the narrative here. >> yeah. you look at that and you think, okay, well, deep seek and listen, i want to be clear to our viewers and listeners. some people think deep seek is a complete bs. i'm going to use my initials in a nice way, joseph. and that maybe they're actually using nvidia chips and it's a chatgpt. whatever. let's put aside sort of all the quote conspiracy theories over here. and just look at nvidia's valuation. it is still an expensive stock. how would you

defend that valuation number. >> yeah. well it's actually. >> not that expensive. >> of a stock on. on earnings i mean they're very profitable. so if you think about price to sales it's quite expensive. >> but we. >> see the stock trading at a low 20s multiple on next year. so the question is are those earnings numbers right. you know are we going to stay on the trajectory that. we're on? i think that we are i think in fact we'll accelerate in the back half of the year. and you've actually seen some of the other ai alternatives companies that provide custom solutions into ai, such as broadcom and marvell, now trading at a premium to where nvidia is trading. >> so it's. >> my view that as we get fully into this blackwell cycle, we'll get that earnings momentum back quite a bit stronger in the back half of the year. and i and i don't think it will prove to be that expensive. but you know you guys talked about the perils of semiconductors early on. i'm definitely aware of that. you know and when you have a gold rush like this things can slow down. the thing is, they're just not right now. we're seeing, despite all of the anxieties around deep sink in the deep sea

in the next generation models, we continue to see quite a bit of growth through at least the end of this year. >> and i thought perhaps one of the more notable developments this week, joseph, was actually what happened with amd, because if you want it to be really bearish on nvidia, you could say, well, you could use amd chips. and i know people say maybe you, you know, some of the mega-caps use their own chips and things like that. but what do you think amd's results showed us? >> yeah. well look amd, amd has done very well. year one. they did over $5 billion in kind of a start up product, a very impressive number. but nvidia is going to have around 85% share when 2024 kind of all the numbers are closed out. and i think that number actually can rise slightly in 2025. it's competing with nvidia is not easy. if it were you know, a lot of other people would be doing it. and so we definitely were enthused for amd, for broadcom, for marvell. we see a lot of opportunity in this ai space. we like all of the stocks, but nvidia is our top pick because they are in a very strong position right now. and going into a product cycle where they're delivering on a

capability of scaling out at a scale level and a data center level in a way that amd is kind of still working to be able to do. so enthused for amd's long term opportunities. but i think nvidia will have more momentum this year. >> joseph moore he is an analyst of semiconductors at morgan stanley. joseph, thank you. thank you. >> and all hail the king. no, the king is dead. all hail the king. well, for the first time ever, a company is expected to dethrone walmart in quarterly dethrone walmart in quarterly revenue. will reveal who next. power e*trade's award-winning trading app makes trading easier. with its customizable options chain, easy-to-use tools and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. e*trade from morgan stanley. power e*trade's easy-to-use tools make complex trading less complicated. custom scans can help you find new trading opportunities, while an earnings tool helps you plan your trades

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medical center, okiyo pharma's drug, if approved by the fda, would be the first ever for ncp. okiyo pharma symbol okiyo on the nasdaq. >> invest with an advantage with cnbc pro. >> cnbc pro gives you the tools that you need to become a better investor. >> go pro with a flash sale offer for a limited time at cnbc.com. slash pro flash terms and restrictions apply. >> welcome back. amazon is set to report after the bell. it's not just a big deal because it's a big stock. it has the potential to unseat the king of quarterly revenue. for more than a decade, walmart has held the distinction of being the top revenue generator in america. it was 2012 when it overtook exxonmobil. for more on what he's watching from amazon this afternoon, let's bring in ronald josey, head of internet research over at citi. and ron, i mean, it's one of these things where like the size and scale of its retail operation is the street just kind of shrugs it off. just

tell me about the cloud. >> you know, that's pretty funny. the size of. >> the company in general. is pretty impressive. i mean, not only. >> on. >> the. retail side. you also. >> have an advertising. >> business that could be 66 plus. >> billion dollars. >> this year. and aws. >> could be. >> you know. $130 billion. >> this year. >> and then you have. >> little old retail. so it's a. >> little bit of everything when we. think about what amazon is. but when i think about. >> the multiple or how we value the. >> company, they're tops in e-commerce. >> they've essentially won that. >> that that market. >> to a certain extent, but. >> that that's not stopping them from investing. >> in newer products like. >> amazon, whole logistics, like their new. 12th gen fulfillment center. >> and then, you know, of course, aws. >> is a faster grower and advertising is. >> high margin. >> so anyway, there's a lot going on at. >> amazon is the point. all very large businesses. >> they're once again retrenching from bricks, brick and mortar, but evidently are now licensing that kind of what's it called. don't check out payment technology. so even there they appear to have, you

know, a revenue stream that they can benefit from very narrowly. what do you think the stock's going to move on? is aws revenue growth. >> i think it's. >> three things. really i think. >> yes aws has. >> a lot. to do with it. >> obviously retail as well. >> but frankly. >> it's going to be operating income. margins or operating. income overall. and so we're looking for another big quarter of overall why they're. >> they're more. efficient within. >> their core retail. >> business. >> particularly in north america. >> advertising helps their. >> aws talks. >> to the. >> overall growth. you know, we're looking for 19 ish percent growth anywhere around there i think would be good. of course, anything better would be great. >> we have gotten sort. >> of somewhat okay. >> checks from google cloud. we saw diesel. >> same thing for azure. >> so anyway, i agree with you. >> it's aws. >> but operating income is really a key part of the story here. >> because from a valuation. >> perspective it's not that expensive. >> and we're. >> now looking at it on an eps basis. >> and there again is the trajectory for quarterly revenues of amazon versus walmart. you know, when google sold off, a lot of people said

it was the operating margin that was the real problem. so just kind of apples to apples. what what did google tell us? what do you think amazon's going to say on that front? where does microsoft fall. >> so i mean i think. >> google sold off on a few things. one is search was fantastic no doubt. but cloud was a miss. we heard they're investing quite. significantly in capex. we heard that they had a capacity challenge, not a demand issue, which longer. >> term is fine. >> but we do need to build out. so that impacts free cash. i think as it relates to amazon and where we are looking here, yes, they're going to be investing quite a bit in capex. i don't think there's any doubt there. however, the retail business is more efficient. and what's fascinating here is we are now getting our packages faster. we're getting them more efficiently delivered, and we're buying more. call it overall everything essentials plus whatever else we would buy. and so that's driving conversion rates higher. and so as we get our packages faster being delivered more efficiently,

conversion rates are going higher. they're making more dollars as it cost to actually ship is lower. so a lot of these things are working together. and then again i'm going back to advertising, which is. >> we think at. >> least a mid 40 likely higher. operating margin on what could be 65, $66 billion this year. that's going to help margins overall as well. so there's a lot. yeah. >> and i find myself using it, you know quite a lot because it's so quick. you know things like birthday gifts or you know, household items. what i'm still using doordash for is those groceries. it's just a little bit easier because i'm more familiar with the inventory at kind of the local places to turn to that app. and i wonder if amazon is ever going to finally crack that one. >> yeah, i. >> mean, that's something we've been waiting for. and that's clearly a foothold that walmart has. and obviously with the whole foods acquisition several years ago, their reinvention over and over again of amazon fresh, the just walk out technology to your to your point earlier they're working hard here. i think the benefit of grocery is that it's at least

once twice maybe three times a week purchase. and so you get just repeat usage. and so amazon's investment in their essentials which is your your paper towels, your deodorant, your soap and now increasingly your groceries. that keeps people coming back more often. and you know, if you wake up with a sore throat, you can go buy your cough medicine or your cold medicine at amazon, be delivered within several hours. and i think that just drives a flywheel more and more. and that's that conversion rate. >> all right. it'll be an interesting afternoon as always. ron, thanks so much for your time. appreciate it. thanks, jesse. you got a buy rating 275 price target as well. brian. >> all right. well let's talk about the cost of delivering u.s. government debt. bond yields are moving higher. we got tomorrow's big government jobs number. rick santelli is in chicago. and rick i'll just say this. we have seen a lot of revisions lately. and i wonder how much the jobs number, with all due respect to everybody, may not be revised again. and if it is, what does that mean for

the federal reserve and them doing their job? >> you know, i'll tell you what. on the two front revision issues, the one we know about from august, i heard everybody talking about it earlier, 818,000. we knew that number. that's from april, march of 23 to april of 24. we'll get a finalized number on that. the other revisions, years and years and years of immigration. you know, immigration is the big story. it's all about the current administration. i find it so fascinating that, you know, the first month of this president's term, all this is coming out with respect to immigration and these adjustments. but i'll make it easy. tomorrow's number, just look at it on its own. both those major revisions, in my opinion, aren't going to really change much. and i contend on the immigration front, there are so many things how much money, representation by the states, all that that goes into it, and who knows how many people have

come across the border. so i say, just look at the numbers, stand alone. and since the last number, which was on january 10th, interest rates are dramatically lower. as a matter of fact, yesterday we closed at the lowest yields of the year going actually into december. and we haven't moved that far as you see. now those are twos and tens. but here's something really fascinating that a lot of my traders are talking about. look at the twos ten spread okay. right now it's the flattest it's been since the 19th of december. why is this important? it's hugely important. look at how much it's flattened just since the 31st. okay. what happened on the 31st? that's when we released personal income and spending and all the fed's favorite inflation numbers. and everybody out there, austan goolsbee, all the big fed personnel talking about how, yeah, we're making progress. to me, this spread is telling me that between the twos with less fed and the notion

that so many issues are still up in the air with inflation and on the other end on the ten year and the longer maturities, growth is an issue. think -500,000 plus on jobs. that spread is what you want to pay close attention to is your easy indicator of how everything's going in the economy and the fed. back to you. >> well, said rick santelli. thank you very much. all right. speaking of inflation, coffee prices, the kind that we track, the commodity itself, maybe not on your store shelves yet. coffee hitting another record high today. coffee prices the futures have more than doubled in the past year. you've got a huge drought in brazil. you've got frost as well trying to grow it back. you've got global demand strong as sort of the coffee culture takes off now, despite high prices, shares of starbucks and dutch brothers coffee, they're both soaring this year. or maybe kelly because of that. right. they can chart even though they're paying more. they can now. chart they.

yeah. or a lot of margin as it may be. meantime on a much more sort of going to bed note, cocoa prices have also been on the rise. they're up 90% in a year. and hershey reporting its quarterly results today, saying that those cocoa prices put significant pressure on results and will weigh on forward earnings. coffee and cocoa both up. >> i'm literally looking at research. can you grow coffee and chocolate in new jersey? the answer, you know, maybe in a greenhouse, but at some. >> point inside. inside, yes. but these are coffees, a very sensitive plant. >> evidently a delicious one too. but it's a crazy to see it keep shooting higher at some point. maybe they can bring more supply online. all right, coming up. we've got a mystery chart. this stock is up 73% in six months. but our next guest thinks tariff could be bad news for the shares. that's in market navigator. next.

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right now, because the dow has quietly moved to a session. low down, almost 300 points, dom. >> all right. so let's reveal that mystery chart kelly from before the break. and our market navigator today. if you check out the focus it's on lululemon. that was the mystery chart. shares of the $50 billion athleisure behemoth have been on a tear since bottoming out kind of last summer last august. but what's ahead for the company and how will it fare under the trump administration's new tariffs on chinese goods? the company does rely on chinese imports for part of its supply chain, a notable portion of it particularly in fabrics now. our next guest is here to break it all down for us and give us her thoughts on where that stock is headed short, medium and even longer term. joining us now is our fan favorite, katie stockton, founder and managing partner at fairlead strategies. she's also a cnbc contributor. so katie, thank you very much for being here. let's break down the athleisure trade. there is pretty much one name that people associate most closely with it. it is lulu. it's reflected in the stock. but where do we think it goes from here.

>> well it's had. a really big run as you mentioned, and we've been bullish since about 300 for lulu. but we still see positive intermediate and now newly positive long term momentum behind the stock. and i think that's the most important takeaway is that holders of lulu can feel pretty good about not only where it's come from, but the fact that the trend still does have positive momentum. we really cannot say that about the vast majority of stocks right now from a bottom up perspective. so as much as the major indices have held on to their gains, the breadth just hasn't been great. and obviously the mega caps have been a bit of a drag. so we do have a weakness in momentum really sort of around the world. so lulu stands out in that regard. now shorter term we would look for a pullback for better entry. the 50 day moving average is roughly 3.81. and that to us is a great place to sort of revisit this stock and try to take advantage of this long term upside. >> katie, we have so many more

consequential questions to ask you, but what is it a fashion thing? i thought we'd all moved on to denim. >> yeah, well, i had to change out of my lululemon to get dressed for this segment. so it's obviously very popular, and the charts won't answer the questions that are more fundamental in nature, but they will help us understand what the sentiment is behind the stock. and it's obviously been quite positive. intermediate term. if you go way back to about 2020, there's a very wide long term trading range and it's kind of an unusual setup right now in the broader market. within that range, there is upside to the upper boundary, which is roughly 485. so it's not a near term objective, but that is long term resistance. and you couldn't describe the stock as long term overbought at this time. >> now katie, one last thing before we kind of let you go here. trade is a big part of the discussion right now with regard to many of these names. and as a chart watcher, are there places in particular that you are seeing in the market, whether they be individual stocks or sectors or certain indices that

set up better, as we see what could be a prolonged trade war slash negotiation play out. >> well, the news is out there already, and i would argue that it really hasn't hit the likes of lulu. so i think that's a positive in a way for that stock individually. more broadly, what we're kind of interested in from a technical perspective are stocks that actually have been in down cycles and seem to be emerging from them. so that would be more common right now in defensive sectors like health care, consumer staples. also, even some reits are starting to perk up after downdrafts. so that's where we're most interested for countertrend exposure until at least the major indices get to a place where we feel there's a better entry at hand. we think that could happen within a few weeks, but right now, most of our indicators from a top down perspective still do point lower. so we think that the odds are best in stocks that honestly look a little bit different than the s&p 500. yesterday. as an

example, we put out a buy recommendation in regeneron. and that stock had just cleared its 50 day moving average. so it sort of crossed our radar for that reason. >> very interesting. as the market sells off and as we await amazon and what's been kind of a rough spot for big tech earnings. >> so katie, this is our permission for you to get back into your yoga gear if you would like to. we're not sure what the rest of your day holds, but thank you very much, katie stockton, for the views there on lulu and trade wars and everything else. >> they're super interesting. let's get to seema mody once again for the cnbc news update. hi, kelly. >> senator ted cruz saying today a key safety system was turned off in the u.s. army helicopter that collided last week with an american airlines regional jet. senator cruz said military aircraft are permitted to disengage the automatic dependent surveillance broadcast, but there was no compelling national security reason to do so. during the training mission, 67 people died in that crash. a federal judge approved an agreement today to temporarily restrict some of elon musk's department of government efficiency staff from

accessing sensitive treasury department information. a group of union members and retirees sued the treasury, accusing it of violating federal privacy laws by allowing doge to access its payment and collection system. the judge's order today keeps the block in place depending on the outcome of february 24th, and that's when the hearing is. longtime chicago bears owner virginia mccaskey has died. she inherited the nfl team after her father's death in 1983, and served as its principal owner for more than 40 years. virginia mccaskey was 102 years old. >> brian and she got to see one of the best football teams. >> of all time. >> yes. >> in the mid 80s, the super bowl shuffle. seema mody. thank you. all right. coming up. we are going to go heavy on metals. i is helping mine the rare earth minerals that are needed to power clean energy. our d.c. colleague diana olick in the studio next to me. and we're back right after this.

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ehh... hmm. oh, that's very, uh... - right? - mmm... this store doesn't have agentforce, so an ai agent didn't tip off the stylist as to what i might actually wear. - yes. - oh. that's a commitment. [glass knocked] hey bud! whaddaya think? you know, people can see you out here. ha ha ha ha, yeah, yeah, right, right, ha ha. love you, too. agentforce helps retailers prevent fashion fails. it's what ai was meant to be. ♪♪ >> hey. >> welcome back. well, the clean

energy economy continues to accelerate. and that's what makes finding the minerals and the metals that power things like batteries even more critical. as with everything else these days, artificial intelligence is stepping up. diana olick has the details in our continuing series on climate startups. diana. >> well. >> brian, at face value, mining is pretty basic. first you need to find the metals and then you need to get them out of the ground. historically, this has been a long and arduous process, but new technologies from a slew of companies are disrupting the. >> mining industry. >> looking to cash in on powering all that clean energy. >> electric cars. >> solar panels. >> hydrogen fuel cells. they all have one. common denominator. they need precious metals like palladium for catalytic converters. that's why, as those clean. energy industries grow, companies like cobalt metals, their i. >> and a startup called earth. >> i are in a race to get those metals. >> to market. >> as soon as possible. earth ai

combines ai powered. mineral discovery software with proprietary drilling technology. their data goes back 50 years. >> we train our ai. >> to learn. >> from failures and. successes of decades, of hundreds. >> of geologists. >> that explored in the past. >> tesla says by using this mining process, they can do it at half. >> the cost and in. >> a. fraction of the time that's valuable. >> potential. as annual. >> mine revenues currently range from 50 million to $3 billion. when the system finds what it. >> thinks are. >> metal deposits. earth ai can drill down to verify it in just a tennis ball sized hole. >> we drill. >> down to 2000ft and grab a sample of rock that has never seen. light and the metals in that rock, they can build hundreds of millions of electric cars that can turn that grid renewable. >> earth ai doesn't explore around existing mines, but finds new areas and then sells that information to mining companies. their early. >> success rate.

>> is very attractive to investors. >> the market for these minerals is massive. it's in the tens of trillions of dollars. it's only going higher. there is a significant moat in their business model and the way that they've trained their large language model. >> in addition to tamarac global earth, ai is backed by. cantos ventures, y combinator, scrum ventures, alpaca. >> and overmatch. >> total funding so far. $38 million. earth i recently discovered one of the largest verified deposits of palladium in australia using ai. their joint venture partner is legacy minerals, listed on the australian stock exchange. earth i explores on its own, as well as with other explorers, to find deposits faster. brian. >> all right, diana, i'll see you out there in the lobby in a couple of minutes. by the way, folks, why am i in washington, dc? that is not a fake screen behind me. that is the actual

capital. because tomorrow we have a cnbc exclusive. 940 in the morning on squawk on the street. i'll be sitting down with brand new secretary of energy chris wright. we're going to talk, kelly, obviously, about the inflation reduction act, money, oil, fossil fuels, drill, baby drill. where does all this money go? exclusive energy interview with chris wright tomorrow morning on squawk on the streets, 9:40 a.m. tune in. >> kelly cannot wait for that. our viewers will remember him when he was still running his company. he would come on and we'd check in with him. so his comments will carry even more weight now than they did. brian. we're looking forward to it. our trader says you should sell this mystery stock that's more than doubled in just six months. she will explain why when we return. >> nothing stands still. not technology. >> not the market. >> and not franklin templeton. we've been a firm in. >> motion for. over 75 years,

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i don't ever see anyone coming out to maintenance anything, so it's very scary for me because i have everything i love in this home. so, we've now implemented drone technology. how is that safe for me? it enhances the inspection, so it allows us to see things faster. your safety is the most important, and if you're feeling unsafe, that's not okay. it doesn't feel like that in our hearts. i mean, it's worrisome. [dog barks] >> get your solar generator. >> and free panel at. four patriots.com. >> welcome back. it's time for three stock lunch. we'll hit three different stories. why they matter to you and what you should do with the stocks. sylvia jablonski is here with our trades today. she's co-founder and ceo of defiance etfs. sylvia, let's start with roblox because the shares are plunging after their annual bookings forecast came in below street estimates. roblox is down 13%, sparking fears about a

broader slowdown in gaming. granted, it's coming off a 60% up year. what do you do here? hi, kelly. >> well, roblox. >> i think had a. disappointing earnings announcement here. >> on one hand, if you kind of look at the numbers in isolation, 988 million. 32% up year over year sounds pretty good. >> but they're not. >> coming in on their. daily active users. >> so they're. >> off by. >> about 5 million there. >> and the users are actually also. >> not spending on the platform. >> and the outlook. >> on this is sour for 2025. and so i think what investors. care about when it comes to companies like roblox and gaming. >> is just daily. >> user engagement. and they're falling short there. and i think that, you know, kind of doesn't bode so well for the future here. but congratulations to the investors. >> that. >> you know, got this on on the run up. i would just be a. >> seller here, probably. >> on my on my gains and not a buyer on the dip. >> all right. let's move along then to tapestry. that was our mystery stock from earlier. it is up 12% today on a big earnings beat in the holiday quarter. and they boosted full year guidance. apparently coach is doing quite well. and these shares are up 120% in just six

months. you chase it. yeah. >> so i love that. >> they're up over the last six months. and again congratulations to those investors. but i would probably take my gains here i think it's a great story. you know they're known for coach and also high end fashion accessories. they have a good business. but if you kind of like step back on this company, you know, over the. last five years, the compounded annual growth rate has been about 2.6%. their constant currency growth has been about 1.6%, which means that they're lowering prices a lot or having to lower prices a lot to grow. and i think that, you know, kind of extrapolating that out over the next couple of years, i don't necessarily dislike the stock. it just isn't high on my list right now. and i think i'd be a taker of gains. you had a great run if you hold that one. >> all right. she's not biting. she's not biting, folks. let's see about oracle which announced today. it's adding ai tools to its popular netsuite software to help with everything from hiring to tax planning. now the shares are only up fractionally today, but they are up 50% over the past year. what do you what do you think?

>> i am such a strong buyer and interested in this particular name. so i think oracle is the yeah, one of the. unloved tech stocks out there that became popular. they're the cool kid on the block again. so they they're leaders in ai and ai infrastructure which is great. the projected compounded annual growth rate for the next two years or so is 50% or more. things like deep seat don't really matter. if anything, they make ai more efficient, and having cloud and infrastructure helps build and feed on that growth. so i think they're positioned well there. they've had a steady dividend for the last couple of years. it's performing quite well. they're touching on quantum computing and stargate. let's not forget that $500 billion of investment going in there. they're one of the top partners in that project. government funding. i just think that this is a potential moonshot here. >> sticking with the oracle. sylvia, great to have you on today. appreciate it very much. sylvia jablonski, we're back after this. >> to catch the markets on today and every weekday on closing and every weekday on closing power e*trade's award-winning trading app makes trading easier.

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bounce off your lows that we hit earlier. the nasdaq is back in green. so why am i in dc? well, tomorrow kelly will be speaking with the newly confirmed secretary of energy. chris wright, obviously known to our audience, former ceo and founder of liberty energy services, now the secretary of energy. we have an exclusive interview with chris wright. 9:40 a.m. eastern time. tune in. obviously much more on power lunch as well. >> it really dovetails with what we've heard from the treasury secretary, scott bessent, who is basically saying he wasn't piling on pressure on the fed. you know, in terms of cutting rates. he was really saying, we're looking at the ten year. we're looking to energy to be disinflationary. >> well, i think that's going to be one of the key questions is how do you lower the price of energy. we want to pay lower money for gas or electricity or for electric cars, but not also wipe out investors in the energy space. if you own some of these companies, if oil prices or gas

prices go down, do you do you work at all to protect the investor side? that's one of the many questions that we're going to ask chris. right. i guess i'll think of the rest of them probably tonight or tomorrow morning. >> i love that chris has been on both sides of it. he understands what investors are worried about and what maybe the country wants. brian looking forward to it. we'll see you tomorrow. and thanks for watching. power lunch everybody. closing bell starts right now. >> all right. >> thanks so much. welcome to closing bell i'm scott wapner. live from post nine here at the new york stock exchange. this make or break hour begins with the run up to amazon earnings, one of the last mega-cap tech names to report amid questions about how the biggest companies in this market are positioning themselves, what they're spending, and maybe most of all, when they will see a return on all that cash. we will ask our panel of experts today, including super analyst mark mahaney, what he expects in just a few moments. in the meantime, let's show you the scorecard here. with 60 to go in regulation. we were mixed. not so much anymore. we are now red across the board. s&p not a big loser. nor is the nasdaq today. but nonetheless we are redfi