seeing reflected from from the weakness in walmart. new highs yesterday. again i think across the board it's early goes to four. big news today a couple of new books. andrew's out with 1929 eventually. >> in october october go check it out. >> and in september 1928 is coming out. my new book. make sure you not really. it's a joke. make sure you join us tomorrow. squawk on the street is next. >> good thursday morning. >> welcome to. >> squawk on the street. >> i'm carl quintanilla. >> with jim cramer at. >> post nine. >> of the. >> new. >> york stock exchange. >> david faber. >> is live at the. priority summit. >> down in miami. meantime futures backing off another day of all time highs as walmart first of the. >> major u.s. >> retailers to report earnings guides below for the full year. it's on pace or close to it for the second worst day since covid. our roadmap begins with this tariff uncertainty. walmart

says it won't be immune from the looming levies, and does expect profit growth to slow. palantir of course, under pressure yesterday as the doge cost cut, target hits defense spending and the ai race, openai. >> cfo. >> sarah friar is going to. >> join david. >> at the event in miami later on this hour. speaking of which, let's get right to david. a day after the president did speak at that investment summit. morning, david. >> good morning carl. >> yeah, it. >> was interesting. >> obviously, we took those remarks, i think live on. >> cnbc. >> at least many of them. of course, much of it not necessarily new. although some certainly some comments that got people's attention when it comes to the continued war in ukraine. but as. >> for the agenda here. >> today, of course, as you said, sarah friar. >> plenty to. >> talk about with openai as well. you heard kate rooney earlier. introducing those new metrics that the company has has introduced. >> and. >> you know, also. >> hoping to. >> speak with former treasury secretary steven mnuchin shortly

as well, to get his take on the status of a number of things here. but with that. >> i'll. >> send it. back to you guys and let's get to. >> some of the news of. >> the day. obviously, jim, those palantir shares, we talked. >> about them on monday. >> they are off a bit today aren't they. >> yeah. well i think people felt that maybe there would be something with palantir and the justice department and the defense department. this is important thing. did palantir does have a lot of business with the defense department, but it is not dispositive to all palantir's business. but there are a lot of people who felt that the cuts in the defense department would actually be orchestrated, or at least would have something to do with some of palantir's views about the military industrial complex. and we didn't hear anything like that. at the same time, we got this report, obviously, about about what alex karp is doing in terms of selling, and it's not at all clear that there's any real change, but it's being used to say that maybe if he's getting out big, you should get out big. i think the key takeaway here, david, is that this is a very detail oriented stock, and they don't know what

to do and that they just presume that therefore you take the 8% off the palantir, too. i don't think that's going to prove to be the case. i just don't think so. >> yeah. >> well. >> and the stock is obviously was down a lot more in after hours, i. >> believe. >> jim, than it is right now. and as you point out, it was the 8% headline. >> carl mentioned. >> at the very top of the show in terms of. >> potential cuts to. >> the defense budget, there are those who obviously argue that the impact would be the opposite, because of course, more efficiencies conceivably are available when you use palantir, and therefore it would actually be used more often rather than less at the pentagon. i'll leave that to you. but i do come back to the valuation itself, which we've. talked about so many times, jim, being, you know, a territory that is extraordinarily high and doesn't seem to allow for a lot of room for error. >> right. and that is the retail component by it. but what you just said at the end, david, is going to be the reason why i think the stock bounced from 106 to 109, which is that perhaps this is the way that palantir has more business. we don't

know. and i think in a vacuum where we don't know, retail will initially sell, which is what we're happening, but then what's happening? but then we say, hey, maybe it'll come back and i don't want to say yes or no to it. but carl, the thing is so expensive you can't have anything go wrong. >> well, we talked yesterday about some of the. >> favorites that had popular. >> longs that were getting reversed. we mentioned applovin and netflix and spotify and some others. this is one of them. >> and i know that there are a bunch of analysts coming out and saying that this is the kind of froth that we should be most worried about. at the same time, i thought there was a piece this morning which talked about how the under the under nature of the mag seven by retail. and i think this is rather extraordinary because if indeed if indeed there's an under owned nature for an apple which has some spectacular news out today about the new phone, which will qualify for the subsidy of china, if you feel that that group is under owned. wow, there's a place to go to.

>> let's get to walmart. i know you guys both want to talk about it. it is the big mover. shares are dropping. >> despite this. >> earnings and revenue beat. company did post a softer than expected outlook jim full year eps two 5260 streets at 276. >> the january. >> month was the strongest of the quarter. >> in terms. >> of. >> the comps, and it is the second best comp in 18 months. >> right now. there is some noise here. we got to back out the vizio, which that acquisition you have a leap year. they've got really got to back those out to 5.5 to 7, which is terrific and consistent in an unpredictable environment. delivery really good. some prudence in the guidance. but i would say that they are as strong as they have been in the last decade. and i'd be a buyer. >> david, your thoughts. yeah. e-commerce up 20. they on the call. courtney's been saying they do talk about a pretty resilient consumer that's been exhibiting. >> the same qualities we've seen in. >> prior quarters. >> yeah i mean you know the numbers themselves guys are incredibly strong. i mean, i

know we know that. but when you look even at a 4.6% same store comp on us, on walmart, us, when you look at 6.8% at sam's club, i mean, jim, listen again. it's backward looking. the stock has had an incredible run. we're talking about a company that had basically an. $850 billion market value coming into the morning. so again you know, you come back to valuation. you come back to the move that's already taken place. and then the guidance itself. and you get perhaps that reaction already, though not nearly as bad as it appeared to be a short time ago. >> no. and remember, if you look if you go back two weeks, you're back to where it is right now. i think it's an extraordinary number. i think that they are conservative. historically, this stock is starting to move up. at one point it was down eight. carl i think walmart remains along with costco and tjx with three retailers. that you must own. they're just doing too well. >> and by the way.

>> food is doing incredibly well. one of the interesting things that we got from the call, health and wellness is up big. and a lot of that is ge dash one. >> this is one name, jim, that's benefiting from inflation. and we did get inflation up i think 30 bips at the supercentres. right. and that's part of the enlargement of the audience. >> yes. well they're also now they're going the new people are going for i mean new new customers going for their what i would regard as being convenience as well as price, you typically have just been price. and what that says is that the more well off people are going, it does have that costco feel. when you go to costco, you say, wow, all these bmws, all these mercedes. and i urge people to go to walmart. you'll see why i like it. it's not the old walmart. it is fashionable and it is incredible. prices. i've been to about a half dozen walmarts in the last six months. my they're excited, right? >> i mean, we're going. >> to start getting a lot more information. a reminder though, that on friday, jim, that retail sales number was the biggest

month on month drop in almost two years. >> well, i think that you're seeing and there's questions about about housing. although builders firstsource actually came out today a lot people are not going to like the number builders. firstsource actually had some good things to say about rehab, about renovate. i'm sure that home depot will be down. i've got a conference call today. my midday noon, cnbc investing club conference call, and if home depot is down, i'm going to pound the table because i think that this is doing well versus the comparisons. and don't forget the whole southland. much of it has to be rebuilt. that goes to. >> home, right? >> two two tickers to look at one is just the home builder. etf down 11 since election day. nail which is the levered etf down 47%. since election day. >> and then you have lumber tariffs. but doug yearley the ceo. >> of. >> toll he's not sweating the program i think he understands you know if it's week to week that it might be good or bad. that's not so positive. you know not so positive or not so negative. but mortgage rates

have to come down. and is that somewhere where the fed the job is working. the fed is winning when it comes to mortgages losing when it comes to small business enthusiasm and large businesses just befuddled because they don't know what the tariffs are going to end up being right. >> president did yesterday. in miami. seemed to throw lumber in there. >> yeah. >> lumber. awesome. that's canada. and but lumber is unique in that the gross margins profit on each house have been going up. and i think that that's not going to happen. if you look at the charts of a toll or lennar, these are trading as if the housing cycle is over. but as doug yearly said, again, i just think he's such a good ceo. there's still not a build. they still have not had, other than a couple areas. austin and florida were the two that he singled out. there is still not enough inventory, but the declines in austin and in florida are staggering in terms of price. yeah, staggering. >> we got philly fed this morning. big sequential drop

although not that far from estimates, jim. but prices paid and prices received highest in more than two years. >> yeah it's just it's such a mixed bag and i want to i'm going to urge people i'm not ever saying forget the fed, but i'm saying that if you thought there was going to be a lot of rate cuts, i don't know why you were doing that. and if you're saying, you know what, i'm not going to buy stocks when we get rate cuts, you're missing the mark. that's not going to work. other than the fact that the food stocks and beverage stocks were were trading on the idea that bonds were going to go up in price and i'm sorry, go, go down price and up and yield right now. but we thought that they were going to be yield was going to go lower and therefore they would be more advantageous. but the yields are not going lower. so they're just not great things to be in. >> and as far as the fed minutes go, not any expectation that they think rates are going to come down either. >> no. but i mean look the

overall direction of rates. remember the late marty zweig taught me that if you just figure out the direction in rates, you'll be fine. and i'm not hearing anyone saying that rates are going higher from the fed. and so i'm i'm okay on that, or else i wouldn't be saying home depot. look, housing the price of housing went up more than anything. i export national in last night. now that's a very big wholesaler wholesaler to amazon by the way. >> which now has more revenue than walmart. >> yes they do. and i would tell you that they see prices coming down rather dramatically for food, not for eggs. but don't you x eggs, right. i know that people say, jimmy, you can't say x eggs. that's a major part of the protein of diet. but they're they're saying inflation has pretty much run its course. this is a huge i mean you're spartannash people say what the heck is that? well, it's nash finch combined with spartan. no, it's a multi-billion dollar wholesaler. and they're saying, look, inflation it's really come down x eggs. >> let's get to doge as well. this morning. continues to make some cuts this time impacting commerce. the irs and the

department of defense. jim i thought be of a note this morning was interesting. she's talking about deregulation. and her general point relative to doge is that it hasn't hit the market yet. >> you want. >> to you want to. >> stick with sectors that are highly regulated banks, transports and some others. >> look, i am going to say that what the any one of these, these sectors, they cared about tone more than they cared about the regs. the tone has changed. and it's not like they're big footing anything. you know, we talked yesterday with eamon about the that the justice department ftc still keeping the same rule of law. it has to do with the fact they're not hitting people with subpoenas endlessly. they're not calling them in to washington. it was a draconian environment. now there's constructive dialog. so we may not see the regs. we may not see anything really change. but these are humans. and the humans are not in there saying business is bad. they're saying business is good. that's the change.

>> are you. >> worried that government employment will start to affect jobs prints in the coming months? >> it's a great question, i think. yes, but i'm not worried. i just think that we need to see look, the jay powell i want them in play. i want him to be able to say, listen, we have a little slack in employment for once and we housing's not good. but i just don't i don't need you don't need rate cuts to buy stocks. now the s&p s&p up s&p up every day. and that's a little daunting. why don't we have a bit of a pullback. but the pullback right now is in some of the speculative we've already had. we've had a liquidation as we know from some of the mag seven. and then we have what happened in china last night. and china is so bullish that it even makes me say you know what you got to buy apple off this new phone. you have to buy apple. >> we're going to get to baba for sure. >> oh talk. >> about this china resurgence. >> incredible because. >> it's a big undercard. >> in the meantime though a special guest joining david in miami. let's get to david.

>> hold on. we'd like to hear carl. thank you. yeah i think at this point it's fair to say that former. treasury secretary steven mnuchin has become a friend of the show. right. >> we can call you that now okay. >> good stopping by here. and good to have you, carl and jim. >> were just talking. >> about doge. i'd love to start there and get your. sense both. given the four years obviously you spent running the treasury department, what is your sense as to the level of waste and fraud, so to speak? broadly speaking, in. >> the. >> us government? >> well, i think. >> the good. >> news is. >> elon's group is. >> uncovering a lot of things. >> that i. think we're all somewhat surprised by. i think that. >> as it. >> relates to. >> treasury. treasury's job is really a giant payment. processor to send. >> out. >> the payments. >> and. >> they get certifications from. >> the. >> other agencies. >> i mean, the big one that everybody is. >> talking about is. >> obviously in president. >> trump talked about yesterday. >> is these really old. people apparently. >> getting social security checks. >> you really. >> by that, i mean, is it really. >> possible they. >> missed millions of people.

>> who are. >> over the age of 100? >> come on. >> it's hard to believe. >> i would. >> hope that they check that quickly. >> yes. >> and audit whether it's a data issue, because if it's not. >> it's pretty astonishing. >> it would have to i mean, it would put into question everything and then certainly embolden the effort, if that was true. but i find. >> it i guess. >> i find it hard to imagine that could possibly be true, because then it would mean they're just. terrible at doing their job entirely, wouldn't it? well. >> it seems like an easy thing that someone checked. you know. >> i recall i had a big title. >> as managing trustee. >> of social security. and, you know, i was always very focused on issuing. >> new. types of. >> social security cards. >> i still think it's crazy. >> that social. >> security issues. >> paper cards. >> in the days. >> of electronic. >> id. >> so. >> there's definitely a lot of things. >> to. >> do there. >> yeah, certainly there's been a lot of attention as well, given to the access that the doge team has had to various systems, whether it be social security or treasury. scott bessent, obviously the treasury secretary. now allowing that,

are you comfortable with with musk and team having that kind of access to treasury? well, my. >> understanding of. what scott. >> said is. >> that you have two people that have. >> access to read information and not write information. >> if that's. >> the. >> case. >> it's completely appropriate. >> they're just looking at the information. >> by the way, a. >> lot of this information feeds. into public. >> systems anyway. >> right. >> steven. >> we've had an ongoing dialog with you about tiktok. it's something obviously, that you very publicly stated your interest in quite some time ago. if there was an opportunity. the clock is ticking here. on the ban actually coming into effect. i guess, again, where do. >> things stand? >> is there a is there a deal being worked on? well. >> we're having. >> conversations with. >> some of the. >> people. >> behind the scenes, and i'm hopeful that. >> the. >> president and. >> vice president who's working on this. >> will. >> be able to reach a deal. and i've always. said that the. >> way. >> the most. probable way to reach. >> a deal have u.s.

>> investors invest. >> into the. >> company. >> have bytedance. >> spin it. >> off so the. >> existing u.s. investors can stay. >> in the business. >> dilute the chinese. >> ownership down to. >> 20%. >> which. >> is required by the law, and. >> make sure that the. >> technology is disentangled. >> now. >> that part. >> of it may take some time, but. >> i think if. there's a. >> deal, that's the most. >> likely right. >> do you feel like progress is actually being made and or where is the, you know, is it ultimately going to just be something that the president decides one day? >> i think he wants to save it. so i'm hopeful. that he. >> comes up. >> with a solution that works for national security issues, and. >> that the. >> chinese sign off. >> on it. >> there's plenty of money, i would think, available potentially to try to get a deal done, given the potential returns. if once you and obviously it's not an insignificant effort to get the technology moved and rewrite a lot of that code, do you think you're going to be a part of it? >> well. >> see, i think. >> it's primarily. >> technology driven, but we. >> think it's a great business model. >> all right. well, you. >> know. >> obviously in the sort of more

the private equity business, so to speak, we've had you on talking about a number of the different deals that you've done. what's the sense of the environment right now, given rates haven't really moved very much in a favorable way? well, look. >> i've said on rates, you know, my. >> view is. >> inflation is taking a little bit longer than. >> people expected. >> to come down. >> it will. >> come down whether. >> it comes down to 2% or. >> two and. >> a half. >> two and three quarters. >> i. think it will be. >> in that range. >> i expect. >> the fed. >> will lower short term rates, but i. think treasuries, ten year. treasuries at 4.5%. >> have that. >> already priced into the market. >> yeah i mean we've got a pretty hot cpi number just the other day. it certainly didn't seem to augur for lower rates. anytime soon. >> i think. >> the fed is being patient. >> yeah. and finally, there's been a lot of conversation recently about whether there's. >> the. >> gold that we think there is import. not when. >> we were. >> sitting down here, you reminded me you actually have a very specific personal experience and tell us, is. >> the gold. >> at fort knox? >> the gold. >> was there.

>> when. >> i visited it. i hope nobody's moved it. i'm sure they haven't. i was the first treasury secretary to go there, and i think over 50 years there's very serious security. >> protocols in. >> place, obviously to. >> protect the gold that i. can't talk about. but we went. >> we saw it. >> and i. >> if president. >> trump wants it to be audited, that's obviously something that. >> can be. >> easily i think you. >> went in 2017, by the way. i'm curious. you said you were the first treasury secretary to visit in 50 years. why did you actually go see the gold? >> we thought. >> the. >> gold stands for. >> the us. >> although it's not backing the us currency. >> it's obviously. >> a major. >> asset of the treasury. >> and we thought it was something important to do. >> steven, always appreciate it. thanks for being a friend of the show. thank you steven mnuchin. former treasury secretary. guys the gold is there. it's at fort knox. at least it was when he visited david. >> thanks. we'll talk in a little bit. thoughts on that jim. >> well i just think oddjob was defeated. bond got it and it was never irradiated. and i think

that it was nice. it was about 50 years ago. so there you go. that's what he was checking. >> yes. >> we did get bested on the tape this morning talking about maybe stretching out issuance. said it was a long way off. things like lowering energy and deregulation need to come first, right? >> i was hoping if i had been able to ask steven, what about refinancing the debt? what what can we do? because interest has now become such a big part. so we know that it's medicare, we know that it's social security and we know it's the interest on the debt. i had always hoped for a big, big, huge piece of paper that would be out 50 years. it's the time for that. it's time for that. people will buy it because the president can sell anything. good. salesman. >> when we come. >> back, we're going to get to alibaba's results, sending that stock surging. bunch of movers shack, wayfair, boeing, hasbro jim mentioned apple as squawk on the street continues.

>> 10,000 buy next month i. >> don't see hey. >> we won't know unless we try, right? >> how long have. >> we waited for something like this? >> we'll have. >> to alert. >> suppliers, coordinate shipments. >> already alerted. >> already coordinated. >> every supplier sees changes. >> as they happen. >> since when can we just scale up mid-cycle? >> since we brought in bdo. >> since we brought in bdo. people who i can't believe you corporate types are still calling each other rock stars. you're a rock star. we're all rock stars. oooo look look at my data driven insights, i'm a rock star. great job putting finance and hr on one platform with workday. thank you! guys, can you keep it down. i'm working. you people are (guitar noises). hand over the air guitar. i've got another one.

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>> in time. >> for cramer's mad dash as we get ready for the bell. >> we have the privilege of having ernie garcia on today. he is carvana. this is one that i've liked ever since i bought a car. didn't like the color. returned it. it is a remarkable company. now, keep in mind the stock was at 80 this time last year, so there's going to be some profit taking. but the world is their oyster. they own 1% of the market. they can easily take it to 3% of the market. they actually have control. i think of what the gross margin is per car. that's what's knocking the stock down today. what they're making per car is taking it down. believe me, they can determine this after a little bit of profit taking. the buyers will come back. >> is are they generally a beneficiary if inventory levels are high or low? >> they have a lot of cars. they love inventory. i mean, on the call ernie talks about that. ernie's pure joy. i've got to tell you, because he has a model that almost wiped him out and he stuck with it. and i think he's a great american story because a lot of people would have just

said, you know what reminds me of, in some ways of fred smith at fedex, they were almost broke, and yet they still went at it and he got the help of apollo. but this is one where i urge people to say, understand, this man is going after a an industry that is really fractionated. i mean, there's just no one big player. he will be the big player. and if you sell the stock today, i understand if you bought it here, profit is never a bad thing to take, but maybe this is your chance if you haven't bought it to get in. >> pretty fascinating disruption story and the. and the near death experience. >> which we. >> talked about with. >> you before. >> yes. many times already. does that factor in the mid-single digits. and i just enjoy him and he is one of the greats. people have to know that. >> look forward to that conversation. in the meantime, after the break, we'll get an exclusive with openai's cfo, sarah frier. that's her first interview. since that musk led $97 billion bid for openai. faber's got that. and the opening bell 4.5 minutes away.

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>> i think similar to. >> last year, the last couple of years, very consistently, we have to acknowledge that we are in an uncertain. time and we don't want to get out over our skis here. there's a lot of the year to play out. again, we feel good about our ability to navigate the environment, whether it's tariffs or other macro uncertainty on on delivery with e-commerce like overall, you're continuing to see this diversification of our business that is improving our profitability. john david rainey, walmart cfo getting that line about skis says a lot today. >> look, i. john david rainey is a very thoughtful person. and off the desk, i would tell you in my calls about the company, it's business as usual. they're actually quite excited about the year and where they are with inventory, which is what matters in retail. food is incredibly good. i mentioned health and wellness doing very well, but why not just throw in a note of

caution? when we found out that zelensky was the aggressor, when we talked about how the boeing plane, maybe there's a problem with air force one when there could be new tariffs on lumber. i mean, look, when you have that every day, it does have your head spinning. >> we're going to talk. >> more about. >> that in. >> a moment. let's get the opening bell here at the big board. >> it's columbia threadneedle investments at the nasdaq. it's lam research of course celebrating its 45th. jim, you talked to tim last night. >> on that stock. tim archer so great. both kla and lam are the intellectual property geniuses behind a lot of what we do. they have this this an engineering powerhouse. every time. i was very close to novellus when they were bought by lam. archer's a novella. guy the lamb. guys i like, but the novellus guys were brilliant. he's brilliant. huge number of the of losses in china. 2 billion was taken away. yet they still blew away the numbers. how many companies can lose 2 billion in in revs to china and yet still do incredibly well. what a company.

>> are you serious about your by apple on china kind of. >> i. >> think developing thesis. >> i think it explains it's the i know that b of a has a note today. are they going to cannibalize. and i did the specs on this thing and i really quite. >> you mean. >> the 16 e. >> yeah i mean i went back and forth with apple saying why not buy it. and it is a great bargain for people who are not necessarily the most facile in making movies with apple, but it's really a bargain for the chinese because it's it qualifies for the subsidy. one of the biggest reasons why the bears have stayed negative on apple is because they think that china is a dead end. i think this is ignites another layer of buying because we knew we didn't know that china is going to be such a good place. we knew it was going to be a bad place. >> meanwhile, baba, we mentioned before the bell talking about all kinds of things, including how much of gdp might one day be replaced by ai. >> well, yeah, they they were incredibly bullish on ai. and i think the man to i've studied david tepper very much ever

since he was one of my myriad bosses at goldman sachs. and this is still his largest position. he i know that if i extrapolate jd, jd still buy pdg still buy hasn't sold any today that i understand. but he does have obviously a what i call portfolio management situation. the thing is so big after this run he did you know he came on our air, said he loved it, buy everything. and then it went down and he bought some more. so it is a gigantic position for him. if you see that he sell some, it's just strictly because it's huge. but boy does he like china. he loves ai and he just thinks that you got to have a big. >> exposure of china. >> again. >> it's interesting. you know, there's a jp morgan's got a note out today basically titled has the end or the retrenchment in the u.s exceptionalism trade gone too far. and they argue there's some pretty fundamental reasons why there has been retrenchment in that trade.

>> well, it is interesting that europe has been stronger than united states. it is interesting to see that the msci, this is something that people haven't looked at to go by in a long time. i think temper for retail. if i know the way he would think, i think he would think by the by the etf, it's just too hard for a lot by the fxi, by the fxi. because i don't think temper wants people to be in a situation where they're playing these individual stocks. but he loves them. and i got to hand it to him because there are very few people who come on air and say buy. and then when it goes down, he bought more. it was true to his word. but at a certain point, you can't just be the you can't be the alibaba fund. >> that said, though, you you would have to set aside some of your long standing suspicions about china, would you not? >> alibaba is the only company i would buy because dave david convinced me a long time ago. this is the one that has a lot of cash and it was incredibly undervalued. so i've always told people, listen, if you want to own one own alibaba, i've not ventured into the pdt. i've not.

we don't own any foreign stocks. we'll talk about that at noon. but i just think that i i've always been in awe of dave tepper. i know recently reiterated why he liked me was because i'm smart enough to know that i'm stupid. so nothing's really changed. and nothing's changed in 45 years. >> sweet words. >> right from when he first screamed at me. why do i like him so much? i do not know. even my wife was taken by him and how miserable he was to me. and yet dumb with a smile. >> well, by the way, club meeting at noon. yeah. >> it's going. >> to be a big one. you got big changes? >> yeah, we do. and we also have a new, new company we're going over. and i'm also going to be severely critical of a company that i've liked very, very much, one where i'm going to suggest that maybe it would be ill advised not to change management. and i typically do not, on a conference call suggest that. and i know it's going to rankle some feathers, but i don't care. >> certainly one name that got criticized yesterday by the president was boeing.

>> yeah, i. >> think speaking today at the barclays industrials conference. >> he's in take no prisoners guy. i really like his attitude. when he came when i spoke to him about the big underwriting, he said, look, this is what we need. and i questioned it. i said, oh come on, you need more. they said, no, jim, this is what we need. this stock's been a good one. obviously people are playing it with ge. ge aerospace was terrific. i do believe ultimately they'll be playing with the honeywell aerospace which is going to be split on honeywell being split into three companies right now. the honeywell automation division i think is just a chronic misery. but maybe they can come back. but a lot of these companies, when they're doing this split, they're in purgatory mode like ge was, but you got to buy them near the end of purgatory mode as you do dupont, whereas honeywell is at the beginning of term. >> we did. >> hear frontier yesterday. barry biffle said he does see a green light for mergers overall in the industry. and we did hear united as well say there has been some drop off in government travel, which is something you might or might not be too surprised. >> but i know that if you look at bookings.com, you look at expedia, look at american express. wow. how about a horse? look at marriott, look at the

cruise lines. and i got to tell you, i no one believes me but disney. i really like disney. i think that disney's making a big comeback. and when i see an article that says it's too expensive and yet you can't get there because it's too crowded. >> yeah, i think the lightning passes are sold out for the year. yes, we're going to watch parks and experiences. >> linear is good, but doesn't matter because they reported around the same time as netflix. and obviously netflix is just an unbelievable company. but there are big sellers of disney everywhere. every time the stock lifts sellers come out, i'd like to know who they are and what their motivation is because i think they're wrong. >> we mentioned as far as consumer goes, walmart, wayfair too. jim, that's about a 5%, 6% gain this morning. >> yeah, i mean initially people just because it's been a heavily shorted company initially they come in and start blasting it. and then you look at the numbers, you say, what do they know? and the answer is nothing. good. >> quarter and. >> shack decent, very good comps. that's going to be your

highest since mid january. >> mystifying because they told you things were good. then they come out and they say things are good and it goes up again. but look this is rob lynch. and anyone knew rob lynch from from papa john. rob lynch is probably the most straight shooter in the restaurant business. i love the guy. when he came over to shake shack, he came on the air and i just said, i don't know, one of those interviews wherever he was there. so you got to buy it because rob lynch can he he's a turnaround artist and he's a he understands value. and a lot of people felt that shake shack was a little too expensive. not anymore. right. he's going to put them everywhere. they he felt the growth path was bad. now the growth path is great. >> yeah. comps up 4.3 i believe margins up almost three points. >> versus a wingstop. that's the one you know i'm critical of which had 20% comp. and now it's dropped to a mid to high single digits. that's not good. go buy brinker in that case. does that got 27% comp in the stock is 22 times earnings. >> hasbro new highs for the year this morning. >> now they're if you look at it you think well wait a second. all the numbers are down. but

the fact is that this is the new hasbro. everything's going in the right direction. >> new strategic plan. >> yes. and i think that mr. cox is doing a terrific job. he came on announced announced the plan on mad money and i, i was struck by how this was the hasbro that is going to be energized. this thing is not done by the way. remember mattel had a good quarter too. some people say maybe toys are back. i would just say both companies are really well run right now. >> talk about reducing the percentage that they rely on china for, for goods. >> and i know that mattel did that too. but it is. these are two companies that really got deep in china. it's very hard to get out of it, although rh did. and if you take a look at rh, which is one of the great comeback stories of all time, they they've moved a lot of a lot of their business to other countries initially. by the way, when you move this stuff is not high quality, but you have to keep working and working and working. gary's done that. gary bought a ton of stock when it was down. look at that. that's where he bought. >> even. >> lazy boy jim on a year on year hasn't done too badly. >> which is interesting because if you look at housing, you'd

think that there is no no rehab houses. a little housing is more difficult than people realize. the fires have played havoc. the storms have played havoc, the tariffs have played havoc. i remain a big believer in both home depot and lowe's, especially going into the planning season. hard to imagine now because everything is so cold, but people are just looking at rates and looking at total and they're saying sell home depot. and that's too simplistic. >> it does look like walmart's going to get support at the 50 day. >> yeah i. >> mean come on. i mean just what are they going to do. going to say, look this is the greatest time of all. they can't do that because you wake up every day. walmart is a company that's part of the zeitgeist. and if you're confused about where things are going, you don't say, well, i'm going to go spend a fortune. although people do spend a costco. >> yes. we didn't even mention the hike, by the way, at walmart, 13%. >> i thought that was, you know, thank you carl, you're getting some great device. we got one yesterday. we haven't seen it in a while from. i know it's much smaller, but it's important realty income because it pays a monthly dividend. we should we

need to be looking at dividends. we need to be looking at what people are doing because they're showing more. that's where they're showing their faith. that's where they're showing their optimism. great point about walmart. let it come in because there are obviously some sellers because it's not down that much. i mean, from where it was two weeks ago. but wow, they're a juggernaut. i'm so impressed with what they're doing. i really like the company. >> meantime, some moderate losses on the dow almost exactly like yesterday's dow is down about 1.55. a lot of that's walmart. let's get back to miami and the fii summit with a very special guest with david faber david. >> yeah, very timely guest of course would be timely every day actually, given everything we talk about. joining us for our first interview since elon musk made that 97 plus billion dollar unsolicited bid for the non profit part of openai is openai cfo sarah friar. it's a cnbc exclusive. sara, nice to see you. >> great to see you too. >> for being here. >> my pleasure. >> all right. why don't we start? we'll get to musk in a second. but why don't we start

with the weekly average user number 400 million. it was his. it was 300 million only in december. so obviously, i don't know. is your growth curve trending upward? >> it is. thank you for asking about that. so yeah it's up 33% since we last gave you a number which was early december. so 400 million people, it's about 5% of the world's population now use openai every single week. and in fact, if you looked at our daily actives, you'd see that that number is also quite high. what does that telling us? it's telling us that there's huge value here. consumers are seeing ways to make their lives easier. might be helping me with a recipe for dinner tonight. help me book a vacation. and then, of course, that's trending into the workplace as well. with 2 million enterprise users or customers today, which is super exciting as well. >> right? i want to talk about consumer and enterprise. you know, you're a private company, but the growth rate on revenues, i mean, there are some who think you're going to hit, what, 11 billion plus in. revenues this year. is that a number that is within the realm of possibility? >> it's definitely we have not

given out our revenue numbers. but thank you for pushing on that. but it's definitely in the realm of possibility. we are a company like we did our first billion in revenue two years ago. if you look at companies that define their era like meta, amazon and so on, the year after, they grew in the close to 100%, we almost three we over three actually. and that momentum is continuing. so we are defining this age of ai with all of our metrics from users and consumers and enterprises through to revenue and even into the scale of our compute ambitions as well. >> yeah. well, again, i want to talk about that. just doing the quick math, if you even are 10 billion, that's only 30. >> times revenues. >> at a $300 billion value. >> that's a. lot less than palantir. >> sarah, you don't rate. >> you know, in terms of a multiple to pay for a stock like ours. there's incredible interest at the moment. and i think you're right. investors look not just at your outyear growth rate when you're young like us, but they say, what

could this company look like over the next five years? and that's allowing us, as we talk to investors, to be able to achieve valuations that are also, i think, on par with the growth rate and the scale that we're achieving. >> yeah. although there is this concern about commoditization, i think that's come up a lot in the conversations i've had, you know, for this interview. in fact, i asked chatgpt, i asked gemini, and i asked grok three for questions for you. and i have to say, a lot of them were quite similar. i mean, it was it was similar output. and so i do wonder, is that a concern and how do you define openai and chatgpt in terms of the value you're talking about, when conceivably i can go to any number of others and get similar output. >> so i think we are. >> so far. >> from being a commodity industry. we are talking about human level intelligence, not kind of bare metal compute. first of all, our numbers kind of prove that there is this reinforcement cycle here. as we get better and better at

innovating, this is how you stop yourself from becoming a commodity. look at the pace of what we've released, just even in the last few months. deep research operator, which is the task worker that will go out and book things on the internet for you, the things we're doing within the enterprise to help them do better, search and so on. and so it's just been like pound, pound, pound of every single week we release a new feature or a new product. and that's what keeps you far away from being a commodity. i think people are thinking a little bit in the mindset of what i saw when cloud computing first started. there was a view that, oh, this will be a commodity. it's just bare metal. today, aws has 38% operating margins. that is not a commodity business. the other piece here that i think keeps you well away from being a commodity is just not that many companies, in the end, are going to be able to invest to keep up the scale and the pace of innovation. we have managed to punch well above our weight to become effectively a hyperscaler, both in terms of the compute that we're buying and the way we're investing in it. and i think, again, that stops you very quickly from

becoming a commodity. and again, you see it in our numbers and the willingness of consumers and enterprises to come to openai to get what they want in terms of human intelligence. >> although there are plenty of people who wonder whether ultimately the return. >> will be. >> there on. >> all of this invested capital, the numbers of which are simply staggering in terms of the hyperscalers and what they're spending. not to mention you. let's talk a bit about that. stargate was a big announcement of a number of weeks ago, a half $1 trillion number over time. i mean, is that a realistic number to think about in terms of what could actually be spent by you and your partners? >> i mean. >> i again, i think we're going to look back, even at this interview in a couple of years and smile with actually how small our ambition was. first of all, with stargate, it was tremendous to get on stage with president trump and be able to show that we are investing here in the united states, but broadly to bring artificial general intelligence to humanity effectively. are we going to be able to spend that again? if i go back to like, prior cycles in the internet, two years out from

when the first when mosaic and the first browsers came, only 2% of today's market cap had been created. so if you think about it, we're two years out from chatgpt launching. do you think 2% of the market cap of ai is being created? i think probably, and in terms of what we'll need to spend to keep up with getting this pushed out globally, we feel so excited about 400 million users. it's only 5% of the world's population. what's it going to take in terms of spend to get to the other 95%? because people deserve the technology. >> but it's going to take i mean, you think you have access to the amount of capital that you ultimately need. not to mention that we're also, of course, talking about it every day. the power that's going. >> to be. >> needed for all of this, which conceivably is a serious gating issue. >> so first. >> just on the ability to raise capital to do something like stargate, there is just so much interest from investors right now. i mean, that's one of the reasons why we're here at fii, because it's a way to be able to talk to a lot of sovereign wealth, and that is the those are the types of investors that we now need to be having deep conversations with. but of

course, our partner softbank also brings a lot of capital. and then i think secondarily on your point about, you know, are we going to have power and so on, i'm actually excited that we have the type of intelligence we're putting into the world to help us solve some of these issues, whether it's thinking. >> about actually be able to help the power situation. >> i do. >> i think that we are getting into an era like this year is really about agent technology, which is more about long horizon tasks like deep research that goes off and does research for you in ten minutes. that might take a normal phd level human maybe weeks or months to put together. that is the stair step into real innovation, new things that have never been discovered. and that's going to mean scientific innovation across the spectrum. it might be around things like power, climate change, it might be drug discovery, but this is the accelerant. thank you. >> i do want to talk to you about elon musk. you know, he bids 97 billion. you guys obviously rejected. you're in

the midst of this fairly complex transition, so to speak, from a not for profit to a for profit. and there are questions about conflicts of interest. sam altman negotiating the. >> nonprofit sale. >> of the profit entity he leads. how do you, as a cfo, navigate that? >> so what i focus on is, first of all, what are we aiming to do here? it always starts with the non profit because our mission is core to everything we do. we've talked a little bit about what makes you successful in ai. we've talked a lot about compute and raising capital, but we cannot forget that it's really about researchers and getting the best minds to come to your company. and in openai, what i see is people are very mission driven, very mission forward. and so that's why important, first of all, that we start with the nonprofit. but beyond that, then how do we just create a traditional company, a pvc in this case, that can help us do all the other things we need to do, raise capital, maybe ultimately think about tapping public markets and so on. and so we're managing both streams at the moment with the people that

are on our cap table currently, and we're just going to keep moving to get all of that put together. >> musk is. >> not going to make it easy. i don't know if you know this about him, but he's somewhat relentless. and even if you reject him, he doesn't take it. take it well, i mean, is that a distraction for you guys? >> no, we are eyes on the prize, which is how do we keep growing our business? you see it in our numbers. we're the only ai company showing up with hundreds of millions of weekly active users. the only company not just talking about models, but talking about down the stack and the infrastructure, the innovation we're doing there, and then up into that application layer. so the consumers just get more and more features that make their lives easier. search, deep research, task worker. all of those things. >> are going to put a lot of analysts out of work, i think, at least from what i hear from my wall street friends. >> it's going to speed a lot of analytic work that is. >> speeded up. it's not going to actually eliminate people. >> i think. >> that people are going to learn how to use these tools differently. our jobs going to be different. absolutely right.

the jobs we had on wall street when we started, i mean, they don't even exist today, right? remember when you used to have to go off and do research almost physically. so i think it's just yet another piece of the curve that says jobs will change. we'll need to retrain people. but we are getting smarter and smarter with the tools we have at our. >> fingertips for profit entity. i mean, musk is calling the whole thing a swindle. obviously. i know you wouldn't. i would assume you dispute that, but how long is the process going to take? >> you know, i can't i can't give you a time frame on it. but i can tell you we're very focused on it. it's the right thing for us to do as we move forward as a company. >> and finally, a lot. >> of. >> this came as a result of the dispute, so to speak, about safe ai. the company was born from that between musk and altman. i don't hear as much about it anymore from you guys. i mean, i hear you're getting close to agi every day, obviously even closer. i used to worry a lot about this a year or so ago. what's going to happen to the world? you know, what assurances can you give us that you are developing this safely, given the race that is taking place

between you and so many competitors? >> i mean, safety has always been at the core of what we do, and sometimes we're louder on it. but everybody should know that it's always right there at the core before we release any model, any new feature, there's always a full safety review that is done, and we try to do it broadly with our ecosystem as well. so we just come back all the time to what is the what, what can we give out to consumers that is helping them in their daily lives? when we work with customers like a t-mobile or a morgan stanley or moderna, what are the things that we can do to speed their businesses along? and of course, they're always going to expect us to hold that high bar of safety. but i think it's a table stakes rather than something that that we need to call out explicitly. >> all right. one day, are we going to do an interview when you're a public company, an actual public company. >> every now? >> sarah, i appreciate it. thank you for doing this. thanks for stopping by. all right. sarah frier, the cfo of openai. guys, back to you. >> what a coup to get. >> her. >> someone i've followed for a long time. >> you've been a long time fan.

>> oh, my. i just think that she from days when she was a goldman sachs analyst partner, this. she's the adult in. >> the room. >> it was a brilliant move to bring her in. i would buy it. it won't because i think that the growth is good, but because frier is that good, she's never let me down. when block, formerly square, went to the low teens, she called me. she says, time for you to get on board. i know you've been right now you're going to be wrong. and it's like, oh, jeez, my wife is saying, who is that? who's telling you? and it was like, sarah fire! i don't know her personally, but she's my old man. >> she's amazing. >> david covered a lot of ground. >> that was. yeah. >> that was fantastic. interview. >> as we go to break watch bonds today, we've been trying to hold or at least yields have been holding above four and a half after the fed minutes yesterday. gave a little bit back from the highs of wednesday. currently right on the money with the dow down 240. don't go anywhere.

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>> jim. big show tonight. >> yeah, one of my favorites is dutch bros. i've been behind these guys long before they came public because my daughter lives in oregon. it's a remarkable story, up 60% this year. i'm about to go with jeff marx, and i wanted to see with ernie because you got ernie garcia from carvana. i like him so much, but he and i are going to go over the club meetings are really important. we only do 12 of them and we pour our hearts into them. so we got to do a little bit, one more rehearsal and then 12:00 and be very exciting. do you love it? >> do you. >> ever do. >> like interim meeting moves like alerts between like like a fed? like a emergency? >> yes i do. >> we've not done done video. we because we do our 1020 video and that's where we 1020 1030 we i was i saw so many people when i was on vacation with members of the club, and they made a lot of money, but they they become better investors. i it's a teaching product. yeah. but we're going to have i got some scathing things to say. >> i can't. >> you teed it up nice. >> yeah. >> i can't wait to see what

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think most of them see their money as a tool, a way to pursue their dreams and pursue their goals. i hope to always be a clear, accurate and investable voice for all of our viewers. you learn a lot here at cnbc. it's also. >> a lot of fun. >> good thursday morning. welcome to another hour of squawk on the street. i'm carl quintanilla with michael santoli here at post nine of the new york stock exchange sarah has the morning off. we're going to see david faber later on this hour interviewing oracle safra catz in miami. meantime backing further off of those all time highs yesterday. dow's down 330. we've lost 6100 walmart is a big story today as they do guide below. and as of the pre market was on pace for one of the worst sessions since covid for sure. we are 30 minutes into the trading session. here are three big movers. we are watching palantir under pressure alongside other defense names. the washington post reporting that defense secretary pete hegseth has told top pentagon brass to prepare the cut to cut the us defense budget by 8% each

year for the next five years. that share is down 13% after actually selling off. also late yesterday, alibaba shares higher, posting a revenue beat thanks to strong growth in its cloud and e-commerce segments. stock up 12.5% and walmart in the red, despite a top and bottom line beat the retailer, saying its profit growth will slow in the current fiscal year. cfo john david rainey said walmart wouldn't be immune from looming tariffs on mexico and canada, even though the majority of its goods are sourced in the us. stock down about almost 7% now. here's a look at walmart. mike, as you've been mentioning, i think misspoke this morning said it's only down 5% or more on earnings a few times since going public, at. >> least. >> since the early 2000. it's kind of been in rare air space. i think before this, many people mentioning it has been this kind of consensus momentum trade well extended above, let's say it's its 50 day average, which is only in the 95. so keep in mind

yeah it looks like a stiff pullback. but it was kind of in this. can't disappoint on any front type of zone. and that's what's going on in this market today. a lot of the big leaders the palantir's walmart all week it's been robinhood down applovin. and so you're starting to see some of the starts come out of really a lot of the kind of go go parts of this market. now, one hallmark of this tape has been very elegant rotation, just harmonious, you know, passing the baton. and we have some slippage here today as you have a little bit, i think, of a of a sense out there that we're sensitive to any sign that the economy might just decelerate somewhat. right. it's either that or i mean, it's not out of the question to draw some geopolitical news from the tape. there's multiple wires now saying that a news conference between zelensky and the president's ukraine envoy has now been canceled at the united states request. that's according to a kyiv official. certainly this was part of the dynamic

yesterday. >> yes. >> and it's been this very kind of high noise environment on the news front, markets struggling to figure out what it needs to try and discount what it doesn't. and what it does mean is that there's plenty of ready excuses to just take risks, some down. if you feel like you need to do that, because we have had this decent run and we'll see how it does play from there. let's get to the street reaction to walmart's latest results and commentary. joining us is michael lasser from ubs. he has a buy rating on walmart with $113 a share price. target. michael, it's good to see you fill in the blanks of, you know, versus what we've said already in terms of what you saw in the quarter and how you're thinking about walmart's guidance from here. >> thanks, mike. good to see you. how are you thinking about. walmart's quarter? is it really if. you look below the headlines, it provided a lot of evidence to support the bull case. its 4.6% same store sales

increase in the us, while slightly below the whisper expectation of greater than five was still very good and will look best in class as we get through the heart of retail reporting season. second, it. generated $500 million, half $1 billion of incremental operating income in the quarter. half of that was from these alternative revenue streams like advertising, membership. >> fee income. >> walmart still very much in the early innings of harvesting those benefits and experiencing a transformation in its model as a result. and third, i think you are. >> absolutely right. >> the guidance did look a little bit below the street. but with that being said, i think it just simply sets. >> it. >> up for consistent outperformance over the course of the year. if i'm sitting at home. >> i'm looking at this. >> pullback as an opportunity to get involved with a really multi-generational story that is compelling here. >> i mean, certainly would i guess, be an opportunity versus

yesterday. but the stock is just back to where it was a month ago or so. and i know your price target of 1.13. i mean it's still contemplates walmart kind of building to this mid 30s type pe as a as a steady state. i mean is that is that basically where you see things heading. >> yeah. so your question is probably why would that type of valuation be warranted. and our argument would be twofold. one, the growth profile of this business is higher than it's been historically. it's going to generate high single. >> digit. >> low double. digit eps growth for. the foreseeable future by really this transformation in the model. and two, that is coming with a lower risk profile than it has historically. so the equity risk premium embedded in walmart stock is lower. that translates to a higher multiple. so it's really those two factors that are driving this this higher multiple. and we think it's warranted. >> and. >> will persist. and the stock can grow with earnings growth as a result. >> michael, do you expect as we

move into retail earnings season, other companies guidance to be as cautionary. >> i do carl i. >> think it's going. >> to be a story where the. >> last several weeks. >> have been. a bit more volatile. within the. >> retail sector. >> companies are going to want to take a more cautious approach. >> as a result. >> there's obviously a lot of. uncertainty on the horizon. it simply would be prudent to embed some degree of conservatism in the outlook to ensure that these companies are delivering on what they say they're going to do this year. >> you know, if that's the case and, you know, probably makes sense that managements are not going to be too specific in terms of what they're building in, in the way of assumptions when it comes to things like tariff policies, is the market doing the same essentially sort of reserving judgment or have in your mind, has the market rushed to kind of penalize those companies more vulnerable or give benefit to those that are more immune? >> by and large, the market is

saying we. >> think the. >> risk from tariffs. >> is manageable. >> this is going to come from a combination of pushing back on vendors, changing domicile production and when all else fails, passing along the tariffs in the form of higher price. that is the playbook that retailers are going to use. we think that's what they'll embed into their outlooks for this year. there is some degree of a penalty driven into some stocks. >> that are disproportionately. >> impacted by tariffs. those who have either exposure to lower income demographics or that are going to be. >> more adversely. >> impacted by this, this tax on the consumer or those who have a. disproportionate amount of their sourcing from overseas. with that being said, the market is looking at this as a secondary factor right now. and just the state of the consumer is the overriding consideration of how the market. >> is thinking. >> a lot of these stocks. >> yeah. one last question on that front, michael. we're not sure where the budget

resolutions are going on, either the senate or the certainly the house side. but one aspect had been a discussion of snap benefits. would that be probed? could there be, you know, a second look at at what is given to low income households in the form of assistance? if that were to play out, would it be material to walmart. >> for walmart less so it generates about 2% of the sales in the us from snap. for other retailers, it could be more significant. the dollar stores generate a greater percentage of its sales from this source. with that being said, what tends to happen is the. >> consumer who. >> is dependent on this snap. >> tends to pull. >> back in other areas to put the basic needs on their table. so while it is a consideration for the year ahead. >> it is something. >> that will be manageable for most retailers who are exposed here. >> good news michael, thanks very much. appreciate it. meanwhile we are taking a leg lower here. dow is down 450. as we said at the top you've lost 6100 though on the s&p. mike this would take you back to

thursday. yeah yeah we're still holding i mean i think people are saying even above 5900, you're still kind of in the in that zone of a rounding error toward the highs. meantime, let's turn to washington. from doge checks to tax cuts. another busy 24 hours. when it comes to the president's comments about policy and the economy. plus some new headlines on ukraine. let's get to eamon javers in d.c. with the latest. morning, eamon. >> yeah. good morning to you carl. let's start with this ap headline on ukraine that just crossed the wire. this is potentially worth keeping an eye on the associated press reporting within just the past couple of minutes that a news conference between president zelensky and donald trump's ukraine envoy has been canceled in kyiv, and that is at the us request. now that cancellation of the news conference comes after a day in which president trump sharply criticized president volodymyr zelensky of ukraine, calling him a dictator and falsely suggesting that ukraine was the country that started the war, when, of course, in fact it was russia's

invasion of ukraine which started the war. so that's something to keep an eye on in terms of the disintegrating relationship between the united states and ukraine and what that means for european security and for russian territorial advance. but let's go back to the comments that the president made yesterday, because president trump said he's considering elon musk's idea to give 20% of any savings from his doge effort back to the american people in a direct refund. he also suggested an additional 20% of that savings could be used to pay down u.s. debt. now, on a per person basis, that's not going to amount to an enormous amount of money in checks to individuals. but federal checks from trump could make the program much more popular with voters. but even as it lessens the program's impact on the deficit. so we'll have to watch that one. and without providing any details, trump also said that the doge effort has found more than $55 billion in savings that coming, even though outside estimates suggest the number so far anyway, is much lower. trump

said doge's efforts will boost the economy. >> we're ending trillions of dollars in waste and it will mean much lower inflation, lower interest rates, lower payments on mortgages, credit cards, car loans and much higher stock markets. i think the stock market's going to be great. >> and the president also touted his upcoming tax cut efforts, saying he wants to include 100% expensing for new factory construction in the united states. and he added lumber to the list of products that he expects to impose tariffs on relatively soon, although he didn't give a specific date for that. so a lot to watch here karl back over to you. >> eamon we'll check back in with you this morning i hope. eamon javers in d.c. as we go to break. get a load of the roadmap for the rest of the hour. carvana shares. >> are down despite. >> an earnings beat and a. >> forecast of. >> a strong 2025. ernie garcia is going to be. >> here. >> to break down the numbers. plus, it's not just about weight loss anymore. a look at where eli lilly is making its next big bet. citadel's ken griffin

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on set today, but good to have you nonetheless. >> good to be. >> here, karl. i'm down in miami at our industrials conference, which has been quite enlightening over the past couple of days as well. so happy to weigh in. >> yeah. what do you make of the selling today and more broadly. >> the reversal. >> of some of these popular longs that have been in the red in the last few days. >> well. >> i think the selling is always going to occur on a short term basis, as you have a market that's trying to break to new highs. understand that. but at the same time we're getting closer and closer down. this policy resolution path. i think we're still far away from clarity, but as you see more. information coming out of the various congressional committees, on top of the ongoing trump policy platform that's been laid out, i think what happens here is that there's something for everybody longer term. there's i think a conviction which you're seeing in the stock market right now, that this is generally. a pro business friendly. >> platform, but. >> at the same time as you get

to the implementation phase of this, we think that it's going to be a little bit more disconcerting for equity fundamentals in the short term. >> interesting. some of your peers this morning have pieces looking at the prospect of deregulation slowly making its way to valuation in equities. and they argue you've got to be patient for one. but second you got to. focus on industries that have high levels of regulation, which lead you to. things like banks and transports. do you agree? >> well, i certainly agree that a sector like. >> the financials. >> and banks in particular, which, you know, we've been constructive on for months now, is under the radar here of where a lot of these policies go. but in general, when you look at where the price action is from a sector perspective, year to date, it is more or less aligning with where there is a, you know, some glimmers of hope from a policy perspective and some issues. so, for example, consumer discretionary tech, even industrials somewhat of a laggard this year. those are areas where you would expect to

see some of this tariff issue come to the fore. but in the meantime carl, what we're starting to focus a bit more on is this narrative where for the equity markets to move. >> higher. >> you need a combination of that mag seven leadership persisting along with the rest of the market. the other 493. we're getting the broadening into the other 493. but at the margin, carl, we're a bit more concerned about the price action in the mag seven right now, where you only have one of those seven outperforming year to date. >> yeah obviously scott that's mike here. the math gets very tricky. if you have a pure broadening without the a third of the market that's in the mag seven not not playing along. i'm wondering what particular color or insights you are getting from the industrials conference. you mentioned that group has actually slipped a bit. it was a big leader for a couple of years now, wondering what they're telling you with regard to the macro. >> yeah. >> i. >> think as you would. typically expect, most of these managements are are staying pretty straight forward in terms of where they see their existing

opportunities. the uncertainty around the. policy perspective is such. that you acknowledge it. you don't necessarily read it as a negative because you're not sure what you're reading negative into just yet, but then they'll also flip around to, well, there are some silver linings that can potentially result from this. so my point being is that most companies are keeping it pretty focused on current ongoing business models and business plans, acknowledging that there's still this broader policy issue out there, giving you puts and takes on it, but not necessarily giving you a lot of granularity on that. >> scott, meanwhile, a lot of the desks that monitor flows have been warning about seasonality getting a little bit worse here. back half of february. how normal is that and how long does it usually last? >> well. >> i think from. >> a flow perspective. >> i think the starting. point on this. >> one. >> carl, is that we had this massive surge on the post-election trade, sort of in november, february, december. etf flows, for example, were sort of off the charts, you know, near record levels. so

there's certainly is some hangover effect to be expected as you go into the first part of the year. usually you get some model and portfolio rebalancing to start the year, which impedes that that continuum of flows. i'd expect that, generally speaking, flows dialed back here at the margin. they begin to disperse into, you know, sort of, let's say other exposures. for example, europe probably picks up a little bit of, of the line here. but all told, i would i, i think that we're going to continue to see a fairly constructive flow backdrop. that's not going to be the issue. >> and finally, scott, you know we got the fed minutes yesterday. market is generally kind of acclimated to this idea. fed's on hold. needs to see progress on inflation. we don't know how policy fits into that. that's probably acceptable as long as it doesn't leave the fed kind of unable or unwilling to respond to a softening labor market or a decelerating economy. do you see that as as a risk, or do you think the fed is

in a comfortable spot? >> you know, mike, i think we're in an okay spot. i'm very happy in terms of our outlook for the s&p. 6500 year end in a ten year yield world that's in this. let's call it 220 to 2 i'm sorry. 422 to sort of 460 range. i think as you push higher towards 5%, which would probably go hand in hand with the fed pivoting from yet another ease to potentially tighten, which is i don't think is in the cards. but but that's where you get a little bit more nervous from a rate implication on equities. i think all told, 4.5% where we are right now. i think we're okay. it really kind of comes back to fundamentals. and i just want to highlight real quickly in our our work overnight just highlighting within the mag seven what we're seeing here, which i think is really important, is a deceleration in the rate of beat and then raise or increase in forward estimates. and again, when you think of the momentum dynamics of this market, that's where we have to come back to this, you

know perspective that yeah we're pretty comfortable with fundamentals. but those stocks need beat and raise. so coming back to mag seven versus rest of the index two different story lines here. i'm probably as concerned right now with the mag seven component as i am with tariff influences and other policy aspects on the broader market. >> now that is interesting, scott. yeah, we're going to continue to watch that that dynamic, among others. we'll see you on set next time, scott. scott cronin over at citi. >> thanks, karl. >> all right. coming up, the ceo of carvana breaks down his latest earnings. stock down double digits. post-results off almost 13%. we'll be right back. stay with us. >> zip this for mary. >> didn't zip.

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>> this is my. >> legacy experience. the power of cnbc pro. never miss a moment with exclusive access to market moving interviews and stock picks. become a smarter investor with the power of cnbc pro, go to cnbc.com pro now. >> carvana posting a top and bottom line beat for the fourth quarter, noting the company expects a strong 2025 in its release. but that said, shares are falling sharply. they are down more than 13% right now. carvana ceo and co-founder ernie garcia joins us first on cnbc to break down the numbers. ernie, it's good to have you mentioned the decline in the stock price. of course, it only gets it back to where it was trading at the end of last month. so clearly

there has been a bit of a run up into these numbers. but the magnitude of a cash flow beat was maybe not what people thought. tell us what drove the quarter. >> sure. well. >> i mean. >> first of all, i thought it was. >> an incredible quarter and more importantly. >> an incredible year. i think. >> if we step. >> all the way back. >> you know, we just had. >> the most profitable year that. >> any automotive. >> retailer has ever had. >> and in history. >> as. >> far as. >> we're aware. >> as measured. >> by ebitda margin, that's pretty incredible. you know, we. grew it. >> 50% in the fourth quarter. >> we grew it. >> 33% for the full year. >> and we did. >> all that with a 1% market share, which i think suggests a pretty incredible opportunity. >> in front. >> of us. and i think that's only possible if you've built a model that customers love. >> and you got a team that are fighting hard. >> all. >> the time. >> so we're very. >> proud of it, and. >> we think there's a lot more. >> good. stuff to come. >> yeah, certainly, you know, the market share story remains a kind of a long term tailwind, i assume. that said, what's happening right now in the market when it comes to used car pricing, sort of affordability, customers credit experience, things like that, are they all

supportive or are there some challenges there? >> you know what? >> to be honest, i think. i think things are. fairly stable. >> i think. >> you know, we're coming off a four year period where there's been a ton of movement. in affordability. >> and. >> credit and all kinds of things. in both directions. i think for the most part. >> things are reasonably. >> stable, which. >> we think. >> is. >> a great environment. you know, our job is to keep delivering great customer experiences. keep making the business better every day. and i think. >> you know, the. >> movement that you see in our numbers is so large compared to anything macro anyway, that we feel like the ball is in our hands and we've got to keep marching. >> seeing some of the, you know, the analysts reaction, noting the big growth in inventory, outpacing the growth in sales over the course of the year, what's behind that? and is that something that's going to need to be worked off? >> no, i think that's something. >> that we've been working really. >> hard to build up. you know, building inventory like that's complicated when you got, you know, a big operationally intensive business. we've got a lot of people in the company that got to find the right cars for our customers, figure out

which which the cars are that the customers want, figure out the right price to pay for them. buy them, transport them, you know, put about $1,000 of parts and labor into every single car. get them up on our site to give our customers tens of thousands of options for them to choose from. and we think that's a huge part of our value proposition, is just having a very large selection for our customers. so we've. >> been. working hard to. >> build. that inventory up. we hope to build it further from here. and we think that's great for our customers and great for our business. >> ernie, to the degree you're seeing evolution in the consumer's preference on price, on model type, i. >> mean, where. >> would you say the biggest delta is right now? >> you know, i. >> think i think that there's maybe nothing crazy notable. i mean, i think, you know, there's clearly. been a. >> lot of movement in evs. >> i think, you know, evs were a. huge focal point. >> for the. >> entire market for several years. i think, you know, more recently. >> they've. been viewed as as. something that, you know, maybe is. >> facing a little bit of a headwind. i think for us, you know, for the full year, we had 5.7% of our our sales were evs.

that's around four times what is seen in the broader used market. and i think, you know, that's an interesting change. i think, you know, we're believers that ev technology is here to stay. and, you know, every technology. >> that makes. >> progress goes through fits and starts. but we think that consumers will continue to demand those cars. we think, you know, we're in a great position to serve those customers needs because we do have customers that disproportionately like those cars. and then also, you know, an interesting. dynamic of the used car market is that. the product clears once before we get it. >> so. >> you know, we. >> the. >> product has already found its price. >> in. >> the market. before we go sell it to customers. and so those are. >> very. >> profitable for us. so that's interesting. and that's an ongoing evolution. but otherwise i would say you know customers want a great experience. they want simplicity. they want selection and they want a fair price. >> and it's. >> our job. to deliver that. >> that's interesting. that's a great answer. and it does sort of point to other research that has been making the adoption curve long term a little more shallow, maybe some policy uncertainty, consumer hesitation

from carvana. from carvana's perspective, are you happy to be agnostic, or do you want to sort of lean on various trends, given the power that you do have? >> yeah, i mean, i think we want to pay attention for sure. and i think that we want to, you know, here and there we want to take positions. but generally speaking, you know, our job is to. >> build a business. >> that that acquires cars from, you know, whoever their previous owner or user was and gets them ready for the next owner as quickly and as efficiently as we possibly can, that's required, you know, rethinking the entire business, you know, making the transaction flow self-service and very simple for our customers so they can go through it. and then we want to listen to what our customers want. and so, you know, our supply chain is really. more of a pull system. you know, we listen to the demand signals from our customers. we go out and acquire those cars. and that's the way we run the business. >> just talk a little bit about the financing side. i mean, you say you want to get to investment grade. the company has issued some equity. you obviously have to kind of, you know, you sell your sell your receivables into the market, things like that. what's the

environment like and where are you on your path to where you want to be? >> i think. >> i think the environment for us, you know, selling. >> the receivables that we. >> originate has been. great and getting better. and so i think that that's that's great and that's exciting. i think as. >> we get. >> bigger and more well known, i think that we've continued to make progress there. and so that's great. i think from, you know, the company's finance profile perspective, i think the evolution has been unbelievably rapid and we're extremely proud of it. you know, the way that we think about that internally is, you know, what is our net debt to ebitda. you know, we had $1.7 billion of cash sitting on the balance sheet. that's a big number relative to our debt. and i think super importantly, you know, we've been growing ebitda extremely quickly. we grew up about four times. >> last year. >> you know, we got to about 1.4 billion. we had just shy of $1 billion of operating income. the financial profile of the company is very rapidly improving. and that's exciting. and it means that we get to focus on, you know, building the business, taking advantage of this huge opportunity over a many year

period. and that's kind of taken care of. >> you know, on the side. >> so i think that's all a great story. and our job is to keep executing. >> ernie i know cramer was sends his regrets wishes. he could have been here for this one. >> but he's been good to us. >> tell him thank you. make it make it work next time ernie garcia joining us from carvana. thank you very much. meantime, sell off mike finding some level a little bit of a little bit of firmness here around that that 6100 level. this has been the hallmark of this this market for some time. we're not everything comes under pressure. at the same time. volatility market has been a bit of a cue on that. and it's not been overreacting to vix still under 16. meantime top investors convening in miami for the future investment initiatives priority summit. our david faber just kicking off a panel now with oracle ceo safra catz. let's listen in. >> we all we. always try. >> to win. >> we don't like losing. >> no you don't like losing. in fact, i think you've said. >> to me you're horrible losers. >> you know, in terms of the culture of the company. do you

feel like that's something that. distinguishes it? >> well, we never give up. that's for sure. we don't want to follow others. >> we always. >> try to do. >> something differently. if we are number two in. >> the market. >> we make. >> sure even number. >> three. >> god forbid. >> we make. >> sure that we do it very differently. >> and we don't. >> just follow. >> number one. >> so yeah, being number one. >> is very, very important. >> it also means. >> you're the. >> best and you're solving your. >> customers needs. >> the best. >> and we basically don't give up until. >> we do it. >> yeah. well so an example of doing something differently in the. near in the. nearer experience, not going back for us 20 years would be what? >> well. >> when we first. >> built our. >> cloud. >> we focused. >> on applications and on database. but what became very, very clear was that the underlying infrastructure was very important.

>> and we basically. >> ended up learning from all of the other the other hyperscalers. >> and we realized that we. >> would never. >> be the. >> best by following them. so we built an entirely different cloud. we built the networking differently because we went back to our. >> focus. >> which is huge amounts of. >> data very. >> very quickly. >> and very, very securely. >> and the reason. >> that's important is because in the cloud you pay by the minute. so if. >> a workload. ends in a minute, that's nice. but imagine if. >> you finish it. >> in 10s. >> so it's a. >> sixth the price. >> and though. >> we. >> built our initial. cloud to be able to cluster. >> and run. >> workloads simultaneously and then bring them back, which is

really important for database, as many of our customers know, it is unbelievably powerful for ai workloads, which is why we've become the really the destination of choice for most of the large language models, including openai. >> right. so you feel as though that has differentiated you, for example, from the hyperscalers. >> that you. >> just mentioned. >> despite their massive ability to spend money on a scale? frankly, we've never seen. >> well. >> additionally, though, we also. >> knew that many of. our customers would want to have sovereignty, would want to have. >> a cloud within. >> their enterprise, within their country. >> even on a ship. >> in some cases, and in fact. >> also for. >> military intelligence purposes, even disconnected from the public internet. so we designed it in a way that our customers get to choose. they

can be in the public cloud. >> they can be. >> in the sovereign cloud in their nation. they can be in a company. >> only cloud, even though. >> they have all their all their all the capabilities of the public cloud. or they can be. completely disconnected from the internet and just on classified networks. this again, something totally different than everyone else. and that's working for us. and that's why things have gone so well. >> they have gone well. half $1 trillion or. >> more. >> more. >> than a. >> half $1 trillion market value. obviously. >> i'm sure. >> many of you know, the stock had a very strong year last year. let's fast forward. >> into. >> the into the present, if not the future. i mean, a lot of focus is still on those hyperscalers. your capex numbers are quite significant, in fact doubling, but they're nothing close. >> to the hundreds and billions. >> that are being spent by the likes of microsoft and meta and aws and the like. do you think

they're going to see a return on investment on that? >> well. >> i think that it's only the beginning, frankly. now, for us at oracle, we like to partner with many of the financial providers so that i don't have to take it all on in my balance sheet. they often want to do that. we like to do. what we do best, which is run unbelievably efficient, secure clouds. some of the other hyperscalers want to do other things that maybe they believe they do best for us. i actually believe ai is going to not be a thing. it's going to be something in everything. just like now with the first generation, with machine learning, most people don't even think how waze is helping them get from here to there. that's the first generation of ai in machine

learning. these large language models, this capability, those agents are going to be part of everything you do, things you never even thought of. and of course, they're going to help us do really important things like save lives and cure cancer. we're not going to give up until we do that. >> yeah. >> you have any concerns about humanity as well, though. >> in terms. >> of agi? >> well. >> i can't see into the future. it would be better if larry was here. he'd really give you something profound. i find that every single time there's a new capability or new technology, people get afraid. and the truth is, change. all change is extremely scary. so i understand that. i think we should just make sure we keep going forward. and us us allies. what i like to call the good guys that we

always have the best capabilities, and that's probably the way to protect ourselves most. >> i just did an interview on air with sarah frier, the cfo of openai, one of your partners. we talked a bit about stargate. of course. and your other partners there as well. and softbank. do you think you'll actually. >> end. >> up spending the half $1. >> trillion. >> the number that was mentioned on data centers over time? >> well. >> the group overall, in my opinion will spend it. absolutely. and each one of us will do what we do best. and openai will do the technical parts of their for their models, both training and inferencing. we will we will run the underlying infrastructure and many of the other partners with many to come. and of course, our other technology partners, which include nvidia, amd, arm, will

do their part. so i think it's going to be amazing. and if we we're very excited about it. we had scouted out the initial location and we've got in the next few months, the first smallest piece of it going live. it is so enormous. >> small but enormous. >> right? well. >> this facility in abilene. >> yes, but. >> the first. >> two pieces. >> are going live and then the, the capacity there is really amazing. >> i showed on tv that was basically the size of a lot of. >> manhattan. >> when it gets fully built. >> is that is that. yeah. >> you guys overlaid or i think. >> altman overlaid it on. >> a. >> he did. yeah. you know us. we're not we don't talk much. so we. >> took it took like over central park. i wish they could have left that out. >> how do. >> you balance though all. of those customers. >> for. >> example, sam. >> altman and elon musk not getting along. >> particularly well right now.

>> you have relationships with both, i think. in fact, you know, you were starting down. >> the. >> road in abilene. you thought at least with with musk as well. how do you navigate that? >> well, we. love them both. >> and by the way, it's not that unusual for us to serve multiple customers that are direct competitors. i would say most banks, most telecommunications companies, most industrials actually are our customers, even though often they're bitter rivals. i would agree that this is a little bit more personal than i'm used to, but our job is to make them both successful. in fact, that abilene site was initially offered to x.ai, which we love, and elon wanted it very quickly and he wanted it like in november, which was just a couple of months now. it wasn't the physical building buildings weren't finished yet, so there

was no way. so elon did. i would say the next best thing is he bought a or he rented an empty building already, i think from electrolux and brought in temporary generators and things. and he you know, it was don't count against him. he did it and with time to spare by the way. but it's a long term direction. i don't expect that he's going to keep doing it that way. >> you don't. know why. >> i think because you you really ultimately want to have your power supplies more redundant and all of those things. but he did a lot of very clever things, including using their batteries to avoid spikes in. so again, all very well thought out and met his needs. and we're thrilled. we work with them extensively still. >> you know, so obviously we know what oracle's. role conceivably will be. but i'm

curious as to how you view. the landscape given. the competition. between all of the different generative ai platforms. i mean, can can they all be winners, or is there a commoditization that will take. >> place in. >> some way that will, that will, will, will eviscerate value? >> well. >> first of all, they our goal in our cloud is to give our customers choice. we're not a competitor ourselves. we don't have our own large language model where we train others. what we bring is both the infrastructure and massive amounts of data. we hold the world's most important data on behalf of our customers. so our customers basically will get to choose which model they want to use, which public model or open source model, or closed model, and which they want to really

educate with their own data, often without letting it go back in the wild. and so for large enterprises and governments, they often want to train their models and, and they get to pick which one because some will be better than others, depending on the data and the industry. and so our goal is to make it available for them, whether, as i told you, in the public cloud, in their own company, in a sovereign cloud run by their own citizens, all of those, our job is to make it available and make it run fast and securely. >> you've had some experience as well. navigating government policies, for lack of a better term. i think you certainly, you know, you were involved in, i think, the transition for the first trump administration, how important is. >> the. >> government going to be. >> in everything that's. >> taking place right now? obviously, the stargate

announcement, even though it had been worked on for some time prior, took place at the white house. >> well, i will tell you that reducing regulations and making power available more quickly will be very, very helpful. things like that matter a lot because so, you know, i'm from the technology world. as a general matter, we don't interface too much with the government other than mergers every once in a while. but now with these build outs, many of our partners do have to get permits, get get capabilities. and those often require government approval. >> the time is already going by so quickly. safra let's go out five years. we don't have to do 20 years between conversations. and you. >> and i. >> are sitting here. >> what is. >> oracle look like? you know what? what is it that you hope you will have accomplished as the company's ceo between now

and then? >> well. >> first of all, the thing that always motivates us is making our customers successful. nothing makes me happier than hearing one of my clients on cnbc saying something like dara said at uber on their first profitable quarter because they moved from on premise to mostly to the oracle cloud, and it was a way for them to really do more and spend less doing it. so what are you going to see more and more of our customers being incredibly successful and infusing everything our applications, our fusion applications already have over 100, maybe hundreds of ai agents. we don't talk about it that much because they're just been rolled out.e'll tk about it as our customers go live. and that's going to lead to unbelievable efficiency and

just more of the same, just faster. >> just faster. so this is the year. of genetics though. i mean, this is the year we're going to see that inflection sort of. and we're all going to start to see the efficiencies as a result. >> oh it's amazing. i mean, as it is, you know that i already announce earnings a week and a half after my quarter closes, right? no one does that. how is that possible? because of all those the capabilities that are in our system that we we've rolled out and are continue to roll out as our customers roll that out. when you do things faster, it has to be less expensive. it has to have less labor. it has to be much less manual. and the more and for us the next few years, it's going to be fun. >> all right. and larry ellison is still going to be doing. >> what he does. >> five years from now. >> larry's the larry is so involved. people always think that i run this place. oh, don't

let titles fool you. the reality is, the genius and the technical direction is all set by larry ellison. but so is the technical management with him. he makes those decisions. and together we make all the business decisions. always together. we don't always agree at the beginning when we have the same facts, we always agree at the end. all right. >> well. >> unfortunately, we're at. >> the end here. >> as well. safra. >> thank you. thank you. >> safra catz ceo. >> thank you. >> thank you. >> thank you. david. >> pretty fascinating discussion with faber and safra catz. very rare appearance, by the way. mike with her discussing how they run the business strategically and tactically. really interesting stuff. when we have the facts, we always agree at the end. it's a pretty good way to put it, i think. meantime sell off continues. dow's down 560 only. energy and

health care in the green. we did get a spike on the vix back above 16. but currently just below it with the ten year really not a part of the story really not a part of the story today. pretty solid at four and ♪♪ only servicenow connects every corner of your business, putting ai to work for people. pfft ... every corner? every corner, nick. ow! so kate in hr ... hey kate. can focus on people, not process. oh actually, i have a question ... keep up, nick. do you have to be sick to take a sick day? patty in it is using ai agents to deal with the small stuff, so she can work on the big stuff. agents like secret agents? secret agents i control. with your mind? you know ... i played a secret agent once. - we know. - oh gosh ... i liked it. over here, ai gives tina the info she needs to get the job done. nick, what did we say about touching? no touching. good. ai helps jim solve customer problems before they're problems. for reals? for reals. for reals. servicenow is the only platform that connects every corner of your business, putting ai to work for people.

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have your cake and eat it, too. don't settle for t-mobile or verizon 5g home internet. get super fast xfinity internet you don't have to share. forty's going to be my year. about this market action and some of the unwinding of some long loved names. >> yeah mike was. >> talking about that earlier applovin. >> but the question. >> people always get the wrong question. it's not why are we down. it's why. >> have we been. >> up so long? i mean, that's really the better question. just flip the story on its side. that's what good. >> journalists do. they flip the story. >> up and down. >> and so look what we've got here. we've had a lot of policy uncertainty. >> around fed rate cuts. >> what's going on. >> with that. >> what's going on with the inflation picture. what's going. >> on with tariffs. >> because they're not. pricing that in to the earnings. >> picture yet. >> and then. >> the washington policy. in general this is a lot for the markets to absorb. and yet we're sitting at historic highs. so i spent the whole day. >> yesterday mike i know you

talk about earnings all the time looking at. >> where we are. >> we were expecting 12% earnings growth. >> right at the top for the first quarter. >> and that's what matters folks. it's the first quarter and the second. >> quarter we're. >> trying to figure out right now. so here's the numbers january 1st. >> s&p earnings. >> up 12.2% today 8.5 okay. is this a little or a lot of a cut. there is a normal. >> downward revision in the first. >> month to six. >> weeks in. >> a quarter. >> as the analysts. >> who are usually too. >> exuberant lower their numbers. >> this is a little. >> bigger than normal. so i spent. >> the day yesterday. >> looking at why these numbers were coming down. >> there was a lot. >> of downward revisions. >> on some. >> of the insurance companies. >> because. >> some of them were talking about la fires. >> that's a little understandable. >> there was boeing, of course. >> had losses in production quality. >> ford had. >> cuts in its electric vehicle. >> software operations. losses there. >> and that's been showing. up some very. >> specific issues. by and large, i still see very good news on earnings. because the downward. >> revisions. >> while they're noticeable. >> a little bigger than normal. >> they're still relatively small. the other thing that's. >> interesting is if. >> you look.

>> at what's been getting their numbers lower, big tech is not a big contributor to this. that is very, very important. >> because if. >> that starts happening, katie bar the door. the other thing. that's i think really important is the full tariffs are not priced in. there have been estimates. >> and mike we. >> talked about this in the last week or. >> two where people were out like savita. >> was. >> estimating that. >> if we really. >> priced in the full length of these tariffs, we're not talking about up 12%. >> on the year. we could be. >> talking about mid single digit earnings. >> and basically. analysts at. >> this point are saying no, no, no, we don't. >> actually have any. >> real numbers. we're just acting like nothing is happening right now. >> so the market. >> is essentially ignoring the potential. >> impact of all. >> the. >> analysts i should. >> say are ignoring the potential impact of everything. so in terms of the bad news, there's the good news for you. the bad news is we're. >> expecting double. >> digit earnings growth. >> in 2025. >> there is very little. >> room for error. >> because the multiple. >> and mike. >> and i talk about. >> this all the time at 22. times forward earnings. that is a very rich multiple. the market is expecting very strong earnings growth on that. >> it's hard to pull.

>> that forward. how are you going to get to 25 on a multiple. you need to get some earnings growth. so we're expecting roughly 1,112% earnings growth for the year. >> mike the story's been broadening of earnings growth. it's happening. but maybe at a slightly lower nominal growth level as you say. so market just sort of trying to digest all that. bob thanks very much. we do want to turn to eli lilly right now a bright spot in today's down day that has helped fuel lilly's profits its share price as well. but it's not just about weight loss anymore. angelica peebles taking a closer look at lilly's next big bet. hi, angelica. >> hey, mike. that's exactly right. >> the big. debate right now is. >> where the obesity. >> market goes from here. >> so i. >> asked the top. >> scientists. >> dan skovronsky, to. >> weigh in on. >> what it will take for new. obesity drugs to compete with the company's own. >> and novo wegovy. >> he sees the two main opportunities for the next generation as. >> drugs that are easier to use. >> like pills and medicines that produce more weight loss. but he's most excited. about seeing what other health conditions glp one can treat. >> this is probably been.

>> the most amazing thing i've seen. >> in my lifetime as a scientist and a physician. just the multitude of different diseases that could potentially benefit. the way we're learning about this is mainly from patients telling us, i've been on your drug. >> and i've seen. >> this benefit that was surprising. >> outside of obesity, skovronsky wants the lead to take big swings, things like alzheimer's prevention. >> als, chronic pain. >> and gene therapy. >> right now, the biggest health care company in the world, probably the biggest health care company in the world ever. we have an obligation. investors have given us that vote of confidence. we see that as an obligation to invest in some of these big problems that are hiding in plain sight, to try and make a difference for the health of humanity. >> so it helps. >> that lilly. >> can afford to. >> make those bets. >> right. and lilly's market cap is around $820. billion today. that's up from $120 billion. >> just five years ago. >> and now we'll. >> have to.

>> see. >> if those. >> bets can pay off. >> guys angelica the one point we always try to make with lilly is what sets us apart. what sets it apart is its thematic discipline. over the course of decades, they weren't distracted by a bunch of other bolt on acquisitions, and we're in the payoff period right now. >> exactly. >> and it's. >> interesting, right. like you. mentioned obesity. >> they've been in this space. >> for years and years. >> same thing with alzheimer's. they finally got a drug for alzheimer's approved. >> last year. >> now they want. >> to. >> keep going. >> on that. >> and you. >> know i've asked. >> them. >> a. bunch of times. >> will their. strategy change. >> they have. >> just this totally different position. so will we start to see. >> some of those bigger acquisitions. >> and they. say no, they. want to stay disciplined. they want to take. >> those smaller. >> bets, invest early and lower prices. and if they pay off, great. and if not, that's okay. but again, you know, they have that luxury right now, right? >> not to mention the thank you, angelica. not to mention, mike, the prospect of tariffs and what that would do to some of their foreign rivals and possibly give lilly maybe some nuance in terms of where the actual pills are brought in from, depending on what you're manufacturing. but

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>> good thursday morning. welcome to money movers. i'm carl quintanilla with mike santoli here at post nine to the new york stock exchange today. a bit of a gut check on some of the street's high fliers. walmart with a big move lower on the back of earnings. palantir is down 20% over two days. spooked with this talk of defense budget cuts and some insider selling. we'll break it down all this hour. plus, with the s&p coming off all time highs, some investors are looking elsewhere for opportunity. goldman lays out the bull case for small caps and international equities this hour. and then the largest office to residential conversion in the us. the ceo of ge real estate on the company's latest project in new york city. meantime we are in the midst of a bit of a sell off. dow's down 1% plus close to the lows of the session. we've been holding the high 6000 here jim. jim. mike. just below 6100. but after a couple of days of all time highs. yes it's been a very like