yes, rates do bring valuation into focus.is a little bit about the macro dynamics. out of the corporate earnings season. we haven't had much in the way of guidance updates. that's weighing on the indecks. i am concerned with the consumer cyclical area, down 2% today and showing you when you talk about housing, the other areas of concern for investors, it is about how much is being restrained by rates at this level. we had the energy cost as well. you know, when you are have a balance outlook from the fed, that's that they told you yesterday, more or less, worry equally about inflation and growth, you know, it means that you could never quite be comfortable on one side or the other. we will get through it. the market can find equilibrium. we have done it before. it takes time to test whether that's the level that's really going to hurt economic activity or not. >> yeah. i mean, you really hit it on the head. i am looking at the discretionary space as we speak, which really where the, you know, the most acute part of where a lo

>> i think valuations are full and they're fair.ink they're fair for the current level of rates. they're fair for the current level of growth, and i think they're fair for what the forward looking earnings expectations may be. obviously there's distinctions within the sector. if i look at tech, we all worry about tech valuations. if i have a company that is growing their earnings at 10, 12, 20%, you know, versus the s&p 500 that is maybe growing the earnings at, you know, 5 to 10%, of course i'm going to pay higher multiple for the higher growth company. >> you're not worried about the fact that that earnings growth and the very companies you're talking about has been coming in not going up. >> that was the case earlier this year, that was the case in 2022, but when i look at earnings revisions now, they're actually trending up versus down, that's true for technology. that's true for cyclicals, and what happened is if you look at consensus gdp forecast for this quarter, it was virtually, you know, 0.5%, 1%, it's moved higher to 2%,

or flat valuations in the last year.ata breach is a company that has a lot of investor interests of even though the price is high they've been able to sustain that. when i see a company like this raising money i think they are not on the verge of ipo. you would not want to dilute your ownership in the next two months if you would do a direct listing. sonali: let me give you an update on where arm is trading. the ipo pop is still holding. this has been rising as much as 15%. some of those gains are volatile but some of those pots could be as large as 10%. the stock is up to more than $50 a share. it was at twice $51. they tried to bring it up to $52 a share but bringing it down has not only given it an initial pop but even more than it would've been had they price it higher. there have been bigger pops in history but there were questions coming into this ipo from the beginning about the valuation itself. this is stacking up for a win for the underwriters. when you take a look at the competitive dynamics why do you think i

in different ways. >> valuation too rich? we mentioned it's ate 100 times, maybe too rich for some including yourself? >> valuation is a little bit higher for us. the growth prospects of this company have not been as attractive. >> you mentioned you're playing it other ways. is that code for we like nvidia the best of all in a.i.? >> we like nvidia but not at these valuations. there's a couple ways to play. the hyper scale cloud vendors which we, obviously, own microsoft and amazon and google. there are strategic consultants like accenture. adobe that just went public with their firefly pricing and that's an interesting play for us as well. there are a couple ways we're playing the a.i. mega trend. >> want to go back to the comment that you made about nvidia, maybe too rich where it currently is. the valuation has come down over the last several months has the guidance have gone up and earnings have been good. it's an interesting perspective that you have that you still think it's over valued. i bring it up, ken griffin on ci

should be and where valuation is. you're still trading at valuation levels of a free money economic environment, and that's not here. i believe that you've seen the market lag and the impact on the economy broadly lag the move that we've seen in interest rates, and that's the concern out there, i believe we're seeing right now. >> brian belski, that's a powerful statement weiss makes. you're still trading at valuations of a free money environment that no longer exists. your comments today, 50/50 on the s&p for the end of the year, quote, becoming increasingly more likely. >> yep? >> why so? >> september will give you a good buying point. you don't want to raise your market target when the market is rallying. you want to see a bit of a pullback. that's number one. number two, if you look at history, and i know people love to throw out these statistics, a 20% gain from a bear market low, it's very likely to see a double digit gain for the next six months as well. more importantly, i think, if you have the first eight mo

>> this valuation is a substantial check. looking at it conservatively, the sellers, the founding family seeking a payout of $4 billion. the buyer has to offer and exit to many of the investors. even on a conservative business, we are looking at a $7 billion check in cash. from the people who you're talking to, they are saying that either the founders have to cut their ask price, or they may pull the deal if the buyers are not willing to shell out this kind of money. the situation is evolving and we are watching it. as of now it looks like the deal is in jeopardy. rishaad: thank you so much. we have equities, market opening and 30 seconds. we are looking at a sensex free market which should open with a record high, the nifty already achieved that. we are looking at very high valuations. a p/e ratio on the nifty act 22.5. let's have a look at what is our next guest doing. he is in an early stage capital firm, this latest fund of his has announced capital of $1 billion. that is nishit garg at rtp global. how do you use it? nish

let's ask the dean of valuation, aswath damodaran.see you again. >> good to be back. >> so, how should we look at valuation? let's take megacap in general because it is not so absolute. just because something is deemed to be overvalued in somebody's mind doesn't mean it is, or doesn't mean that it matters at the all. >> right. i mean, i think that both parts of that statement is true. on a pricing basis, as much of a run-up as you had in the stocks, in a sense you go through the list, you are more likely to be overvalued than undervalued. you don't get a 40% run-up on companies of this size without expect something degree of overvaluation. so right now if i look at these companies, they're all either fully valued or overvalued. at the start of this year, four of those six stocks looked undervalued. middle of last year, all six looked undervalued. so i think it is part of the boom and bust of these companies. and i think that if the market is going to be carried for the rest of the year, i don't think these companies can do it. so some

pop, you are getting a little bit of boost in valuation., as we've been talking about, a far cry from the $39 billion valuation it was able to ink in the heyday of the pandemic for instacart, when a lot of people were using the delivery app. now, i know you and i will talk about this later, but the sell that instacart might have as an a.i.-focused company, it doesn't even meet what you would get from the same type of idea here and is expected to price tonight in instacart's wake. you had also they're up there, the i.p.o. pricing range as well. let's see if they're able to meet that, especially because the markets they're meeting are a little more mute than the markets we saw last week that they lifted into. caroline: it's interesting coming off the previous highs, but on the big sell, was this an artificial intelligence empower company? i talk about this the a.i. pitch that she's trying to take to the investor at the moment. she's saying, look, there's a really big opportunity to make the grocery even more convenient. we have all the data.

in the private market you don't have to mark down valuation.never you raise another round of money. or as in the car did, they did it themselves internally. you are seeing the private market flag because a lot of ceos want to believe the company is still worth more, maybe not the peak of 2021, but that is why if the card is so interesting. it is nowhere near the peak. >> the other dynamic if it has been a pretty successful run a company for a while. you have employees that have a ton of equity. it seems like there is an imperative to create some liquidity. it could be kind of painful along the way. >> absolutely. this is one of these companies that was born shortly after the 2008-2009 financial crisis. is sort of miss this chance. you can debate whether not that was a good or bad thing. you take a look at his closest competition, doordash. it is trading at a premium to what this valuation implies for instacart, about 3 1/2 times ev to sales. that is lower than even uber which was at three times. >> all right. thanks very much. christina, oracle

valuations are far from cheap. we are a valuations are exceedingly attractive is most portfolio holders are not investing solely in fixed income or solely in credit. when you look at where high-yield yields are, 8%, loan yields 10%, as a de-risking from value equities, it is an extremely attractive valuation to de-risk your portfolio at those types of yields. when you look at measures like the equity risk premium, all points are in context to where other things are or where other parts of the portfolio are. in that context, it is not expensive. katie: it is a great point that money managers are not investing in isolation. the equity risk premium is exactly where i wanted to go because i was reading a note from barclays this morning. here is what they had to say. >> while the s&p 500 equity risk premium was low for most of 2023, the latest leg of the rally has caused to fall below ig credit spreads raising the question of whether equity investors are willing to continue chasing growth at any cost. we doubt the valua

if you flip the valuations on their head, and some cases the valuations are well below what you would get from t-bills which is north of 5% now and that will be a headwind for valuations also. jon: it's a good point. if we are in an environment because we were alluding to the fact that in canada there is an expectation for example given some of the contraction we have seen for the actual economy that the bank of canada will be sitting on the sidelines at their next meeting, that we have to get used to higher rates longer. that environment could potentially change where investors put their money. you alluded to the fixed income market. you have a turbocharged ai boom which will keep some investors interested in technology stocks. if it's a new interest rate regime even if we are near the end of rates and people are tracked analyze that, how does that impact sector strategy going forward in your opinion? guest: it is so difficult, i am working on research now about -- one of the things we always here is ultimately higher interest rates will be harder on growth stocks and value stocks. t

when valuation didn't matter this was lower left upper right and valuations are a concern and now you'vea great time >> heretofore, trumps lost >> i think so, too and at ulta, you have a case that was in the sweet spot coming out of covid and i think you've gotten to a place where it is, and i think if you look at the pricing normalization and this is something that's started to come back, and i think you look at diskrcretionary and we spent time talking tonight about the consumer, and i think we've seen a peak. >> i think whilest is trumpeded by heretofore. >> no, he did. >> i give carter props he's the mount rushmore. >> of technicians. >> of everything. >> no one tells the story like carter he slows it down for you and he gives it to you to the pen and he kind of delivers. >> up next, final trade. ens) [due at target in 5!] copy that. make a hard left down the alley. network's got you covered. [please confirm requesting back-up.] -changing route. -go. roadblock ahead. ...back up, back up... reverse! reverse! next level moments, we're 30 seconds out. need the next level network. [north

valuation's okay. hat on, maybe you get a chop of that deal. >> calling people. >> all of these companies, instagram, snap, pinterest, they all have a slice of a demo, right? and walmart's demo might actually be closer to pinterest these days. >> call dom. >> there you go. >> explains why guy's there. >> coming up on the show, big blue is seeing some green out there. find out why shares of ibm are topping the tape in today's trade. we've got those details coming up on "fast money." >>> and here's a sneak peek, by the way, at the cramer cam, because jim is chatting exclusively with the ceo of wingstop, who is hungry now? catch that full interview at the top of the hour on "mad money." "fast money" is back in two minutes. nice footwork. man, you're lucky, watching live sports never used to be this easy. now you can stream all your games like it's nothing. yes! [ cheers ] yeah! woho! running up and down that field looks tough. it's a pitch. get way more into what you're into when you stream on the xfinity

well below peak levels in terms of valuation.ernational part of the semiconductor space, down 1.7%, one of the biggest losers. alix: coming up, a lot over the next 24 hours. france's budget will be huge. and guy johnson is at the world aviation festival in portugal. i was in oklahoma with oil people. i goes to lisbon for 24 hours. could not be a better shift, guide. 90 got there ok. what is on your radar? guy: this is where our worlds overlap. i apologize for the noise. this is where our worlds overlap. energy is where the aviation sector is. you have got brains rocketing higher. that is the narrative. will it be strong enough to allow airlines to pass on higher jet fuel costs to customers? europeans are more hedged than american carriers. there is a bit of relief, but this then takes us into the sustainability story. this is the big thing that will be the challenge for the industry going forward. sustainable if he should fuel is expensive. there is not a lot of it. if you want to make carbon, that is the precursor to sustainable

to your mind side, the valuations we are trading at.p: the upward revisions we have seen for nvidia, we have to ask ourselves, are there any other companies that can see upward revisions like that. it is too early to say that companies are able to unpack new revenue opportunities, especially on the softer side or services side, right now they are buying chips and investing and trying to figure out a new product can monetize. copilots is one way microsoft has had we can monetize this based on we have and can sell them an additional product in the form of a copilot. others it is not so clear whether there are customers that are willing to pay for generated -- generative ai. caroline: revenue generating. man deep: it adds -- mandeep: you have to buy the chips and invest in engineers. when the product will be ready is the question. you can see a hit for some companies investing in generative ai. caroline: it is not just the notes but big takes from buyers and players in the value space. ed: the so-called bubble hunter of research affiliates

valuation $9 billion, down from $39 billion.$50 billion or more listing. you know, you might say well, it's best growth days are behind it. that was going to happen anyway. did you want to get in at a $50 billion valuation or 9? >> i think the reality is online grocery retail can never be like online retail in other spaces. you're never going to get 100% gross retail. you would be lucky to hit more than 20% online. that puts a ceiling on how much growth you can get for an online grocery intermediary. the grocery business is not a very profitable business. there's not a lot of fat to share here. it was always a company bounded. in 2021, people forget the bounds and in 2023 i'm glad to see that they're recognizing those bounds. in fact, when i look at the pricing of $9 billion they're building in the presumption that instacart will lose market share of the online grocery retail business and that its stake will drop. which i think is realistic and grad to see reality win out here. >> just to back up for a second, this is actually a

how should i thinkabout valuations or all of those scenarios?i think that is the right way to present a framework, to think about valuation in light of everything that we've seen that's putting pressure that we really haven't seen at least converge at the same time around apple, and i think that will put pressure on valuation. we do need to -- and i think people that have a longer term perspective will likely say, okay, we've seen situations where there's been a little bit of turbulence in the past and apple has always managed their way through. i don't know if we've ever seen quite this many issues to address head on that present the headwinds, but i think long-term investors probably are thinking ahead to the future, when i think short-term traders are going to be a little bit concerned about their position. >> are you still asked all the time about whether you're at a cocktail party or walking here at the stock exchange, hey, this ai thing, is it as legit as the stocks would make you believe it is? and how do you answer that question today no

i do not see this as a less valuation.dicate of the banks and softbank decided to play it safe. the valuation is still compelling if you look at their main peers. it is well below what softbank paid vision funds not a long time ago. considering the fact they are only selling 10% this is the right approach to ensure this is becoming one of the first and biggest capital markets globally. kriti: this is something bankers do often. they price low to make sure it is oversubscribed by 10 or 15 times. my concern broadly is why only 10%? do you see this as step 12 broader issuance? -- step one to broader issuance? silvia: yes. you can see the key steps. there is more free float. many economists are investors. the reality is to take the company public and then to take advantage to show for the growth , for investors, in the coming months, the long-term. kriti: it all makes sense on the surface but here is the risk. we have seen it time and time again with every tech ipo. doordash, airbnb, etc.. you see an initial surge, questions w

valu valuations never, ever a concern. matter, though in terms of eps growth, you got it in spades. >> it's about how they operate the runup energy could hurt margins, which i think might hurt the stock >> all right, for more "options action," be sure to tune into the full program, friday, 5:30 p.m. eastern time. i'll be here you don't want to miss that. i'm going to be here for that. i really am. >>> coming up, the future of semiconductors intel holding its annual innovation confess, revealing new processors and chips what the ceo is saying about the company's next move. the details next. >>> and kristina partsinevelos is going to be here, too. >>> and back to basics does knee doubling down on its parks and cruise businesses, but will the move be enough to turn the magic kingdom around we'll debate the mouse when "fast money" returns >>> missed a moment of "fast?" catch us any time on the go. follow the "fast money" podcast. we're back right after this. (sfx: stone wheel crafting) ♪ the biggest ideas inspire new ones. 30

>> i think the valuations look okay. look at nvidia. nvidia is trading at just 26 to 27 tim street's fiscal two earnings right now and they are clearly the best position for a.i. the a.i. chip is going from $30 billion in 2023 to $150 billion by 2027. that's a 50% cagr and between their cpus and gpus and dp us ad software, that company is going to capture such incredible value. we have bull market consolidation here. that happens from time to time especially when the stocks are up a lot. if we look out over the medium and long-term, which we're always trying to optimize in our strategy, 18 to 24 months, we feel still pretty good. >> i markets. we still feel really good about india. services continue to grow as a total percentage of the overall revenue and the stock is trading at 26 to 27 times the street's earnings. i think apple is going to be just fine. >> is there anything you don't feel pretty good about? everything i've asked you, you said you feel pretty good, whether it's a comedown in valuations, fundamental questions about orde

valuation is reasonable. i think a lot of people are saying, listen, the road to the upside might be limited. a lot of names under the radar screen have runway. >> these names have a.i. involved to. remember watson? >> if you have watson, that was the original a.i. >> i'm sure ibm is screaming, how about us? >> 1997 champion, watson beat. you remember them from jeopardy. these are names that still have the a.i. kicker but to guy's point, they have a much better valuation, much easier to digest. you're not buying nvidia. you're buying ibm or dell, cisco. all names have a much lower valuation and still get the a.i. kicker. >> it is fascinating. karen, what do you make of these names as well? you get more with dell. i understand their computing division wasn't all that either. >> right. i think we've seen -- we saw it with best buy that mab we're talking about the bottoming out of the consumer electronics space, and this is maybe the pc cycle has really bottomed. and so to guy and steve afc point you have a bott

so we'll see the impact of those valuation declines.now, continue to be impacted over the next few quarters. i'd say that conversely, it's a tough market for to be an asset owner that will create what we think will be a pretty good vintage year for real estate in 2024. and 2025. and again, i think while there will be certainly will be distress in certain sectors, areas like industrial and residential areas that the plan has been active and will likely continue to be active. you'll certainly see some distress there. but we're not expecting widespread distress. i would describe it as maybe, you know, more likely opportunities to get exposure to asset classes, properties at a at a more attractive valuation, a better yields and an underwriting that doesn't require especially heroic assumptions to get to the target returns perhaps you know transitioning to the infrastructure sector where i'd say the story is a little bit more positive as chris mentioned, renewable energy, digital infrastructure. so think of things like cell towers and data c

alix: but it is valuation. guy: back to the auto sector in just a moment.berg. ♪ own online store. i sold that. and you can manage it all in one place. i built this. and it was easy, with a partner that puts you first. godaddy. nice footwork. man, you're lucky, watching live sports never used to be this easy. now you can stream all your games like it's nothing. yes! [ cheers ] yeah! woho! running up and down that field looks tough. it's a pitch. get way more into what you're into (jennifer) the reason why golo customers have such long term success when you stream on the xfinity 10g network. is because we focus on real foods in the right balance so you get the results you want. when i tell people how easy it was for me to lose weight on golo, they don't believe me. they don't believe i can eat real food and lose this much weight. the release supplement makes losing weight easy. release sets you up for successful weight loss because it supports your blood sugar levels between meals so you aren't hungry or fatigued. after i started taking release, the weight j

i think, number one, valuation is a problem for apple for a long time.efore covid, the stock historically traded closer to 15 to 18 times earnings. since then, there has been a pretty large re-rating which partially is explained by the pull forward in revenue on the device and services. since then, even with the company not delivering strong results this year, it has been much lower expectations, especially last quarter, and the stock hasn't gone down. we think there are catalysts for that to happen or i'll say a more relevant event. maybe with the restrictions in china, that could be the trigger for the stock to finally come down to a more reasonable level. in addition to this, the perception i have with demand, especially in the united states and in europe, has been lagging. we haven't seen so far any improvement in terms of exp expectations or alternative data. anything leading to improvement. we have a perception there could be additional misses to the strict numbers moving forward as they happened in the last quarter. >> thank you for giving us your

on a valuation-to-sales multiple.billion dollars in revenue this year, investors would be paying $90 for each dollar of revenue generated. that makes openai more expensive by this metric than even nvidia whose valuation of sales clocks in at 19 times. even microsoft which owns 49% of openai is at a mere ten times. so for openai to justify that lofty multiple a lot has to go right. certainly it is putting out some of the most generative a.i. applications, but monetizing it will be a different proposition. that has been difficult for even the biggest tech companies. guys, i know leslie picker was just on talking about brad gerstner's panel at "delivering alpha" and even he, someone who invests in tech companies, thinks this potentially $90 billion valuation seems a little rich. when we put it in this context you can see why. >> although you said a billion in sales, right? that's pretty impressive for a company we never heard of six months ago. deirdre, question for you. as i understand it, openai can now browse the inte

a valuation that in january was $30 billion. so threefold increase in valuation, it just raises the question yet again as to whether some of these stocks, maybe not all, are in a bubble. you look at the gains year to date on some of these names, they're astonishing. nvidia is up 188% year to date. p palentir 130. you can go down to microsoft and you don't see a gain of 30%. in many cases you're 50% plus across the board. many p/es elevated but not dramatically in several cases. however, you could look at this list like the nvidia, which you just bought more of, pick shovels, i get it. i can see the finish line in some way of how they're monetize ai. the question i ask you, can you look at other stocks and see a finish line for the monetization question, which justifies not only the stock valuation but the move. >> this is another question. there's a reason i'm buying nvidia. it's not just that i'm underweight tech or nvidia, the forward multiple, it's 26. this was a year and a half ago, two years ago, we were holding our nose at

valuation is extraordinarily reasonable.t said in terms of revenue, probably about as expensive as it was before the move. with that said, you don't run far from lockheed martin. look at the last quarter. it was excellent. this is lower left, upper right. >> it's amazing in the world that we live in, almost like cybersecurity stocks. you would think you wouldn't have a more bullish environment for these names. especially with defense stocks. and if you look at lockheed, if you look at general dynamics or north run grum monday, all of these charts look terrible to me. so, i don't know, if this isn't the right time to buy them, i'm not sure what would be the right environment to buy these names in. >> i don't think this does much to the short-term numbers. it may put a little bit uncertainty on '24. i think it's an overreaction. and i think they're going to stay defensive here, pun intended or not intended, i don't know. you're right. this is a sector you want to own, and i think -- i love boeing here, too. >>> coming up, amc

you have to let the valuations correct. you have to go through some of these glitches in the narratives and then you want to own them for the longer term. gdp is expected to be less than 12%, so, you've got some time you're going to want to be in these things. >> all right, a news alert on the uaw negotiations. phil? >> melissa, i want to show you what's going on right now. shawn fain is holding one of his regular facebook live broadcasts, if you will. it's not a broadcast, it's on facebook live, where he updates the membership about where things stand with the negotiations, with the big three. remember, we are just over one day away from the deadline of 11:59 p.m. thursday night, and shawn fain has been very clear, in fact, we talked with him on "squawk box" this morning, if there is not an agreement, they're not just going to extend these contracts as they have sometimes done in the past, there will be strikes. and where might they strike? increasingly, it looks like they're going to do targeted strikes. that would mean t

they lowered their own internal valuation, the valuation to market conditions, and their own slowed growthing bankers may be trying to price this -- it opens the window for ipo's. sonali: even with a valuation that is closer to where it was in private rounds, this is still lower. they are bringing an interesting massive names. what does this say about the model to take companies public? >> at this point goes in the tech company were no longer in denial. the market has been in correction for over a year now and companies are aware that it is not going to look like 2021. they are so close to nosh -- sonali: the biggest investors, two tiger cubs that have been investing in this -- the ipo companies. >> they are going to make a lot of money regardless. when this was a very young company, depending on what shareprice they got in, it is still going to be for most of them a lot lower than where it is trading. some of the ones that invested at 39 billion valuation are going to lose money on those shares unless there is a gigantic pop. but overall, i have to do the math. if you are invested in it i

you don't have the compelling valuation case. you could make the argument that we should be there but it's harder to sustain that. you have the september effect and we are fighting it out around the 50-day moving stuff. >> is volume backing this up necessarily? >> no. i would say it was a light volume rally last week. it really actually has been relatively low volume coming back. it hasn't been about a stampede out. it's been about buyers on we and the seasonal effects and the valuation headwinds. when you don't have the secular growth story animating the apples and nvidias that are covering up for the cyclical concerns, which is what's been going on right now as well. i would argue apple is always its own thing. it's not really a bellwether economically. it sort of operates in its own kind of atmosphere, but you clearly have some coattails there. some storage names are weak are some downgrades. nvidia is not holding the earnings related pop. >> you say apple is not a barometer but it might be an indication of the china sentiment

that's something i'm more comfortable with the valuation than i am in arm. however, however, i'm paying -- >> that's not exactly cheap, my friend. >> actually it's not that crazy. you look forward one year, it's about a 28 times multiple. so it's actually growing into it. on arm this is very important and not just for the health of the ipo market. i like where it's trading now. the only reason it would go down is because of valuation concerns and that would spread, in my opinion, to other sectors of the market where valuation, even nvidia, is questionable. so really for many reasons besides the ipo market, i want this to do well regardless of whether i'm in it or not. >> jay? >> it's not a touch right now. i think to jimmy's point, it's very important for the capital markets. we need this to be a successful ipo. i think that's very important. i think there's concern for me just their exposure to china. 25% of revenue is in china and with the tensions there, that's concerning for me. they're suggesting the company will grow mid teens. it obviously hasn't done

but what i'm saying is its valuation kind of accounts for that.llion company that's going, you know, public at that high valuation. plus, its ev multiple is less than that of door d.adash and u. it kind of tells you that maybe valuations have become a little more reasonable in this case. arm, though, a very different scenario. softbank and massa san are trying to get as much as possible that makes sense, but it has to sell that ai story and those cornerstone investors could help. >>> our next guest is hopping on the arm train early, initiating the stock with a buy at a 59 target above well the top owned of its 47 to 51 range. joining us is pierre ferragu. are we of the mind that there's a lot more runway on data center and ai? is that the theory? >> what's interesting about arm, it's an ai play, but it's very much from what's happening in the dar center today, where you see the deployments of these very large clips. arm has very, very good presence there. almost zero. arm is really the play that ai getting everywhere. and so what's happening today

and i think it boils down to valuation. relative valuation, bond yields rising, makes stocks less attractive i think that's the new item which is pushing stocks down today. higher long-term bond yields, relative attractiveness or unattractiveness of stocks it is as simple as that as to why the stock market has been moving down these last few days. >> so funny. i have a conversation with the very beginning of the show with somebody who says 45, 4600 on the s&p by the end of this year makes perfect sense. market is fairly valued. earnings are going to live up to the hype as well and then some 41 minutes later i got somebody arguing the exact opposite do you not think that earnings are going to live up to where expectations have come to? >> i don't think so. earnings may come in strong this third quarter. but i think -- i don't think there is any debate about the slowdown, right? it is not a matter of if, it is to what degree are we getting a slowdown, a softer landing, i think earnings will be disappointing late this year and

are these valuations actually sustainable?f they're not, what does it mean for the rest of the tech sector? >> the valuation you are referring to are backward looking. they are taking place compared to last year's earnings. the point in particular with nvidia is that the forward earnings are far higher than the earnings to the previous period. if you look at nvidia on the forward multiple of earnings, it is by the recent record is trading in the 40s over the last few years. not because the stock price has gone down, but earnings or expectations of earnings have been going up so fast. that would not be the case for a.r.m. i don't think it would have explosive growth that nvidia is seeing at the moment. you have to look at forward multiples. i thought a better comparable is synopsis. >> william, how far outdo do we have to go in the a.r.m. valuation to look more palat palatable? >> i suspect a little way. at the moment, it is not a bad time to buy a.r.m. all is not going perfect. the smartphone market is the biggest market. that

kind of hype in the market to help their valuation. the trouble is for arm is that arm actually is, you know, a business that was built on mobile chips, right? and when it was acquired originally by softbank, they invested in the internet. you may remember that was the last hyped up area of the market. that never materialized. probably lost a little bit of the drumbeat where they could have been investing in the data center. now they're coming at this on the back foot with access to the mobile market. growth has been flat last year. the question is can they convince investors it's all about the future? the market has been quite week as we've seen with apple and the like, but the other thing we're going to do is raise royalty rates. it's going to help growth. they're going to have trouble convincing investors there's a leg of growth which would give a strong valuation of the company. >> it's so interesting. when you think about the ipo and the landscape, the landscape has slowed down a lot compared to the boom times. it's going to be th

the valuations are fairly demandsing in this space.ic subindustries. for instance, stef makes a great point in terms of aircraft and that demand is going to continue. but overall, you would need to see that -- really that no-landing scenario bear itself out for industrials to lead going into 2024. and i think we should be cautionary in terms oh of what the sector has done so far, and that disconnect from an economic cycle perspective. >> okay. we'll take a quick break and come back and do "final trades" next. (♪ music ♪) (♪ ♪) the walking tree is said to change its entire location in pursuit of sunlight (♪ ♪) where could reinvention take your business? accenture. let there be change. >>> we're out here again tomorrow in san francisco. and glenn is going to join us of light street capital. lots to discuss with him. i'll get his reaction to the fed decision. but talk about the investments he's made in big tech, ai, and all things market. that's 12:00 noon eastern. by the way, today on "closing bell," as usual, jeffrey guldlach joins us o

it's valuation, valuation, valuation. i like amazon a lot because their fate is in their own hands. they were not a couple of years ago. apple is problematic. it's a great company but it's a really high multiple. we're old enough to remember apple at 12 times earnings. >> it's just a hardware company and maybe it still is. we've come full circle on the show with our apple bears so we'll leave it right there. chris, thanks so much for your time. appreciate it. that does do it for the exchange today but next on "power lunch," we've got a little more than 100 days left until rimachsts and concerns about holiday sales are already cropping up. i'll see tyler and everybody in a moment. ♪♪ we're not writers, but we help you shape your financial story. ♪♪ we're not an airline, but our network connects global businesses across nearly 160 markets. ♪♪ we're not a startup, but our innovation labs use new technologies to help keep your information secure. ♪♪ we're not architects, but we help build stronger communities. ♪♪ we're not just any bank. we are citi. ♪♪ ♪ ♪ connecting to opportunity is

we don't know. >> you heard us talking about valuations. the stocks, i mentioned marathon, mpc, marathon petroleum, which you came and talked about in the fall of '21, $60 stock, basically tripled. ish. i think valuations are still compelling, am i right or wrong? >> well, you hesitate to say new paradigm, this time it's different, we don't like to say it, but these stocks just buy back stock, you know? they get the excess cash flow. if they have a great quarter, effectively, the stock is worth 5% more, simply because you know these managements now have got a new paradigm, and the new paradigm is, we'll just pay it back to shareholders. and so yeah, no, i mean, it's a really positive refining environment, though, again, it's some what caused by the saudis cutting barrels from the market, combined with the problem we have globally. >> how does the election cycle play out in your oil forecast? i mean, higher oil, the biden administration is going to try and knock that down either by calling up saudi arabia or going there and saying, you know

>> well, first, i'd take out the word valuation. what happens in if -- ipos is you price the company. it's a different game. other people are paying for similar things. it's kind of tough with instacart because you compare it to doordash and airbnb and try to figure out how much to pay. i've given up trying to explain what happens on an a offering based in valuation, but i can explain it based in pricing. so i think if you look at the arm ipo, you look at the instacart ipo, it respects the -- reflects the fact that there's at least enough demand, -- the. liz: you brought up arm. let's talk about arm. arm had a boffo day buy last thursday, and it skyrocketed. right now it's come down, pretty much three days in a row, and today i believe it is the down another 6%. yep, about 5% at the moment, so it's off the lows of the session. it is still above its initial valuation of $54.5 billion or pricing, i guess. but is this a tale of, i guess, beware kind of, of these very frothy moments this time, and how long do you wait for something befo

worry about yields in the context of valuations. they're no cheaper than the rest just safer. to me the consumer cyclicals have been struggling. as i said, the august lows, maybe we just got to get a little more oversold and the seasonal weakness runs its course. we'll see if it can turn. >> do you think the outlook for the market and the outlook for earnings growth depends on when the fed cuts next year? >> i don't think it most immediately depends on that. i think the psychology is very dependent on, can we see our way clear to when the fed is going to be easing off, before the economy buckles. to me it's this late cycle psychology -- >> it's that the market kind of assumes that once the fed is done raising rates, the next thing we look forward to is a cut. and the sooner that happens, that will be a big relief for stocks. >> i think my -- my take on it, we're going to have a few quarters of earnings. almost no matter what before the fed cuts unless something really blows loose in the system. we're not wishing for that. we want to

he's not worrying about valuations. the discipline growth strategy has a mandate of buying companies 5% or better free cash flow yield and the idea is when the market is melting down and you're in a march of 2020 or a financial crisis, hey, you know what, they are making so much money that bankruptcy isn't in the conversation. when you have an intel, that fits that strategy. so we're not springing for the fences trying to hit home runs but more like this is my one and only sports reference, the billy beane moneyball trying to hit singles and doubles. over the long term, you get great portfolio returns and in a way that's less risky. we don't tend to have an up 80% year or down 50% year. we tend to be a lot tighter and deliver decent returns but not swinging for the fences. just collecting the companies we know the cash flow is being delivered. >> i'm sorry, jenny, thanks. i'll continue the sports analogy. your view would be, yeah, but this company has been striking out a lot more than it's been getting key hits and that

going out at 7 billion-dollar valuation.es me pause i ask myself what is it that could have created $3 billion of incremental value in such a short time frame? and i passing on that one. i'm just not seeing it. charles: overall market, ann, last time we spoke you were somewhat cautious about the market. >> yeah. charles: on one hand it is been extremely resilient. back above the 50-day moving average the s&p is. it act the like it just needs one catalyst but i'm not sure what that is right now. >> yeah, i think, i've been bearish on this. a couple of others come out to be increasingly bearish. larry summers came out said there will be a surprise to the downside a couple of others have said it. so i remain very cautious. i think the market inning a grat is overvalued compared to historical levels but is a having said that i've been inching into couple names one of which is adobe. since you and i last chatted i moved into that one. morgan stanley has price target of 660 on that one. the company came out yesterday with really s

absolutely, that's in the valuation tesla.ou look at rivian which is a great tv maker but it's valuation is 5% of tesla. when you think about why is tesla such a valuable company, is because of its technology that centers a lot around ai dojo chips. it's machine learning and ability to train the cars through ai clusters. they just bought a huge nvidia h100 cluster. they are not really chips, they are massive machines that you add to your database. when you look at salesforce which had great numbers and you start adding ai to this platform, it's going to be a game changer for salesforce and its users. i think there is so many companies in big tech that could benefit from this. nvidia and ultimately tesla are the roads to reaching these efficiencies through ai and autonomy. ed: we talked this week about salesforce can charge 7400 per user. >> we spend so much. ed: i want to get to disney and charter because disney is a name you hold and follow closely. what do you make of that spat? >> i feel like being a disney long-term shareh

gene munster, deepwater. >> thank you. >> so, what's the right valuation here?hat much different. gene's got a long-term view of the stock that it's going higher, he's going to be right. he said from here, you could see a 10% move, which i can do that math, gets you to 160, which is level that dan talked about, and you go back over the last five, six years, we said this 100 times, it's not like the stock goes from lower left to upper right, it does pull back over time. and given everything we've talked about, this is a perfect time for that to happen. >> if the consumer weakens, is this defensive, rebecca? >> i think that's the question i've been sitting here playing with in my mind listening to the conversation. if we have a slower consumer going into 2024, is this a defensive stock, because of organic growth over the long-term or is this a consumer stock? and it may end up being in the middle. but i do think that the track record over the last decade of tech has colored people's view on how much tech to have in an allocation, so, it's hard for me to see people

we could have done this at billions of valuation which i think is absurd. what is happening is not good for the industry. we want to unhyped use cases and augmentations. the real use cases are when you put people and ai together. i think and overfocus on the large language models, the valuations of the companies is distracting from actually getting value. caroline: we come off a week where a lot of thought leaders were in washington thinking about future regulation. how do you think about your role in forming that? may: we already get rfp's that ask us about the e.u. app and it is not even law yet. we have built for customers being able to audit our training data and look at if there is copyrighted information. i think the companies that make it in the enterprise have to think about a world where regulation is here globally and not just in europe. ed: what roles are a priority for you to hire? what kind of people do you need? may: literally everything. if you are in tech and want to work in ai, please email me. caroline: we will not ask you to give us your

still i had, openai seeks a $90 billion valuation. company is eyeing a possible share salem we will have details next. this is bloomberg. ♪ alix: did's 23 past seven on the west coast and we are covering the top tech stories. silicon valley is starting its gorgeous morning. ed ludlow joins us. open ai potentially seeking a $90 billion valuation and possible share sale? that is enormous. ed: when openai did its share sale back in april, 300 million shares, it was valued at around $29 billion. this is a big jump in one point with the journal is reporting as this would be an insider share sale valuing the company at up to $90 billion. they are not offering new shares. 10 billion of the money raised to date comes from microsoft. they own 40% of the company and you look at the financials in the journal reported that revenue this year for openai will be about $1 billion but grow big-time into next year. does that justify a 90 billion dollar valuation? it's impossible to answer. dani: the time is maybe right for ai related big tech to ipo an

last time i was here you asked me the same question about valuation and i said meta's cheap. meta's numbers went up and the numbers are 6% lower than it was in the quarter the stock is still inexpensive and kind of trading at a mid-15 times multiple on 15%-type growth so the valuations don't necessarily seem that stretched to me. some of them you have to look one year out like in microsoft's case, but remember, 85% of microsoft's revenue is occurring in nature. >> i'm looking at, you know, some of these stocks over the say the last week and i wonder how you feel about microsoft microsoft is not getting a lot of talk these days after stealing the show as it were with a.i., until nvidia blew everyone out of the water and the stock is down 3% over the week and has aren't had the greatest move of late. how do you look at that now? >> look, i think when you think about some of these businesses, you have to take in purview longer than a week and longer than four weeks and longer than a month and for companies that are up 40%, 200%, 150% they need time to breathe, and you know, by l

look at the valuations. we don't have to wring our hands. it's an easy place. >> i think you want to have technology exposure but the weighting if you add in services is a risk. i think 35% is a lot to have in your portfolio but total addressable market, superpowerful, data center and cyber security. on any weakness prior to the last two weeks you have to look for opportunities. i think there are a lot out there on sale. the broadening is very encouraging and especially on the industrial side. >> it should be happening, right? >> onshore and aviation are two big themes. you see better results across the board because the companies have gotten so lean and mean and restructures so the margins held up. i'm 1100 basis points overweight industrials. i'm there. >> rob, you've been trimming tech. >> how far do you want to run these up? saying you're neutral weight means in the russell 1,000 growth sometimes 13 and 10% weightings in these positions. they're still meaningful. what bets to get outperformance? i think there are certain parts within tec

it priced at a valuation of a quarter where it raised privately.is is a company able to generation some liquidity from selling shareholders as well as for some employees here again, indicated around 42.25 and should expect this to open in the next 10 or 15 minutes or so >> if the expectations are correct, leslie, we'll see you in about 10 or 15 minutes. thank you very much, leslie picker, over at the nasdaq watching the instacart ipo this is an ipo that along with arm holdings, team, has probably been the most talked about ipo in ages in what's been a very tough deal making environment. jim, i'll go to this one with you. is the sentiment in the ipo market as robust as the ipo looks to be or is it more indicative of where arm's ipo went to and has settled back to now? >> implied in your question maybe we should be worried about arm. i don't think i'm going to do that there is a price, you, a valuation issue. i don't want to get into that. these ipos are coming in september and in a september living up to its billing we're off 6, 6.5% on the nasdaq.