with flexibility to work from home one day almost a year to the day of instituting a three day in-office policy i have a feeling we're going to see more of this the labor market isn't so tight, and people are required to come back more. >> yes we'll see what happens let's get to wapner and "the half." carl, thank you very much. welcome to "the halftime report." i'm scott wapner front and center this hour big money's big ai bets and what it says about the stocks that can still work in this market even after some nice early year gains. we'll discuss and debate that with the investment committee. joining me right here from post 9 josh brown, stephanie link and jim lebenthal. let's check the markets. largely in the red today home depot is weighing on the dow. the s&p down about ten points. it is the nasdaq that is outperforming once again with technology, and that's really, josh, where i want to begin

today is taking a look at what happened yesterday with these in the market and the concentration of bets being made all around ai whether it's ackman, tepper, la font, revealing new stakes or that that he are adding to the existing winds they have tepper adds nvidia, meta and amazon and uber. i want to get you take on how this trade has done incredibly well and the alleged smartest money in the market thinks there's a long runway to go. >> i told you in february, i wrote a blog post about it, we did a segment on it, i told you we are going to have a bubble in ai and i told you that bubble would include not just trash, not just de-spac'd penny stocks but the biggest in the world and their stocks would get caught up in it i told you they would rip

nvidia, would rip microsoft and alphabet and anything even close to being related to ai, and the reason is very simple because the technology revolution being ushered in by ai is absolutely real it doesn't mean all of the prices being paid for these stocks will look smart in hindsight but there are people that just cannot not be there. they are questioned about it every day, every charity and foundation they manage money for, so what are you doing about ai every private client, every family office, ai, ai, ai. they have to do something, and they don't want to scrape the bottom -- >> why are you so convinced it's the bubble >> it's going to get so much bigger it will not stop until jensen huang is on the cover of "time" magazine, the same way cisco was at the top of the dot-com bubble >> i want to stop you there because in looking at all of this, we were thinking along the same lines as you in taking a

look back at the, let's say, the height of the dot-com bubble, the peak steph, we made a wall. i want to show you where forward p/es were then versus where they are now for what we would call hot tech the qualcomms, the yahoos, the ciscos, look at those forward p/es in very early january of 2000 192 times forward for qualcomm 739 times for yahoo! 134 times forward for cisco. pull out a little bit and you will see where the ai, quote, unquote, stocks are today. alphabet is 22 times microsoft is 31. okay, nvidia is 63 amazon, 76 meta is almost 20. i'm not suggesting by saying this or showing any of our viewers this that today's valuations for these stocks are justified, but what i am saying

is there's a big difference to where we were then and where we are now as we are thinking of the hottest trends and we're talking of them in the same way and making comparisons from today to the early 2000s >> i think you have to step back and look at what i always call the total addressable market and you're at $183 billion in ai today, and it's expected to grow to $2 trillion by 2030 it will grow 37.3% per year between now and 2030 it's going to contribute 21% to gdp in that time frame, and only 25% of companies out there are actually using ai. so my point being, they can grow into even these multiples which aren't really, really cheap other than maybe meta at 18 times, but they can grow into these multiples because the growth is so massive >> what if they're -- okay, i hear you they're not cheap relative to where the multiple on the s&p is >> right >> but what if they are cheap

relative to what their real growth prospects are as it relates to ai? >> yeah. >> maybe that's the way you have to look at these now not relative to where the s&p market is >> that's why i look at the total addressable market technology in general, we talked about cyber security, we talked about cloud, we talked about data center. ai is right there and is gaining momentum it's only a quarter of the companies in the united states are using ai in their business mix, that's very telling there's a lot they can do to grow and then expand the total addressable market you want to have exposure. you just have to be comfortable with what name you're going to play, what horse you're going to ride, right? for me, meta, i am comfortable because 18 times is very cheap i'm tempted with alphabet. i'm tempted with microsoft even because that stocks trades at 28 times, but, yet, historically it's traded at 35 times. so it's still down i can make a case for it, right, because the landscape is changing

so you pick up spots, and i'm going with meta for the time being, but i'm looking for opportunities. >> you're only exposed, jim, in one stock and that's alphabet. >> microsoft >> microsoft, too. how would you address this issue not only these very well-known investors, not saying they're wildly bullish, but if they have to be invested and they're putting their money in anywhere, it's here. and they're bullish about ai and i know it because i've had conversations about it with them >> and it's understandable why everybody is bullish about it. i will riff off what i think i heard josh say it might be a bubble now it's likely to grow. as i look at the multiple of microsoft, here is where i go -- >> it's not yet. it's going to become one of the great bubbles of all time. i don't think it is yet. >> you're in the middle stages if you look at microsoft and the multiple, 29, 30 -- >> it was 31

>> 31, fine. i'm looking at fact set and the long-term earnings growth rate of 12.5% for a guy like me who focuses on valuation, i come out at about 2 1/2. that's what the math is. 2.5 on a peg ratio isn't cheap it's not cheap and it doesn't make me want to go in and buy the stock hand over fist google is more attractive. it's around a little less than 1 1/2 times and that's where you should be excited about it so where i come out on this, scott, is, yeah, it will be a bubble early stages, early to mid stages i don't think microsoft is ridiculously priced i'll leave nvidia to josh. that's been his baby and he's done extraordinarily well with it for me i do have heartburn at the multiple, but i've been wrong on that. i'll leave it to josh. >> josh, those bullish on ai and those who have nvidia, yeah,

they say, well, of course nvidia is not the most reasonably valued company out of the space right now, but they justify it because of where this company is going to play in the most transformational trend arguably ever >> i've been talking about this for eight years. think how many times i've been on the show within an analyst has downgraded nvidia because of inventory concerns for next quarter. this is the difference between trading and investing. just because you hold the stock for a long time doesn't mean it's going to work i have plenty of stocks i've been holding for a long time that do not look good. the situation with nvidia you had to believe in they had such a substantial lead in the types of gpus that lauallow to you cay out nonlinear compute that when this wave crashed upon us, this is the stock everyone had to

own. that's the way it played out took a while but now we're here. you can cite amd to me, the 25 chip they're trying to sell for some ai applications is not even in the same ballpark intel is repositions cpu products and trying to tell people their ai chip -- forget it it's literally the only game in town the only real competition is going to be at the hyper scalers themselves google is an example the chips that operate in google's own environment yes, that's also happening on a parallel track, but there's a reason why nvidia is becoming as overowned and overhyped as it is as a long-term shareholder i don't wantto get rid of it jus because other people are excited. i didn't throw out big head todd and the monsters because they had a top ten hit song in the 1990s. okay, other people discovered them it's still cool. maybe i'll pull back, let them surge forward. this is what it means to be a

long-term investor in a stock that gets discovered by the masses it's probably a harder time right now than when nobody wants nvidia which was the case 18 months ago now everyone wants it. it's hard to know, do you trim a little do you use options to reduce some of your potential risk? i'm in the process of making that decision right now. >> i have two questions then is it time for both of you, at the end of our table, to value investing bottoms up traditionalists to say, like steph was kind of alluding to, i need to maybe expand my horizons and also throw out some of the rules i've lived by because i don't have enough exposure into what is this trend i only have a couple stocks for jim. i only have meta for steph >> broadcom, too >> and my second question, if you look at the positions of a tepper, for example, it's not just here, it's there.

by there i mean china, all of these people are thinking about ai in not the most likely places we don't talk about every day -- the alphabet, the microsoft, nvidia jim? >> it's a good question. i think about this every day and i talk to clients every day, should we be more invested in tech where a lot of my portfolio is, i see higher growth rates in earnings now it's for the next couple of years. what we're talking about with ai is for five years plus it leaves me in the middle as far as adding to microsoft or google or initiating a new position that's me. just where we are right now for the next couple of years for reasons i've expressed to you, scott, many times, there are

better earnings growth rates for the next two years some of these hard asset sectors. >> i think that's highly debatable at this moment do you think there are better earnings growth rates in industrial stocks than in these top quality -- alleged top quality names? >> for the next couple of years, yeah >> some. look at what they produced this last quarter look at caterpillar producing up 34% in north america revenues, up 17% overall like at newcorp, profitable growth in the quarter. look at them raising guidance mid teens to 20% what am i getting out of meta? and i own a lot of meta. i just got 6% growth last quarter. i might get 10% growth in the second half of the year, and i think i probably will get 10% to 15% next year. i think the valuation is attractive so i'll stick with it i think there are other places

there are other places within technology that's why i own broad come because it's ai and data center and cloud. i think cyber security is a huge untapped market. i want to have exposure. i'm playing around in a lot of different parts in technology, certainly have increased my exposure throughout the year in technology because you know last year i was underweight the whole year i am kind of increasing but i want to be selective i can be valuation disciplined >> three things will happen, and you can set your watch by it because it'll be the fifth or sixth time this has played out over the last 25 years since the internet became an investor darling. you'll see a lot of existing mostly failing companies change their entire strategy and some will actually change their names and their ticker symbols to be

ai-centric companies we saw this with block change. there will be promoters, a lot preorchestrated. >> that's the bubbalicious -- >> let me finish the point the activist short sellers will be all over those situations and take them apart relatively quickly. we saw them do it with a lot of the ev upstarts that didn't have anything so that's one compartment of this and that will be part of the bubble small market cap stocks. most people will steer clear the second thing that will happen, the ipo machine is going to ramp up to levels we have not seen in 25 years it will be late '90s levels of frantic activity behind us at post 9 -- >> we're post 9. >> as long as interest rates don't go to 9% this year, we will see a market environment where there are two, three deals

a day. some at nasdaq, some down here we will be breathlessly reporting 100% pops on those ipos, and that's what you see the big money right now getting positioned for they can't buy those things net. they're on the runway. they're buying the proxies that will work during that type of activity and then the last thing, and i think this is really important, a very, very big, important company, will make a very stupid acquisition, and that will feel like the end of this ai bubble that i know is coming. >> are you referring to aol and time warner? >> i can give you ten examples but scott will lose his mind you know it's coming if you've been around, you've seen it, played in it, you've lost money you know it's coming that's what the big guys are getting ready for. >> i think we try to bring perspective by showing you the wall in which we did with the comparisons between the then and now. >> that's right.

>> which then got absurd we'll show you the p/es and where they got to in the dot-com boom and bust and then versus today. some of these stocks today were caught up back then, too, with elevated valuations and they came back down hard. let me also point out, too, i want to make sure everybody is clear since we're talking about this that in the 13f, well, there was a position in arkk and tesla. not in those stocks anymore. those were trades. there were opportunities to be made and maybe they were made, but they're not still in the making i should say that. >> you made a good point about china, how some investors are investing in chinese companies i think that's hard. i really do. i would rather own u.s. companies that have exposure in china. at least i get better transparency i can do all the analysis i want and you wake up one day and the ceo is gone which happened with

baba and jack ma to play the china recovery or china growth or whatever you want to call it, you want to own u.s. companies that have exposure there >> what if that was just a moment in time thing are you suggesting that now china is uninvestable for the foreseeable future why not the baidus, i will not say bytedance, taiwan semi people on the show have invested before in taiwan semi. >> i don't like the lack of transparency >> obviously it's different, titant taiwan semi. there are other ai plays that you know, these smart investors are talking about that don't get enough focus >> probably. >> we focus on three or four, if not four plus one stocks >> china as an asset class has this existential problem that makes these stocks uninvestable but are tradeable.

the other thing is we're citing these tech giants. they don't even have stagger boards they have a shares and b shares. lack of transparency, we're investing in shadow equity with some of these companies where i don't care how much stock you own, you have no say over anything that they do. >> you used to have the k-web. >> i think you can trade it. i think anything is tradeable within reason. i understand the point of, like, i don't want to directly own an sie, a chinese company, but the caymans are involved and i don't have the equity. i have a piece of paper that's a claim. i don't argue with anybody with that i totally get it we have a market flash right now. let's get to frank holland frank? >> reporter: hey there, scott. shares of s.a.p. outperforming the nasdaq after the company released updated guidance for fiscal year 2025 that guidance shows overall

revenues, forecast at 37.5 billion. the prior guidance was 36 billion. cloud revenue guidance now 21.5 billion. it was previously 22 billion part of that is due to divestiture operating profit, the new forecast, 11.5 billion the same as the previous forecast of 11.5 billion showing free cash flow at 7.5 billion. previous guidance was 8 billion. as you can see the stock is still outperforming the nasdaq this week the companies made several announcements related to ai as part of the conversation you're having partnering with microsoft, google and ibm. and the s.a.p. ceo will be on "overtime" tonight i'll interview him along with morgan brennan not only about their guidance but ambition and partnerships with microsoft, google and ibm shares of s.a.p. almost a percent and a half higher after guidance for fiscal year 2025 at their annual conference. back over to you >> frank, thank you.

that's frank holland with the update for us there. let's use that as an opportunity to pivot to a move of yours before we take our break. >> sure. >> not related to ai in any way -- >> like the opposite >> not related to tech >> like the opposite >> johnson a& johnson. >> they finally spun out the consumer business, they're a simpler company. we can focus on pharmaceuticals. with a huge pipeline and they have a goal to grow total revenues of $57 billion by 2025. they also have a med tech business and are seeing volumes increase and procedures and so i just think it's underappreciated, down 10% on the year, it trades at 14 1/2 times forward estimates. a little bit of a dividend yield. we still have the talc resolution ahead of us so it's a small posiscott. if they don't have a favorable ruling, thate i think for the long term they're set up pretty well >> do you own ken view

>> i do not. now they're going to have to but it will take a long time to see margin improvement coming up, we're going to do our "chart of the day. home depot, the company posting its first verenue miss in 20 years. jim owns it. we debate it next. i'm an older student. i'm getting my doctorate in clinical psychology. i do a lot of hiking and kayaking. i needed something to help me gain clarity. so i was in the pharmacy and i saw a display of prevagen and i asked the pharmacist about it. i started taking prevagen and i noticed that i had more cognitive clarity. memory is better. it's been about two years now and it's working for me. prevagen. at stores everywhere without a prescription.

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all right. home depot, it's our "chart of the day. as i said it's one of the stories of the day, under pressure after reporting its worst revenue miss in about two decades. the stock is down 1 1/3% jim, what's your takeaway here >> if i told you a year ago that mortgage rates were going to triple -- triple -- and that home depot was going to be down 1% total return over the 12-month period, would you have believed me ahead of time? you would have said, no, the stock would be down 25% or more. >> maybe i would have said maybe people aren't going to be able to buy homes, they'll spend more to fix up their places, so maybe it's going to do better >> i said it's a thought experiment this is a good reparte here, if

i told you the ten year would go from below 1% to almost 4%, 3.5% right now, i think we would have come to a conclusion home depot is not the place to be, and yet it's hung in there i think today's price action is telling you something and is emblematic of the economy and the market overall, the fed has done its worst and done a lot and yet the markets are hanging in there >> it's down 10% year to date. >> okay. as i just said, a year -- a year of nothing but interest rate hikes, 500 basis points -- >> so what let's look forward what happens now >> thank you very much i'm expecting interest rate stability whether it's the fed funds rate, the tennell year or mortgage rates, that's what most of us are expecting now if the fed is done. i do believe the fed is done at the same time you have employment strong and you have a strong need for housing. you've put all this together, and this is probably why the stock is only down 1.4% right

now. even after a pretty lousy quarter and not so good guidance, the market for home depot, as i think the market overall is starting to look past whatever the second half of this year is going to bring and saying 2024 is going to be an economically growing year. >> the biggest year over year drop since 2009, and i don't know if that was the bottom for home depot stock, but this is a new environment for most shareholders in home depot they have not been up against anything like that in 15 years ago, so it's interesting to consider this is something new is management up to it >> management is totally up to it 36% of their revenues are in california and we know what happened weatherwise there, lumber, deflation. that was a problem, too. lowe's will see that as well it will not be isolated to home depot. >> i agree >> the housing data today came in much better than expected and

last month was much better than expected i think you're seeing a trough in housing from home depot we worried about 2023 earnings and the collapse to maybe we're at the trough and maybe they can do $14.50 or $15.50 this year. >> what if the consumer is becoming more sensitive to bigger ticket purchases? as they would allude to you believe, we also observed more broad-based pressures across the business compared to when we reported fourth quarter results a few months ago transactions down 5% the average ticket was basically flat it's not just weather and it's not just lumber deflation. >> the economy is slowing down, right? i don't think the consumer is getting killed by any means, i really don't >> not getting killed, i said either putting off or rethinking larger priced purchases. >> maybe that's possible. the company has productivity

measures, cost cutting measures, and expanding their smaller concept stores, too. there's a lot they're doing in the face of maybe some slowdown from the consumer. i just don't think the consumer is done. very resilient because of jobs and wages. >> home depot is a great company and i'm not currently long the stock, but if i were, i wouldn't be freaking out. they're talking about an earnings declinl for negative 7 to negative 13%. that's livable the problem is you're not getting a discount for the stock given that's the backdrop. home depot trading 29 times enterprise value to free cash flow, two times enterprise value to sales all of those metrics are well within the five to ten year median it's not like you were getting a discount to the degree to which home depot is facing challenges this year. i want it lower if i'm an investor i don't want to buy it in no man's land below the 50 day, the 200 day.

maybe i'll buy it when they disappoint next quarter. >> you are getting it at a discount let's take a quick break coming up we're following the big money new bets on the banks as well. we'll do it right after this a mountain? a tree weathering a storm? (thunder) lions? nope. (lion rumbles) we do it with our people. what if you could make analyzing a big bank's data... no big deal?

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welcome back to "the halftime report. i'm contessa brewer. china's national defense urged the united states to cut all military ties with taiwan today. the u.s. plans to send half a billion dollars worth of weapons to the region and the defense spokesman said that could shake relations between the two countries and undermine stability in taiwan. a former employee of rudy giuliani claims giuliani discussed selling presidential pardons and detailed plans to overturn the 2020 elections. those allegations against donald trump's personal attorney are laid out in a new 70-page lawsuit, and that lawsuit accuses giuliani of wage theft and sexual assault giuliani has denied the

allegations. a recall of nearly 220,000 jeep cherokees because the suvs could catch fire even when engines are off. the company warns the suv should be parked outdoors and away from other vehicles until it can figure out a fix the recall affects the power lift gates on certain cherokees from the 2014 through 2016 model years. we'll keep our eye on that one, scott. >> appreciate that contessa brewer. a number of high-profile investors making big moves in the banking sector during the first quarter including david einhorn, michael berry and berkshire hathaway you don't know what's a trade, what's long term, et cetera, but einhorn, according to the most recent filing, had a new stake in first citizens bank shares in new york community bankcorp. capital one, the same as berkshire, western alliance, pacwest, huntington and first republic and then buffett exited

the ny melon bank corp what do we think about the moves in a space that is being questioned right now >> i think it's gutsy. i don't want to own a regional bank or community bank at all. i think they're losing market share. we've had 513 closures we're going to have more >> even super regionals you don't want to own? >> i really don't. i can get some of the big names that you know i own like wells fargo. bank of america is cheaper than wells fargo and is down 17%. i was adding to that in march. schwab is interesting down 40% on the year. i have opportunity in the big banks, i think, and i don't have to go digging and diving for some of the more speculative names. that doesn't mean you won't see

a huge bounce in these things. for me to sleep at night, these are the ones i want to own and buy on the weakness. capital one is really gutsy. i know it's cheap at seven times forward but, i mean, their clientele is different than buffett owning american express. i would much rather own that one. >> farmer jim, you own the kre why? >> it's a trading position i put it on too early. it augments my long-term investments, scott, as viewers know in goldman and citigroup. >> when did you put it on? >> a week after silicon valley back it's down 17% from where i bought it. i'm not alone in thinking there is value here, and really what this is, it's a tug of war between those who think of the banking system, steph, has more shoes to drop, more players that will be taken out or have the earnings expectations been lowered enough that when you look at the book value of a lot of these regional banks, wait a second, if they don't get taken

out feet first then there's tremendous value here. it's never an either/or but enough people thinking like me that the damage that's been done in the sector simply got too great. clearly i was too early. >> ask you about the middle of the road case because i don't think they're all going to zero. i don't think the sector is a blanket buy. and the reason is the middle case where these companies are fine the interest rate volatility calms down they get their portfolios and their house in order, right? but then how do they ever grow earnings again because now we're in a situation where to attract deposits, they will have to offer higher rates than they arguably have ever had to offer, is one, and then, two, competing against the whole world whether it's a fintech app -- >> this is a great question. >> or a morgan chase what's the reason that regional banks ever do well again in a new world where there's this new polarity it's these apps that have no cost of capital, it's equity

capital and then the five or six gigantic banks -- >> i think you've made the point. can i respond? >> what do you do if you're the 3,000 other banks? >> it's an excellent point >> i have a question for you, too, but go ahead. >> if there were the conversation of, gee, how are we going to deal with lowered earnings, that's not the conversation that's basically being had about the space right now. the conversation that's being had about the space is who is next to be taken out by the fdic and this is the discussion -- i like having this discussion with you, because that's a rational point you pointed out there. what i'm saying is that damage is already in there. we're having existential discussions, not what the level of earnings will be. >> these stocks could be five times earnings like forever. it really could turn out that way and then maybe none of them are biased >> you bought the kre. you said you were too early, down 17% since you bought it you made an impassioned case for the value that exists in this

space, right right? >> yes >> so why aren't you adding more if you think there's so much upside and they're 17% lower than where you bought it, why aren't you putting your money where your mouth is? >> i think i have a little time -- listen, i'll be very honest, i'm down 17% i'm feeling like my face is getting punched in let me have a little time here because there is still this question, and steph brought it up, you know, is somebody else going to be taken out feet first? i clearly went in too early. i don't need to add to this heroic bet by jumping in more now. let me just give it a little time >> it's that heroic? >> it is i was using a term of phrase i think you know what i mean >> you don't need to say yes it is you made your point that you think it is. >> i think it is heroic. the stocks are selling where they were in march of 2020 are we saying these companies are in worse danger now --

>> when you look at a portfolio, there's only so much money that i can risk in this particular trade and right now is not the time to add to it. >> that's the most oversold since covid. >> great you're making me feel good if it starts to go up and i buy 10% higher but i feel more confident about it, fine it's not that i'm lacking in confidence but i'm well aware there are risks. >> we'll take another break. we have a couple bullish calls to tell you about including a health care mete os.na sphwn at morgan stanley, old school hard work meets bold new thinking. ♪♪ at 87 years old, we still see the world with the wonder of new eyes, helping you discover untapped possibilities and relentlessly working with you to make them real. old school grit. new world ideas. morgan stanley.

welcome back let's get to our "call of the day" now ge health care is number one, outperformed oppenheimer price target 97. it's up 38% since it started trading at the beginning of the year stephanie link, this is you. >> yes, this is -- i like the story very much, and it's down 13% from its highs after they reported pretty much in line quarter. i would look to be buying down

this much. i think it's way overdone. the company has been around for 125 years. they have a billion patients they have 4 million in stall base, recurring revenue that's 55% of total revenue i like everything that i'm hearing and i think it's a buying opportunity on this weakness >> trian disclosed a stake of 3 million shares as of march 31st. >> i like that >> again, grain of salt. i didn't talk to nelson peltz. you're thinking about that, right? >> i like that, yes, very much >> are they getting a benefit from being ge health services? >> i think people in the industry know who they are they've been around 125 years. you don't get a billion patients overnight and that kind of thing. >> i think josh's point is not necessarily people in the industry, it's investors >> maybe over time they'll prove their worth. >> ge health services, ai -- >> dot ai. do it. $10 immediately.

>> citi reiterating deere as a buy. jimmy, that's you. >> whenever we talk about this name on a quarterly basis and how the earnings are going to go, i really don't lose my mind but i do lose interest because in any quarter we're talking about weather patterns here and there and how that affected the crop for soybeans or corn. it misses the bigger picture there need to be a major redistribution of where they are made across the globe and that will benefit deere i see stephanie nodding her head, leaving aside the construction business. that's only 20%. what you said about cat earlier applies here this is a stock and, scott, going to our earlier conversation, the fact set, long-term earnings estimates here, 16%. and you get this at 12 times earnings to me, i'm not worried about the quarter. i look at that setup and say i can hold this for a few years. >> and you get mortgage expansion -- >> thank you thank you.

>> mike santoli will join us next for his "midday word. by the way, don't miss david faber's exclusive interview with elon musk following tesla's annual meeting tonight at 6:00 p.m. eastern time. it's a cnbc special presentation

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senior markets commentator mike santoli with us now for his "midday word." i want you to weigh in on this notion of ai bubble then versus now and how it's kind of obvious at this point that the biggest and alleged smartest money in the market is all sort of gravitating to those stocks. >> yes they absolutely are. it seems right now as a little bit of a kicker or an accelerant on an existing fundamental story for these net winner companies, for the nvidias and microsofts where they had a lot else going on and this seems like either just another layer of why you like it or a reason to justify a higher valuation if you look at nvidia, what has happened to the numbers in the last six months, the earnings estimates for the fiscal year that ends in january 2025 are up 15% in the last six months, and you're trading for 48 times that number on the stock right now. so if you say this is an

unrecognized factor, i would not believe that's really the case is it justifiable? can you get further upside from there? maybe because it doesn't compare to just the level of nonfundamental bubble activity back then. to me, the real question is, there's a huge gap between maybe a limb bit overvalued or this side of fair value and cataclysmically doomed bubble valuations you had back then and those stocks went down 90% peak to trough. >> what if i'm simply looking at it as six months ago let's say the valuations of the mega cap stocks were today pretty close to what they were six months ago. i don't remember exactly the day that chatgpt burst into the lexicon. >> november 30th >> so if that is our line in the sand and you say, well, if the valuations were -- maybe they were a little bit stretched in some people's minds six months ago and now we have wrapped our

heads around the prospects of what ai is going to mean to these companies -- >> right >> -- are the valuations really that stretched now >> more that six months ago you were, like, ten months into some pretty nasty valuation compression, and you had another reason to a second look at an alphabet which traded at a market multiple. to me, i still need to be persuaded that this is not just open sourced, big data all the other things that seem like yep, there's a lot going on here there's a bit of an investment cycle. maybe big companies are panicking that they have to participate, but does it convert two, three years down the road to earnings that are not cannibalizing another part of the business i have no idea >> good points that's mike santoli. straight ahead, more portfolio moves from stephanie link to tell you about that's when we come back at allspring, we break away with purpose. harnessing data-driven insights and boundless curiosity.

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[ overlapping speakers ] >> we would lead the show off with that if you did that's what we should be talking about here this is a growth company, getting its margins back, more voices from shareholders in the room i think it's all good. >> is it a regular menu item or a special? >> i don't think they'll keep it forever, scott so act now >> thank you i want to get to some more moves that we have from you, too you bought more chevron and more slb. >> yes both of them down. chevron is down 18% on the year. yield is close to 4%, great company, they're buying back stock with a $20 billion guidance author they buyback they're doing all the right things and the stock seems to be hated. slb is down 25%. i don't remember the last time the stock traded at 14 times forward estimates. i'm a big fan of their technology initiative.

international markets are just getting going. at some point, somebody has to cara care about energy again. >> "final trades" is next. meet stephanie... goodnight! and bethany... [guhhnnaaaghh] identical twins. both struggle with cpap for their sleep apnea. but stephanie got inspire. an implanted device that works inside the body to help her sleep. unlike her sister. there's more than one way to treat your sleep apnea. if you struggle with cpap, look into getting inspire. inspire. sleep apnea innovation. learn more and view important safety information at inspiresleep.com.

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your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire i want to go to d.c. and show you sam altman, the creator of chatgbt, leaving that hearing in d.c let's watch. >> a lot of the things that were going on in there, we're talking about we forgot we couldn't use social media regulation.

do you think this is going to happen do you think they're going to do regulation on ai and if you don't, how do you self-regulate? >> i hope they will. >> and if they don't >> the industry does what we should do any way. we said a lot about what we want to do that we hope other people will do. on the positive side, i think the industry takes the gravity of this seriously. but we would be better -- >> how fast does congress have to move on this to keep up >> i think it's more important to get it right than to move super fast but if it takes a decade, that would be a bad thing >> how quickly could ai become self-aware if congress does not regulate this? >> i think there's a huge amount of speculation on that question. it's very important that we keep talking about this i totally understand where the anxiety comes from i think it's the wrong way to think about it

>> are you worried that you could lose control of chatgbt? [ inaudible question ] >> i think it's really important to figure out. i meant to say that it's difficult and that it sounds like a naive thing we've done it for other industries i think this is a technology that we should treat with a level of seriousness so although difficult, it's important to start the conversation [ inaudible question ] >> -- what do you expect for -- [ inaudible >> i'm not close enough to that one to have a meaningful conversation what japan is thinking about [ inaudible >> i'm looking forward to hearing what they talk about -- [ inaudible question ]

>> i think it's amazing to talk to creators about how they're using the current tools. people talk about it as the most important creative tool they have ever used [ inaudible >> there's so much happening what's one thing i don't know it's really remarkable to watch this happening >> can you give us an example -- [ inaudible >> an ai that could help design biological pathogens, these systems can become quite powerful, which is why i happen to be here and why it's so important. i can probably do hike two more minutes. >> what about the eu law >> i'll wrap it up the eu law is still going to evolve a lot, right? i would rather wait to comment on it until we see something [ inaudible >> i'm sorry ni