Closing Bell: Ride the Rip? 11/21/24
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Welcome the closing baLance, Scott walter, life from one market out and separations go today to make a break arpi gins with this big day in the markets. Let's take your right to the score car here with sixty minutes to go in regulation dow up more than five hundred at at high and this is up nearly five fifty right now. The Russell ripping as well as stack also higher even as an video taking a bit of a freezer today.

Following in turnings report may still close positive though, and we will keep a close eye on IT. As IT is now Green, we're watching uber as well. The day altimeter capital's brad gerstner revealing on half time earlier that he sold that stock on concerns over text less robot taxi is an interesting move.

Stock was down, reversed as well. Snowflake, no reversal needed. IT is soaring after its own earnings.

Will watch that stock today, one of the best days for IT in years. Bitcoin surging two towards one hundred thousand dollars. word. Now that S C, C chair gary ginza will leave come january. I will watch that into the close that I see if we get one hundred thousand dollars.

IT does take us to our talk of the tape, the post election rally and where these markets might go from here, let's ask cerealis. SHE is the head of equities and fixed and income to cio as well at new vine welcomes. Good to see. So how do these markets feel to you? You know, we had this burst post election and we took a little bit of a breather, and now maybe we're in the midst of something else.

What you see, I think markets are finally finding their footing for two reasons. One is recovery from that election hanging over after the first week and reaction to invidious earnings. Now invidia guidance wasn't as much as investors had hope for, but IT is continuing this underlying trend of a shift to software stocks. So those are what's are performing from here. I think first of all, because budgets that have been spent so much on A I are starting to be pulled back and shifting back to spending on software and expectations for lower interest rates to good for software socks you back to the election, tera s and regulations and how those are going to impact the markets going forward .

is what we're going you like in video here. I mean, if anything, this just shows how high the expectations are, right? Mean, you're doing your revenue growth is so enormous year on year but fails to meet what are I mean almost unbelievably impossible expectations at this point. Well.

stock is up almost about two hundred percent year today. So a lot of expectations in the stock to constantly beat and raise guidance. And we did not get the guiding rays that investors wanted today long term.

And videos is very strong. Black, White is going to be huge for them. Spending on our eyes going to be big, but you're going to see these periods of consolidation.

People are waiting now to say, how are we going to monetize A I? How are we going to see that in clients and corporations, business models? So I think that low could happen. And now you see software .

taking the lead here going you mention three things on your mind that the themes for the new year, lower taxes, higher tariff s easier regulations that against backed up fields. I mean, what do I do with that? And at what point is that a problem? Well.

the concern is that those three things are going to cause two problems, which is sticking your inflation in an economy that could overheat. I think the jury sell out there, which is why you're are going to see this volatility on the trump trade. It'll work for a while.

It'll take a break as people worry about IT IT probably depends on what's going to happen with about budget cuts. Uh, will regulations and cause more amy? Will they cause will taxes cause higher inflation in the us? I think those are real risk. Investors need to consider S M P right now trading at about twenty two or so times forward earnings. Last time we thought higher was in march of two thousand were were treated at twenty four.

But is this ending going to be different because of the power of a new administration, the lowering of regulations, the lowering and reusing of the tax cuts and all that can be more important than whatever higher tariff s do. And by the way, if you look at performance of stocks with higher terriers, it's not like the stockmarket did terribly the first time that Donald trump was president. So why should I do terribly the second time I seek trump?

Two point eight oh, is different in terms of the environment than trump. One point of interest strates and inflation were not at these levels of first time around. I think that does give us a different ending. I don't think we're going out the same ending as march two thousand where we have this stock com bubble because tech soccer are much more fundamentally strong this time around.

So at the ending, I mean, chAllenging ing to say it's really going to depend on to can this economy continue to perform strongly without overhearing? And can we manage inflation? We will see pce data next week. Can we manage inflation down to about the target without IT reacclimatise I did earlier this year?

Are you dating back your own expectations of right cut? I mean, I feel like now we're debating in real time whether decembers is gonna en or not. IT seemed like a formality at one point, but now I hear doubts. Yes.

we've been worried about the degree of rate cuts at the market expects for quite a long time. We weren't in the sixty seven cut camp at the beginning of this year decembers about a coin toss now fifty, fifty chance of a rate cut.

And I think the four rate cuts next year in question, if the economy remains at the strength that IT is an inflation picks up, I think the fans going to have to cut back on rate cuts. That volatility could be a dependent. Now more on the fed, how will the market handle this lower degree of racket? Can they handle IT as well as I did this year?

I mean, the fed speak spent a little bit mix. You know, bed governor bombing yesterday was pretty hawkish that she's been hawker ish. So that is not a big surprise.

Goods be today was more dovish. H, I guess as long as we get some degree of cuts, is that all that really matters. The size of those cuts, the speed at which the fed cuts is not that important.

I think IT depends how does the economy and the consumer react with those rate cuts. What's been the driver of this economic cycle has been consumer spending, particularly on the high. And if that can continue even with higher and frustrates and inflation, then I think all of this soft landing narrative will remain intact.

If the higher consumer starts to fall apart and crack, and we're not seeing that yet, I think we would be more at risk. But another important numbers going to be employment numbers coming out at the end of this month because you saw that last month, payroll were only up twelve thousand. We blame with on strikes and storms, but september payroll up accord in billion. Where are we really in the labor markets going to be an important factor?

What about the broadening trade that we've seen? I'm looking at the rosell. Today's up percent dows up, as I said, five fifty. But the second that are leading or classic cyclical plays, whether it's industrials or financials, materials and things like that do, do you expect that those trades are going to continue to work into twenty.

twenty five small caps of financial, particularly are part of trump trade. I don't think there's any reason for those to slow down within those two. We particularly like small caps because they have the valuation argument.

They're still trading IT about a two decade record discount to large caps. The small caps, I think with regulations which that could open up M A A markets, terabits could bring more consumption back to the U. S. And tax cuts as all Better for small caps, which tend to be more domestically oriented than large cups.

even with higher rates.

I think even with rates that are stable to declining as good for small cups. And we do expect that we're not going from four rate cuts expected to rate hikes. I don't think at this point, but IT probably is lessen for rate cuts for twenty twenty five. And that's so positive for small caps. And remember, you do have that valuation argument.

Best area for credit right now is what do you think?

Well, given that we don't expect break the degree that the market does, I take leverage those those areas of credit that, that are less dependent on rate cuts are going to .

form the best about how yield .

high yield is higher quality and IT used to be. And that is where you can reach for yelled and get stronger returns. So I think as long as the economy remains strong, the fundamentals for highest.

especially field munis, is a favorite. Our higher rates threat, if you want to use that word, to to high yield and also a maybe you know some are still projecting a possible deterioration of the labor market and the eventual slowdown in the economy. Maybe you don't see that.

We do we are worried that eventually the economy will finally get hit by this degree of inflation and interest strates. We're not seeing that at this point. And with fixed income are given that rates of backup p, you can lead more into generating income with fixed income at this point and and look for those areas which are fundamentally strong. So municipal bonds are a great area because of the strength of this economy, strength of the state, strength of their coffers and rainy day funds. They're very different, fundamentally strong, and they have already been somewhat hurt because of the election and the tions for less tax hikes going forward.

You good to see out here one market.

Great to see the tail ceremony .

c of new vee joining is right here. Let's bring an atom Parker. Now try very, very researchers and jot nova vertus investment partners. Both are cnbc contributors. Joe, I want to start with you, and I want to start with a moment that happened earlier today on cnbc on our halftime report where brad gerstner of altimeter e said that he sold uber shares. I want you to listen to his reasoning .

leading up to the election, right? We have been taken down our position size and we've been rotating in the tesla. why? Because I said before, we had a ChatGPT moment around full self driving in twenty twenty four.

I think the year of twenty twenty five is going to be about robot taxi. We had we were present at the robot taxi day. Um you know we were impressed by the robot taxi.

And so for over they have to get past this moment right where you know they have a hugely disruptive force coming. In the case of tesler. And now we know that the trumpet administration is going to push right for a national regulatory change. So that will be good for wamo and good for tesla. Now uber has a solution to this, right? They have lamos on their platform, but we just want .

to see IT play out. Joe, you on the stock. I play this because I was very surprised to hear that brad had sold IT given how bullsh has been on the company on its leadership with darkness for shah, obviously, sea, what you're taken are you move to make your own move in this name?

Well, I already made my move in the name. I sold the personally at seventy three, fifty on. A lot of the concerns that brand is citing that keeps something in mind relates to uber.

Year to date, the stock is underperformed for the entirety of twenty twenty four, the S M P five hundred. And certainly than as that it's only up thirteen percent this quarter is down six point eight percent in the etf. Ownership is still maintained.

I think that's the right position when you look at this company long term is one of the Better industrial lane. You get to find its quality and its nature for sure. But I respect, understand and agree with the premise which brad presented you on the halftime report today.

I do think when we turn the calendar into twenty twenty five, the conversation about robot taxi is going to intensify. And you can't dismiss the fact that elon mosque has the year of the incoming president of the united states. And that is a very powerful position to sit in. It's a very powerful position for test little to be in. And obviously, the market is recognizing that.

But I mean, that what you're talking about is the potential moving of the goal posts that because of that position, it's going to more benefit the companies that you know mosque is in or cares about or that matter. And in this battle over robot taxi, i'm not saying it's it's a two part, a two position battle, but IT sure feels like that IT does.

But the premise has always been a wish and a hope. Now you're at the moment where if this cannot become reality and you can advance the technology at this moment with this administration, that i'm not sure you'll ever be able to do IT. So I think understanding what risk is reshaping risk in taking risk and markets is what we all do. And brad does phenomenally well. And I think this is the moment where you step forward in your an into the risk and you say to itself, okay, this is the opportunity that potentially we've been waiting for.

Adam would spin to a video then with you, you know the stock well, you know the space well, what's you you read what you think IT means for where this market goes from here.

if anything, you know i'm a little bit on the other side of what Sarah was saying earlier in in the call. You know I software has been semis by a lot in the last few months. Um I think in the medium long term, semis are just um going to be more enduring and more confident that I need them.

I thought and videos numbers were an absolute to turn pretty good. And I think they kind of told you that other semis are gonna participate. So I kind like selling some of the software that worked and buy some summer.

And here I think that tree could be good. It's hard to only recommend things that are straight up. And I like semi, and I like in video.

I think theyll be higher in in a three months, six months, twelve months. you. And so i'm a positive. I I think there's a lot to look for.

I don't think there's any doubts that in twenty twenty five and talk about the year of robot, I think there's also going to be the year of proof cases for A I working the dry productivity and earnings for companies. And I want I want to own companies that they're exposed to that. So I like things IT .

seems like when you talk about, you know enterprise so enterprise software that that that's where the the action is and that's where the mony's gona flow outside. Adam, of course, of the invidious s of the world and the badd comes and maybe a couple of other names that easily come to mind for the investors, but it's an enterprise software story and that's why the money has predominantly gone there. If you look over the last, I don't know, five months, no competition.

right? But I mean, i'm just i'm not sure three years and now or five years and now what new companies are going to form that going to be one hundred, two hundred, three hundred billion market cap are going to all be accessing on our phone. But I am sure I need tawang semi and I am sure I need in video.

And I think ultimately that means there multiple les will stay at higher levels. I could create and poke some holes in some of the large cap t software companies about what they're really going to do. And so sure, I can get this argument that there's a little bit of a near term spent on enterprise.

I get I want cyber. I think there's some pockets that work. But I think in any medium plan term view, you want to own semis over software.

They might both work, but I certainly semis will be Better. I see a big dislocation where software is really outperformed like the last few months. And that makes you want to lean in the other way, not chase this even more. Just my personal view.

joe, you own in video mean what you read on on the way that the stock is trading today on the back of earnings, which everybody could agree were great, right? You know whether the guidance lives up to whatever hype was necessary. I don't know you have to determine that. But what about the Price action today? Is that tell you anything?

I'm somewhat surprised because I thought in the revenue guidance, we needed to for handle, we needed to see forty billion. We didn't get that and the stock is obviously higher today. I think what in video did is IT basically didn't get the optimism that's currently embedded in the financial services industry that we can have this end of year runup.

I also think based on what we're seeing, the Price action in video, you're getting a little bit of a jump start in what has been dormant momentum for some of the A I and halo, a jit names. So take a look today, the name like synapses. Take a look at ka corp.

Take a look at a material, these names that have not been working that now after in videos report are finally beginning to work. Once again, I agree with what adam said on on software, but let's keep something in mind with software. You're finally seeing some of the emerging software names participate.

Silly O A name that I bought recently at at one today, you've got a data dog. You've got dark sign. So the enthusiasm is not just in the large cap and midcap software names you're finally seeing now the emerging software is where investors are turning to Scott thought .

on that is you can't love all the m na companies because it's going to be m na. And they are not like some small cap software. I kind of you that I probably sell some a large cap software, buy some small cap and then buy semis. That's my I like that positioning because believe this get to deal, you're going to see some it's often work.

What what about you know server max call here that you he likes small caps if you're going to have a boost to the economy and SHE says that's a place to look, you disagree. I no, I mean that I .

think that's an obvious trade from the trump trade. We seen the the questions how much is left to mean the things SHE pitch? You all stuck.

That's up a lot very recently. And so I think about the note I write every sunday. I know you get at the level said like what i'm going to say, it's not going to be just buy anything that's ripped straight.

The last two weeks can be a little more what I thinks overly run up on the trump trade. What maybe is leg. So I kind of think the small cap party pitch that I disagree with would be the banks. Me, i'd rather own large cap, big, big financials that are gna benefit from the area cycle if we're going to get position where we get a strong jobs report december six and people say maybe the feds not going to be doing as much. There's no way the small cat banks are going to work as well. You know, even if even if your points right that there's more coming if there's less accommodation, I want to be short the small cap backs, but i'm still gona believe in Apollo and P, G, T and Morgan instantly in K, K, R, except so I think the paratroopers be long. The guys who benefit from the M, N, A, short, the small cap banks, if we're going to the breaks on on the fed.

Now I like you. Well, I feel like we're already kind of putting the brakes right. This isn't IT doesn't feel like a maybe any anymore. I feel like where we're going to be facing the reality that the feds not going to be cutting anywhere to the degree or speed at which we thought even a month ago.

Oh, I think that I think that's clear. Um you know yesterday the reMarks from fed governor bowen a it's obvious to me that independently in place, remember, SHE was appointed in twenty eighteen. She's a republican appointed by president trump.

So they're keeping their independence. They are observing the economic environment. And I have to tell you, Candy, i'm OK.

If they go slow, as long as what they're doing is through the course of twenty, twenty five, they're lowering rates are okay with that. And by the way, that goes back to the point on small caps. I don't think you need to go directly to small caps if you really like the financial sector.

The financial sector, the top performing sector in the sp year to day, it's thirty three percent. I can do the work that I need to do right there with USB, with golbin sax, with J. P.

Morgan. I could trade down to some of the private equity names that out of mentions. And I can even look at some mid cap reggio, al.

Banks, pull up regions financial, look at mt. bank. These banks are all doing incredibly well right now. So I think with the expectation of where the policy is going to go, which I think you and I agrees a little bit slower than maybe the street anticipated, you want to stay high up and that equality, size class, big cap and large cap because the broadening outs happening there.

all things equal. Adam, I mean, do you feel like the post election rally is intact, that after the burst and then the rest. That we've got now some a clearing event of getting in video out of the way. We're going to take bets on december, and we're going to do IT right up until they make their decision and chair pol meets the media. But but do we think it's still intact?

I could see I think we talked about last week, you know, I could see the shelling August call like we could rally, told them and then we may get a bit of a dead spot til we see some of the benefits of what people we're discounting. The biggest neck are the big firms that were negative last year or more, boss, this year.

I think the good sense is optimistic of the big positives are we have an incoming administration that values the stock market, wants IT to go higher use as that as one of the metro of success and is going to shake things up. And if something happens and IT doesn't work, we'll stop doing IT. They want the market to go up. So I think the full market probably still higher than the bear, and I think you're going on higher, but I don't think it's quite as easy as it's been know the last couple .

weeks going forward. Joe, last word, same topic.

yeah. I think you know it's interesting. Got month to date.

I think most viewers would be surprised with what i'm about to say. The best performing sector is energy. Energy is of nine percent.

So energy is raining right now. Natural gas is is at three forty oils at seventy dollars. I think if that continues, there's an effect on the other side of the year.

But I think for now, what IT does is that provides multiple avenues for investors that are chasing this tape to find the investment vehicles. And I agree with that. And I think that's why .

we're in a good place to you're and James believe that there on east, let's send at the corney region now for look at the biggest names moving into the closet court.

Hi, there's got some shares of deer. Those are soaring after posting fourth corner revenue and profit that people street estimates the traction maker are the issuing a weaker than expected forecast for twenty twenty five still CEO john mays that the company is in a strong position to handle any potential terrace under the incoming trump administration.

Shares of deer are higher here by more than eight percent, and MongoDB is also higher today with data software stocks rating across the board. Really after snowflake released a strong earnings report and optimistic guidance, MongoDB also recently announced of the companies expanding its partnership with microsoft AI applications and data analytics. Shares of MongoDB more than twelve percent, almost thirteen percent, in fact, got back, of course.

Thank you for reagon. We're just getting started out here at one market up next notable capital jeff Richards is here with us. Live will find out how he's playing the text space right now, where he is putting his money to work where live at one .

market we're backers after this experienced the power of C N B C prose. Best deal of the year. Track your portfolio from every angle on one of the ice terms restrictions. Ly.

the great news for technology.

Scott, is this. I look at massive tail winds over the course of the next five years. I think they're going to be incredible winners.

I think twenty, twenty five is going to about picking winners and losers. Software clearly in the backup f this year was one of those winners. And I think we're just getting started. We're still trading under that ten year average.

Well, that was altimeters brad gerstner earlier today making the bull case for software in the month ahead. Join on me now. Jeff Richards, he's managing partner at nota capital.

Good to see a minute. Are you as bullish on on tech and software? Person.

I saw you're segment with bread and he certainly came across as bullish, said that I would give you the backdrop of it's been a rough few years. Twenty three was particularly chAllenging for software. A lot of companies, d cell growth.

You went back the clock tue, three years ago, we had quite a few public companies were growing in north of fifty percent, including snowflake, who you guys talk quite a bit about. The fastest growing company in software today are just taken over thirty percent of most of mid twenty snowflakes, one of those. But all the really good ones, the crowd takes, the snowflakes are in the mid twenty. So we've seen A D cl and growth, and I think a little bit of what that was looting to us. We're now seeing that pick back up.

I mean, as you saw the the D, C, L, I guess the multiples had to come down and now or they're gonna be expanding on once again. And those talks are going to be attractive.

Well, if you look back the peak multiple l for software back in, I D believe IT was november of twenty one or december of twenty one was twenty x forward revenue. I was the average for software today. What about six, which is the ten year historical average? So the brad's point, you were looking at software five or six months ago trading at five x forward IT looks pretty attractive.

The question is, are we going to see that growth take back up as kind of been the unknown? I'd say the one thing that we're seeing as a tail when we're certainly seeing in in the private companies were invested in as A I, it's everybody's about win as A I gona kick in for software is happening now. What has to not .

that has to be that's why these stocks have picked up. We played the sound from when brad was with us in june, where he said software at bottom and the outperformance software to semis has been stark. I mean, it's preaking zing. yeah.

And i'll tell you, i've got private companies last two quarters have been their best bookings for quarters in years. Sixty to seventy percent of bookings are AI or AI related. So you ChatGPT came out two and five years ago.

It's taken a couple years for those companies to build into their product road map. But the scale, I mean, you guys also talked about the infrastructure built out that's happening, that's unprecedented. Hundred eighty billion of spending in cate's by the mag s seven this year, three hundred billion next year.

And to put IT in context, the entire federal and state government spending on infrastructure, bridges, roads, airports in three hundred billion year, these seven companies are spending that on the A I built out. So it's now setting the table for the software applications. And think about IT as a an evolution from the chips.

So semis and chips start first. Then you get the hyper scale es in the infrastructure. And then on top of that comes the applications.

And we're talking mostly about in a Price software, but also consumer. We have yet to see the airbnb, the uber, the doors dash of AI that's coming that's getting funded by vcs right now. Obesity, as you know, we best over a very long time horizon. So we have been funding these things for two or three years, and you're going to start to see those companies hit the .

mainstream in a couple years now feels like what was bridges, roads, airports in yesterday year were railways. Railroads are now data centers. I mean, how do you see the evolution of that where the feels like a lot of the dollars are now going there? Well.

they're think it's amazing about this. Build out is its global, right? So in our firm, we have a very global perspective.

We call U. S. plus. You think about the amazons, the met as the apples, the google.

They are not just serving us. space. Customers are serving people in europe and eventually india and africa, other countries around the world.

So those bridges, roads and airports serve the U. S. predominantly. But I think what's interesting is think about the tale of this.

What the impact to global GDP is going to be were very fortunate, the us. To have these companies, that they have the cash flow to investments. If you look back twenty or thirty years ago, the origins of the internet was made by the government. The government can afford to spend next for three hundred billion on infrastructure built out for eye today. So thankfully, we have these amazing companies are building out, greeting the kids for all the innovation that's going to come .

on top of IT thought there was a pretty interesting headline from the journal AI. Investments are booming, but venture firm profits or at historic lows. They talked about how venture firms have returned twenty six billion dollars where their shares back to their investors that the lowest amount since twenty eleven. When does that change? Well.

you guys having had very many days you're talking about IPO.

yeah.

Was I going to change any chilly market? What's amazing about IT is we had an IPO, alissa and redit stocks up. I think three or four x from the IPO companies is growing at sixty plus percent.

So clearly, there's domain for these companies. Public shareholder, investors know would love more of those names. We've got one that just announced the filing this week called service tightened.

So hopefully testing the waters there to good software company itself to the S M. B space. I think a lot of the bankers I was with folks from golden and Morgan last week, they are expecting a pretty robust pipeline next year.

IT may not be the names that we think of the strikes in the data bricks. It'll be a bunch of names that people are unnecessarily heard of hopefull with an eye bent to them. But there's a whole bunch that there's probably one hundred companies that are well over one hundred million of revenue that are private, mostly funded by adventure capital firms that will hopefully get out in twenty five and twenty six.

We only have forty, three hundred public companies. I had a great interview with mark o in the other day from Apollo and said, no eighty percent of the companies in the world, over one hundred million or private. So I think it's good for our economy, how this company is go public and carefully, you will see a return of the IPO .

market in twenty five. I mean, the other part of that issue is that companies just simply choosing stay private, they don't need to access the capital markets for the certainly the public markets for their funding. Why is that going to change? I mean, there are firms who are who are lending money hand over fist to to these firms who are just remaining private, don't need the headache of the public market.

Yeah, I think it's a great question. And you certainly, you've seen stripe following that path for a while now. Strips of fifteen year old company is not to start up guided over sixty billion dollars.

The secondary market for them for liquidity, for employee shares, for example, is very liquid, plenty of domain. I think the argument that I would make is it's good for the economy, it's good for your employees and it's good for company discipline. And you look at the performance of companies like snowflake in crowd strike hub, spot shop a fy.

If you ask those ceos they love being public. right? IT helps for branding is great for their employee base. That gives them tons of access to capital in the debt markets, in the public markets. So hopefully, we will see you course company like open the eye, which is spending a lot of money eventually there may not be in a private appetite for that will .

need to top the public markets. Lastly, are you being pitched anything that's not A I related? And if so, do pass immediately.

We do we're investing in fin tech. We're investing in consumer, and there are some companies in those spaces that are doing incredibly well. We have a private company called coin's.

I don't have very a shop down coins, but it's sort of affordable luxury multi hundred million dollar company that's on a tair. So yeah, we're doing a lot outside of cyber and software and cloud infrastructure. There's still pockets of innovation, and those categories are going to be impacted by a as well.

Appreciate you spending some time with this going to see again. Thanks for as jeff ferice's, john is right here on closing, built one market up next the cio of A I driven software company, logic monitor, is with this year, after a fresh funding round fun, I was yet to save our demand for one critical piece of the A. I story. We are alive in franco, as you know, the bell fact .

after this experience. Ed, the powers of cnbc prose, best deal of the year, track your portfolio from every angle on one up vice platform, get the power of C N B C pro and C N B C outcomes lash pro back friday terms and restrictions apply.

Welcome back. Investing around data centers has been one of the hottest and fastest growing part of the AI story. Our next guest company just raised eight hundred million dollars and has seen its evaluation surge in recent years. Christinia a Cosmos, kia's logic monitor CEO joined us. Hear at one markets, nice.

See you well got. Data center .

monitoring is exactly what how do you describe that to people?

Yeah so logic monitor where a hybrid of observably platforms. So what that means is we monitor both on premise your traditional premised data centres as well as those in the cloud like a of U S. In microsoft issue.

And so we monitor to ensure that those systems stay up and running in zilia. We're really at this epic right now between AI and the data center optimization. And so we are able to ensure that these data center set up and running the resilient while also looking for insights around cost optimization and sustainability. And so as we say, A I need data centres, and data centres need .

logic monitor. I mean, like we wrote in the intro here, IT does feel like, you know, all roads literally ambiguous tive lead to these these data centres, peak data center or we anywhere close to that? Or is this build out just going to be infinite almost because we haven't we're still at the nacco stages of what gena I is really going to be. And do definitely.

I think we're in the early N. S. For sure. And we're seeing this incredible demand and tAilings as our customers are really looking at how do they power this A I innovation and how do they ensure that this innovation can stay up and running. And you need those data centres to be resilient. And but then they're also balancing how do we do this in in an optimal cost way and how do we ensure that we're meeting sustainability of requirements and we're able to derive those sites for them and really be the advisor for .

them as they think through all of, I mean, your own growth and the valuation that you now you know raise capital, uh is pretty astounding. Um your own by vist equity partners according to pitch book, they acquired you for about four hundred million in twenty eighteen. So IT sells the stake at a two point four billion dollar valuation.

I mean, okay, Robert smith, I get IT. He understands blow and cell part very high. Yes, they're gonna remain the majority shareholder. They are the remaining in control.

And so we are so excited about this eight hundred million dollar investment at this incredible valuation of two point four billion dollars. And it's just a huge testament to the demand worsen in the marketplace and the need for these systems to stay up and running. And so where we're excited for this investment and to continue to partner with this.

And there's three things we wanted do. The first is we want to continue to expand our platform innovation, and we may do that through ema as well. The second is we want to accelerate ri products. So we just watched our IT assistant and win and win A I, win A I and midd july, and we're seeing tremendous impact with our customers as well as on our own business. And then we want to continue to expand to additional geography and markets.

I just have the conversation. I'm not sure if you had a .

chance to hear with jeff Richards.

venture capitalists. And we talked about the idea of companies is going public or staying private longer. What are your own views as that sort of scenario and evolves?

Yeah, definitely. I mean, as CEO, i'm focused on billion, a long enduring company and ensuring that were deriving great value for our customers. So clearly focused on this. This investment round allows us to accelerate and expand that mission. And then, of course, we will continue to watch the markets and and see what happened.

I mean, when you watch the the valuations of AI related companies just explode, you know what goes through your mind?

I mean, I think we're at the ground floor, this incredible revolution. I was at sales force there in two thousand and two, where we are on the ground floor of the cloud computing and really how that was changing the way companies you deploy their software. And then now were in this A I revolution, where we're really driving data insights.

And so I encourage this in the in the early innings and logic monitor. We're proud to be at the pinnacle of this, where we, first and foremost, we monitor these data centers that are fuelling the AI revolution. But then we also and just over a trillion metrics a day. So we have all this incredible data that we can drive insights and predictions around the this this management me .

you mention the the court on teammate that you have an Edwin eyes, we said and you just talked about the trillion plus records a day. I mean, I have a one hundred thousand plus customers. And this was only launched in june and it's already contributing to revenue growth.

IT absolutely is. We just launched IT in mid june. And so Edwin is your you know IT employee who basically never sleeps, doesn't go on vacation and can really help elevate and optimized performance for these IT teams.

They're under enormous amount of pressure because their environments are not getting similar. They're getting more complex, especially as they are continuing to build out these data centers and they're under increasing that may on to be more efficient and do more with less good. Have you here if it's preciate?

And thank you. Christinia cosme a sqa again, logic monitor C, E, O up next for tracking the biggest movers as we head into the closed Christinia parts. And evolution is sitting by with that Christina, popular name. The impact of chinese stimulus plans should take a longer than anticipated. And that turning one tech, all of the details next, we're fifteen from the closing bell.

Let's get back now a Christine parts and novels for a look at the key doxies watching Christina got well, e commerce didn't P D D hindu or deal holdings is sliding today after the parent company missed revenue estimates. The company is the latest chinese tech giant to be hit by increased competition as well slow growth in the country as chinese consumers are pulling back on spending online ad spending also from businesses in china are weaker in the third quarter. This, according to chinese international giant by dee.

And that's why the quarterly revenue fell three percent. Year beer and they chinese stimulus plan is actually going to take a longer to take effect, and that's why the stock is in about six percent right now. All right. Thank you very much, Christina. Part now still had out that shares thinking in today day section.

I'll tell you what's behind that big drop and back on the belt out here in santiago after the break in in overtime tonight, i'll tell you what to watch for when those reports at the tape is raw stores and the gap side, the markets zone. Next, we are now on the closing bill markets zone. See if you see senior marketing mentor or accident today here to break down these creal moments of the trading day plus dear to posa on the big swing lower for alphabet shares today in regular. Looking ahead to gap in ross, those earnings cobs after the bell. Mike, you first I mean, video is now positive and the markets got to a very good day out of this.

IT has although in video, my read on IT is the report passed IT didn't do any damage in the launch on fundamental case. No real incremental reason to get particularly excited freshly, but the catalyst steps aside, the rest of the market is released to do its rotational thing. Actually very dirty rally, especially below the surface.

S P. Being suppressed by selling in the other as that one hundred tight names. But you ve got the equal way up, one point four percent banks, very strong, small caps up almost two percent.

The one thing that I keep having to come back to, though, is the split nature of this market, where the majority, the markets being kind of go inside ways and cooling off, hanging around the net, waiting for, you know, for another upside attempt for the two two week for the S M P. But the wild smaller cap crypto links stuff has been really erratic. And you get big downside reversals today in microstrip, gy and coin base, even with big coin going high. So you have to be alert with that as a potential source of a little bit turbulence in this type of not sure you can get a perfectly seamless rotation out of the hot money stuff into the rest of the market.

I guess now we're going to be focusing on data, you on the economy and what we think IT means for for cuts going forward. I mean, that now that in video is the clearing event out of the way, there really isn't that much for the market to focus on. I suppose we're still waiting for A A truck treasury secretary, which the markets going to way in on one where the other, I guess, outside of that, what are we left with? No.

that's basically in I mean, you have this sort of holiday week upside drift dynamics that are just in the background. We are still over trading every appointment announcement and every hints about policy, I think. But that's just what we have to work with.

Arguably, the market took him up like midday just as the match gates withdrawing headline. Came out, which also was when the Austin goals by chicago fed president headlines came out. It's hard to know, but it's clear the market would like to see someone about of a more maybe less friends, less contentious process here. But that just conjecture yeah.

Speaking of headlines, we got some to do relative to alphabet, and it's not often you see that stock off by more than four percent. That's not even as bad as IT was earlier, right?

Usually, investors have been kind of complacent when IT comes to any trust stuff. Not today. There's the proposal of chrome ending the exclusive deals with the likes of appellant samsung, but the deo j went even further than that, also raising the prospect of separating android requirements on data sharing and asking the judge to force google to shed at stakes and A I companies that control technology that could compete with search changes like anthropic, which is important for google's AI chip ambitions. And all of this, that leads to the most important point here for investors.

And that is, in the leveling google search position, the D, O, J is going to hurt google's position in the generated A I race at a critical moment. Now this will take months, maybe years, to settle. But january, that's an president.

Electron takes office. That could be the next most important event for google. att. Trust battles. Trump has recently suggested that google should not be broken up, but as we know, he is prone to flip flopping on his big tech anions. Plus he's now got elan musin, his ear, who sends to benefit from a weekend google on a number of fronts. M self driving technology to AI to videos.

Be interesting to watch the thanks to bossa r cord gap, ross. After the bell, what do we need to know?

Yes, that's a busy time for retail, scot. So industry are going to want to see if gap in C A, which are dicon changes, are really taking route for more than one quarter. Like we saw last time around, he's talked about sharing of the retailers finance rigor, which he thinks will enable the brands to grow and be reinvigorated themselves.

So last year, to myself and shareholders looking for a continuation of that, especially with this most important holiday quarter under way here, the state expect captions third quarter earnings will be fifty eight cents on revenue, three point eight one billion dollars as total comparable sales up a little bit more than one percent a last quarter. Old navy was the driver. Has that trend continued? We will have to see rosters also reporting the street looking for comparable sales growth stronger there two and half percent with earnings of a dollar forty per share on revenues of five point one five billion.

Now compete. T J. Had these and quarter though soft holiday guidance and a softer marm execution that one more closely compares to T J X. It's good division when you're talking about the comparison between ross and T G X. Now T D, T D cow win is maintaining its my recommendation for us, but cutting its Price target to one seventy seven from one to eighty five. Shares of ros and gap are higher going into this print.

Scott, you'll let us know what happened as well. Thanks for cigna. Agan of art. mike. Yields up today. Russell, yeah, outperforming today.

What's that? You know, it's interesting. It's an interesting combo.

And my read on IT is first yet started lower and that we did get a little a data out there. Initial claims. We're certainly positive.

I don't think you know weekly leading gome indicators was a mover, but just wait a real value of growth tone. I think that's where the russels coming from. Banks are up two percent.

So I think as long as we don't go blasting to new hides in field, maybe those things can co exist. But it's prety delicate because you look at the chart of the ten year yell, you look at the chart of the U. S. Dollar index, they're both bump up against these your recent range ceilings that maybe would be a little bit of test, but so far not really upset ding. A lot of the a lot of the underlying story today.

What's gonna on your mind for tomorrow, the final trading day of the week is bitcoin gonna be at the top? I mean, we're pushing up against one hundred k. You mention some of the trades around the crypto universe as we assess what's gonna en in the new year with a new administration there. IT is yeah get never close to my ninety eight two.

right? Look, absolutely mostly because IT is this incredibly concentrated risk appetite tell and also you have to be aware of, you know, when the markets finally get to this krishna u peak, it's on the pilot of good news when IT gets discounted and maybe when the angle of a scent has gotten too steep. That might not be the case with bitcoin. It's definitely the case with some of the related stocks. So watching that and just watching how the overall market continues to react to its own fuel position as imagine the S A P at about a two week high, trying to regain the more of that post election about that we gave up.

Yeah, pretty IT might not be a back there. Thank you. Might sand toy. We'll go out Greening across the board, down the rustle course, leading the games today. But it's great across the board, most sectors that way as well.

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