Power Lunch : CNBC : June 26, 2024 2:00pm-3:00pm EDT : Free Borrow & Streaming : Internet Archive (2024)

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♪ good day everyone, and welcome to "power lunch." alongside kelly evans. nvidia holding its shareholder meeting this afternoon. we'll break it down and look forward to micron earnings after the bell. >> plus trouble at home. new home sales down more than 11% in may, a day after a big drop in housing related stocks like lowe's and home depot. we'll talk to an analyst who's upgrading home depot today. first we'll get a check on the markets where you see the dow hanging on to a gain of 29 points. nasdaq positive, despite nvidia being lower. and shares of rivian are soaring, despite today's gain, it's still down this year. amazon is hitting a new all-time high and crossing the 2 trillion market cap level for the fifth time. it's the fifth company to do so

following microsoft, apple, google, and nvidia. sarat, it's great to have you on board. welcome. let's start this hour with what we've heard from nvidia this afternoon at their meeting seechlt ma modi covering that for us. >> there has been plenty of news from anyone invidia. all the different initiatives nvidia is working on, drummed up excitement around blackwell -- also reiterated the role its generative a.i. products are playing in different industries from pharmaceuticals to the automotive sector. >> the blackwell platform will be adopted by every major cloud service provider, server maker, and leading a.i. companies, including amazon, google, meta, microsoft, open a.i., tesla, and

xai. users have always been able to get the software they needed quickly and easily. >> just spanning the different companies in his p universe. nvidia will continue to invest in a.i. quantum computing. and the company is expected to generate around $270 billion in cash over the course of the next three years. that's according to analysts. there's only so much nvidia can spend on research and development and acquisitions due to regulatory head winds, and therefore a good amount will likely come back to shareholders. that's why they're raising their price target to $168. the stock trading around $123 and change. still down about 9.5% from its recent high. and it's been interesting to see the number of wall street analysts over the last couple of days coming out to defend their bullish targets, upping their price targets today. cantor writing that nvidia has created a flywheel effect with developers and customers

creating a challenge for competitors to break through, which has been a part of the thesis. >> thanks very much. our next guest has a brief selloff in nvidia shares, does not derail the company's growth trajectory. it is still and will remain the undisputed leader in the gpu space, daniel newman. daniel, welcome. good to have you with us. is there anything intrinsically worrisome about a company that basically triples its market value at such a high scale to begin with from $1 trillion to $3 trillion in such a short period of time. what does it suggest, if anything, about the future trajectory of the stock? >> yeah. you have to look tetra jekt ri of a.i. as a hole. when the stock was trading about 1/10 the value, i said, this is the company to look out for. it had secular tail winds that a.i. is going to deliver to the market. and it was not just selling gpus, but it's selling the full

compute and software stack. that's so important for people to understand how when you gain a market advantage -- and now they have 96, 97% of this gpu space. you heard jensen on that sound bite talking about having google and having amazon and having every major oem using its hardware -- that this entire trend line -- it's going to flow out to salesforce, microsoft, and all its software, and eventually to the industries. that's what jensen is saying. that's what investors are betting on. and it's going to be hard for competition. there is no native predator in the wild right now. there's companies trying, but no one can compete right now. >> that's the obvious question. when you have 96, 97% of a market area, as important and as fundamental to what seems to be happening in the world of computing, let alone commuting, you start to ask, well, where's the competition going to come from? you just don't see it mounting any time soon. >> yeah. there is competition.

and i've said this for some time. you see companies like aws, microsoft, they're building their own silicon. amd has shown a compelling forecast and able to deliver $7 billion of their series. nvidia has a distinct advantage. out of the gate early. jensen has been on basically the stage of every major oem, every major software provider in the last year plus. they're building their whole a.i. solution around nvidia. so, when you look at how this is going to proliferate, i think if you're looking for the risk, it's all about that second network of fact. it's do people start consuming this? are people going to pay more for service now subscriptions and salesforce? are the google users that are getting searched going to depend on an nvidia trained model or something trained by model? if these companies can show the same capabilities, there might be opportunity for competition. i think the market grows.

competition comes into play but not at a big cost to nvidia. that's why i see the growth continuing. >> what about what are the risks of double ordering? everybody is trying to get a chip. we've seen this in the past when it's happened to other semiconductor companies and hey everything is great. now all of a sudden we get a little bit of a slowdown in the economy. google's advertising revenues come down or apple, et cetera, and all of a sudden, hey, we stop. where has that, kind of, in your projections? >> well, the sell in and sell out are interesting data points to look at. we see tsmcs sold out for over the next year, almost two years now. that demand is very clear. you see the hpm memory from micron growing. and that's all in effect of the amount of demand these hyperscalers and of course these largest enterprises have for nvidia hardware. i, like you, have this one concern. and this one concern is that consumption layer. who is buying and using and

getting productivity and value out of all of this a.i.? where are these enterprise use cases that jensen talked about? and can we start to talk about them at scale and how they're delivering value to pharmaceutical companies, to retailers, home builders? i think we're seeing the sell no the hyperscalers, and there's not a lot of risk there. but the consumption layer is where i'm watching very closely. >> that's very interesting because it seems like what you're saying is that here is a product, these gpu chips -- here is a product that has immense potential, but the question is, do the consumers of the product really know how to use it? and more importantly how to monetize it either through efficiencies or growth? am i understanding correctly? >> yeah. i'm looking at use cases both in the enterprise and the consumer. this killer app that we've had is the llms. we're using proplexty or google or open a.i.

i've mentioned service now, i've mentioned salesforce. how are you helping sell more to your customers because generative a.i. helps you speed up your kpucommunications? i've heard from companies like ibm consulting talking about how they're deploying a.i. and getting solid concepts. but are these proof of concepts turning into big productivity gains that we believe a.i. can generate? that's going to create the constant upgrade cycle. jensen wants to upgrade every year to the next architecture. that's how they grow into this valuation. it's still very early. proof of concepts need to be massive deployments across enterprises. >> daniel, thank you very much for your insights today. we appreciate it. we'll have you back soon. we thank you. what do you think here, sarat? i know we've talked nvidia. i can't remember whether you still have it or you got rid of it or what? >> no, it's our largest holding. and i've been cutting it back for two years. >> you've been trimming but you can't stay ahead of it. >> but you can't stay ahead of

it. some of these fears are really founded. some of the issues that we think about internally is to say, what if the usage is not there, right? and if it is, do you need the fastest computing chip from nvidia? it's back to the pc. do you need the fastest chip on your pc, or can you use what was a year old or two years old? who needs the cutting edge? do you need the fastest chip when you're doing customer service or maybe you use something different. when that comes up and maybe amd comes with a chip or google or somebody else. right now it's going to go back to the qualcomm story. everybody was like we have a qualcomm royalty. then we've got other chips coming out there. at some point, this party will slow down. and then what happens to the momentum investors here? it's not just everybody's going to have a long-term investor. you've got the retail investors, index investors. 6% of the s&p now, you're buying

6% nvidia, apple, 7% of microsoft. own it but be careful as to your size position because this thing, as you know, two days ago, three days ago, was down 10%. >> when will you -- you've mentioned trimming. for those that might be, hey, i'm in this stock, when do i know that i want to jump out? >> so, i look at it as position size. for us, anything over 5%, we take it down. it's just a diversification. it's our way of saying, too good of something. then it comes back. you could have 50 other really good stocks. but if one stock is driving the up and down, it doesn't matter if you own anything else. that's the risk as a fiduciary that i am trying to manage. there are individuals and other people saying, hey, i don't mind riding the roller coaster because i'm going to get to the same place in three years, but maybe or maybe not. >> it's just enforcing a sell discipline, which says, if you get above 5%, that's a place we get a little uncomfortable for

portfolio concentration point of view. >> for that, volatility. and there are other immaturities in the market too. >> there are? >> there are plenty of other opportunities. it's just that we focus on five or six stocks continually. but i still think there is. >> we'll get to some of those other opportunities a little bit later. sarat, thank you. as we head to break, let's get a power check on the positive side. fedex, the company that topped earnings estimate that said they're reviewing estimates. acti aptiv is down today after news of the rivian/volkswagen partnership. that's your power check. we're back right after this. traw powered by ameritrade, giving traders even more ways to sharpen their skills with tailored education. get an expanding library filled with new online videos, webcasts, articles, courses, and more - all crafted just for traders. and with guided learning paths stacked with content

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this fall. let's brings in chief investment officer. i don't know if we want to jump right into the political aspect before you just offer a top-level thought about the market. >> top level is that, you know, look, everyone knows that during election years with an incumbent, we get really good results. the average is 17% or something like that. as i was saying earlier, we're on the autobahn. we've got the green light. we've got a five or six month brick wall in front of us, called the election, and no one knows, including the market, how this is going to play out. as a result there's lots of negative outcomes that could happen. what's puzzling to us is why that isn't getting discounted a bit. is it not? do you see any signs that wall street is not discounting a trump win here or a biden win here? >> it's not much. there's -- you know, there's -- >> we may know more tomorrow. >> yeah, right.

there's some stock baskets you can track and follow. you can also argue that the rest of the market isn't up as much as the technology names. >> sarat. >> to your point, if you look at equal-weighted indexes, they haven't performed, especially in the last six weeks. the equal weighted is 5, 600 behind now just in a matter of weeks. the market is focused on the momentum plays, but are we now discounting some of that. if you look below, where are we going to go? the other question, to your point, where does the house and senate go to, right? so, that politically -- and one of the things we always say -- and i'd love to get your view on this. we always are like, earnings drive the stock market, the economy, right? but you're getting to a point things could change a little bit. at least you get the bump of the auto bond. >> earnings drive, but emotions drive the shorter-term stuff. what's odd about this is you have this big, hairy thing coming at us so fast, and yet

the market is sailing along like nothing is wrong. of course you have 2025. we took a look at inauguration years. >> yeah. what happens then? what happens after? >> with an incumbent in an inauguration year, you get middling but a really positive outcome. there's really positive years. think about the crash in '08 and '09. same thing after covid, had a big year. there's some outliers that have changed. it's not as much of a pattern in inauguration years. but average is 6 or 7%, so much lower on the long-term. >> 2017 was a pretty good year for stocks. 2021 was a pretty good year for stocks, followed by a bad year in '22. >> correct. the point is, again, investors are super optimistic. if you look at all the sentiment indicators, they're superoptimistic. and yet we've got this really big, unknowable thing coming down the road at us very quickly. what does that cause you to do? >> i think we hedge a little

bit. some of the names we talk about in a few minutes, really about smaller in value. one of the things that happened in '16 when trump won is one of the great memes of all time, in my opinion, was the baseball cap that said right after trump won and value stocks started running, trump, make value great again. it was terrific. and it was three or four months of really strong value stocks. and i think we might see that again because the tariffs might hurt the bigger guys, help the smaller companies. so, you might get this rotation. so, that's what we're doing. we're actively looking for that kind of stand. >> what sectors are you focused on? you know, you and i share this value bias, and of course people come at us -- >> says the guy whose nvidia is the biggest -- >> well, it was a value -- >> weren't they all? >> we bought in 2016 when it was a gaming stock and it was trading in single digit multiples. it would not fall into our screen at this point. >> right. sector is probably things like

finance and energy because those are the antithesis of all things a.i., and they've done so poorly. so, we'll see. you know, it's -- but finance, particularly when you're dealing with a small cap index, thinking about small cap value, it's dominated by the financials. so, clearly you want to have some of that because they've done so poorly. again, it's really talking about balanced. if we get a significant rotation, it's likely to be violence, given the incredible move in the tech space. >> let me quickly mention a couple of the names that are -- ibm is not off the radar. cord energy group, a new energy company, pure play, farmer mac, which we talk about fred di, fanny, jenny, sally. we are looking at really idiosyncratic plays. >> they're not so idiosyncratic. they just don't dominate the headlines like nvidia and microsoft and all the rest. it's a wonderful little company

sponsored byhe senate, and they are really designed to create credit and liquidity in the agriculture market. >> but it is growing 84% year-on-year earnings? >> no. >> that's what investors in the big five want? they don't want farmer mac. >> you're right. it's only growing 14% a year. >> 14%. wow. >> so, it's doubled in five years. 94% or something like that, right? and the stock trades at ten times earnings. and it's a money machine. you're not going to get rich tomorrow. and it's not going to triple or quadruple like nvidia has. >> and congress is not going to full out the you rug on farmers. >> exactly right. >> so, it's guaranteed. >> politically, it's a good thing to have happen. anyway, we like the name. we've been accumulating it. it's small. it's not a big name. cord is an interesting name just from a box and shale perspective. it's getting bigger. and as a result bigger energy names get bigger multiples. it's involved in the m&a

business, a very interesting strategy there. we like ibm as the counterbalance in the large cap tech name. you're getting slight earnings on revenue acceleration, which is important. ibm has been a dog for decades, and we think there's a little bit of movement up in their organic revenue business. red hat is doing good things for them. watsonx gives you optionality in the a.i. stuff. it's only 15 or 16 times earnings. it's a nice way to counterbalance some of that risk you see. >> for the retirees. but the irony is retirees aren't in nvidia. they don't want the tech. >> exactly right. >> mike, thanks very much. we appreciate it. sarat, please stick around. and further ahead, nuclear energy securing a quiet albeit impactful victory in congress, one that could lead to fast approvals, lower fees, and more inventives. "power lunch" will be right back. we'll talk news after this.

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♪ i'll be there... ♪ ♪ you don't... ♪ ♪ you don't have to worry... ♪ welcome back to "power lunch," where we now have green across the board, as the s&p has joined the dow and the nasdaq in positive territory, albeit by a point. and bond yields are moving

higher. 430 was last check on the 10-year. rick santelli has the details. >> we're at 431 now, up half a dozen basis points, as you look at the 10-year note yields. even though all maturities have moved higher over the last several hours, it was the longer maturities, like 10s, 20s, and 30s, that really led the way. 10% now on pace for the highest yield close in two weeks, which isn't a long time, but quite a reversal from the low 420s not that many sessions ago. maybe the big news today, foreign exchange. look at the dollar index. it's on pace for a two-month-high close. keep some things in mind. the dollar index breakdown, the number one currency that affects it to the tune of 57.6% is the euro. in second place is the yen at 13.6%. and here's why i brought that up. look at a chart of the dollar yen. it is screaming against the

dollar to the downside, meaning the dollar is moving higher, the yen is moving lower. and if you look at where it's trading today, let's open the chart up. believe it or not, this is going to be the first time in 38 years since the end of 1986 that the dollar yen is going to close above 160. we had some intraday violation one time, april 28th, just recently, where it traded up and then game down with rumors of an intervention. don't see any interventions today. and this really is something to pay close attention to, especially with the yen at weak levels and the japanese, of course, export economy, getting ready to potentially raise interest rates. tyler, back to you. >> very interesting developments there, rick santelli, as you point out. thanks very much, rick san tell la. let's go to contessa brewer. >> hello, tyler. the supreme court may be ready

to grant abortions in idaho for medical emergencies, according to "bloomberg law," which reported the opinion was posted in error and removed from the website this morning. the posted language indicates hospitals in idaho would be permitted to perform emergency abortions to protect the health of the mother. the court acknowledged the document was posted, but we don't know whether this was a draft decision, the actual decision, or neither at all. the former president of honduras convicted in march on charges he let drug traffickers use the military and national police force to get tons of cocaine into the united states. and more than 21 million miniverse toy sets from mga entertainment are being recalled because of potentially hazardous resins. the safety commission says that when in the liquid form, the make-it minisets can cause skin, eye, and respiratory irritation.

kelly? >> when in liquid form? okay. contessa, thank you. contessa brewer. after the break, d.a. davidson is spending big on a lower interest rate environment, so they've upgrated home depot to buy. but following bearish commentary on rates. we'll speak to the analy hi ialnestbendt l xt.

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welcome back to "power lunch," everybody. check out shares of whirlpool jumping today on a report that the german engineering company, bosch, is considering making a bid for the company. but other home-related stocks have been struggling, including home depot, which fell 4% yesterday among worries on consumer spending on housing. today d.a. davidson upgrading home depot and giving five specific reasons, including potential for low interest rate environment. michael baker is behind the call. michael, welcome, good to have

you with us. explain the argument for home depot, which already sells at a premium to its main competitor in the space lows. >> sure. it does sell at a premium, bit always has. and part of the call here is that the weakness, both this week but also year to date and really over the last two and a half years gives us an opportunity to own the stock on weakness. part of the call is macro related. part of it is company specific. but the macro call, we think six months from now, a year from now, rates are going to be coming down. it will be early next year. and historically, home depot just works well in environments when rates are coming down. in fact, it really started when the fed started raising rates. part of this is a don't fight the fed call. in terms of the macro environment, you did cite new home sales being weak. what we saw last week in the

existing home sales is that home price appreciation is up year over year. it happened down toward the end of 2023 and early part of 2024. now it's up five or six months in a row, in fact at an absolute basis, home prices are at a record high. we think that can help support improving demand, again, maybe not within this quarter, but we think we'll see better cause for home depot. >> where do you see the e on the p/e going up? i'mguessing you think the earnings expansion is going to be there. is it through margin expansion? is it cost cutting, kind offen given higher levels of onshoring costs as well. where does that fit into the thesis? >> it's a based on 2025. for 2025, we do have a higher -- sales than we have this year and actually total sales as well because we're layering in the distribution acquisition, which closed last week. we also think that margins on a core basis will be up a little

bit. they are dragged down a little bit by srs, but still no longer getting worse and me getting better and part of that as costs get better, part of that is because costs get better. $500 million cost-cutting program in terms of gross margin, drivers, and that should start to layer through. we do have earnings higher in 2025. that consensus, that's where we think the beat comes. not a cheap stock, but relative to where the market is, it's trading right in line with the market valuation right now. historically trades at a premium. at relative p/e basis, home depot is trading below 5 and 10-year averages. >> let's talk a moment, you said there was a correlation -- historically there's been a correlation between rising house prices and the price of this stock. why are prices -- i get it if

it's home building activity. but what is the connection between rising prices and higher home depot -- >> in the u.s., most consumers, the biggest asset is their home. if they feel like their home is worth more, they're that much more willing to invest in it, do an upgrade, and possibly get it ready for sale. even if they're holding onto it, they just invest more. we show in our report historically. turnover is certainly important. but turnover affects 4 or 5 million homes a year. and year over year, it's couple 100,000 less this year. but the price appreciation impacts other homes that aren't being turned over. >> if home prices are going up, homeowners are more inclined to invest in their house, and buy wood and lumber and dry wall and whatever else you need from home depot. you mentioned interest rates and that they have traditionally

been highly correlated with this company's stock price. how important -- let me ask it this way. i'm fumbling here. can home depot go higher if interest rate cuts are very modest and delayed? >> it is harder. swimming upstream in that case. now, it can, though. we have seen over the last few years lowe's has been a better stock than home depot. and part of that is company specific. the margin gap versus home depot. we think that is largely played out. you may or may not recall, we downgraded lowe's earlier this year after outgrading home depot. particularly in a motor rate environment. it's easier for these -- when rates come down. we think if rates do start to come down, the stocks move before the fundamentals really turn, as investors will anticipate that. >> michael, thank you very much. michael baker, we appreciate it. sarat, you are a lowe's owner.

they downgraded lowe's. >> i think lowe's has better room for margin expansion. it trades at 17 times earnings. i'm not a believer in owning my value bias. it's market rate. f firstly the overall market is moved by the big stocks. if you take on the big stocks, it's not trading at 22 times earnings. it's trading at below. i don't feel home depot has better earnings growth than the market. i think you have better head winds. as a value investor, i don't bet on interest rates moving the stocks. that could be the icing on the cake. that could be a great as an option value, but i wouldn't be buying stocks ahead of that, given where we are right now. it's just hard for us to say interest rates coming down in the next six months. and if they come down, is it for the right reason. >> that's the big part. >> is it coming down because inflation is beaten or is it

coming down because the economy is small. >> in our view, inflation is not slowing. it's flat lining. so, that would worry me. i don't think the last thing people are going to say is let me go spend more money on my home. if you're not going to spend money at mcdonald's or starbucks or other things. this is a very high quality company. i think at the right price, you can get into it. that's going to be the difference that i have. >> interesting. all right. sarat, thank you. coming up, evs, a.i., all this new technology requires more power than ever. and congress is rushing to allow new advanced nuclear plants to bridge the gap. details next.

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those computers. we're going to need electricity to power the computers. while nvidia is the clear winner in the chips race, many are still searching for the power players. pippa stevens joins us now. >> just how much power we're going to need remains to be seen. but it's clear there's going to be a whole lot of spending to upgrade the grid. that's stoking interest in utilities. active exposure to utilities is at a 14-year high. and relative exposure is at a record. across all 11 sectors, hedge funds have the highest relative exposure to dwrielties. two a.i. beneficiaries are independent power producers, both of which have seen an uptick in exposure. b of a said more than 20% of large cat funds own at least one of the names.

the utility sector also pulling back from its recent high, but noting the xlu was at a key level, where old resistance could become key in support. the key level to watch there is 68.50. >> so, how do these dwrielties -- how does the fact that utilities are so tightly regulated play in the investment prospects of that. >> couple of things to note here. so, utilities during covid were actually trading at premiums because they were interest rate substitutions. so, once the fed started raising rates, money moved away from utilities to say, hey, we can go buy bonds. now you've got the tail wind of, to your point -- >> demand. >> -- demand. and what they do is the independent power producers are not regulated. so, they can actually earn as much as they can because they can sell it out to the grid at whatever price there is. the regulated dwrielties have to keep on going back to the rate

case. >> right. >> they can also make more money over time by selling it outside of the regulation. that's where investors are focused on and saying y do i want this? we like some of the utilities too. what you're getting there is 6 to 7% earnings growth. i will take 10 to 11% earnings growth at cheaper valuation than the market because you get that. that releases your more -- i would say less volatile earnings in your portfolio. >> that's why i'm surprised, pippa, that the valuations, because our guest also likes energies and notes they're undervalued. with all the hype of a.i. >> they were under pressure. there was a rotation out of the group in both 2022 and 2023 they underperformed and they were in the negative. and that was the first time in more than two decades when both had negative rirns. i think there has been so much enthusiasm recently. it also petered out. about may, mid may or so we saw

an 8% decline since then. the reason we've seen such mixed performance across the space, why consternation and vista are up so much, they are ipps. their upside is limitless. versus regulated where they have to operate within the regulator. >> very quickly, how much capital spending do these companies have to do? >> i mean, it's to the sky. >> to the sky. >> yeah. i mean, it's a lot, a lot. >> distribution lines gets complicated in there, but they go back to the regulators for that. just like you would think they could raise, they can't raise as much as you think they can. if demand was low -- if you remember a couple years ago during covid, all the industries weren't producing and system of the utilities were losing money, that's when they could guarantee a certain amount. so, you get capped. i mean, and that's why -- >> their argument is even if their profits are capped, their number of customers, or the

usage is expanding so much that you get that delta. >> that's where, by the way, what other unintended consequences come out of this. as you know i always talk about copper. what are these companies doing? you need more copper for data centers. you need other things that are going to increase the demand for production and to make all the equipment you need. >> and remember all the spending was required even before a.i. and data centers blew up. that's a theme of this year. we've been talking about all these great upgrades, all the hardening of the grid that has to happen thanks to all these record storms we're seeing and low growth. >> storms? e.v.s, data centers, the whole thing. it's a conflation. pippa, thank you very much. >> kell? congress is starting to realize the importance of increased power generation. they're coming together to pave the way for more nuclear power. >> kelly, as you guys were just discussing, there is a need for

more energy. it's one presidential signature away from making it easier to build facilities in the u.s. and provide a bump in electricity needed to power a.i., electric vehicles, crypto, and more. it's a bipartisan bill and it would basically look to streamline the environmental reviews and processes. it would look to reduce fees. and it could save companies potentially months of time and tens of millions of dollars in getting these advanced nuclear projects off the ground. about two dozen nuclear projects are currently being planned or considered in the u.s., according to the nuclear energy institute. only about two are actually under construction. one of them is -- power, broke ground earlier this month in wyoming, that plans to create a smaller, cheaper reactor, that can be sold across the country. the president and ceo said governors are becoming worried that their states won't have enough electricity. >> we should be concerned about

the electricity supply because, you know, we've been a little complacent in the last 30 years, what the computing sector is telling us. a.i. is going to require a lot more electricity than we thought even a year or two ago. that's raising totally new concerns, very valid ones, about how are we going to power these data centers? >> electricity demand could increase as much as three quarters by 2025, according to the u.s. energy information administration. and guys, i would not expect this to be the last bit of advanced nuclear legislation that we wind up seeing in congress. >> emily, thank you very much. we appreciate the reporting. up next, we'll get you a little technical support. first, as we head to break, cnbc celebrates pride month throughout june. and here is -- >> one of the ways that i think we can combat anti-gay sentiment

is first to understand what it means to be gay. for me, at least, it has been a transformative identity because it has taught me how to love people who might not love me, which is sometimes our family. so, out of that core, what i have learned to do is how to turn poison into medicine, to tuelids d own those brgean nns.

dow has erased its earlier losses for a gain of 57, now as all three major averages are higher, although the gains are small, the nasdaq showing the biggest gain, in fact, of just about a quarter of a percent has amazon hits an all-time high today, up more than 4% to pass the $2 trillion mark for the first time. >> and remember, you can always hear us on our podcast, be sure to follow and listen to "power lunch" wherever you go. that's not a question. that's a directive. we'll be right back.

okay, team! oh, thank you so much i couldn't have done it without you.

honestly, i don't do a whole lot here. i'm really just here for the at&t internet, it's super-fast so, any pre-launch concerns? what if nobody buys them? that's mean or, what if everybody buys them? oh, i hadn't thought of that that's probably not gonna happen can we handle that kind of traffic? the network can handle it! i downloaded eight hours of true crime stories just during our last video call i'm learning a lot

3:30 left in the program, a couple more stories we'd love to share with you, volkswagen slipping on worries with its

deal with rivian, it's seen as good news, it provide it is company with funds to compete with tesla. what do you think of this? >> i mean, this is lifeline, right. >> phone a friend. >> this is basically how much more capex can we spend, how are we going to work together, maybe share our technologies, at the same time you've got tesla, you've got the chinese evs of the hybrids and gm and ford. the space is getting so competitive. i don't know, the return of capital is going to be harder. >> the rivian trucks look like trucks, have you seen the tesla ruck trucks? >> i have. >> a couple around my town. >> slowly starting to come out. >> they look military to me. >> they look like a spaceship. >> that company is really struggling, they have to figure out how to do this at scale. they're the ones who hosted elon musk for a big talk many years ago, those shares are down, i forget the number, 20% over the past year or something. is this the right move for them?

>> this is just trying to buy technology, to partner with somebody who's ahead, but maybe get the scale. i just see the profitability now given where we are is going to be really tough. >> used to say rivian lost much on every car it made? >> and the production issues rivian had, as an investor, it's going to be more kind of, hey, we're kicking the can down the road. the biden administration wanting to lower costs for 64 drugs but inflation penalties on drug makers. this law would require drug makers to pay rebates to medicare if they raise the price of the drug faster, literally, than the inflation rate. >> we're just talking about politics right now, right? >> totally. >> look at the timing of this, given where we are on a wednesday, what do we have tomorrow? >> yup. >> it's already the administration, again, not being political here but if you think about what's happening with the pbms and united health and cvs, it's making a statement and a stronger statement, we are trying to get costs down for health care. >> fascinating story and the

times on sundays about the pbms. tesla recalling 11,000 cybertrucks we just mentioned over trunk and wiper issues, tesla told the nhtsa that a trim attached to the trunk bed of certain 2024 cybertrucks could fall off creating a hose road hazard. the motor could fail, and reduce visibility, well, yes, if the windshield wiper fails it does reduce visibility. >> it does. there's a cottage industry. i've gotten footage myself. it's not exciting as having pieces fall off. i wanted to be at a red light. this is me, intrepid. >> this is you. >> intrepid. they look -- my favorite part of watching these go, other tesla drivers go by honk the horn and wave. they do look sci-fi. the key question, if they can literally stay intact enough.

>> if something doesn't fall off and the droid comes out. >> they wanted to get rid of side mirrors to increase the range, couldn't get approval to do so. >> thank you for being with us. >> thank you for having me, a lot of fun. >> really enjoy it. >> thank you all for being here as well. thanks for watching ""power lunch"". >> "closing bell" starts right now. i'm scott walker, live from the new york stock exchange. make or break hour begins with mega cap tech name reaching a new milestone today, and it's not nvidia. strike up the band. it's amazon. topping $2 trillion in market cap for the first time ever, we will talk about the stock's supercharged comeback with a shareholder who's buying more today and we'll do that in just a little bit. in the meantime, take a look at the score card with 60 minutes to go in regulation, get the feeling from looking at the major averages at a there's a pretty big wait and see ahead of friday morning's pce, inflation report, no big bets being puon

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