Investing in Space, Meeting Data Center Demand 6/4/26

 Now, futures on the rise.
 Tech takes a breather.
 I'm Morgan Brennan.
 This is your morning call.
 Good Thursday morning.
 It is great to be back with you.
 Let's get a check on U.S. stock futures.
 After the S&P and Nasdaq both snapped
 their nine session win streak.
 So you can see it's a mixed picture this morning.
 The Dow is poised for gains on the open.
 The S&P and Nasdaq both under pressure this morning.
 Checking on energy as we continue to monitor
 developments around the Iran War as well.
 We've got a lot more on that in a moment because
 we got a lot of news after the close last night.
 We can see right there oil is taking a breather this morning.
 WTI down 1% trading just below 95 bucks a barrel
 and Brent also down more than 1% trading at $96 a barrel.
 Nat gas is fractionally higher.
 We get a check on treasuries as we await initial
 jobless claims before the bell this morning.
 This after a stronger than expected ADP report yesterday.
 And of course ahead of the jobs report the non-farm payroll
 report tomorrow.
 You can see treasury yields taking a bit of a breather
 this morning to lower across the curve.
 U.S. 10 year treasury yielding 4.487% right now.
 And we are watching a trio stocks on the move on the
 back of earnings broad calm crowd strike five below all
 facing steep losses this morning.
 Double digits for all three of those names.
 We're going to have more on those results.
 And what's triggering those pullbacks coming up.
 But turning to the latest in this war in Iran.
 The House approving a war powers resolution to limit
 President Trump's war powers in Iran in significant
 rebuke to the president several Republicans for specifically
 joining Democrats in the two 15 to 208 votes.
 It was very tight here.
 The Senate advanced its own war powers resolution last month.
 Meanwhile, the Wall Street Journal reporting that
 President Trump has told AIDS privately that he would
 consider ending the ceasefire with Iran if Tehran
 kills American troops.
 The journal says the president's reluctance to reignite
 the war suggests that he might be willing to withstand
 smaller flare ups to avoid a broader conflict in the middle
 of the east.
 And of course, this afternoon also noted that perhaps the
 blockade is more effective than bombs.
 And Israel and Lebanon agreeing to implement a ceasefire
 following U.S.-led negotiations in Washington.
 The ceasefire hangs on a complete stop of strikes from
 Iran-backed Hezbollah forces and their pull back from
 the southern part of the country.
 Israeli Prime Minister Benjamin Netanyahu discussing
 Lebanon and Hezbollah ahead of that agreement and an
 exclusive sit down with CNBC yesterday.
 If we want to save Lebanon and if we want to get
 a Lebanese Israeli peace as I do, we have to disarm
 Krasbala and we have to demilitarize Lebanon.
 And I think that's a goal that it's not I think.
 I know that this is a goal that the president and I share.
 And that's what we have to do.
 So we're trying to, how shall I say this, degrade
 Hezbollah so that a free and independent Lebanon can
 emerge.
 We're still working on it but we're on good.
 Well, let's see how Europe is shaping up this
 morning.
 Ben Boulos is in London with the trade and what we're
 seeing there right now.
 Ben, good to see you.
 Yeah, good to see you too, Morgan.
 And a bit of a mixed picture in terms of the equities
 here in Europe.
 You can see the continental bourses, the DAX and the
 cat carol both in positive territory but the FTSE 100
 retreating traders can't quite shake off the concerns
 about the situation in the Middle East that you were
 just discussing.
 Tech stocks are in decline, though, tracking heavy losses
 in Asia.
 There's one stock that I want to focus in on particular
 and that's universal music group because its shares
 are in the red after Bill Ackman's Pershing Square sold
 it's stake in the company valued at more than one and a
 half billion dollars.
 It had been thought that Pershing Square might try
 and acquire universal music group.
 That led to its shares popping about a month and a
 half ago but it seems according to reports that that
 possible takeover deal has now gone away.
 Universal music group of course representing artists
 like Lady Gaga and Taylor Swift.
 Who knows one of the may penner bit of a break up song
 to note this latest development.
 Morgan.
 Big Ben Boulos.
 Great to see you and have you on the show.
 Thank you.
 Also watching Asia markets a lower finish to the trading
 session on concerns around the war in Iran.
 South Korea's Cosby returning from holiday finishing
 down 1% despite the pullback in the Cosby, though,
 it's more than doubled so far this year.
 The index performing well above markets here in the US
 with the S&P up 10% so far in 2026.
 So for more, let's bring in Williams that cliff ahead
 of emerging markets equities at Billy Gifford.
 William, it's great to have you on.
 I got to start right there because the very beginning
 of your notes that I see here, you're seeing emerging
 markets are no longer emerging.
 What do you mean by that?
 Yeah, look, I think something really important is going
 on in financial markets at the moment.
 And it's a regime shift if you like and you can see
 that in the way that emerging markets are no longer
 behaving in the way that emerging markets of old might
 have behaved.
 And what I mean by that is so far this year, we've had a war.
 We've had an energy shock.
 We have growing concerns over global growth and ordinarily
 that sequence of events would be pretty bad news for emerging
 markets and investors would traditionally panic back
 to the safety of dollar assets.
 But that's not happening this time.
 Investors seem to be sticking with emerging markets
 and the emerging markets index, the MSC IEM index is
 continuing to outperform most of its developed market
 equivalents.
 So what is going on here?
 And a lot of it is about AI and it's notable that that
 rally has been led by the tech heavy markets like Korea,
 like Taiwan.
 But it's broader than that.
 Even the less tech heavy markets like Mexico, like Brazil,
 they've held up pretty well over the last year or so.
 So I think that's really interesting.
 And I think one of the implications of that,
 or if we think that one of the implications of the war
 is that it accelerates this drive towards global
 self-sufficiency and resilience and supply chains and energy
 security.
 Then I think emerging markets are really well positioned
 from that respect because of course in emerging markets,
 you have the best, the lowest cost resource producers
 to help build those supply chains.
 And you've got all the copper and lithium that you need
 to build a renewable infrastructure.
 And you've got the world-class semiconductor picks
 and shovels to enable the rise of artificial intelligence.
 What you highlight is so important because we talk so much
 about this AI trade, and specifically
 the AI infrastructure build out and all the components
 that go into it from a US standpoint.
 But obviously this is a global phenomenon.
 So to that point, I mean, the other piece of this
 is that not every so-called emerging market
 is created equally.
 I mean, you talk about Mexico, Brazil.
 I mean, these are very commodity-driven markets.
 When you talk about the Cosby or you talk about Japan
 and what we see with the NICA, I mean, these are also
 very, very levered to chips and other parts of the AI
 build out.
 On the flip side, if you look at India and the Nifty 50,
 it's been a big underperformer in part
 because of what we've seen with oil prices, supply chucks,
 and everything in the Middle East.
 So how do you discern where to put your money
 and what that looks like?
 Yeah, I mean, I've been investing in emerging markets
 for 25 plus years, and one thing that hasn't changed
 is that there will always be large chunks of the interest.
 It just holds no interest for me from an investment perspective.
 And that, of course, is a nice thing
 about being an active investor.
 We can focus our clients' money where we have our enthusiasm.
 And right now, as you mentioned,
 a lot of that inevitably is artificial intelligence.
 And look, let's be clear about this.
 Without emerging markets, there is no artificial intelligence.
 It's the US companies, of course, that get the headlines
 in this respect.
 But it's in emerging markets that the companies are doing
 the heavy lifting.
 It's the companies like Taiwan semiconductor
 that are the poster child for this.
 And that's one of the biggest positions in our portfolios.
 There is multi-company on Earth that comes anywhere close
 to matching TSMC's capabilities.
 I think it was back in 2020
 that Intel admitted they were about two or three years
 behind TSMC in technical terms.
 And that gap has continued to widen.
 But of course, there are others.
 Samsung Electronics, SK Hynix,
 these are very big positions in our portfolio as well.
 And they are absolutely critical to helping
 to solve that bottleneck that relates to memory
 in our artificial intelligence.
 All those high-power chips from Nvidia
 basically are sitting idle 60% of the time
 because they cannot get enough access to memory
 and Samsung and SK Hynix are helping to solve that.
 And that, I think, is the excitement for me
 as an active stock picker.
 We can focus our clients' money on these sorts of names
 where you have the world-class AI enablers
 still trading on what I guess you could call
 emerging markets discounts.
 I mean, both of those companies, Samsung and SK Hynix
 trade on about six times this year's earnings.
 So that combination of growth, world-class AI enablers
 and valuations, I think, is a very powerful one
 for investors.
 Okay. William Sutcliffe, a belly gifford.
 belly gifford, it's great to have you on
 to kick off the hour.
 Thanks so much.
 Well, we're going to turn to SpaceX
 and it's highly anticipated IPO,
 setting a fixed price of $135 per share
 that's ahead of officially marketing
 for that public offering, according to SEC documents
 that Roadshow kicks off today.
 At that price, SpaceX would be valued
 at $1.77 trillion, making it the seventh
 biggest company in the U.S.,
 just above Elon Musk's other company, Tesla.
 Now, SpaceX says it plans to sell just over 555 million shares
 and mounting to about $75 billion in capital raised.
 Goldman Sachs is the lead banker for the offering,
 followed by Morgan Stanley, Bank of America,
 Citigroup and JP Morgan Chase.
 And SpaceX revealing that it plans to begin trading
 on the NASDAQ next Friday, June 12th,
 under the ticker SPCX, we're going to have much more
 on the SpaceX IPO coming up throughout the hour
 and all the way up to that IPO.
 Let's be honest.
 A lot more to come here on morning call, too.
 In the meantime, including more on what we're seeing
 in Broadcom right now, as that stock is selling off down
 about 13 and a half percent, falling on the back
 of a forecast that didn't meet the street's needs.
 Plus, we're digging into oil, holding below $100 a barrel
 still.
 Pippa Stevens lays out how China's crude moves are factoring
 into all of it.
 And later, applied aerospace.
 We can recover some altitude after a rocky start
 to its public markets debut in public yesterday.
 It's actually SpaceX's supplier.
 Very busy hour, still ahead.
 One morning call returns.
 Welcome back to morning call.
 Let's get a check on Broadcom because those shares
 are falling almost 14% right now pre-market
 on the back of Q2 results.
 Revenue coming in just shy estimates.
 Investors also disappointed that the company did not
 raise the full-year target of $100 billion in AI chip sales,
 which let's just let that sink in.
 $100 billion in AI chip sales.
 Huge growth still for the company.
 A similar story for CrowdStrike.
 Those shares are down about 11% right now.
 That's after a narrow beat on the top and bottom lines
 with quarterly results, the cyber company.
 I think it's revenue guidance for the full-year.
 Just above analyst forecasts, also declaring
 a four-for-one stock split effective next month.
 And yet, what we're seeing in tech results,
 even with beats and raises or inline quarters,
 not good enough for investors right now.
 So let's dig further into the tech sector.
 Let's bring in Leo Susan, Founder and CEO of Eclipse,
 which invests in startups to help modernize
 physical industries.
 And Leo, it's great to have you on.
 I want to start right there because obviously
 we've seen this in public markets.
 This big run up in the tech piece of the market here.
 And even with strong results, it's not good enough now.
 So how to think about that balance between expectations
 and the actual growth we are seeing right now
 as this AI renaissance is realized?
 Yeah, Morgan, good morning.
 Great to be here.
 Quite amazing, right?
 If you just take Broadcom, an incredible story,
 an incredible company doing extremely well
 in the world of AI.
 Natural transition from the world of software.
 So they actually positioned fairly
 softer numbers around the software.
 But continue, I mean, you just said a hundred billion
 dollar building AI chips.
 And that's kind of was our entire thesis
 at Eclipse 11 years ago.
 The world is going to shift for much more of a software
 to a much more physical.
 We're going to bring this digital tools, this AI,
 those rockets.
 We just talked about SpaceX into the public market.
 And the demand is incredible.
 Yeah, speaking of public markets,
 and I do want to get your thoughts on that.
 And just what we're seeing in terms of equity issuance
 and capital flows in general ahead of SpaceX also
 with this alphabet raise that's playing out in real time
 right now.
 You also weren't investor in coming into the IPO
 and cerebris too.
 So just in general, what we're seeing in terms
 of the IPO pipeline investor reaction to it.
 Yeah, I mean, we walked on cerebris for 11 years.
 The demand for AI chips like cerebris is nothing we saw
 before.
 I think the market, both the private and the public
 wants to see a new stock, new businesses being built
 and delivering a strong fundamental results.
 In the case of cerebris, you know, it's just an amazing
 US semiconductor story, a company that we walked on
 in the last 11 years bringing wafer scale integration
 to the public market.
 We saw an incredible demand at the IPO.
 And you know, now we need to deliver.
 We need to build a lot of data centers.
 We need to build a lot of chips because the demand on AI
 is nothing as an tech entrepreneur.
 And I'll take investors and nothing that the world
 ever saw before.
 Yeah, whether it's SpaceX going public and
thropic later this year, potential for open AI as well.
 Massive massive liquidity events,
 like we really haven't seen before.
 What does this do to the startup ecosystem?
 I mean, Morgan, the US startup economy is on file.
 There is so many companies that is being started
 in the physical world from robotics to space,
 from defense to semiconductor.
 There is a lot of capital flow into those markets
 because I think investors and limited partners are
 going to meet roughly a three and a half trillion dollar
 in a net new market cap in one year is like it's
 it's even hard to imagine saying it loudly.
 I mean, you're showing open AI, you know,
 an enormous, enormous story of a company that just
 you know, building an amazing technology growing
 in speed that we never seen before in the tech industry.
 So where are you investing right now?
 What do you see as the next tranche of possibility here?
 We we started the film we came from an operating background
 building companies and the physical world,
 the physical world, roughly 85% of the world GDP.
 This is your energy manufacturing, construction, defense mining.
 And when we started the family 11 years ago,
 we felt technology is going to live the screen.
 It's going to live the internet and it's going to come
 to rockets, chips, energy systems, data centers.
 And we are seeing an incredible speed of adoption
 in those industries to pull in technology.
 I mean, you cannot not seeing away more cars around you.
 You cannot not talk about SpaceX.
 You cannot not talk about open AI or service.
 Those companies are being moving in a speed
 that is incredible.
 And we are just very, very bullish on that.
 It's helping us bringing technology
 to the rest of the economy.
 It impacts jobs in a way we never seen before.
 It's bringing technology into places in the country
 that historically we were not built.
 This type of a company is outside of Silicon Valley
 and it's just really, really exciting.
 We are Susan.
 It's great to have you on from Eclipse.
 Morgan, great to be here.
 Well, straight ahead.
 We've got, I don't know what this is.
 There's a typo in CEO.
 There we go, of one American exchange operator
 sounding off on one asset class
 that's hitting his company stock this week.
 We've got his comments to CMBC coming up.
 First, as we had to break, take a look at five below shares.
 Those are falling.
 They're down about 12%.
 That's despite beating Q1 earnings expectations.
 Really beating Q1 expectations.
 Raising full your profit guidance,
 same store sales guidance,
 the retailer flagging concerns about consumer sentiment
 due to rising fuel costs, sticky inflation.
 Morning call.
 You're right back.
 Welcome back to morning call.
 Turning back to oils.
 We continue to follow the developments
 around the conflict in the Middle East.
 Crude prices are under pressure again this morning.
 Yet oil remains under $100 a barrel
 despite the energy sector facing the biggest supply crunch
 on record.
 We're well below $100 a barrel.
 Look at WTI crude is below 95 right now.
 Still and ice Brent to 96.
 Pipa Stevens is here with a closer look
 at some of the reasons why,
 which I know our colleague Brian Sullivan
 has been laying out as well.
 Yeah, so there are a number of reasons
 why oil does remain below that
 $100 per barrel,
 including the drawdown in global inventories.
 You've also got bypass capacity out of Fujira
 and Yanbu, as well as some signs of demand destruction
 and some ships getting through the straight of four moves.
 But we've also got a drop in Chinese oil imports.
 So take a look at this chart from Kepler.
 So this shows Asian oil imports prior to the war.
 You can see that they were right around a record
 in January right before the war started.
 And you can see that, you know,
 countries like India, South Korea, Japan,
 some of those imports have come down.
 But then to take a look at China,
 you can see this very steep drop in their oil imports,
 which went from over 11 million barrels per day
 prior to the war to now about 6.4 million barrels per day.
 So that is the lowest level in a decade.
 And it essentially means that China has now
 become the global oil markets balancer
 because they are buying less.
 That means there are more barrels available
 for other Asian nations.
 So the question Morgan becomes,
 how long can China sustain these lower oil imports?
 So take a look at their crude oil inventory
 because it has been steadily growing for years.
 And prior to the war breaking out,
 it hit a record 1.2 billion barrels.
 So they have a lot of cushion there essentially
 to whether the drawdown in their oil imports.
 And Kepler said that this probably can sustain them
 throughout the course of the summer.
 But beyond that, we're not sure.
 Now a separate analysis from JP Morgan
 found that maybe China can simply now
 just live in a world of 9% less oil.
 Some of that is thanks to consumer behavior.
 You think about things like the switch over to EVs
 and just consumers changing their behavior
 based on high prices.
 But then once things normalize,
 if and when that happens,
 we will start to see how sticky that is.
 Are these long-term changes
 or will we go back to a world
 where the same amount of oil demand is needed.
 But essentially that is one of the main reasons
 why oil does remain 700 dollars.
 Oh, this is such a great report, Pipa, as always from you.
 And that was my question.
 It was going to be how much of this is an expectation
 that we're going to see maybe at the end of the summer,
 et cetera, et cetera,
 that we're going to see a renewal
 towards stockpiling for China versus a reflection
 of the state of the Chinese economy.
 And it sounds like we potentially don't know,
 at least not yet.
 So they've definitely moved away from an oil-intensive economy.
 They've made a lot of shifts over the past years
 and their economy has become less energy dependent.
 They're also big on the nuclear front on the renewables front.
 And so those shifts have been there.
 But of course, there are such a big manufacturer.
 And so when you also look at things like
 their petrochemical feed stocks
 and the manufacturing needs
 and even just the byproducts
 you've got from oil and gas production
 and the extent to which that will then flow
 through to the rest of the world,
 given their place in the global manufacturing landscape,
 including for the U.S.
 and how many of our products are imported
 and how many of our products are derived
 from oil and gas.
 I think that will be one of the questions going forward.
 But there is this world in which maybe China
 will just require less demand.
 And that's been kind of one of the eye-opening things
 that has come out of this so far.
 At first everyone said,
 this is the largest disruption
 the energy market is ever facing.
 Price is should be so much higher.
 And then we just haven't seen that same response.
 So everyone is trying to parse what exactly is happening.
 And now there's this growing narrative
 that maybe China just doesn't need as much oil
 as we previously thought.
 All right, Pippa Stevens.
 Great to have you here.
 Thanks Morgan.
 All right, well as we had to break,
 we're gonna get a check on shares of private credit firms.
 After falling between two and four percent yesterday,
 this after Switzerland's partners group
 moved to restrict investor withdrawals
 from one of its funds,
 that stoked fresh fears about the sector.
 You can see it's a mixed picture on your screen right now,
 fractionally moving in either direction
 depending on the company premarket.
 Meanwhile, on New York, next fans celebrating
 the streets of Manhattan.
 After the team overcame a 14-point deficit,
 beating the San Antonio Spurs in game one
 of the NBA finals,
 the next securing at their 12 consecutive postseason victory.
 They're now 7-1 on the road in the playoffs.
 Huge moment for New York folks.
 Huge decades in the making.
 Morning call continues next.
 I'm Morgan Brennan.
 Welcome back to Morning Call.
 Let's get a check on U.S. stock futures,
 which are mixed right now.
 After the S&P and Nasdaq snapped their nine-session win streaks,
 with all major averages closing lower yesterday,
 you can see the dials poised for a higher open.
 The S&P and Nasdaq both started off
 in the playoffs.
 I'm Morgan Brennan.
 Welcome back to Morning Call.
 Let's get a check on U.S. stock futures,
 which are mixed right now.
 After the S&P and Nasdaq snapped their nine-session win streaks
 with all major averages closing lower yesterday.
 The S&P and Nasdaq both under pressure here.
 We're watching a trio of stocks on the move on the back of earnings,
 Broadcom, CrowdStrike 5 below,
 all facing steep double-digit losses on the back of earnings earnings,
 by the way, that were either better than expected
 or in line depending on which metric you looked at,
 and yet big moves lower.
 We're taking a look at crypto to specifically Bitcoin,
 which is down another 4% pre-market here,
 $62,778.
 We're at new lows for 20-26 here,
 as we continue to see a down draft in a liquidity coming out of this marketplace.
 We're checking global markets to a lower finish in Asia,
 largely across the board,
 with the UK down about a little over 1%,
 the cost will be also taking a breather down point,
 1.8%, led largely by a down draft in chip stocks,
 which is just had a torrid run higher in recent months.
 We're checking some of the morning's latest headlines as well.
 We're going to start with Iran,
 the House approving a war power's resolution
 to limit President Trump's war powers in Iran,
 and a significant rebuked to the President.
 This is the Wall Street Journal reports that the President has told AIDS privately
 that he would consider ending the ceasefire
 if Iran, if Tehran kills American troops.
 So basically that is the line in the sand here.
 Shares of continuum will begin trading later today as well,
 after pricing, the IPO at $60 a share,
 raising the price range earlier this week,
 and so pricing meant above that raised range,
 also an upsized offering here.
 This is the quantum startup that is coming from Honeywell here,
 and one of the biggest players in quantum at a time
 where it's getting a lot of attention, the sector overall,
 $1.7 billion in that offering too.
 So we'll check how that trades today.
 Meanwhile, applied aerospace and defense shares are looking to recover big time.
 After following 5% in their trading debut yesterday,
 you can see those shares are jumping more than 23% right now pre-market.
 They are key supplier to quite a few companies in aerospace and defense
 on the drone side, also supplier to SpaceX.
 The Wall Street Journal reporting that meta continues to delay the release
 of its new AI model to developers.
 The journal says the delay, now nearly two months behind,
 is raising questions about how quickly a meta can monetize its massive investments
 in building out its own AI models.
 And we're watching shares of meat producers, by the way,
 a meta had a big move yesterday after that business bought release.
 But we're also watching shares of meat producers and meat packers,
 processors, after the U.S. confirmed the discovery of a flesh eating screwworm in Texas on a calf.
 The U.S. DA says it's taking immediate action to eradicate the parasitic fly.
 This, of course, coming as the cattle herds here in the U.S. are at 75-year lows.
 We're also watching shares of exchange operators facing a pullback this week
 on the CFTC's approval of perpetual futures for Bitcoin.
 The CEO of CME Group, Terry Duffy, bashing these future-style contracts.
 When I listed crypto in 2017, I got chastised by all the crypto participants
 for not listening a physically-delivered crypto product
 because that's the most credible product in the world.
 Now they're all saying a perpetual is more credible, which is laughable.
 So you can't have it both ways.
 Well, demand for power to run AI data centers is projected to more than double.
 To 666 get-go at Watts by next year, and according to a research report from Goldman Sachs.
 But even with all the major investments that are being made by the hyper-scalers building out
 that infrastructure could be hitting a snag.
 I spoke with a CEO of Stanley Black and Decker at the CNBC CEO summit earlier this week.
 He says one of the biggest pieces, one of the biggest supply chain issues here,
 is the labor itself, and specifically a shortage of skilled tradesmen to do the work.
 The biggest bottleneck to the AI revolution is electricians, believe it or not.
 There are more than 50% of the hours in any data center build out is electricians.
 And so us and our ability to continue to figure out ways to make the electricians
 more efficient is really helping that.
 The company that is working to create more efficient power solutions
 to meet the surging demand of AI workloads is ABB.
 So joining me now right here on set is CEO Morton Virat.
 It's great to be with you again.
 One of the largest industrial players in the world and very specifically focused on
 and exposed to this AI infrastructure build out.
 So what are you seeing?
 And I guess let's start with your reaction to what we're hearing about skilled labor.
 Yeah, I think that is one of the biggest challenges now.
 It's to have enough electricians to connect all that new power coming online,
 but also all those data centers.
 I think how we as an industry try to mitigate it is to do more in the factory
 and less out on job site.
 You know that is normally easier to do it under the roof instead of out in the sun
 and on a building site.
 So it's more of modular design, you know what we call e-house or containerized solutions.
 That's kind of the new, that's how we're able to scale up this faster
 and mitigate some of the challenges we meet with skilled labor force.
 Yeah, I mean it has been interesting.
 We saw yesterday getting a lot of attention in Wall Street Journal article
 on how the US data center builds out is starting to fall behind
 because of all of these bottlenecks.
 What do you see as the biggest bottleneck and what does that mean potentially
 in terms of opportunity for ABB?
 Now we see that these bottlenecks is coming up on different
 but they are moving around in the system because sometimes you know
 you need to have power and permits to get going.
 But then you start with the construction work, there's another bottleneck
 and then you have the equipment coming in there.
 We all heard about gas turbines, about power transformers.
 That is two of the bottlenecks.
 But we see more capacity coming online, kind of quarter by quarter.
 That is mitigating and helping.
 So we will see that this is moving more, I think, moving these bottlenecks
 or moving around in the system.
 And that's kind of, so you go from one side to the next, so you're moving around.
 And for us at ABB, that's kind of we try to make it so we can mitigate this by,
 as I said, building more on site doing these more of modules that goes out at the site.
 This is what helps down the construction time and also the need for workers at site
 because this is one of the challenges but so far it's going very quickly ahead.
 I think there's also just a lot of, I don't know if I want to call it misinformation
 or just maybe lack of information and just how much different AI data centers are
 as they're being built out right now versus what we've seen with more traditional cloud-based data centers too,
 whether it's talking about the water and the cooling systems or there's talking about the electrification
 and it's talking about even just where some of these power supplies are going to come from
 and what hooking into the grid looks like as well.
 Yeah, I mean, traditional data centers were more, kind of especially machine learning data centers.
 They were running like, you know, like clockwork and at the same, more or less,
 at the same speed all the time.
 The new AI identities will have much more variation in loads.
 You're going from a 200 up to can go up now, the biggest one up to a gig of what's over.
 And that means that variation of powers put a lot of stress over the power grid.
 And that means also there is a lot of, there's a new challenges that we need to meet again
 and we are helping there to get grid stability because it's not enough to have enough power
 but it also need to be reliable all the time.
 You know, these data centers but also the consumers and industries in the neighborhood
 kind of have voltage dips. That means that the whole plant is restarting. That's very expensive.
 So this is one of the, I would say challenge, but also an opportunity where we're coming with equipment
 called something called synchronous condensers, which is large electric machine
 that stands in the grid to make this the stability in the grid that is needed.
 So we avoid those kind of voltage dips.
 So this is just one example you see new companies coming online to mitigate all these,
 the new challenges that data centers put on the electric grid.
 So if I was going to put my concertion hat on, I'd say perhaps longer term depending on how all this plays out,
 we might end up with a less fragile power grid in the midst of all this.
 Yeah, there is a massive investment in new grids now all over the United States.
 And so we need both more power, you know, so it's the energy expansion we're talking about,
 but then it's also about more reliable power.
 And there is at the same time as for the grid side, you see a lot of underground work
 that means that even the overhead line that you're used to see when you're driving down the road
 is now going on the ground.
 And it's a good thing.
 First of all, it looks better, but mainly is that we will always have power available.
 You know, if there's forest fire in California over hurricanes on the east coast,
 this is where people can be out of power for weeks, worst case.
 And now you should be able to do that without running that diesel generator in your backyard.
 Yeah, I also just want to talk specifically about the ABB portfolio.
 You're selling the robotics unit to soft bank here.
 You're obviously positioned for and continue to position yourself for this industrial AI automation future.
 Do you feel, I guess do you feel like your portfolio is where it needs to be to realize that future?
 And why is robotics not part of it?
 Well, we have a ABB focused over the last years to kind of streamlining and focus our portfolio
 very much around electrification and automation.
 These are great markets.
 Robotics is also a good market, but we also see that as a company,
 we are the over electrification automation offering goes hand in hand,
 and there is where we find the best synergies in the company.
 And therefore, we decided that robotics would have a different future and a different ownership.
 But we have so many opportunities now.
 The world is going electric and it needs more automation.
 And that's kind of the sweet spot of ABB as a company,
 and that's where we can make a difference.
 All right, Martin Vera of ABB. It's great to have you here, Hanset.
 Thank you.
 Thank you.
 We've got a lot more to come here on Morning Call,
 including seemingly everyone wants a piece of SpaceX.
 But we're going to talk with the COO of one VC style ETF
 that has SpaceX making up about 20% of the funds,
 plus PVH, which owns Tommy Hilfiger and Calvin Klein Brands,
 following more than 20%.
 After the company beat on earnings and reiterated full your guidance,
 down about 22% right now, pre-market.
 Morning Call, I'll be right back.
 Welcome back to the latest on the SpaceX IPO.
 The company's setting a fixed price for the offering at $135 a share,
 that's according to the SEC filing that was out last night.
 Ahead of the official investor road show that is kicking off,
 as we speak, that would value SpaceX at $1.77 trillion.
 It makes it the seventh biggest U.S. listed company,
 just above Tesla.
 The company plans to sell just over $555 million shares.
 This would raise roughly $75 billion.
 We knew this was going to be a history-making IPO,
 now you can certainly confirm it here.
 SpaceX also plans to begin trading on the NASDAQ next Friday.
 June 12th, under the ticker, SPCX.
 Joining me now is Ava Ados, COO and Chief Investment Strategist at EAR Shares.
 SpaceX accounts for about 20% of the firm's private public across over ETF,
 also known as the XOVR, just getting a lot of attention ahead of this IPO lately as well.
 It's great to have you on.
 Welcome to the show.
 Let's start right there with valuation as we do go into this road show.
 I'm already starting to see the Wall Street notes and the chatter about
 whether this company is overvalued at 95 times sales, et cetera, et cetera.
 But the other piece of this is how do you value a company that has no comparable like it in the market?
 Case in point, all the space stocks that are currently trading are re-rating higher
 to meet the expectation around SpaceX because many of those companies wouldn't exist
 if it wasn't for SpaceX bringing launch costs down.
 That's right, 100% agree.
 We get in terms of evaluation, we'll look at SpaceX as a three engine empire.
 You have the SpaceX core that accounts for about 90% of all mass to orbit.
 That's all mass to orbit. It's a huge number.
 You have Starlink, which has leapfrog, the telecom industry,
 just like mobile leapfrog, the landline.
 And this is the cash cow. We have 10 million subscribers.
 And then you have SpaceX AI.
 You get to 1.2 trillion with the two first engines.
 You get to that with SpaceX core and Starlink.
 And then the rest is optionality with SpaceX AI.
 And to us, for people who can see towards the future,
 SpaceX AI can be the leader when it comes to AI because the AI game is not about the LLM.
 It is about the infrastructure and SpaceX provides the optionality with data centers up in the space
 for whoever wants to believe in it.
 We believe in it.
 And if this happens down the road, then the leader in AI will be SpaceX.
 So all these three engines together and they're all interconnected,
 gets us to 1.77 trillion.
 And we believe this talk will do amazing on the first day of trading
 because we see so much pent-up demand.
 So in light of that, we've got a small float.
 There's obviously a huge amount of appetite and interest in this name as it goes public here.
 And then you're going to have force buying too,
 just given what we've seen in terms of changes around methodologies
 with some of the different indexes, etc.
 But there's also, the counter to that is also that with the retail allotment
 I think about that piece of the puzzle that there's also a possibility, a high risk that,
 as we've seen historically, retail investors could get burned.
 Is this time different?
 We believe it is different.
 As you mentioned, we are speaking about a faster conclusion to the S&P 500.
 Then you have 15 to 20 trillion following of passive money following that index.
 If SpaceX goes public at 1.77 and we're speaking about 2% plus of the S&P 500 index,
 that means we will have 300 to 400 billion of force buying to keep that's going to mitigate the selling pressure.
 And then you have a faster conclusion to the NASDAQ.
 That's going to happen effect in the first weeks.
 We're speaking about a 6% weight in the NASDAQ.
 And that accounts for about 30 billion of force buying.
 Then you have the Russell 1000 growth.
 It is a historic IPO.
 You have force buying.
 We believe the floor.
 There is a floor unlike other IPOs in the past.
 And we see a tremendous amount of interest.
 We can say this because of the XOVR ETF.
 The interest we have received from retail investors for people who want to invest 50 bucks or 100 bucks,
 they all want to be part of this historic IPO.
 They believe in the future.
 All right.
 The US.
 Okay.
 If it's great to have you on, appreciate it.
 Thank you.
 We talk a lot about this tiered lock up system.
 But the other piece of this that I think is not getting enough attention is the fact that senior leadership including Elon Musk
 are actually locked up for 366 days, which is double what we typically see.
 And so that piece of it needs to be thought about too.
 We just got job cut numbers from Challenger.
 US employers announcing just over 97,000 job cuts in May of 16% from April of 3% from a year ago.
 A.I. is being cited as a big factor for those cuts.
 We're going to dig into that with a morning call crew right after this break.
 Time for your call sheet where we look at the topics driving the trading day ahead.
 Crew members today, Joe Quinlan of Bank of America Global Wealth and Investment Management.
 Sylvia Jablonski from Defiance ETFs.
 Jessica Inskip from Stockbrokers.com.
 We got a rapid fire today.
 I apologize up front because I haven't been on set for a week and it's been pent up.
 So a little squeezed on time.
 We're going to get it all in though.
 Joe, I'm going to start with you.
 Challenger, job cuts, A.I. being attributed to some of this.
 Say to the labor market as we go into a report tomorrow that's going to matter.
 Solid Morgan, despite the new numbers, it just came out.
 Every company I'm talking to is looking for whether it's lower skill labor or higher skill.
 I mean, it's still a good job market is a lot healthier than the numbers you're talking about suggests.
 Okay.
 Sylvia, want to get your thoughts on what we're seeing as we march up to this SpaceX IPO next week.
 And we got another one on tap today.
 And I'm sure you're probably watching closely.
 Continue on.
 Yes, so we're seeing a massive amount of interest in quantum computing.
 We know that quantum computers can do complex things better than classical computers.
 And I think that what we're seeing now is really the Nvidia moment.
 This is the future of compute.
 And the fact that these companies are coming to market with these healthy IPOs.
 You know, we're talking about five point or sorry, 15.6 billion here evaluation.
 Really interesting for the market and shows the commercial interest.
 Okay.
 Jessica, want to get your thoughts on this too, especially because there is so much chatter around SpaceX next week.
 And I think it's also casting a light on this debate around what this means in terms of a retail investor Renaissance.
 Whether we're seeing one or not.
 Yeah, so I do think actually interesting what came into place today is the pattern day trader rule being removed from 25,000 to 2000.
 So we might see a little more volatility within the market.
 It doesn't mean that there's more leverage available.
 It just means there's trade restrictions are lifted, which allows for more trading.
 So I think that could certainly welcome more frost because there is momentum because we have an overextended AI trade.
 But I do think it's important to remain in the AI trade.
 The market is very earnings driven. There's rate risk.
 That's subsiding. We have to watch oil at flirting.
 The long and flirting with 5% is a concern.
 But right now, I feel like you have to be exposed to the AI infrastructure build out in the short run.
 There's a ton of momentum, which means a lot of volume momentum.
 But in the long run, we just need to see true productivity enhancements for their rally to continue.
 But still bullish AI.
 And even the valuations are looking more attractive.
 I think the sell-off is natural.
 Yeah. I mean, the equity supply piece of the puzzle will probably only just continue to get more attention.
 Joe, and let's not forget this alphabet raise as well.
 In the midst of that, how do you balance that as we're seeing a little bit of a breather here in tech?
 And in this AI trade, case and point, Broadcom trading down double digits this morning.
 Versus the TikTok of a potential realization of a piece deal with Iran.
 Well, Morgan, we're telling our clients, yes, we like the AI trade.
 But there's much more to the U.S. economy than just artificial intelligence.
 Of course, it touches everything.
 So we're rebalancing, broadening out the portfolios.
 Whether some dust drills, healthcare looks more attractive here.
 Financial, some overseas markets as well.
 So we're trying to redirect the conversation with our clients at, yes,
 AI is important, touches everything.
 But there's a lot more to help other places put money to work in this market.
 Yeah, Sylvia, if we actually realize a piece deal here, some sort of deal.
 Meaningful deal with Iran.
 Is that a sell the news event?
 In light of everything we've seen with equity markets in the U.S.?
 I think it's a sigh of relief.
 And I think it gives the market a catalyst to keep going.
 We've been talking a lot about AI.
 AI had a 17% increase in electricity use last year.
 I think about the picks and shovels, AI infrastructure.
 That's another place where the puck might be going.
 Whether it's cooling, bottlenecks, GPUs, memory, all of these topics.
 And I think that removing that geopolitical risk, which is, which really, you know,
 is keeping the market a little bit volatile here is something that would give investors peace
 and allow them to continue to invest and buy new names in the space and hold their positions.
 All right, Jessica, I've got 15 seconds. Final words.
 I think it's all about rates.
 Every bit of what we're talking about is the effect on rates.
 So just watching how the curve really is affecting everything goes into financing.
 And it's just this competing with earnings yield and yield altogether.
 Look at that. We did it.
 You guys rock.
 Thank you to our morning call crew.
 Great to have you here.
 Futures are mixed.
 Glockbox starts now.