AI momentum, space growth and global risks drive markets 5/27/26

 the trillion dollar club gets two
 new members.
 Futures are higher.
 This is your morning call.
 Good morning.
 Welcome to morning call.
 I am Morgan Bretton.
 Let's get a check on US
 stock futures after another day
 of records for the S&P 500,
 the NASDAQ, the NASDAQ 100,
 the Russell 2000 yesterday,
 even as the Dow finished
 fractionally lower.
 You can see right there on your screen,
 quite a bit of green this morning,
 with futures higher and all the major averages poised
 to open higher.
 Well, we've got the big stock story of the week.
 Micron, only two days in, not even.
 Shares closing up more than 19% yesterday.
 It became the latest member of the US $1 trillion stock
 club.
 Micron is the fastest ever to double in value,
 $21 trillion.
 It joins the 11 other.
 US listed stocks in what our
 Jim Kramer calls, quote,
 the new era fueled by AI.
 We've got much more on that stock
 throughout the hour.
 In the meantime, let's get a look at
 the treasury market because we did see
 bond buying yesterday,
 and that is continuing this morning.
 You can see yields lower across the curve.
 US 10-year treasury yielding 4.465%.
 The two-year 4.02%.
 Turning now to the dollar index.
 Dollar software against other major currencies this morning,
 as well, perhaps unsurprisingly.
 You can see the dollar index,
 $99.08.
 Turning to crypto, as well,
 where Bitcoin is fractionally lower again this morning,
 but still holding in at more than $75,000.
 You can see ethers fractionally higher
 and other cryptocurrencies as well.
 Finally, let's get a check on energy
 because oil is sitting at its lowest level
 since late April, and you can see under pressure
 again this morning.
 WTI is down about 4% trading around $90 a barrel
 and Brent's down about 3% trading around $96 a barrel.
 Our above gasoline also,
 3% lower.
 Micron's not the only stock crossing that $1 trillion mark,
 though.
 We got record moves in South Korea overnight,
 as well, for another chip maker.
 Also in the memory space,
 Lisa Kim is in Singapore,
 and she's got the trade out of Asia.
 Lisa, great to see you.
 Hey, Morgan.
 So, SK Hynex hit that $1 trillion mark today,
 less than a month after its South Korean rivals,
 Samsung Electronics reached the same milestone.
 SK Hynex leads in HBM chips,
 and these are the chips that hyperscalers
 are trying to get their hands on.
 So, SK Hynex closing the session up around 9% here in Asia,
 and Samsung up around 3%.
 And the two memory names make up a bulk of South Korea's
 Cosby Index, so that index posted yet another record
 closing high today.
 Over in Japan, AI hardware names,
 Adventists and Tokyo Electron outperformed
 the benchmark index, the K-225,
 and Taiwan's TSMC also closed in the green as well.
 I guess those clock Asia said that
 the things demand for memory chips will continue
 as tech giants, space X, open AI,
 and anthropic prepared to go public.
 But, of course, we have analysts warning about
 the cyclical nature of the memory chip space
 which investors look to have sort of set aside
 for now market.
 Yeah, Lisa Kim, thank you.
 We've got greeners across the board in Europe.
 A number of chip names also following
 a micron and SK Hynex higher.
 So, let's get to Steve Cedric with more from Europe.
 Steve.
 Morning, Morgan.
 It's exactly the same story.
 Anywhere where anyone can find anything to do with chips,
 they're just buying it voraciously,
 and ignoring, as Lisa said, the volatility
 and the oscillation in the memory market
 will know historically.
 Anyway, let's ignore that because it's a brave new world.
 Anyway, most European indices, as you can see over my shoulder,
 trading in the green today.
 Now, London, bit of a lagard,
 because BP and Shell are trading to the downside
 on the back of what you just mentioned,
 with Brent and WTI oil prices, as we say,
 a touch software.
 It hopes, again, that a deal can be reached
 to open the state of Hormuz.
 Auto socks are higher, after new car registrations
 in the EU jumped over 5% in April.
 But it was EVs that were really gaining.
 They've gone from around about a 15% market share.
 Up to 20% and ice engines,
 the likes of petrol and diesel,
 down from 38% market share, down to 30%.
 Meanwhile, European chip stocks, as we mentioned,
 pushing higher today after that SK high-nix,
 shares join the trillion dollar market cap club
 with investors, as I say, piling into anything they can find
 that is AI linked to semiconductors
 and that broader technology arena back to you.
 All right, Steve Cedric.
 Thank you.
 Of course, I've more to turn to with Marvel,
 the Bell tonight, as well, here in the US.
 We'll turn back to that $1 trillion club,
 what it could be, what could be the next stock to join,
 when it goes public next month, SpaceX,
 fresh off of a $23 billion contract from the US Space Force,
 unveiled after the close yesterday,
 the owner and operator of the Russell 2000 index,
 the FTSE 100, and others,
 announced new rules that are aimed at fast tracking
 the newly listed large companies into its main indexes,
 after just five trading days versus the previous quarterly review,
 this is SpaceX pushes to fast track its own stock
 into the Nasdaq 100,
 and other main indexes following its public debut.
 So if we stick with SpaceX's hotly anticipated offering,
 retail investors remain front and center,
 with Musk reserving some shares on debut day for investors
 on Robinhood, so-fi, and other trading platforms,
 quite a sizeable chunk.
 It's expected to be dedicated specifically to retail,
 but for investors wanting a piece of the action.
 Before that, they've had to look to funds
 run by Fundrise Innovation,
 Kathy Woods Arc, Baron Capital,
 there's a number of others,
 the later requiring a ladder requiring a minimum investment
 of $1 million, but starting today,
 you can add a new name to that list, Power Law.
 It's going public in a direct listing on the Nasdaq 2 Day,
 owning a portfolio of names that do include
 SpaceX, Canva, OpenAI, Proplexity, and Seronic,
 names known to this show.
 So join me now to see if we see exclusive ahead
 of those first trades,
 since Power Law Capital Group CEO Mike Dinsdale,
 great to have you here on set. Welcome.
 Thank you so much for having me.
 All right, so why take Power Law public now,
 and how is it different than what's already out in the marketplace?
 Yeah, so Power Law is different in that we're the first
 venture capital group taking and building a fund
 and offering it to investors around the world
 to give access to private companies.
 Why now?
 It's because we've been working on this for a couple of years
 and getting through the process was difficult,
 but now that we're here, we're excited to bring
 the best of the best of what we believe are the best
 of the best private technology companies to everyone,
 to access all around the world.
 Part of it is, I'm sure you've talked about a little bit on the show,
 but the executive order in August of last year,
 starting to really push and challenging
 the Department of Labor and the SEC and the Treasury,
 figure out how to gain exposure to the wealth creation
 happening on the private side and bring that
 to the $40 trillion as invested in investment accounts
 in the US.
 Yeah.
 If we just take a little more deeply here,
 then in terms of what investors can expect when they buy
 into Power Law versus some of the other players that are out
 in marketplace, we just mentioned, you know,
 Kathy Woods fund and Ron Barron's fund and some of the others
 who know there's XOVR, there's Destiny 100,
 I can go through the list, especially when we talk about exposure
 to some of these companies like SpaceX, for example.
 So what specifically is it about Power Law
 that investors should be paying closer attention to?
 Yeah.
 So Power Law is built off of my own operating experience.
 I was a CFO of DocuSign, DoorDash, and then Gusto,
 and then joined my partner Ben Black,
 who is a 30-year venture veteran in Silicon Valley.
 And so we have a firm that's been in venture for 16 years
 in Silicon Valley.
 We have unique access to all the big tech names
 and then just the foundation and the discipline that we bring
 is different from our competitors that were true venture capitalists
 bringing exposure to the best technology companies
 headquartered in Silicon Valley.
 What happens when SpaceX goes public?
 It's going to be an exciting day, I think,
 for a lot of investors around the world.
 And we're happy that that's our largest position actually
 in our fund.
 And we're big believers that that is going to treat very well
 and it is a one-of-one company.
 So we're excited that we're part of that journey with SpaceX.
 Do you hold on to your SpaceX holdings once they go public
 or once that lock-up period starts to be realized
 does that change for the fund?
 I mean, the end of the day, the value that we bring at power law
 is exposure to private companies.
 And so once companies go public, we'll assess the portfolio
 and decide what makes sense in terms of reallocation.
 But at the end of the day, we're all about giving access
 to private companies.
 And so we'll rebalance the portfolio over time.
 So somebody with roots in tech and roots in venture as well.
 I mean, the fact that we're talking about a trillion-dollar club
 and one, if not potentially, two companies
 that could come public this year that could join it immediately
 whether SpaceX or OpenAI or even potentially Anthropic
 when that time comes, if that time comes,
 how does it speak to what we're seeing in the private markets right now?
 I mean, I think this is a trend that's been happening for 25 years.
 If you look back 25 years ago, there was just under 8,000 public companies
 today, there's less than 4,000.
 And so that's a trend that's been happening for decades.
 And then the other piece that sort of figures into all of this
 is you look at 90% of US households are not accredited.
 They don't have access to private companies
 because they're regulated from having access.
 And so you look at these trends, that's where products like power law entering the market.
 You know, it's at the right time in history
 and it's going to provide a lot of that value creation happening on the private side
 and now allow others, you know, investors all around the world to participate in that value creation.
 Very active debate going on.
 I think across all investor circles both in public and private markets right now.
 And that is when you see these types of offerings coming to market,
 what is it going to mean for the IPO pipeline?
 But also what does it mean for the capital that's available out there?
 I mean, power laws and instrument to companies is actually a great tool for companies
 because it's an evergreen structure we can continue to invest in companies
 and they can stay private.
 You know, I think until regulation changes where we start to have reasons why companies should be public,
 we're not going to see big changes because it's a lot easier as an operator to be a private company.
 And if you have access to capital through sovereigns,
 all the different to funds that are investing, the emergence of big mega venture funds
 and now we're starting to unlock public capital coming across on the private side,
 I think it's going to still be the same.
 We're still going to see less and less public companies over time
 and we're going to see venture as an industry go through structural change in the next 10 years
 as more products like power law are in the market.
 All right. Well, definitely want to keep track of that structural change
 in the meantime, Mike Dinsdale, power law capital group.
 Great to have you here on set. Thanks for joining me.
 Thank you so much.
 We've got a lot more to come here on morning call, including how one company is using AI and robotics
 to prevent disasters, keeping critical infrastructure safe.
 Plus, we've got a software sector breakdown.
 What you need to watch when Snowflake and Salesforce report after the close today
 and later got a sigh of relief for Lulu, possibly possible deal with its founder and former CEO.
 We're going to have those details for you.
 Very busy hours still ahead. Don't want to miss it more and call you right back.
 Welcome back to morning call officials in Washington state will resume efforts today
 to stabilize a massive chemical tank holding a highly corrosive liquid in a paper mill
 after it imploded and collapsed.
 At least one worker was killed.
 Nine were hurt and nine others are still missing at the facility in long view,
 which sits along the border of Oregon.
 Authorities say there is no current threat to the public.
 Meanwhile, and Southern California officials there have lifted remaining evacuation orders
 for residents who live near a damaged chemical tank in Garden Grove.
 Crisis there began late last week after an explosion of storage tank
 that had been leaking a hazardous chemical, forcing 50,000 people to evacuate.
 The incidents raising questions about the integrity and safety of structures like these.
 So for more, let's bring in Jake Woostererian, co-founder and CEO of Gecko Robotics,
 which uses robots and AI to inspect and monitor critical infrastructure.
 Jake, it is great to have you on the show and certainly we don't have a lot of details
 or know very much about these specific incidents or facilities,
 but it does cast a light on safety and the need for ongoing monitoring
 and lowering the risks associated with infrastructure,
 especially as we build out more in this country.
 So just a very basic question here, old way versus new way,
 what can be done to increase and realize stronger safety in general for infrastructure
 across the US and beyond?
 Well, thanks, Morgan.
 And we saw a sad deed talk about these kind of catastrophes that have happened
 in the last five days, like you're mentioning, the OC Chemical Tank,
 an explosion sitting on the shipyard,
 the paper mill that we just saw seeing multiple deaths,
 and all these locations missing injured.
 So heart-felt feelings and prayers go up to the families.
 And what we're seeing is kind of a tip of an iceberg that I've been working on
 for 13 years have been seeing since a power plant worker fell and died
 doing an evaluation at a power plant in Western Pennsylvania.
 And that is this example of getting information and data sets
 to prevent these kinds of catastrophes from ever happening
 by using archaic tools that were 50, 60, 70 years old
 as well as processes, insurance policies,
 and corporate standards that are also that old.
 Now, what we built is technology and what others are building
 is technology to gather information and data
 to feed into artificial intelligence systems like you see here.
 And that's the opportunity that all corporations have, policy makers have.
 The critical thing to understand here is that these assets that you're seeing
 are past their useful life.
 And this is just going to happen at a faster rate than before.
 Yeah, so in light of that, how quickly are you deploying your technology
 and your capabilities?
 What are some of the examples of where it's being used right now?
 And perhaps most importantly, what is being realized in terms of the results of it?
 Well, deploying these robots allow for you to collect information data sets.
 Basically, what you're doing is sonograms of critical pieces of infrastructure
 using ultrasonic's phased array.
 You're using techniques and sensors that are able to diagnose the health
 that you're seeing here of where all the defects are.
 With these examples, whether it's in California or it's the paper mill,
 where we've done these sorts of evaluations of those exact assets
 at paper mills, at chemical facilities.
 What you're able to see is an incredible amount of fidelity of information data sets.
 And then, because we have hundreds of thousands of assets
 that are located inside of the company's source of truth and cantilever,
 we're able to predict using all that information what sort of defects can occur
 into the future under what conditions you should predict these things.
 I mean, we live in a world where AI can complete a bunch of code.
 They can predict what kind of shows you should be watching on Netflix or detect fraud.
 We should be living in a world where AI can predict the critical assets
 that if they go wrong, could kill people, what's going to happen
 and how to prevent them from happening into the future.
 That's the word I want to live in and what's what AI can do.
 You just need the data sets that people do so.
 Yeah, and we're talking about infrastructure that's everywhere,
 including in very highly populated areas.
 I mean, garden grove.
 We're talking about five miles away from Disney in California, for example.
 You mentioned it, we've talked about it for many, many years on CNBC elsewhere,
 the fact that in the US you have so much aging infrastructure.
 We also see so much more new infrastructure being built and brought online here too.
 So what does that mean for Gecko in terms of market opportunity
 and how quickly are you growing as you deploy these robots?
 The deployments are incredibly fast in terms of its growth and to our growth.
 What you're seeing is just this idea that if you have more information than data sets,
 you can do things like predict these things from happening.
 You can reduce the amount of time you're in turn around.
 But I think the thing to understand here is that the infrastructure that we're using
 to supercharge the American economy, whether it's in making kilowatts
 or it's supplying critical needs like you see in this paper mill,
 we're getting these assets stressed in a way that they haven't been stressed before
 at the exact time when they're so old and the people that are running these facilities
 are retiring in a faster rate than they're coming online.
 And so this is a national imperative.
 We want to be able to accelerate the ability to be able to make power,
 to feed the data centers as well as continue to make goods and services
 and ensure more and more things or quickly develop and speed up how fast we're making ships
 and vessels for the Navy.
 All these things are stressing a very old piece of infrastructure and supply chain.
 And that's kind of what you're seeing and that's what you're going to continue to see.
 And the fact that is with things like these robots and artificial intelligence systems
 that are able to take that data set and predict what to do,
 what to do, how to make things smarter into the future.
 And it's allowing for companies like mine to be able to be seen as the solution
 and the antidote to this horrible problem that's coming more and more pervasive.
 I mean, this isn't a one-off, like this is happening at a faster rate than ever before.
 And so that's why you just need to take a completely different approach
 and not wait on policy is insurance policies to change and Congress to change,
 which I call in all of these groups to get their act together
 because these are people's lives that we're talking about.
 And elementary school was just a few,
 it was right across the street from the OC chemical tank.
 And these are people's lives and corporations have to take a forward approach and stance here
 because we can't just wait for rules to change.
 Yeah. Jake Lucerarian of Gecko Robotics, it's great to have you on.
 It's good to see you and certainly a very important conversation to be had
 and important work being done by Gecko.
 Appreciate it.
 Thanks, Maureen.
 We'll straight ahead.
 Paramounts and Warner Brothers reportedly get the all clear from federal regulators.
 We've got details in a moment.
 First, though, we're checking shares of Louisville Lemon.
 Reuters reporting the company is nearing a deal to settle that proxy war with founder Chip Wilson.
 Just days after previous talks broke down.
 What was the deal?
 Reportedly.
 Wilson would get board seats in exchange for not badmouthing the company publicly or privately
 for a certain period of time his ownership stake would be capped at about 10%.
 And Louisville Lemon and Wilson have not commented.
 You can see shares of Louisville up fractionally this morning.
 Morning, call your back.
 Well, the software sector will be in the spotlight today as both sales force and snowflake
 report earnings after the close.
 The stocks aren't performing as well as some investors would like.
 Snowflake is up about 5% since its last earnings report.
 But shares are down 35% from their high back in November.
 Sales force is off 8% in the past three months.
 Stock is down 36% from its 52-week high.
 But both companies could see big swings following their earnings.
 Applied volatility, which measures how much a stock is expected to move up or down,
 is at about 8% for sales force and even steeper for snowflake at 12%.
 Still, analysts are largely bullish on both names.
 50 have a buy rating on snowflake with just 6 at a hold and 1 at sell.
 The average price target $231.
 Well, for sales force, 43 analysts have a buy rating with 13 at a hold
 and 2 with a sell their average price target is $254.
 It is going to be a show me quarter as our friend to the show Dan Ives likes to say
 amid this AI ghost narrative and for sales force specifically,
 it's going to be the top line growth.
 It's going to be full-year guide and it's going to be growth specifically of agents force.
 And for snowflake, it's really that core data warehousing capability
 and how they're leveraging that in this new AI era.
 So a lot to dig into after the bell here as we have recently,
 in the last call out in a month or two months,
 seen some green shoots in software overall after just a big re-rating across the sector.
 Still on deck, a presidential pick prevails in a major primary,
 Samsung makes its new contract official,
 and a big bump for space stocks courtesy of NASA.
 More in call.
 Be right back.
 I'm morning.
 I'm Morgan Brennan, German.
 It's Morgan is morning in German.
 Welcome back to morning call after another day of records for the S&P 500,
 NASA, and also Russell 2000.
 Stock futures are higher this morning with all the major averages poised for gains
 at the open this after a slightly lower day for the Dow yesterday.
 Big stock story of the week so far has been micron.
 Shares are closing up more than 19% yesterday,
 becoming the latest member of the US $1 trillion stock club,
 micron the fastest ever to double in value to a trillion dollars.
 It joins the 11 other US listed stocks in what our Jim Kramer calls,
 quote, a new era fueled by AI.
 Me and time if we take a look at treasuries after a day of bond buying yesterday,
 that's continuing here this morning with yields lower across the curve.
 US 10 year treasury yielding 4.465% right now.
 If we turn to energy, a lot of red on the screen there too,
 with crude prices under further pressure.
 WTI is down about 3.5% trading around 90 bucks a barrel,
 and ice Brent crude, the international benchmark is down about 3% trading around $96 a barrel.
 Well, let's get a check on global markets as well.
 Those are in the green on the screen in Europe as you can see right there
 with the French CAC up about 8.1%.
 And South Korea's Cosby in Asia is leading the gains on that continent
 in what's been a mixed trading picture there overnight.
 But the Cosby finishing up more than 2%
 a big factor for those gains.
 Again, SK high next, closing up more than 9% also,
 officially joining that $1 trillion stock club
 as we continue with the surge we've seen in semis
 and specifically anything tied to memory.
 Let's get a check on some of this morning's latest headlines,
 Texas Attorney General Ken Paxton won the Republican nomination for US Senate,
 defeating four term Senator John Corden in a closely watched runoff election.
 The race drawing national attention after President Trump endorsed Paxton
 last week.
 Paxton will face Democrat James Tolerico in the November election.
 Well, US antitrust regulators are reportedly set to approve paramounts
 $110 billion take over of Warner Brothers Discovery.
 That's according to semaphore, DOJ attorneys seems swayed by arguments
 from top paramount executives that the deal would not hurt other studios
 and creative talent.
 Well, President, and you could see shares up of both names, pre-market.
 President Trump says he wants the US to spearhead regulatory authority
 over prediction markets like Kalshi and Polymarket.
 And in a post untruth social, the president saying it is critically important
 that the CFTC's exclusive authority over prediction markets is maintained
 adding, quote, we are setting rules of the road that are the gold standard for the states.
 CNBC and Kalshi have a commercial relationship
 that includes customer acquisition and a minority investment.
 And we're also watching shares of Samsung in Asia,
 popping after union workers approved their new pay package
 and bonus deal, closing up about two and a half percent,
 averting what would have been an 18-day strike by some 48,000 union members.
 And let's turn to the latest developments for the war in Iran.
 ceasefire is that what we're calling it reports that this morning
 that officials from Iran's revolutionary guards say that while a renewed war
 with the US is unlikely, it stands ready to repel any attack.
 The apparent comments coming after the US carried out those, quote, self-defense strikes
 on Iranian missile launch sites and boats around the straight-of-form moves.
 And the IRGC also reportedly claiming that 25 vessels, including oil tankers,
 have recently traveled the straight.
 As traffic within that waterway remains very reduced though,
 it's shining a spotlight on broader global shipping vulnerabilities.
 Pippa Stevens is here. She's in the studio and she's got more on all of it.
 Pippa, good to see you.
 Good morning, Morgan.
 The decades of the boom in global seaborne trade has been underpinned by
 the idea of unfettered free access to global waterways.
 But now with Iran nationalizing essentially Hormuz and also potentially looking
 to install some sort of long-term, tolling system,
 it's really shining on a spotlight on other global shipping choke points.
 Because there are many.
 So of course we have Hormuz here, then we have Babel Mendab,
 we have the Turkish straight, the Dover straight, the Danish states,
 then we've also got the Panama Canal and the Suez Canal.
 And then finally and most importantly we have the straight of Malacca.
 So let's zoom in here on the straight of Malacca because this is arguably by far the most important.
 It handles even more trade than Hormuz,
 and it handles about a third of global seaborne trade.
 It's bordered here you see by Malaysia, Indonesia, and Singapore.
 And at its narrowest point, Morgan, it's less than two miles wide.
 Compare that to Hormuz, which at its narrowest is 21 miles.
 It sees over 100,000 vessel crossings per year and connects the Indian Ocean
 up through the South China Sea and finally into the Pacific.
 Now recently we saw Indonesia's finance minister make a sort of throwaway comment
 about placing a toll on Malacca.
 All three countries then said that is very much not in the cards for right now,
 but even just the threat of that is enough to raise red flags
 in what is a very fragile global industry.
 An energy research from Kepler actually took a look at it to monetize the impact of nationalized traits
 and they said across the largest 10, it could be 136 billion dollars in annual recurring revenue.
 Now again, no plans as of right now for any of these traits to be nationalized,
 but Ben Stone over at Aeon if we advance to the next graphic.
 He told me that it is causing a kind of rethink in the industry.
 He said that the straight up, the disruption in Hormuz has refocused attention
 on how concentrated global shipping is around these small critical choke points
 and that the market is reassessing how shocks in one choke point can cascade across others.
 So a lot to watch here Morgan and global shipping.
 It's super fascinating and not to mention on packing everything around Taiwan
 because for years there's been speculation that China would not take up Taiwan by force
 but could just impose an embargo within the straight there and basically stop the flow of trade
 and good semiconductors etc as well.
 As with Interior Secretary Doug Berger in Alaska, a little while ago, a couple days ago
 and one of the points he made and this is specifically for oil and gas production
 and why they're so focused on Alaska, eight days to get to Japan from Alaska
 versus say 30, 35 days when the straight up Hormuz is functioning from the Persian Gulf
 and that you're talking about a route along the illusion islands
 and you're talking about U.S. controlled waters that are more safely, strictly,
 whatever however you want to put it governs. So just this idea of more stability.
 I do wonder whether we start to see more trade routes out of the U.S. with that in mind.
 Yeah, exactly. I mean going around in the other direction would certainly cut down times
 and then I think what's so important about that is that it speaks to the long-term changes
 from Hormuz which I think will be countries looking to diversify their supplies
 because the fact that Iran has essentially put the global economy in a choke hold
 just because of their control of, again, this very narrow waterway here in Hormuz
 it illustrates how you need to be diversified and how you want your energy source
 to come from other places and even just looking at Asia, the fact that basically
 all of their energy trade from the Middle East is going through Malacca
 and then up into all of these economies, all those industrial economies are relying on that energy imports
 they are certainly now saying where else can we go? And so the U.S. not only are exports
 now at a record high as we send cargoes to Asia and then Philippines from our SPR
 for the first time we got that news overnight, Alaska is certainly seen as an area
 that could be a boom in time to come. All right, Pippa Stevens, great stuff
 and really, like, I'm so impressed with how you just drew everything big-bam boom
 it's almost like you practiced it. But thank you. We lot more to come here
 on morning call including a fresh check on the health of the American consumer,
 via man's best friend. The CEO of Alanko is here with a closer look at
 whether his customers are shifting spending habits and as we had to break
 a check on shares of Z-Scaler. Those are tumbling right now down more than 22%.
 The cybersecurity company's third quarter results beating forecast
 but it gave cautious outlook for the full year, cutting its free cash flow estimates
 as CapEx jumps. Z-Scaler also flagging challenges in winning new customers
 guess what came up in this earnings call? The cost of memory
 shares of other cybersecurity stocks like Palo Alto and CrowdStrike
 are also lower in sympathy with Z-Scaler. You can see right there on your screen
 down more than 2%. We're on call right back.
 Well space stocks are on the move. NASA detailing its $20 billion
 seven-year moon base strategy yesterday. It's a new cornerstone of this
 Artemis program. A lunar outposts expected to cover hundreds of square miles
 near the lunar south pole materializing over the next decade. The agency announcing
 three uncrewed missions before a year's end, awarding the first
 of what's expected to be dozens of contracts. Jeff Bezos, a blue origin
 winning the contract to deliver rovers to lunar surface using its uncrewed
 cargo lander Mark I to build and deliver those for those rovers
 specifically astrolab and lunar outposts won those contracts but
 losing out for the lunar train vehicle contract was intuitive machines
 which plunged on the news triggering a halt due to volatility at one point.
 Those shares closing down nearly 9%. And popping this morning up
 another 16 almost 17%. And part because I think the company came out last
 night and said that they are focused on building out that lunar communications
 infrastructure. Another winner, Firefly Aerospace which will build and
 operate the spacecraft that will transport drones from the Earth's orbit
 to the moon. That's stock surging nearly 19% yesterday. And if you take a
 look at shares this morning, we're up another 8% or so. And that's
 despite by the way, Firefly saying it's going to sell more shares into
 the market and raise more capital. But if you look right now on your screen,
 all the space companies are trading higher, marketly higher as this re-rating
 continues for the space sector in parts because of NASA in parts because
 of the SpaceX IPL what that's expected to do in general for investor sentiment.
 Well, let's turn now to something a little more earthly. Americans love
 their four-legged family members and are willing to spend to keep them healthy
 and happy. Total spent pet spending in the US is projected to hit a record
 $165 billion this year. But just last week the CEO of Chewie said that
 even though overall spending is holding up pet owners are feeling
 quote more stretched these days. Joining me now is Jeff Simmons at CEO
 Valanco, one of the world's largest animal health companies which makes
 drugs and vaccines for pets and livestock great to have you here on set.
 Welcome, welcome. I suspect I know what you're going to say but I am
 going to start right there with the Chewie comments because you did see any
 kind of pet-related stock sell-off on this stretched consumer commentary last
 week. What are you seeing? You know, I think the pets never matter more
 to the family. We know that and that's globalizing in a big way. 70%
 of new puppy starts are actually outside the US so I think this is a global trend.
 Yeah, it's a dynamic economic time. Morgan, no question but the pets,
 you know, owners willingness to spend on pet care continues to grow.
 I mean, we've seen 30 years of durable high single-digit mid single-digit
 growth. We saw it again last year. I mean, we saw 7% growth last year.
 We saw a strong Q1. Valanco grew 10%, 6% in this category and we're
 even guiding to high single-digit low double-digit next quarter.
 I think the big difference here is pet care versus some of those other durable
 goods. We've seen in our market research that a family of pet owners,
 their willingness to spend and prioritize pet care over even entertainment
 and travel for themselves continues to be the priority pet care does.
 So that we're seeing in the trends, we're seeing that in our own, you know,
 business and we continue to see that globalizing as well.
 So the takeaway there is that consumers may be tightening their bells but not
 where pets specifically are concerned. That said, have you seen any sort of
 shift in terms of consumer behavior, in terms of how they're spending on their
 pets or when it comes to health care specifically, it's very insulated.
 Yeah, so I think animal health continues to be the priority.
 And the animal health market and pet and protein on the farm animal side is
 growing and it's probably never been more durable and that's been one myth
 out there is that the case. No. So inside of pet care and, you know,
 pets spend at 165 billion, 40 billion is animal health and that animal health
 market is probably the most durable and market research shows that is the
 highest priority. Take care of this. We're going into the itching flea
 ticks season right now. Bites are greater than they've ever been in
 January, February and the CDC reporting. So look, I think that's the priority.
 I think the second is, and this is where Lanko's well position is,
 they're also changing where they want to shop. So Lanko's made some acquisitions
 and built over the last eight years, an omnichannel approach to be able to say,
 hey, online, as you mentioned, a company as well as, you know,
 in stores all the way to the vet clinic. We are the leaders in pet retail and
 we're the leaders in innovation inside the vet clinic. So, hey, meeting pet owners
 where they want to shop at multiple price points is essential, I think, to win
 in this animal health market. Yeah, it's super interesting that so much of this growth
 potentially is from international to over the future years. Okay, you just talked about
 protein. I've got to get to protein. Yes. You've got cattle herds at record
 lows right now. I just think about what we saw with bird flu. You saw the spike in egg
 out to the market. That's gone away. Now we're a wash and eggs. What should we expect
 in terms of that relationship between animal health and the ability to bring
 more protein to market at a time where food inflation is very important is very much
 in focus. Well, step back, everybody wants more protein. And it's being driven by
 a lot of trends. And I think all of our customers from poultry to dairy
 to be fallaway across to San, hey, we've never seen this kind of underlying
 demand. GLP use is driving protein, aging population,
 dietary guidelines, and this is globalizing. So first of all,
 we expect 5% growth in overall animal protein
 here in this country this year. We've seen meat sales go up 100% the last
 five years. So what I would say is the underlying durable trends are there.
 There is always volatility quarter to quarter. There's droughts
 or things that I'm very call out to farmers. I mean, there's a lot of
 lunch out there now, but I would say the underlying demand for what they
 produce has never been greater. And that is globalizing as well. For the first time
 in 30 years, I've been in this industry 35 years, as we saw farm
 animal actually outgrow pet health. 10% last year in overall growth. So
 what I would tell you is I think the demand is there. And then
 to our business and why it's really driving growth in our businesses
 the health and the well-being of that animal
 safety of that food and the well-being of the animals is never been more valuable.
 So our value proposition for what we offer is actually greater.
 And of the $40 billion, $25 billion is farm animal.
 So when I step back and look at animal health, pets and
 protein, the market's growing, it's durable. Any
 Lanko with historical innovation is well-positioned.
 Okay, Lanko CEO Jeff Simmons, great to have you here on set to talk about all of it.
 Thank you. Well straight ahead, we got the morning call crew
 team up the trading day, including a big test for softwares,
 soft rebound, and that trillion dollar club getting even bigger. We're back in a moment.
 Amazing.
 Welcome back. It's time for your call sheet where we look at the top of
 striving the trading day ahead. The crew members today, Barbara Duranne,
 BD, Capitol Partners, Veronica Clarke of City and Mark Short of Advancing American Freedom.
 We got a lot to get to. Every day, we got a lot to get to.
 It's great to have all of you here. I'm going to start with this trillion dollar
 club. And Veronica, I'm actually going to go to you on this first,
 because we had Micron join yesterday. We're talking about S.K.
 Heinex on the overnight. I think it's like three names that have joined in three weeks.
 But how does it speak to? We talk about bifurcation in the economy.
 Bifurcation in the market, too. Yeah, no, absolutely.
 I mean, we do see the, even in the market, of course, but the economy
 is just increasingly concentrated in all this AI investment.
 Consumer is still strong, but I'd say the two things that are really driving growth
 right now are consumption, but increasingly that AI investment, which
 it is a little bit of an uncomfortable place when the drivers of growth are increasingly narrow.
 But does seem like it's going to stay pretty strong this year.
 Yeah, I mean, I don't think a day goes by.
 They were not hearing about surging costs of memory, specifically.
 Going back to Micron and S.K. Heinex and even Samsung.
 And so Mark, I would just love to get your thoughts again on this AI infrastructure buildup,
 but also just where we're seeing some of these inflationary tentacles
 as the semiconductor surge does continue.
 Well, I think from a political perspective,
 as we're looking at geopolitical from the present,
 he's going to look at and say, look,
 cause keep rising, and that's the challenge for Republicans ahead in the midterms yet,
 the same time the consumer remains strong.
 And as market continues at all time highs,
 I think the present feels like it gives him more latitude
 and a lot of his geopolitical negotiations in the Middle East.
 Yeah.
 Barb, want to get your thoughts on this, especially as we're counting down a couple weeks away from another
 trillion dollar plus company coming to market SpaceX as well.
 Yeah, no, I think that's what you're seeing here.
 I mean, the big surprise, I think, has been the first quarter ornans,
 which when we came into the quarter was expected to be about 13%.
 It's coming in at 28% plus.
 And that's what the 95% of the S&P 500 companies have reported.
 So I think what we're seeing in the market is justified.
 You're seeing a real fundamental improvement.
 And if you look at the forward earnings forecast,
 both revenues and earnings estimates have come up dramatically somewhere
 anywhere from the 25 to 40% range.
 You know, and as Veronica said, it is narrowly based,
 but this is a huge long tail in terms of the AI
 and all the surrounding infrastructure and power needs
 that we have here. So I think the market at some point here will be due
 for a bit of a pullback that would be normal.
 But I think the fundamentals are set up very well for the rest of the year.
 Hmm. So Barb, after the bell,
 we're going to get Marvel earnings.
 But we're also going to get key takes on software
 with both Salesforce and Snowflake reporting.
 So when we talk about this AI narrative,
 and specifically, I think we're software's concern this AI goes narrative
 as Dan Ives puts it.
 What are you watching for?
 Well, there are two very different companies.
 Obviously Snowflake is about data warehousing.
 You know, but it's really the agents, you know,
 the people at the AIH,
 the people want to see what traction.
 They're doing their own because they've got,
 you can't access, you have to have the data,
 you have to have the security around it in order to get to it.
 So their basic business should be intact.
 But it's really about other agents coming in and using that
 and making their business model less robust.
 And the other one, Salesforce is, you know,
 all the software sector has been hurt because of the fear of
 disintermediation people doing their own agents,
 or also hurting their user based model, which it can.
 But they're also rolling out their own agents
 in order to sort of shortcut that.
 So we will see.
 I think this is going to be an important earnings report
 to see what traction they're getting.
 And the stock is down over since it's high,
 some 35%.
 It hasn't really participated.
 Service now other names have had a bit of a rebound,
 you know, off their lows.
 But this one is a little bit more troubled.
 Sales have been cut in half over the last year.
 So this will be important in terms of getting the direction
 of the stock.
 And if the risk reward is attractive,
 or if it really should be valued down here.
 So it's going to be a close watching.
 Yeah, I mean, Mark software in focus,
 as we talk about AI disruption,
 we're continuing to see, I think not a day goes by,
 though, we don't see another company announcing some sort of way off.
 Some of it in some cases being tied to AI
 or publicly said to be tied to AI.
 And meantime, you have an administration that's focused on
 next frontier technologies, too.
 I think about quantum, for example,
 and the news we got there last week.
 Look, the president pulling back the EO and AI
 thought was interesting last week.
 I think he clearly is decided.
 They want to keep more of a hands off.
 But something else that continuing to bubble up
 is the public unrest and discomfort
 on the team growth of data centers.
 You're seeing it become a bigger and bigger political issue
 at the local level.
 That's something else to watch the AI space.
 Okay, Veronica, I want to get your thoughts on this,
 especially as we also watch for retail earnings this morning,
 we keep getting consumer sense bit readings that are not so great
 to say the least, even if some of the other macro data
 has been pretty solid.
 Yeah, it doesn't seem like, you know, you consumers say
 they feel one way and then they seem to act another way.
 That's always kind of been the case,
 but yeah, consumer sentiment has been very low.
 But, you know, with the retail sales data
 we've had for the last couple months,
 we'll get hard spending data tomorrow.
 It's been very resilient.
 I do worry that, you know, as job growth is slowing,
 even if that's just from, you know,
 slowing labor supply, immigration changes,
 you know, that's still probably the best
 determinant of if people are spending or not.
 And we do see real income slowing.
 Certainly higher gas prices won't necessarily help that.
 But yeah, consumer has been very resilient so far.
 It's been super fascinating, too.
 I mean, the CEO of Atlanta was just on it.
 He was saying, look, you know, pet health is resilient.
 It's basically a consumer staple
 and that consumers will tighten their belts
 and not eat out as much, for example,
 or go to events just to keep spending on something like health.
 So how does it speak to winners and losers in an environment like this?
 Yeah, yeah, certainly, you know,
 even for people healthy and easy that
 in the consumption data, it's been very strong.
 Yeah, you do spend obviously more
 on the non-discretionary items,
 but we do see pretty broad-based spending.
 But yeah, it is coming maybe
 at the expense of some pretty low savings rates recently.
 Okay, we're having all of these conversations
 with S&P and NASSAC at record highs,
 Russell 2000 as well, and Dow just below.
 Thank you so much to our morning call crew.
 Great to have you all here.
 And if we just do take another check
 on U.S. stock futures,
 they are higher this morning
 as Treasury yields continue to take a breather.
 Squawk box starts right now.