AI, quantum and defense fuel the next growth wave 8/6/26

 What made you confident that you could do something that hadn't been done before?
 I have no fear of failure.
 Trailblazing women, changing the game.
 One of my favorite pieces of advice.
 Think about what your boss's boss needs.
 Leadership can look in many, many different forms.
 It really does come down to just trusting yourself.
 Life is short, and you just gotta think big to accomplish big things.
 Julia Bourston hosts CMBC Changemakers and Powerplayers.
 New episodes every Tuesday, wherever you get your podcasts.
 Back on Record Watch, I'm Morgan Brennan, and this is your morning call.
 Good Thursday morning.
 Let's get a check on U.S. stock futures after a mixed day
 for the major averages yesterday.
 This saw the Dow hit another record high, but the S&P&N has that coming off their first
 down day and five.
 You can see right now it's a mixed picture this morning, too.
 S&P is basically poised to open flat.
 Dow up 130 points.
 Nasdaq under pressure.
 Again, this morning, in part because of the chip trade poised to open down 170 points.
 Ahead of today's initial jobless claims.
 Let's get a check on where we are in the bond market right now,
 and specifically with treasuries.
 You can see yields are higher for the most part across the curve.
 U.S. 10-year treasurer yielding 4.62%.
 Fed sensitive to your treasurer yielding 4.19%.
 And 30-year, I'm going to keep an eye on that lady.
 That lately under a bit of pressure here this morning, 5.17%.
 Energy.
 Let's get a check there, too.
 As investors await details on the latest possible U.S.
 Iran deal over the straight of Hormuz.
 You could see a bit higher this morning.
 I'll be at Fractually WTI's, basically trading flat,
 trading rent $75 a barrel,
 Brent's up fractually as well, trading just below $80 a barrel.
 Later, we're going to dig into Hormuz,
 the new shipping risk much closer to home as well.
 But in the meantime, we're going to turn back to equities.
 Got more of names that we're watching.
 Ahead of the opening bell, including Sandisk and Western Digital,
 which are part of what is putting pressure on the NASDAQ this morning.
 Rough sales outlooks for the current quarter,
 hitting both of those stocks hard.
 Sandisk is down about 8.5% pre-market Western Dig.
 Big move to the downside, down about 15%.
 Saking down the rest of the chip sector with them,
 we got much more on that in a moment.
 We're also watching Shares of Apple, though.
 Open AI this morning is asking a federal judge
 to dismiss the iPhone maker's lawsuit,
 accusing it of stealing trade secrets,
 opening AI calls the allegations meritless,
 and quote, rotten to the core,
 adding it acted in line with industry hiring standards.
 You could see Shares of Apple up almost 1% pre-market.
 We're also going to get a check on sales force.
 The company there says it's promoting revenue head
 and former Oracle executive, Miguel Milano,
 to the role of operating chief
 as the company looks to diversify its leadership ranks,
 sales force shares, are down some 60% this year,
 and under pressure again this morning, down 4%.
 We have a lot of early movers to get to across Europe and Asia as well.
 It's not just a US story.
 Elaine Yu is with us from Hong Kong,
 Karen Cho is live from London.
 Elaine, let's start this with you
 and what was a very, very to put it mildly volatile
 tech trade overnight, particularly in Korea.
 Exactly, the South Korean stocks are selling off again,
 erasing much of the gains from the previous two sessions.
 The cost be close down 4.6% after gaining about 5% in the previous two days.
 Samsung is down 6.3%,
 an SK high next shed more than 10%.
 Now, high next was also hit by a second pre-market flash crash
 in about a week on next trade.
 This is a new alternative exchange launch last year
 that also handles trades outside of regular trading hours.
 So earlier today, high next on next trade
 fell by the daily limit of 30% at one point,
 like it did last Tuesday before pairing back those losses.
 So next trade only uses a single pricing source
 like other alternative platforms
 and it has grown in market share in Korea recently
 because of its lower fees and also longer trading hours.
 But all this volatility has also drawn more scrutiny now.
 But more broadly, the retreat of Korean stocks
 have followed the sharp losses in SpaceX and AMD
 as the investor jitters about the sustainability
 and the returns of this AI spending spree are back.
 And analysts say that these concerns naturally spill into Korea
 because of the cost fees heavy chip exposure.
 Now in Japan, the NK225 also tracked losses
 among its Wall Street peers, closing almost 1% lower.
 And meanwhile, the Japanese tech giant SoftBank today
 reported profit for the June quarter,
 that beat market expectations that was driven
 by a 1.3 trillion yen gain in its stake and intel
 and also due to a rise and value of TikTok's owner,
 by dance, that helps its vision fund portfolio.
 SoftBank reported a net profit of $2.2 billion US dollars.
 Although that was an 18 percent fall from a year earlier back to you.
 Alain, thank you. Let's get to Karen show now
 in the early action that we're seeing in Europe.
 Hi, Karen.
 Good morning, Morgan.
 And while we are seeing equities here's stronger in morning trade
 as investors suggest the latest developments out of the Middle East
 with potential agreement over the trade of Humus
 between Iran and Iran seemingly close.
 Attention, though, also on a string of corporate earnings out this morning.
 First up, Azimond's hiking its outlook on the back of record orders
 in the third quarter and record profit in its industrial business
 that surged thanks to the digital industries
 and smart infrastructure segments orders at the laptop
 more than 40 percent on a comparable basis
 to a record-high mid-date descent to orders from both the US and Europe.
 But as you can see, the stock under some pressure
 appears to be caught up in those AI spending fears.
 And we're tracking shares in my material under pressure
 after the German defense firm
 lowered its four-year sales outlook range.
 Following the government's decision to scrap a delayed frigate program,
 the contract for which Rhymetel had been expected to win
 other stock though reversing from some of those early moves.
 And you can see just modestly in the green now.
 And shares of WPPR set for the largest daily gain since 1992
 after the advertising giant beat on organic growth estimates.
 The CEO, Cindy Rose,
 says plans to stabilize the business are on track
 and you can see those moves 23 percent
 currently in session.
 Morgan, back to you.
 Wow, that is a big move.
 Karen, thank you.
 Well, we're going to market flash here on copper too.
 We got copper spiking this morning on a report from Reuters
 that the Congo is banning exports of both copper and cobalt concentrates.
 The Democratic Republic of Congo is the world's largest cobalt producer.
 It is the second largest copper supplier as well.
 And you can see copper futures here.
 It looks like in the US state side up about 1 percent right now.
 And we saw copper here in the US yesterday hit a record high too.
 This, by the way, amid reports that we could get some more
 in terms of tariff dynamics and policy announcements.
 We're copper here in the US as a concern.
 And of course, coming after we had just on this show,
 a conversation yesterday about supply chain reason,
 regionalization when it does come to some of these critical minerals.
 Okay, we're turning back to the chip trade.
 And once again, watching shares of sandisk and other move,
 others that are moving sharply lower ahead of the open.
 Revenue guidance at the memory chip maker missing the street's most bullish estimates.
 Otherwise, it was a very strong quarter with data center revenue more than
 doubling from a year ago.
 Shares may be lower this morning, but they are still up huge for this year.
 And we're having some technical difficulties.
 So we're going to come back to our next guest on the other side of the sprake in the meantime,
 including that. We got a lot more to come here on the morning call.
 Next test for SpaceX.
 As millions of shares get set to hit the market as soon as today,
 we ask one former SpaceX VP if he still holds shares and plans to sell today.
 What investors need to know and understand about that SpaceX ecosystem,
 plus a democratic ground shift in Michigan,
 why Abdul El Sayed's primary victory could be as much an economy story as it is a political one.
 And later, first day was removed, then a critical lane in the Red Sea.
 Now, the global shipping risk hit one passageway much closer to home and it's driving up prices
 in a very big way. Still, a very busy hour on the other side of the sprake morning call,
 be right back.
 What made you confident that you could do something that hadn't been done before?
 I have no fear of failure.
 Trailblazing women changing the game.
 One of my favorite pieces of advice.
 Think about what your boss's boss needs.
 Leadership can look in many, many different forms.
 It really does come down to just trusting yourself,
 like the short, and you just got to think big to accomplish big things.
 Julia Borsten hosts CNBC Changemakers and Powerplayers.
 New episodes every Tuesday, wherever you get your podcasts.
 Welcome back. We're turning back to the chip trade.
 And once again, watching shares of Sandisk and others that are moving sharply lower here,
 pre-market. Joining me now is Venex Nicholas Frosty,
 whose firm manages a number of ETFs that hold Sandisk and other memory names.
 It's great to have you on, Nicholas.
 And I think we've got to start right there because whether it's Sandisk or Western Dude,
 Gidgetall, or what we saw with AMD yesterday, or a number of others,
 I mean, we're talking about blowout results.
 And while the results were big, expectations from investors were bigger.
 Yeah, absolutely. And thank you for having me. I appreciate it.
 We've definitely seen a little bit of a reversion to the meme.
 I think across the chip stocks, especially memory,
 this kind of led the way with that. But we're not an equity analyst, but at the end of the day,
 it appears that investors are looking for clear beads and guidance way outside of whatever
 the consensus is to really turn in the right direction. But yeah, as long-term investors in
 the space where we're really just a reversion to the meme is nothing for us.
 We're trying to keep that long-term AI super cycle perspective. And we think that the chip trade
 is still very strong, even if you're seeing a little bit of volatility in the near-term.
 Okay, so where do you think we are in terms of this AI super cycle? What is your perspective?
 Yeah, I think we would argue that we're probably in the first third honestly. It's a very
 nascent technology. I think there's a lot of speculation around it, but at the end of the day,
 it's very transformative. And if you look at from an adoption standpoint,
 I think we're still very low on the adoption side, even though we hear about it every single day.
 True users and really the full fledged ability of the technology has really not been felt yet.
 And regardless of who wins or where the revenues fall, I think chips at the end of the day
 are in compute is what's going to drive this technology forward. And in our eyes, there's no world
 where we need less compute. And we're using less AI moving forward. So at the end of the day,
 a lot of this is top-down noise, we believe. And there's a lot of opportunity still within the AI
 trade. I'm looking at your notes. And you say investor interest tends to follow wherever the
 near-term constraint sits in the AI buildout. Obviously, memories getting all the attention right now
 this year. But if you look out, where do you see the next sort of bottleneck?
 I think it's very hard, difficult to tell, right? I think if you're trying to, you know,
 play the genie, right, and look in the crystal ball and see where that next bottleneck is,
 I think there's a lot of bottlenecks across the entire stack. We don't think that there's really
 just one. Now that tends to shift depending on the news of the day or where the technology is
 in the cycle. So, you know, from our perspective, it's very difficult to track those bottlenecks and
 know what the next one is going to be and approaching in a diversified way is probably the most
 prudent way to do it if you believe in the technology as a whole. And that's kind of the message
 that we've been trying to convey. Okay. So I guess I realize long-term investor, but we'll say even in
 the nearer to medium-term then, is memory still the compelling place when you think about chips?
 Or are you looking to other aspects within semiconductors or elsewhere within this tech chain right
 now as compelling, especially given the down draft we saw coming off a June? Yeah, sure. I think
 there's definitely a lot of merit to the conversation around memory. You know, it didn't get a lot of
 attention for a long time because it was commoditized. And there's a lot of interesting things happening
 that are driving the technology forward, high bandwidth memory, where you're stacking your
 RAM together. And now there's the talk of high bandwidth flash, which is kind of more in the sandest
 sandest conversation, right? And that technology has not come to very yet, but I think there's still a lot
 of interesting things happening within the memory space. So I wouldn't discount it and it's not that we
 don't care about it. It's just that a lot of things are moving fast and there's a lot of opportunity
 across the board. And it's very difficult to try to pinpoint that. So not to say that we don't
 like the memory trader that we don't believe in it or that it's not a bottleneck. Absolutely,
 it is. But we're just trying to keep, you know, at the end of the day trying to keep that long-term
 perspective and not lose our heads, especially amid a lot of this volatility. Okay. Nicholas
 Frossi, great to have you on. Thank you. Absolutely. Thank you so much. And there has been a lot of
 volatility. We've seen a 6% gain in the S&P up until yesterday. It took a little bit of a breather
 there. That's just in four days of trading. Okay. So the reverse wave of insider space stock
 on locks today, speaking of stocks that have been volatile, available share count balloons to more
 than one and a half billion from 629 million in the IPO. That's just the start. Billions of shares
 on lock into 2027 by January 50% of shares are in free float. That is according to Bernstein.
 The key question here, who's eligible to sell and when? Because if you know some of that information,
 you might understand better whether they will. That matters when determining how supply could,
 in fact, come to market. For many employees, lock up expiration starts today. Senior executives
 and officers are subject to longer lockups. And Elon Musk, who owns 42% of the company overall,
 can't sell until June of next year. But if history is any indicator, he likely won't,
 unless he really has to. And he's not alone. Many long-time investors plan to hold something else,
 hold plan to hold as well. So something else to consider, insiders have had liquidity events.
 Even before the IPO, via secondary share sales, two times per year. That said, the last one in
 December valued SpaceX, which hasn't absorbed XA had not absorbed XAI yet, at about 800 billion
 dollars according to reports. Even with a stock tumble on Wednesday, market cap is around $1.4 trillion.
 So some may still take some profit here. You can see shares of SpaceX are actually bouncing higher
 this morning, about 1.6%. JPM argues, and perhaps this goes to this argument, quote, there's already been
 significant prepositioning ahead of this first expiration at the largest of many over the next
 several months. Bottom line, it's not a typical lockup expiration. Do not expect a typical
 trading reaction, especially amid reports of surging retail buyer activity. Yes, those are
 out there coming into this. Joining me now is Jim Cantrell and early employee at SpaceX. Currently,
 the CEO and co-founder at satellite launch company Phantom Space. Jim, it's great to have you back
 on the show. I'm going to start right there, as somebody who was involved in the founding of
 SpaceX, do you hold stock in the company still? Yeah, in fact, I've just recently bought stock
 because I'm pretty bullish on where this goes long-term, so I continue to add to the portfolio
 and certainly don't plan to sell. So what are your thoughts then on this stock lockup and the
 possibility just knowing the ecosystem that is SpaceX and sort of the culture there as well,
 not just for Elon Musk and the C-suite, but also just for folks that work there in general.
 What a lockup expiration could mean in terms of selling activity.
 Yeah, I think your comments were spot on coming into the segment here about
 there's been liquidity prior to this through secondary sales.
 Most people who were early at SpaceX and had those shares participated,
 I don't think you'll see a huge rush to sell SpaceX from that point of view,
 plus long-term, if you look at anything Elon's done, it grows.
 Most of these people are going to sit on it and now it's just something that can be sold
 as needed, and I think that's how you'll see at least the early people and probably the early
 investors. Yeah, I want to touch on something else with you. When we talk about the PayPal Mafia,
 I wonder if we should be talking about the SpaceX Mafia, because there are quite a few
 former SpaceX employees, pet-agreed folks, who are able to raise capital and private markets,
 I can think of just 10 different startup examples off the top of my head that have been on the
 front lines at SpaceX, understand what's coming because they have helped build and pioneer the
 technology and are now off creating the next thing. You could see that in wire harnesses,
 you could see it in hypersonics, you could see it in in-space propulsion, I could go down the
 list here, but how should we think about how this ecosystem is now radiating out, including
 yourself, by the way? Yeah, yeah. In fact, Phantoms, one of those companies, there's four of us
 of the SpaceX Mafia, as you referred to it, and we're doing something that we've
 used completely complimentary to SpaceX. SpaceX created a whole new market, and then those of us
 that understand what's really happening are building businesses to fit in in the wake of that,
 and in that demand space that's been created by SpaceX. SpaceX is a category of its own,
 it's becoming, I think it was a nation-state, they're settling planets. No other companies
 ever done that before, and it's really a closed ecosystem, so there's so much that can be done
 behind it, and so much talent and experience has come out of the SpaceX side of things,
 companies like Phantomspace, we're building rockets to launch the satellites that SpaceX
 probably won't. We're building data systems to exploit the data that's created by those satellites
 in space that is not going to be what SpaceX is doing. So in light of all that, I mean, SpaceX
 raised a gargantuan sum of money, it's also really made the space industry mainstream
 on Wall Street now. I think investors are more educated on this than they've ever been before,
 and sort of getting a crash course here. So that's all positive. The other hand of it is,
 we've obviously seen shares fall. I think they're down something like 50% from the all-time trading
 high. What do you think this means for the possibility of more companies in the industry going public?
 Yeah, I don't think the share trading on SpaceX, it does set sort of investor expectations
 of what the rest of us are doing, is really going to affect us in the long run because
 this economy is like what the new world was 500 years ago. It's a frontier, and there's so much
 space to expand into people that can execute and raise the capital are going to do very well.
 And I think that SpaceX has created this opportunity for us. The volatility, the stock,
 is not concerning to me, it's more concerning to the chatting class that I hear talk about it
 than it is, I think, in the reality of those of us that are doing it.
 Short shorts, Jim Cantrell, it's great to have you on. Appreciate it.
 Yeah, I could just see it. All right.
 Straight ahead, CNBC exclusive with the CEO of Quantum Computing Giant Eye on Q.
 As those shares pop following the latest results, a near quadrupling of revenue.
 But first, checking shares of Alphabet after closing down more than 4% yesterday,
 on news of talent exodus. Again, it's Chief Scientist is leaving after a nearly 30-year career
 at the company. You can see shares are attempting to rebound this morning up about six-tenths
 of 1%, morning call, you're right back.
 What made you confident that you could do something that hadn't been done before?
 I have no fear of failure. Trailblazing women, changing the game.
 One of my favorite pieces of advice, think about what your boss's boss needs.
 Leadership can look in many, many different forms. It really does come down to just trusting
 yourself, like the short, and you just got to think big to accomplish big things.
 Julia Bourston hosts CNBC Changemakers and Powerplayers. New episodes every Tuesday,
 wherever you get your podcasts.
 Welcome back to Morning call, let's talk one of my favorite topics.
 Manufacturing, Hadrian, and Aerospace and Defense startup, but announcing,
 well, I'm not quite sure we should categorize you as that, but I'm going to,
 we're going to start there. And asking a new round of funding today, the company,
 which is building highly automated AI-powered factories, raising roughly $1.7 billion
 in a nearly $8 billion valuation. The funding being led by Billy Gifford,
 a JPMorgan Strategic Investment Group, quite a number of others, including
 Washington Harbor partners. I could go down the list joining me now as Hadrian's founder and CEO,
 Chris Power. Should I be calling you and Aerospace and Defense startup?
 I should be calling you a new industrial company.
 I think it's new techno industrials, yeah.
 Okay, so you're raising some more money, you're growing very quickly here. What is this enable?
 It enables us to make massive investments to scale a workforce,
 software platform opens the powers of factories, and frankly get ahead of
 the massive amount of production challenges the country has in areas like submarines,
 munitions, the drone industrial base, where we just offshoreed everything for the last 40 years,
 and now we need to reshore and rescale to meet a threatening world and also be a sovereign
 country with sovereign manufacturing. Yeah, it's interesting. So yesterday we're having the
 conversation on the show about automated mining. Now we're talking about automated manufacturing.
 So when you talk about bringing AI and autonomy onto the factory floor, what does that look like
 at Hadrian? What it looks like at Hadrian is giving an Ironman suit of physical AI to the workforce
 to make them ten times more productive. And unlike some other areas of the economy,
 we've got such a deficit of highly skilled manufacturing talent in the country because we
 offshoreed everything that it's really about enabling workforce productivity and uplifting everyone
 and creating millions and millions of American jobs. So it looks like technicians that have never
 set foot inside a factory before running ten robots at once, taking people from white college
 jobs, taking credit from the military, giving them a great job, great pay, and allowing Americans
 to compete globally and create a ton of new jobs in a long way. It's interesting. So in a week where
 we're very focused on labor data and the state of the labor market, what you're saying is automation
 at least through the lens of Hadrian is going to create more jobs. Correct. I mean we lost
 99% of the manufacturing jobs in defense and commercial level the last 90 years. So reassuring and
 rescaling with physical AI, enabling the workforce instead of not enabling them is critical to
 be able to produce it all and just be globally competitive. Yeah. I want to go back to something
 that you touched on and that's defense industrial base. I mean a nodded day goes by with this
 conversation with Senator Joni Ernst yesterday. There reports even overnight about the president
 speaking to a number of folks in the Pentagon about this too, but the missiles and munitions situation
 that they are depleted, especially as we move forward in this conflict process with Iran, the U.S.
 I mean moves forward in this conflict process with Iran. How dire is it? How quickly can a Hadrian
 step into help the defense industrial base to replenish it? So I won't comment on the president's
 position or how dire it is, but in terms of how much we got to scale here. I mean you can
 look at the production numbers of any of the critical munitions and really we haven't been producing
 a lot for the last 10 to 20 years. And now you need to four to five X ramp and replace everything
 was expended in the war. And the reality on the ground is that a lot of the companies that are
 producing these missiles are operating with a Cold War era workforce and Cold War era factories
 that just haven't been rebased or rescaled in a long, long time. So it is a huge whole of nation
 effort for Hadrian because we do design, agnostic, automated factories. We can scale super fast,
 the fastest we've ever brought along a factory was six months from lease to stuff coming out the
 door and being produced. So we can step into the next six to 12 months. And these sort of critical
 issues from energetics through to critical components, through to supply chain, through to assembly
 itself is the kind of things we'll invest with a series day to get massively ahead of because
 obviously the scale of problem is a whole of nation effort. We're very happy to be here to help.
 So if I take a step back, I mean I've been having these conversations for a number of years with
 a number of companies. I think about Siemens reported earnings overnight. I think last I check
 there under a bit of pressure because of their digital business which involves factory automation,
 rock well automation. There's, you know, Honeywell, especially now that it's spun off. How does
 Hadrian and the technology are bringing to bear in these factories compared to what we've seen,
 particularly from some of the other stalwarts that are also reinventing their businesses?
 Look, we built our software in the fire of actually running our own factories. And we firmly
 believe that, you know, and customers are now adopting, adopting opuses as a standalone software
 platform as well, including several services like the Army and Navy. This has been publicly announced
 and we'll soon announce some of the defense primes for adopting it as well. And the reason is
 is because it actually works. We built it for ourselves. We built it for our own automation,
 our own factories. And it just means, you know, it's one of the only manufacturing software
 platforms that actually works. And I know that's a insane statement. But with Physically AI sweeping
 the physical economy, which is a hundred times larger than the digital economy,
 everyone's going to need to rebase their software platforms to adapt and compete in this new world.
 All right, Chris Power of Hadrian, it's great to have you here on set. Appreciate it.
 Thank you so much for having me. All right, come back soon.
 As we had to break consumer stock alert, we're watching
 Elf Beauty and Dutch Burrows. Ha, shares of both are under pressure this morning. Elf, falling
 despite surging net income, growing margins, both tied to a one-time $50 million tariff-related
 refund. And Dutch Burrows also lower despite some very strong same-store sales growth and sales
 guidance. Investors instead may be focusing on its acquisition of 65 salad and go locations
 across Arizona, Nevada, Oklahoma, and Texas. That deal is expected to close in the third quarter.
 See, Dutch Burrows is down 10% a big move for a company that tends to have big moves. We're back
 after this. I'm Morgan Brennan. Welcome back to morning call. Let's get a check on U.S. stock
 futures after a mixed day for stocks yesterday with the Dow closing at another record high. You
 can see it's mixed again this morning. S&P is poised to open flat to the downside. Dow poised for
 gains of 98 points as of right now. Nasdaq is under pressure right now. It's down poised to open
 down 196 points. And that rough session shaping up for the chip trade, she said, on the back of
 Sandisk and Western digital results. The latest report blowout numbers that just weren't enough for
 expectations. You can see Sandisk is down 9% Western digital is down 14 almost 15% pre-market and
 all of that striking other names lower in sympathy, which in turn is putting pressure on the Nasdaq.
 We're checking the metal rally as well. We've got copper at an all-time high. And you had some headlines
 out of the Congo about perhaps limiting some exports there. And in general, we've just seen a
 rally overall for copper, both here in the U.S. and abroad. And we've also seen a rally for
 precious metals too. So gold is basically back at the levels that we saw a month ago after some
 strong trading the last couple of days. But if we go from metals to banking and a new warning
 from JP Morgan CEO Jamie Diamond speaking on our air yesterday in the wake of last week's near collapse
 of an AI hedge fund situational awareness, got a lot of attention. In the wake of broad tech
 sector sell off that caught the highly levered fund off guard, Diamond speaking with our
 Leslie Picker. You know, market leverage is pretty high. Now, of course, we manage it client by
 clients. And so you've seen disasters that people lose a lot of money. Nothing really happens. They
 just unwinded. But when you have that, you do have a higher chance of something to disrupt the
 market a quick way and people get rattled over it. And that is a little high. Well, Diamond adding
 that heavy leverage increases the risk that a single investor fund could trigger broader volatility.
 And of course, we have seen that before. Well, shares of IonQ are moving higher as the
 quantum computing firm reported a smaller than expected adjusted second quarter loss revenue
 nearly quadrupled. The company is also raising its annual revenue guidance, citing growing adoption
 of its quantum model demand for its cloud services. It's also benefiting from string of acquisitions.
 The most recent closing just last week with a nearly two billion dollar purchase of chipmaker
 Skywater. You can see shares are popping eight percent this morning joining me now in an exclusive
 interview is IonQ's chairman and CEO, Nicola Demasi. Right here on set, it's great to have you.
 Let's start right there because it was a very strong quarter. Absolutely. We actually did five
 exciting things this week earnings, maybe the most significant so we can start with that. It was about
 a 4X increase year on year. We beat the quarter by about 20 percent of the top end of revenue
 guidance. And we lifted up the entire year from 260 to 70 to actually 28290 of revenue. So 290
 at the top end of guidance, which is the fifth consecutive quarter that's been a record for us,
 our biggest quarter ever. And of course, this will be our biggest year ever as well.
 Yeah. If we take a step back, let's talk, let's talk about what you bring to market and how that
 compares to what else we see publicly traded in the market because you have quite a head start.
 We do. We have about a 30 year head start. I mean, we built the world's first quantum
 logic gate in 1995. We just published the world's first shovel ready fault tolerant blueprint
 for how we're building the next three generations of our quantum computers back in April.
 And we've built the world's first quantum platform. So we're not only leading, we believe in quantum
 computing, but leading in quantum networking, quantum security, quantum sensing. And now with Skywater,
 we are the largest, what's called, merchant supplier of the sector. So we're selling our atomic
 clocks. We actually want an award from DARPA just overnight here to the sector. We're also selling,
 of course, our quantum chips with Skywater to the sector as well. So we're very much embodying
 President Trump's executive orders around quantum from June 22nd. Yeah. So in light of that,
 how close are we to realizing the full capability? I feel like I ask you this every time,
 full capability, full realization of quantum computing technology. And I ask you that every time
 because you do have that 30 year head start. Yeah. So look, quantum is happening in every aspect
 of applied science. And we're delivering quantum advantage to the material science sector,
 pharmaceutical sector, financial services sector, defense intelligence. And we're doing it not
 just in computing, but across the whole platform. So DARPA gave us a sole award overnight
 to sell them up to 125 clocks for something like up to $58 million. We also want an award from
 the NRO overnight on our quantum sensing business, our SAR platform. And so you're seeing every aspect
 of the I&Q platform actually firing all cylinders. Earnings were not just up a lot for the quarter
 up a lot year on year, but we talked about the fact last night that something like 60% of our
 revenue was commercial. 50% is actually international now. And a quarter of our customers are buying
 more than one product from us. So we're the first quantum company in history that delivered seven
 figures of revenue, then eight figures and nine figures. And we continue to double and triple
 every year. We just demonstrated. Yeah. I'm going to ask you about Q-Day because there's some estimates
 out there about that this is sort of this idea when this technology is able to break standard
 public key encryption. It's certainly been roiling, I think, to a certain extent. The crypto market,
 Bitcoin, for example, I heard that chatter from Bitcoin enthusiasts as well. How would you
 categorize that? How would you see that? What does that mean in terms of how the world changes?
 Sure. So a year ago, I think it was the first to say that the Q-Day time horizon was coming in
 from the 2030s to the 2020s. A year later, I think large companies like Google and of course
 the White House agree with me or they wouldn't have issued an executive order on securing the nation
 against the future of quantum cyber security. I incuse unique because we offer defense and depth.
 So we offer both software solutions, PQC, post quantum cryptography. We also offer hardware solutions,
 QKD, quantum key distribution. And we believe you need both. And we're seeing obviously tremendous
 upticks and interest as people realize that this is now in the planning horizon of CSOs, both in
 the enterprise space, the government space. You know, in the crypto space, the blockchain space,
 elliptical encryption is actually slightly easier for quantum computers to crack than RSA 2048.
 And so the entire crypto space, you know, we expect to be, you know, rushing to find us soon
 because they do need to find a way. We need to find a way to help protect them and protect this
 critical element of our economy on a global basis. And they need both, frankly, PQC and QKD and
 I&Q is the leading cybersecurity provider of quantum solutions. All right. I can spend another hour
 talking about this. Unfortunately, we're out of time right now, but please do come back.
 Nikolo Damasi of I&Q. It's great to have you on set. Always a pleasure. Thank you.
 On the back of earnings, I'm gonna stop pop this morning. We got a lot more to come here on
 morning call, including what we're calling a shipping chokepoint trifecta. First, it was the
 Persian Gulf in the Red Sea. Now, a critical canal on this side of the Atlantic joins the myths.
 Can you guess which one? We're back after this. Welcome back again. Use alert on tariffs. We
 mentioned a moment. Go. Elf beauty. A new court filing shows the US has so far refunded around
 $100 billion from tariffs that it collected before the Supreme Court struck down those IEPA duties.
 That $100 billion is as of the end of July. It represented more than half of $166 billion
 collected. Tomorrow, we're gonna get a closer look at those tariff refunds as well. And the big
 boost that they are giving to the current earnings season. And it has been a big boost. If you look
 at some of those headline numbers, the global shipping industry already facing disruptions from
 the Strait of Hormuz and Bob Elmandeb. And now a third waterway could be at risk. Pippa
 Stevens has more Pippa. Good morning, Morgan. So we are talking about the Panama Canal,
 where next week additional weight restrictions go into effect to preserve water ahead of what
 some are calling a super El Nino. This would always be disruptive, but it's especially so.
 Given halted flows out of the Middle East have boosted traffic through the canal,
 12% year over year between March and July, according to BIMCO, as vessels rerouted. Now,
 this is especially true for fuel products with gas, diesel, and jet cargo is up more than 40%
 while LNG transits have jumped 74%. That comes as US fuel exports have hit record levels with Asia
 now a major buyer. Ultimately, more ships want to transit the canal than there are slots available,
 which has pushed auction prices for one of those slots to record levels, according to
 Argus Media. Individual auctions for Neopandamax and Panamax locks hit highs of 3.76 million
 and 2.6 million respectively up from around $100,000. Argus is Ross Griffith telling me,
 because of these high fees, we're starting to see more ships going around the cape of good hope
 instead. That adds at least three weeks of transit time and increases fuel costs. It's good for the
 ship owners though, since longer trips require more ships and therefore decreases the spot availability,
 and so increases the amount ship owners can charge. Likely not good for consumers though,
 these higher costs will ultimately be passed along in some form, but Morgan, the tanker companies
 are having a big year stocks like Scorpio, an international seawave, all doing very well here
 up more than 50%. Yeah, not enough ships, especially when you talk about all these bottlenecks.
 Pipa Stevens, thank you for bringing us that Super El Nino striking again. We'll straight ahead
 to the morning call crew teeing up the trading day ahead. Welcome back, it's time for your
 call sheet crew members today. James Pathikukis of the American Enterprise Institute is also a
 CNBC contributor, Matt Powers of the Powers Advisory Group and Stephen Whiting of the CIO Group.
 Great to have you all here. I'm actually going to start a little differently than I usually do here,
 and Jimmy, I'm going to put this to you. I don't like to talk politics. I like to talk policy,
 and specifically when I do talk politics, it is how it reverberates to the broader economy and
 what investors need to know or understand, especially as we're three months away from a midterm
 election. So with that in mind, let's talk a little bit about what we saw in Michigan. The
 results of the Michigan Democratic primary yesterday with El Sayed. He won that election,
 but by less than 1%, I want to get your thoughts on that at what it means as we do look to midterms.
 Yeah, close election, battleground state. The president has one in the past.
 I guess the way I look at it is that this is another sign that he didn't win the primary,
 and we'll see what he does in the general. But there's no doubt that both parties have become a lot
 more comfortable with candidates who want to intervene in the economy. The parties are way more
 comfortable with that. Those wings are much bigger, and whether that is trade, industrial policy,
 tech regulation, I mean, both parties seem perfectly fine with taking stakes in American technology
 companies or preemptively taxing AI companies, which may or may not prove to be particularly
 profitable in the future. So that's policy. Policy in the United States is at a point where we feel
 okay doing more. Will that work out? I'm a little bit skeptical, but it's going to be an interesting
 experiment. Yeah, and of course some people are calling El Sayed a socialist. Others are saying
 progressive. I think he's called himself a capitalist. I'm looking like an interventionist.
 Okay. Well, and I think an interventionist in the economy. Yeah, and I think also I think the
 read through here is that populism continues to manifest here in the US, and it's manifesting
 in different ways across political parties. But to your point, maybe there are some similarities
 here more than we realize in terms of what that means for the future of policy. How that policy comes
 together, the devil will be in the details. The other thing that I think is the takeaway here,
 and Steven, I'm going to go to you on this. Okay. What we've seen in the last call at 10 years
 is we've seen the polls get it wrong, typically more regularly, much more than they had previously.
 And actually what we've seen in the last couple of election cycles is prediction markets have had
 a better go of it. That was not the case here this week. Right. The effectiveness of polls,
 who's going to answer a telephone call, you know, the ability to look past this sort of thing. This
 is again one of the worst topics, the effectiveness of data, this sort of thing. I think look, we're
 going to get into the market side of this. This is going to create a great deal in noise. If we get
 to the midterm elections and we're disputing the results and saying that elections are illegitimate
 and we don't actually have conclusive results, that's where it's really going to matter.
 Okay. So let's get into the market side of this. Matt, whether it's this or whether it's more
 broadly what we're seeing in the markets, doubt a record high, S&P just below it right now,
 your thoughts on where we are here this far into the year.
 Yeah. Good morning. You know, it's five straight positive sessions with the dial. We're hoping for a
 six. You know, I think I think the biggest mistake anybody could make right now is watching the
 index and actually looking at it as if it's one thing. It's actually the markets two different
 things right now. It's almost split or bifurcated and it's somewhat of a concern. So, you know,
 we just went through a stretch where tech communications, you know, we just went through it where they
 dropped double digits and the other nine sectors are actually positive. You know, hyperscalers are
 trading on monetization, semis on infrastructure spending and everything else is on earnings,
 fundamentals and valuations. So yes, participation is broadening. You know, that's kind of the theme,
 that's what everyone's talking about. It's healthy, but you know, even with averages hitting some
 of these record highs, I think everything under the hood is incredibly fragmented at this point.
 Yeah, I do want to see if I'm going to bring this back to you because it's been interesting.
 Case in point just today, whether it's Sandesk, Western Digital on the tech and semi-side,
 whether it's Elf and Dutch Bros on the consumer side, we're seeing big sell-offs in the wake of
 what you could categorize as blowout earnings, but it also speaks perhaps to the fact that investors
 have had very big expectations coming into this earning season. And I do wonder when you see
 higher highs, lower lows, I mean, the level of volatility, what it says about the market.
 Well, this might be a little bit like what Warren Buffett just talked about, it sort of has
 become for some folks a bit of a casino. I think that away from that volatility, the fact is
 we have record high corporate profits and the outlook is for higher corporate profits from here.
 It's very difficult for markets to just shrug that off and say, okay, well, you know,
 that's a powerful pull for markets, but that's what we've just experienced in the past month.
 We've recovered all of this. There is all of this fear and doubt. Now, of course,
 there's some exaggerated areas. You just mentioned the DRAM stocks, memory chip makers again,
 which 3,000% returns to the first half of the year. That's a little different from the rest
 of the market that is being pulled up by powerful earnings growth. That includes tech and non-tech.
 Okay, we've got 40 seconds left. Jim, I'm bringing this back to you. We get jobs report tomorrow.
 We get a headline today, just in less half hour, that AI led all reasons for U.S. employers'
 job cuts for the fifth straight month. That's Challenger Gray. Everybody's been focused on
 inflation to be focusing more on labor. Yeah, listen, this is a powerful technology. There's
 going to be labor market disruption. We have yet to really see that labor market disruption,
 which makes some people think, well, maybe the technology has been overrated because you're
 going to want to see both higher productivity and you're going to see a lot happening in the
 job market. So I am looking at every jobs report for the signs that that is happening. We really
 have yet to see it. Maybe we'll see it in this one. Okay, we just scratched the surface, but we did
 get quite a bit in on the less. Thank you to our call crew. What made you confident that you could
 do something that hadn't been done before? I have no fear of failure. Trailblazing women changing
 the game. One of my favorite pieces of advice. Think about what your boss's boss needs.
 Leadership can look in many, many different forms. It really does come down to just trusting
 yourself, like the short, and you just got to think big to accomplish big things. Julia
 Bourston hosts CMBC Changemakers and Powerplayers. New episodes every Tuesday, wherever you get your podcasts.