AI leadership broadens as defense and markets evolve 7/31/26

AI Summary

Transcript

 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 gotta think big to accomplish big things.
 Julia Borsten hosts CMBC Changemakers and Powerplayers.
 New episodes every Tuesday, wherever you get your podcasts.
 It should trade.
 Wars back.
 I'm Morgan Brennan and this is your morning call.
 Good Friday morning.
 Let's get a check on US stock futures,
 which are in the green.
 This is following yesterday's sharp rebound
 to the Nasdaq breaking a six day losing streak.
 All three indices seeing their best day
 and just over a month yesterday.
 You can see those gains are poised here to continue pre-market.
 S&P is poised to open up about 23 points,
 Dow 220 points, Nasdaq, the big mover to the upside this morning,
 poised to open higher to the tune of 235 points.
 Keep in mind, mixed picture for the week,
 but all of the major averages are poised for losses for the month of July.
 Because yes, we are at the end of July.
 The Dow is on pace to break a three month winning streak.
 It's just about flat right now.
 Slightly lower.
 Nasdaq, though, that's looking at second straight month of losses.
 Nasdaq 100 is facing its worst monthly performance.
 Since March of last year,
 on pace for losses right now of 7% for the month of July.
 Two big stock stories today, though,
 and two very different stock moves.
 Apple and Amazon on the back of earnings.
 You could see that right there.
 Apple is down 7% pre-market Amazon,
 spiking about 11 and a half 12%.
 We're going to have more on both of those companies.
 In just a moment, but we're also watching Microsoft shares.
 After it's more than 15% jump yesterday on the back of its earnings,
 you'd see it is fractionally lower pre-market.
 It added nearly $450 billion to its market cap yesterday.
 That's the most by any stock ever in a single day.
 Accounts for more than half of the Dow's gains as well.
 Microsoft did as well.
 Let's get a look at treasuries and what we're seeing in the bond market
 and what's been another whipsaw week there, too.
 You can see mixed picture here across the curve.
 That's sensitive US two-year treasury yielding 4.24%
 and the US 10-year treasury yielding 4.6%.
 And of course, we are higher on the month in terms of those yields
 amid the bond sale if we've seen.
 But coming off some of the highest levels in yields
 that we've seen this month, mid-month as well.
 Also, let's get a check on energy.
 Iran's army says that it carried out attacks on U.S. assets
 in the mid-east today.
 Meanwhile, Hamas reportedly agreeing to President Trump's
 disarmament agreement as part of a Gaza peace plan.
 You can see oil is taking a breath this morning.
 WTI is down 1% trading.
 Around $82.65 at barrel.
 Brent is also down 8-10th of 1%
 and it is trading around $88 a barrel.
 For the month, WTI is up 19% Brent of 21%.
 Well, let's turn to Apple and Amazon's latest earnings reports.
 It's starting with Apple shares following,
 despite a beat on the top and bottom lines
 the company offering disappointing earnings guidance
 for the current quarter,
 pointing to supply constraints around what else?
 Memory chips.
 iPhone sales rising nearly 22% over $54 billion.
 That top estimates,
 but revenue for iPad and perhaps most notably services,
 following short of expectations.
 It is not just the hyper scalers that are spending more on AI either.
 Apple's research and development operating expenses rose 32%
 to nearly $12 billion in the quarter.
 That was above estimates.
 Bottom line there, though, for Apple is really
 those supply constraints was what held up the numbers
 and is factoring into the current quarter guidance.
 It's not the demand side.
 At least according to some of the commentary
 we got from executives last night.
 It's a different story for Amazon shares though.
 Taking off after earnings and revenue beat,
 company also delivering the strongest cloud growth
 in more than four years.
 AWS revenue up 37% to more than at $42 billion
 that topped estimates,
 CEO Andy Jassy discussing AWS's success
 on the earnings call last night.
 We want to leave AWS could become a few hundred
 billion dollar revenue business
 and now believe it'll be at least double that
 and very possibly be a trillion dollar annual revenue
 business for us in time with very appealing
 a company in free cash flow and return on invested capital.
 Well, Amazon also upping its catbex projections
 from 200 to 220 billion dollars this year.
 It's free cash flow turning negative,
 losing more than seven and a half billion dollars.
 That was compared to an 18 billion dollar gain a year ago.
 But unlike what we've seen with some of the other prints
 we've gotten with other hyper scalars in the past week,
 investors do largely seem to be shugging that off
 because look no further than those AWS results.
 To know that they are seeing a return
 on all of that AI investment.
 Also just a lot of bullish commentary
 across the board on the call regarding all of that.
 Also the chips business growing and growing gangbusters.
 Well, let's turn overseas.
 Big rallies in parts of Asia with chips
 and a central bank decision in focus.
 European trading just getting underway.
 J.P. Young is in Singapore, Ben Boulos is in London.
 J.P. I know it is the end of your day
 and the end of your trading week.
 But let's kick it off with you
 because it's certainly going out with lots of news this Friday.
 Indeed, Morgan.
 Good morning, guys.
 And also the end of our trading month out here in Asia
 and a lot of interesting news.
 And we'll start off with the monetary policy
 and some of the central bank moves of the bank of Japan today
 as expected, keeping rates untreated about 1%.
 Some interesting commentary there for the BOJ
 after that decision.
 They do see that core inflation might return
 above their target range in September.
 And also, BOJ Governor Kazoo Weta saying
 that this AI cap expanding might be leading
 to some of these price pressures they're seeing.
 So, interesting how he's linking AI cap expanding
 to inflationary pressures out in Japan.
 But even more interesting perhaps
 was the decision at least.
 What would seem that the overnight surge
 that is for the Japanese yen
 and what some are saying is the intervention once more
 and also perhaps coordinated intervention
 into both the yen and the one
 but you've seen that intervention
 that strength is weighing quite significantly.
 We want to take a look at how the AI return
 for AI stocks is manifesting out here
 and again, nowhere more frenzied
 than in South Korea with a cost fee surging 17.9%
 and Samsung and SK Hydex once again,
 some of the usual suspects.
 One thing that's really lending a strength to that also
 is the fact that SK Group and Chairman Chete
 want to bought a $3.5 million stake
 in SK Hydex supporting it
 and Samsung also following upwards as well.
 I'll leave you with this look though Morgan.
 Single stock leverage ETFs tracking
 Samsung and SK Hydex listed in Hong Kong
 both surging at paces that made the interday surges
 for Samsung and SK Hydex look quite sheepish in comparison.
 But you know what that means, leverage and volatility
 are back on the menu for South Korean markets
 making it probably arguably the most exciting roller coaster
 in equity markets anywhere in the world.
 Good morning to you guys
 and hope you're having a good Friday.
 Thank you, you too.
 And I hope you have a good weekend.
 Wow, some big numbers on the screen.
 Jpeong, thank you.
 Well, let's turn to early trade in Europe
 and Boulos is standing by in London with more.
 Hi, Ben.
 Hi, Jim Morgan.
 Yeah, take names have sent European equities
 to a record high this morning.
 Amid that roaring demand for the sector
 around the world, the FTSE 100 in London
 dragging behind his content will
 piss just a touch amid falling oil prices today.
 But all of the main benchmarks are on course
 to end the month higher.
 And actually for the month,
 it is the FTSE in London that is the outperformer
 bear in mind, although we've seen the oil prices today,
 it has advanced around 20% on the month
 that lifting some of the oil and gas majors
 and lifting the broader London index.
 Now, speaking about oil, BP is putting its North Sea business
 up for a potential sale.
 CEO Nego Neal said that while the UK has been
 the company's home for more than a century,
 it believes its North Sea business
 will be better positioned as part of another company.
 The move comes after months of contention
 over varying governments' desires
 to open up the North Sea for further drilling.
 The UK Energy Minister, Mietta Fanbullet,
 says she's been in contact with BP, has made it clear
 her priority is ensuring that workers
 and the local community are protected
 during any sale process.
 Needless to say, Morgan, we're going to keep tabs
 on that story and bring you any key updates
 as and when they happen.
 But for now, it's back to you.
 Have a great Friday on a wonderful weekend.
 You too have a great weekend, Ben Boulos.
 Thank you.
 Let's dig further into the markets.
 Bringing Robert Teeter, I've Silvercrest Asset Management,
 also Daniel Flaxton, Newburger Berman.
 Great to have you both here.
 Robert, you're on set.
 But I'm actually going to kick this one off
 with Daniel, and here's the reason
 because Daniel, I want to get your thoughts,
 your insights on what we saw from Amazon and Apple
 and how it caps off a big week, a big cap tech.
 Good morning, Morgan.
 Great to be with you as always.
 We're seeing the acceleration in AWS Amazon Web Services.
 You're seeing margins expand.
 And so the returns are there in cloud
 with a lot of the new workloads such as AI.
 And so I would expect the debate around the spending levels
 to persist certainly through the rest of the year
 and into 2027.
 But the growth is there.
 You see it with Amazon.
 You saw it with Microsoft Azure and Google Cloud as well.
 And so this build out of the digital infrastructure
 in many ways is in relatively early innings.
 It's lumpy, but we see a lot of growth.
 Robert, want to get your thoughts on all of this
 and how it's propelling its way or winding its way,
 I guess I should say, through the broader markets right now.
 Yeah, it's a super interesting time.
 I think a lot of this volatility and churn
 is really telling us that we're at a key inflection point
 for the AI theme and the AI build out.
 Investors are really starting to take a microscope
 to these earnings reports
 and what they're looking for is really two things.
 One very sustainable revenue, not just revenue
 that's a one-off build but sustainable over time.
 And two, starting to look through that and understanding
 who are the next level beneficiaries of this,
 who's using the AI technology,
 who's generating productivity gains
 and profit margins from that.
 And so we think it sets up a really interesting
 and complex backdrop.
 Yeah, I think that's the case.
 Danielle, Danielle, Daniel, I want to get your thoughts
 on specifically Amazon.
 I mean, they up to their CapEx guidance.
 We know that hasn't been good
 and they're free cash flow at negative.
 We know that hasn't been good for some of the other stocks
 that have reported and yet stock is spiking 11.5%.
 I mean, they also, to your point,
 really expressed strong growth and strong demand here.
 How much does the chips business with Traenium
 and Graviton, Graviton, she said, factor in here, too?
 I think they're innovation with the Silicon,
 with the solutions, for example, bedrockage.
 It's really it's a full stack approach
 that Amazon is bringing.
 And when we speak to customers,
 they're deriving a lot of value.
 They already have, in many cases,
 significance amounts of data on the Amazon Web Services platform.
 And so the key for Amazon,
 even as CapEx is going up, memory,
 of course, is contributing to that.
 Is that they're investing in solutions
 and the customers on the other side
 are deriving a lot of value.
 And so you have AI labs, for example,
 Open AI and Anthropics seeing good growth
 with Amazon enterprises as well.
 And so many of these newer workloads
 in areas like inference are creating value for customers.
 And of course, that's creating incremental value for Amazon.
 And so this is a multi-year journey in my view.
 Yeah, the commerce business did pretty well, too.
 You know, it's interesting, Robert,
 because when I take a look at the gains
 that we've seen, where we've seen gains
 for the month of July across the major averages,
 it speaks to the rotation trade we've seen, right?
 I mean, it's energy, it's financials, it's real estate,
 it's health care, it's consumer staples.
 I mean, these are the sectors in the S&P
 that are poised for gains for the month,
 despite this big down draft we've seen in semis
 and other tech stocks.
 I mean, is that the future of this market
 if we look out to the second half of this year?
 I think that's likely to continue.
 There's no doubt that the earnings on the tech side
 are fantastic and will continue to be for some time.
 Valuations have come in quite a bit
 because of those really strong earnings.
 And so we think tech will continue to do fine.
 Megacap tech will do fine.
 But investors are really looking for a place
 to diversify a way to that and starting to say,
 where do we pick up some of these next level benefits
 from the next phase of AI?
 Are there some places we can allocate
 that are perhaps away from the AI trade
 so that we don't have all our eggs in that one basket?
 It's a great basket to be in,
 but diversification has come back into the fold.
 And that's classic when you have a complicated market backdrop.
 You tend to go back to a simple portfolio construction
 of let's be diversified and ride through that.
 Yeah, I mean, we started this conversation,
 Robert talking about Megacap tech,
 but how much is the Fed, other central bank decisions,
 how much is what we're seeing in the bond market,
 we're seeing in energy prices,
 what we're seeing with geopolitical dynamics
 in the backdrop, how much of this is funneling
 into the broader picture right now,
 what do investors need to be watching?
 That's something I think has been really interesting
 this month.
 That geopolitical backdrop, as he said,
 has been very volatile, very complicated.
 The Fed picture has been a little bit complicated
 by this changing communication strategy,
 so people are trying to figure out how to work through that.
 The geopolitics aren't going away in the state of removes,
 they keep coming back into the fold.
 And yet, you've instead of seeing people concentrate
 into just the same names that they had in the past,
 you're starting to see them take a broader approach.
 And so we think that's really healthy here
 that you're getting not to move away from equities,
 but a rotation within equities.
 And to us, that's really healthy
 and sets the stage for a longer lived rally.
 Okay, sounds good.
 Robert Teter and Daniel Flax, thank you both
 for kicking off the hour with me.
 Appreciate it.
 Have a great weekend.
 Well, you got a lot more to come here
 on morning call, including lowdown, slump, details
 on what has row blocks, shares dropping
 on the back of earnings,
 and they are dropping right now.
 It's a different story for shares of overseas telecom
 operator, Vion, getting a boost on the back of its results.
 The CEO is standing by to break down that quarter.
 And what it is to do business in these geopolitically charged
 parts of the world, and later another AI hack attack.
 But this time it's not open AI, that's to blame.
 We've got a very busy hour still ahead
 on morning call returns.
 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 gotta think big
 to accomplish big things.
 Julia Boerston hosts CNBC Changemakers and Powerplayers.
 New episodes every Tuesday, wherever you get your podcasts.
 Welcome back for checking a few earnings
 from averse today, just a few.
 Coinbase is lower after reporting a third straight quarterly
 loss, the prolonged downturn in crypto markets
 denting the company's trading volume,
 which fell more than 20% those shares are down 4% right now.
 Vion, though, is higher after the EV maker reported
 a smaller second quarter loss in an uptick in sales
 and revenue.
 Companies says it hopes to sell more vehicles this year
 than previously expected, a likely positive sign
 early momentum for its newest model.
 Those shares are almost 5% pre-market and roblox dropping
 after reporting a narrower loss and revenue
 that was slightly shy of estimates,
 the online game company expects revenue growth to slow
 and bookings to decline this quarter
 as it rolls out more safety features on its platform
 and invests in AI.
 Those shares are down 17% right now.
 We're also watching shares of Vion rising
 on the back of the telecom company's earnings,
 showing double-digit growth for both overall
 and digital revenue, the company also raising
 its full-year guidance.
 And so for more on the quarter,
 let's bring in Con to Zulu, CEO of Vion.
 Con, it's great to have you on the show, welcome to you.
 I want to get into the earnings picture
 and what you're seeing across your markets,
 but first for our viewers,
 just a little bit of background here,
 headquartered in the Middle East and Dubai
 and your two largest markets are Pakistan and Ukraine.
 So I just have to ask a bigger question
 for our viewers here and that is,
 what is it to do, what is it like to do business right now
 in some of these geopolitically charged parts of the world
 and in outright conflict zones?
 Morgan, great to be back and yes, we are blessed.
 We are blessed to be in countries
 where growth is still there,
 where people are underserved giving us the opportunity
 to prove our purpose a better life for all.
 And the 600 million people living in our countries
 in Pakistan, Bangladesh, Uzbekistan, Kazakhstan and Ukraine
 gives us a unique opportunity to touch their lives,
 improve their livelihood
 and contribute to developing prosperity in these countries.
 Yes, our countries are kind of unique
 in the sense that they are in geopolitical areas
 which are difficult to maybe do business for others
 but not for us.
 It's a pleasure and it's an honor to serve them.
 Yeah, I mean, when I think about telecom
 and when I think about just the business of communications
 and connectivity overall,
 you're talking about critical infrastructure.
 So what does it also mean to be able to protect it
 from interruptions and from cyber attacks
 and from targets that we see
 given the environment geopolitically?
 Morgan, telecommunications for us is not a destination,
 it's a foundation and it is the foundation
 of our services like financial services,
 digital lifestyle services or enterprise services.
 And when it is a foundation,
 it is critical that it works with no excuses.
 This is why we took a very different approach.
 We have integrated our terrestrial networks
 with satellite platforms.
 And today in our countries, especially in Ukraine,
 Kazakhstan and Bangladesh today
 and very soon in the others as well, our customers,
 here regardless of they are in a war zone
 in a land mine or electricity is not there
 or there is a flood or an earthquake,
 they are capable of connecting their smartphones
 directly to the satellite platform of starting.
 We actually serve five out of 10 currently direct
 to sell customers of starting in our countries.
 And I'm so happy because this is really allowing us
 to focus on what matters.
 What matters is the customers,
 what matters is meaningful services
 that we provide to them.
 And that shows in our results,
 our top line this year, this quarter was up 17% in US dollars.
 But it's a combination of two different pictures.
 Our telecom business, the foundation business
 was up 7.6% our digital services were up 53%.
 Currently, 27% of our total revenues
 are coming from these services.
 We see a great demand for services like financial services,
 wealth management, to payments, to loans,
 and on the other side, healthcare services,
 right-hailing services, pharmaceutical marketplaces
 and all these businesses makes us relevant to the customers
 and allows us actually to be their partner in their daily lives.
 You mentioned Starlink, you have a big partnership with Starlink.
 Starlink has certainly been in focus here in the US
 as it's being seen by investors as a disruptor
 to whether it's a right or wrong interpretation
 as a disruptor to the more traditional wireless operators
 and telecom players in general overall,
 especially with the advent of AI.
 How is connectivity changing and evolving?
 And what is that going to mean for a company like Vion,
 which is in these frontier markets
 and in a position to adopt the technologies
 arguably more quickly?
 Some long time ago, we decided that we are not in the business
 of raw data, number of gigabytes,
 number of minutes or number of SMSes.
 Our philosophy is to be relevant to our customers
 every single minute in a day.
 And whether you provide digital services
 like entertainment, healthcare, financial services
 or augmented intelligence to them,
 it is really critical that foundation,
 the telecommunications platform is ubiquitous,
 available, accessible, and affordable.
 But the real value comes from those services.
 So I consider ourselves as a digital operator
 rather than a traditional telecom provider.
 And I think the three pillars of our growth,
 whether it's the financial services
 or digital life services or enterprise businesses,
 that's really where the growth potential is
 because our markets are underserved.
 And our markets are needing the proper level of relevance.
 Consurzulu, it's great to have you on the show.
 Appreciate it, CEO Vian, thank you.
 Thank you very much, Morgan.
 Well, straight ahead, writing defense demand.
 The CEO of Leonardo is standing by,
 talking to companies latest results,
 it's upbeat outlook,
 one of the largest defense contractors in Europe.
 But first, we're checking shares of Reddit.
 Those are syncing despite the company reporting better
 than expected second quarter results.
 And guidance that missed or excuse me,
 that is above estimates.
 Analysts pointing to concerns about search referral traffic
 from Google.
 Reddit CEO says that metric was quote, choppy in the quarter.
 Shares down almost 9%.
 Morning calls back after this.
 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 gotta think big to accomplish big things.
 Julia Boerston hosts CNBC Changemakers and Powerplayers.
 New episodes every Tuesday, wherever you get your podcasts.
 Welcome back.
 We're checking some of the morning's latest headlines
 Anthropic revealing some of its models
 hacked into three separate organization systems
 during routine testing.
 The company says the models access to the internet
 when they were not supposed to.
 Anthropic says it hadn't noticed the issue
 until it did an internal review prompted
 by OpenAI's own model hacking issues.
 Meantime, CNBC confirming that Morgan Stanley
 is the lead banker engaging in advanced talks
 to lend $15 billion to Nexus data centers
 to build out a large AI infrastructure project
 for Anthropic sources add that as part of the deal,
 first reported by the Wall Street Journal,
 Google has agreed to backstop Anthropic
 with its investment grade credit rating.
 Well, Wall Street Journal reporting
 that former OpenAI researcher,
 Leopold Ash and Brenner's hedge fund situational awareness
 is down around 67% so far this month,
 after incurring heavy losses on AI stocks.
 The details emerging after CNBC's David Faber reported
 the hedge fund was forced to sell all of his public equities
 with Citadel buying the assets after big losses in AI
 and software stocks left situational
 scrambling to raise cash.
 Leverage was a big part of the story there.
 Elon Musk dismissing a Wall Street Journal report
 that Tesla executives have been told to prepare
 for a separation of its China business
 ahead of a potential merger with SpaceX,
 Musk saying the idea to calm potential regulatory issues
 around a merger has never come up in discussion.
 And New York is suing Kalshi claiming that its prediction
 market platform violates state laws
 against illegal gambling.
 Reuters says Kalshi and its lawyers did not immediately
 respond to requests for comments.
 A note CNBC and Kalshi have a commercial relationship
 that includes customer acquisition
 and a minority investment.
 And as we had to break, let's get a check on Jersey Mike's
 and the Reformation after both of those companies.
 Consumer facing companies had their trading debuts
 yesterday Jersey Mike's falling 6%
 while Reformation rose half a percent.
 And as you can see on the screen right there,
 both are lower again this morning,
 seen as a key test for the market
 that we had two consumer offerings IPO yesterday.
 And so far investors, not too hungry.
 We'll see how it goes.
 Morning call continues next.
 I'm working, Brennan.
 Welcome back to morning call.
 Let's get a check on US stock futures,
 which are in the green today.
 That's following yesterday's sharp rebound
 with the Nasdaq breaking a six day losing streak.
 And you could see attempting to build on that
 as of pre-market S&P is poised open up 19 points,
 Dow 200 and Nasdaq.
 Thanks large part to some of those tech gains
 that we've seen overnight
 from the likes of Amazon is poised for gains
 of 200 points at the open as of right now.
 This with gains or same picture
 depending on the averages you're looking at for the week
 and the losses for the month as well
 for the major averages.
 Nasdaq 100 is actually the biggest loser
 for the month poised to close down 7%
 for the month of July.
 And it's the worst monthly performance since last year.
 We've got two big stock stories today,
 two very different stock reactions.
 Apple and Amazon on the back of earnings.
 Right now you can see apples down 7%
 Amazon's up 12%.
 We're gonna have more on that in just a moment
 and let's get a look at treasuries
 and what we've been seeing in the bond market
 where there's been a lot of volatility this week too.
 Mixed poker across the curve, Fed sensitive,
 US two year treasuries yielding 4.25%
 and the 10 year treasuries yielding 4.66%.
 Let's get a check on energy too
 as Iran's military says that it's carried out attacks
 on US assets in the Middle East today.
 Meanwhile, Hamas reportedly agreeing
 to President Trump's disarmament agreement
 as part of that Gaza peace plan.
 We're also keeping an eye on Egypt
 where drone attacks yesterday have not been claimed
 by any country, but certainly raising some eyebrows
 about another key shipping route in the region as well.
 You can see it's a mixed picture right now for oil.
 WTI is down fractionally trading around $83 a barrel.
 Brent is up fractionally trading around $89 a barrel.
 We're on pace for 19, 20% gains for the month for crude oil.
 We're checking shares of Leonardo this morning as well.
 The Italian aerospace and defense company
 raising its annual guidance for earnings, cash generation
 and orders after reporting second quarter results
 that beat forecasts.
 As governments continue to spend more
 on military modernization and security,
 our Carolyn Roth joins us now from Rome
 with Leonardo's new CEO, Carolyn, take it away.
 Good morning to you Morgan, yeah, very strong numbers
 from the Italian defense giant Leonardo this morning.
 And I'm glad we're now joined by the new CEO
 of Leonardo Lorenzo Mariani.
 Thank you so much for your time.
 Before we get to the numbers,
 which really were a blowout set of results,
 can we expect a change of strategy from you
 now that you've entered this post just a few months ago?
 I, good morning, first of all, and thank you.
 No, I think strategy I will continue
 on what has been already presented as an industrial plan
 by my predecessor, building on what on major initiatives
 on multi domain, on partnerships, adding some acceleration
 because I think what really matters today
 is accelerating all our processes
 both the industrial one and the strategic ones.
 If we take a look at the numbers,
 45% rise in new contracts for the first half.
 And maybe most importantly,
 and this is something that the market had been widely
 expecting you to do is you raised your guidance.
 Not just for orders this year,
 but also for cash generation and earnings.
 Talk to me about the level of demand
 that you're seeing from governments out there
 when it comes to defense spending.
 I strongly believe that Europe, first of all,
 has started a path of increasing their spending
 in defense and security.
 Leonardo is a perfect position to get benefit from that
 due to the multi domain approach
 to the differentiated offer at the portfolio
 and to the strength of our basic industrial processes.
 So I really think it was good to raise our guidance
 for end of year
 and we are proceeding in our industrial plan, accelerating it.
 It's great to have you on the show, welcome to you.
 I'm gonna ask you the same question
 that I have asked quite a few US defense contractor CEOs,
 including John Bayloony, who is your colleague
 for Leonardo's US subsidiary just a couple of weeks ago.
 And that is, demand is off the charts, orders are growing,
 how quickly can you ramp production to meet the demand?
 I think that ramping up in how we fulfill the demand
 is really the key element to deliver to our customers.
 What they need, I think this is true,
 both for our European arm and for the US arm,
 you mentioned John Bayloony and the arrest
 and the arrest is making exceptional progress on that,
 even including some M&A operations
 that were concluded just a few days ago
 and which I'm extremely happy and proud.
 What Europe has understood is that
 there needs to be a lot more defense spending
 and we also understood here in Europe
 that this needs to be a coordinated approach
 and that's why we're seeing joint ventures
 left, right and center,
 specifically also when it comes to space
 and I'm talking about Project Romo here,
 how will you counter SpaceX?
 Are you competing with SpaceX?
 How will you do that?
 I think first of all, space is really a new crucial domain.
 It does not only apply to communications
 that is where Starlink or two launchers
 where SpaceX apply but also to a number of other domains
 like observation, earth observation, space exploration
 and this is and services that are related to all of that
 and I think that Romo building a real European giant
 can really help to make a competition
 to the big giants that operate in space
 in all sectors,
 even giving more capabilities in some specific sectors
 such as the support to must be the main applications
 such as the Michelangelo and their defense.
 Lorenzo, it was wonderful to talk to you today
 as we're braving the heat here almost 100 degrees Fahrenheit
 or at 37, 36 degrees Celsius in this Roman noon heat.
 Thank you so much for that really appreciated
 guys back over to you.
 Thank you.
 All right, our thanks to Carolyn Roth and to Lorenzo Mariani.
 Grazie Miele, we got a lot more to come here
 on morning call, including getting set
 for a big oil result on outpouring.
 Pippa Stevens lays out what you need to watch
 when Exxon and Chevron earnings cross
 in less than an hour morning call.
 We'll be right back.
 Welcome back, Chevron and Exxon mobile report earnings
 next hour, expected to rake in big profits
 as the Iran war impacts energy flows through the street
 for mues consumers everywhere are paying more for gas
 and just in general, a lot of volatility.
 Pippa Stevens trains us now to preview the numbers.
 Hi, Pippa.
 Good morning, Morgan.
 So it was a choppy quarter for oil prices,
 but the street is expecting big prints
 from the majors with analysts forecasting Exxon mobile
 to double EPS year over year with Chevron expected
 to more than triple 2025s numbers.
 But the quarters could show differences
 between the two companies.
 Exxon has a larger refining footprint than Chevron.
 And so the elevated fuel prices we've seen
 when it comes to gasoline and diesel especially
 could lift downstream earnings.
 Chevron, for its part, is more leverage
 to the upstream business.
 And while both companies have assets in the middle east,
 Exxon has more exposure, meaning it could take a hit
 thanks to production being offline.
 About 25%, 20% of Exxon's upstream production
 and 5% of its downstream output
 is in the region, notes B of A, compared to just 4% exposure
 for Chevron, much of which is in Israel and undamaged.
 Venezuela and Rand will be top of mind for Chevron,
 given it is the only US major in the country
 as production and exports rise.
 Now, for revenue, the street is expecting about 98 billion
 for Exxon and 62 billion for Chevron,
 up 20% and 38% respectively according to LSEG.
 Now on the call, top of mind will be oil and gas price
 environment, production targets,
 capex and shareholder returns, as well as the ongoing
 situation in the straight up for moves.
 Investors will also be looking for an update
 on Chevron's recent 20-year power deal with Microsoft.
 Morgan?
 Yeah, and it's interesting too, because it's not just
 your point, it's not just the middle east,
 it's what we're seeing with Russia and Ukraine right now
 and the big impact that's having on the energy markets too.
 I actually want to go back to something else
 and that is downstream operations.
 The refining businesses for these companies
 and others know you're reporting about it yesterday.
 Valero's EPS grows of 450% plus year over year.
 I mean, we're seeing a record crack spread for diesel
 and other refined products right now.
 That's right, we saw the 321 crack spread,
 which is the most widely followed metric in the industry,
 top $70, which is really unheard of.
 And it speaks to the factor that while you can have oil
 still on the market, if you can't refine it,
 then it's essentially useless.
 And what we've seen as you noted is that Ukraine is ramping up
 its targets on Russian refinery infrastructure,
 all of which means that now between the middle east,
 you have about 1.2 million barrels per day
 of refinery capacity offline there.
 And then you add in Russia curbing its diesel exports
 at about 800,000 barrels per day in total,
 about 8% of global diesel is now offline.
 And additionally, we're seeing the refineries here
 in the US run at utilization rates that are north of 95%
 for now 15 weeks in a row.
 And it does beg the question,
 we're going to what happens if there is a severe hurricane
 or what happens if there's any unscheduled maintenance
 or issues that takes one of those offline.
 The US has been a key supplier for global markets
 for gasoline and now diesel especially,
 and we're operating at full steam.
 So if anything were to happen,
 we could definitely see some further price increases here.
 All right, a lot to watch.
 Pippa Stevens appreciate it, as always.
 We're going to hear more from Exxon's quarter
 on Exxon's quarter.
 When the CEO joins Glockbox in a first on CNBC,
 interviewed just after 8 a.m. Eastern
 and another first on interview with Chevron's at CEO,
 that's at 9 a.m. Eastern on Glock on the street.
 So don't want to miss those, straight ahead though.
 You don't want to miss this either.
 Morning call crew, seeing up the trading day ahead
 as markets look to close out what has been a turbulent July.
 We're going to talk about energy and geopolitics
 and the tech trade and everything else
 on the other side of this break.
 Welcome back.
 We got a marketplace on Repplemune, stock surging.
 This morning, FDA panel voting in favor
 of its melanoma treatment.
 Look at that stock right now.
 It is up 118%, market caps more than doubled to a billion bucks.
 So we're going to keep track of that today.
 It's time for your call sheet where we look
 at the topics driving the trading day ahead.
 Crew members today, Peter Schier,
 of Academy Securities, Thomas Martin,
 of global investments and Daniel Newman of Futurum.
 It's great to have you all here.
 Look, I was going to start with the tech trade.
 I was, but when I see a move like that
 and a small company like that,
 when we come off of a commercial break
 where we're talking about what we've seen in energy,
 which is the best performing sector in the S&P this month.
 Peter, I'm going to start this with you
 and that is just the big market moves
 we've been seeing overall,
 whether it's on going up or now coming down
 and also the role that leverage
 and some of these other products are playing in all of it.
 Yeah, I feel like what we're witnessing
 is the play of ETFs is just huge
 and when you look at the semiconductor space in particular,
 you have all these inflows too, whether it's SOC, SOXL,
 but there's also a lot of single name ETFs
 and I think what we miss is on the way up
 when we had this parabolic move up,
 those leverage ETFs helped
 and no one wants to give them credit.
 On the way down, they drag things down
 so they amplify moves.
 Right now, I think we're back and forth.
 I think it's really interesting that maybe we for now
 solve the problem with situational awareness
 being taken out of the market,
 but yeah, with this volatility,
 it's a little bit scary to me and it doesn't make sense.
 Yeah, and Daniel, I mean Microsoft yesterday
 a nearly 500 billion dollar gain in market cap.
 It's the largest daily gain we've seen
 for any stock ever in the history of the world.
 You can look to the move we saw
 in semiconductor stocks in South Korea overnight too
 and the massive volatility in the cost fee.
 How does it speak to this trading environment
 and what we are getting from tech results?
 Look, the results have been pretty good across the board
 but what we just saw this week was,
 looks like the unwind of a whole lot of deleveraging
 a little bit of capitulation and a tech trade
 that was really structurally always sound.
 A week ago, we got Google's earnings.
 They had 80 plus percent growth in their cloud business.
 They announced a small increase in capex
 and the market sold it.
 And the entire world started to think,
 maybe this AI trade is falling apart.
 We had the China Kimi news
 and there was concerns, you know,
 are the frontier labs not going to be as successful
 as we thought, but then you have AWS, you have Google,
 you have to your point, Microsoft, all beating,
 all seeing margins expanding,
 all with half trillion dollar backlogs
 and what we believe is that this 10 to 12 trillion
 in cumulative capex that is going to be spent
 between now and 2030 is very much intact.
 This was all about the deleveraging.
 AI is looking very good now.
 Yeah, Thomas, I'm going to bring into the conversation
 first just a quick follow up for you, Daniel.
 And that is, are you surprised by the move we're seeing
 this morning in Amazon when they raised capex?
 And realize AWS numbers smashed expectations.
 No, I'm not.
 I think this is where we see there is a big separation
 between Google last week and Amazon this week
 with the Cosby and now with the US markets
 having that deleveraging.
 I think the market was completely wrong
 about what was going on.
 The market thought it was an AI problem,
 but the real problem was leverage.
 And now we're seemingly on their side of this
 because it wasn't only Microsoft and Amazon
 that are running all of these capacity and energy
 and micron memory names.
 All of them saw a huge boost.
 There was multiple things going on,
 but AI took the blame.
 Hmm.
 Thomas, want to get your thoughts on all of this?
 Sure, well, I think the important thing
 is what you started out with with the ETFs
 and that it's retail and sentiment
 that has been driving the market for quite some time.
 So the market is logically following
 good fundamentals and the fundamentals
 of the semiconductor stocks were just fantastic.
 And so those got bit up to very high prices
 and the sentiment was good.
 People want to participate while it's going up
 and then when it reaches a certain point
 the narrative changes or the fear changes,
 the underlying fundamental story hasn't changed
 as we've just said, but the valuations have changed
 then the fish swim to the other direction
 and it goes down for a while
 and nobody wants to own these in anticipation
 of getting caught holding the bag at the end.
 And that seems to have run its course
 with some of these stocks down 40 or more percent
 and the fundamental story not changed.
 So let's get back in and maybe some of this pressure
 from retail or from leverage has been relieved.
 Hmm, I need to touch on it
 and I realize that markets have basically put it
 on the back burner this week to focus
 more heavily on earnings,
 but I gotta talk to you, Peter,
 because I knew you'd follow this very closely
 but the geopolitical situation.
 Because we haven't just seen a reigniting
 of back and forth strikes between the US
 and around this week.
 We've seen arguably an expansion of the conflict
 whether it's what's happening with Ukraine
 in the Caspian Sea, whether it was the drone attacks
 yesterday on Egypt, Saudi striking,
 being involved in strikes too as well.
 You've seen energy prices move higher
 which has had Leonardo CEO on talking
 about just huge defense demand
 in Europe and abroad.
 What do investors need to understand about this right now?
 Yes, I think maybe we're being a little bit complacent
 we're trading what happened
 during the first iteration of the Iran War
 and I think this one's different, right?
 Clearly we started the Iran War
 and we were relatively in control
 of being able to pull back or not.
 This time around I think Iran
 is actually the one nudging things along, right?
 They are pursuing this.
 They're getting the hoodies involved.
 Now the rest of the regions involved
 and I think one of the things that saved us
 through this whole was the strategic petroleum reserve.
 We are able to release a lot domestically
 and the whole world was able to release a lot.
 That's going away.
 All these countries in the region are now suffering
 because they're not selling oil.
 You've got Ukraine hitting Russia.
 I think we have a much bigger risk
 this time of oil going above 120 and staying there.
 I think we're a few weeks away from that
 but the market is still relying
 on the playbook from last time around.
 I don't think we can release as much
 from the strategic petroleum reserve.
 I think we are less in control
 about being on the back out and quote unquote taco.
 Iran seems to want this to go on.
 I think that's a real risk
 and when we're talking to people in the industry,
 it's diesel, it's jet fuel.
 All these things are going to filter
 the way through the economy.
 And I thought we were on smooth sailing,
 deflationary, we're letting oil sell.
 This is problematic and the market is still going by
 what happened in the first iteration.
 I think this is worse and it's going to stay.
 All right, Jensen, we have to leave the conversation there.
 I appreciate it.
 Have a wonderful weekend, fabulous call crew, as always.
 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 Boerston hosts CMBC Changemakers and Powerplayers.
 New episodes every Tuesday, wherever you get your podcasts.