11AM Hour: Apple’s iPhone Duo Goes on Sale, Tesla Unveils Roadster, Proofpoint CEO on $6.3B Cyber Security Deal 10/16/26

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Sara Eisen (0:51)

Good Friday morning again. Welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla, live from Post 9 of the New York Stock Exchange. Today, the AI trade is no good, very bad week with the NASDAQ 100 down 4%. Semiconductors pacing for a seven straight down day, but we are joined by one veteran tech investor who says it's the narrative, not the fundamentals which have shifted.

Carl Quintanilla (1:12)

Plus, he's known as the father of the iPod, co-creator of the iPhone and the founder of Nest. Tony Fadell will join us. We'll talk about tech's push into this new AI agentic era and why he believes Apple is positioned to win on the trust and safety front.

Sara Eisen (1:26)

And the AI boom reshaping the cyber security landscape. Tomo Bravo's Proofpoint acquiring Varonis systems in a more than $6 billion deal. The CEO joins us this hour.

Carl Quintanilla (1:36)

As for the markets, a little continued pressure on the NASDAQ, NDX down a full percent, but breadth is pretty good, almost two to one positive. 1% gains in financials and energy and staples.

As you can see, the 10 year 509, actually not quite to session highs. We got a little above 51 this morning, but man, what a week for treasuries.

Sara Eisen (1:55)

And for the NASDAQ, I mean, the NASDAQ has gone down pretty much all week. There hasn't been too much relief. A little bit yesterday in the semiconductors, but information tech, communication services, those are the weak sectors right now.

Carl Quintanilla (2:07)

Let's begin with what has been a painful week for many parts of the AI trade. Mike Santoli, Senior Markets Commentator, co-anchor of Closing Bill Overtime here. When you think about the week in review, do you think it's one we'll remember in months?

Mike Santoli (2:21)

I think it could be in terms of the latest wave in a multi-month process of having this reckoning with where exactly the AI hardware trade in particular and credit-sensitive AI is going to be. So I mentioned earlier, quality has actually been ballast for this market. The S&P 500 is down less than 1 percent, you got 4 percent down for the NDX. That's momentum relative to quality. The reason it's important is just look at the crazy peak in momentum in June. Then we have the big purge in July. Everybody says maybe it's an all clear, it's washed out and only a half-hearted bounce above that. So this is not uncommon to have one of these speculative peaks and have a multi-month process of it trying to get sorted out. AI infrastructure, in particular, power and industrial infrastructure, that's this ETF AIPO, which I think is very illustrative too, and that's going against the Mag-7. So the AI trade is a little more migrating toward the big platforms that nobody wanted earlier in the year, like Mag-7.

And then that sort of excludes, at least recently, NVIDIA. And the Apple vs. NVIDIA kind of toggle has been fascinating too. You now have Apple outperforming NVIDIA on a year-to-date basis. Look, they're both up plenty. They're both, you know, five-plus-trillion-dollar market caps.

So they're doing more than their share at this point. They're like, you know, whatever they are, like 1 sixth or 1 seventh of the S&P 500 But it still shows you that the market right now is a little bit less willing to bet on the durability of the hardware bottleneck credit-sensitive parts of AI. So it's getting rationalized. I mean, I don't know that it's necessarily saying it's game over. Yesterday's lows might sort of haunt the semis and the NASDAQ for a little while, like maybe they have to be tested. But it was a pretty impressive intraday comeback.

Sara Eisen (4:07)

I do wonder now if we're in this period where if rates start rising again, then CoreWeave and the whole complex sells off because that's ultimately what's driving this action.

Mike Santoli (4:18)

It is. At least that's sort of the big immediate pressure point and its credit spreads on top of what the treasury yields are. I mean, that's been the whole story. It's not really leaking away from that too much. I think Oracle is absolutely the central linchpin here.