S&P 500 Milestone, Zuckerberg’s AI Manifesto, Anthropic’s Power Deal 8/13/26

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**Kelly Evans** (0:44)
You're listening to The Exchange. Here's today's show.
Thank you very much, Scott. The S&P 500 crossing above 7,800 for the first time today after more soft inflation data that has bond yields moving lower. I'm Kelly Evans and welcome to The Exchange. The memory and AI stocks are strong again today. The DRAM ETF is up 13% in two days, while yesterday's big mover, Nebius, adding another 6% for a 30% two-day gain. This comes even as Cisco, yes, sells off post earnings. It's down 9% now. It is weighing on the Dow, which is negative. We'll debate Mark Zuckerberg's manifesto this week, calling for the need to open source AI. What would be the implications business-wise of all of that? Plus, our restaurant stocks about to break out. Seems hard to believe anything could rival the AI trade, but Jonathan Krinsky is here to make his case. But we begin with this move in markets while the S&P is above 7,800 for the first time today, a number, remember, that many originally thought we'd be lucky to hit by year-end. It comes after this morning's producer price data unexpectedly came in flat last month. Despite expectations for a small increase, that does have yields down across the board today, the two-year and the 10-year dropping about six basis points at last check. Charles Babrinskoy is the vice chair over at Ariel Investments and he's here for our opening exchange. Charlie, it's great to see you again.

**Charles Babrinskoy** (2:07)
Hi, Kelly. Great to see you.

**Kelly Evans** (2:08)
I'll see how long I can go without talking about the Lakers, but was that why?

**Charles Babrinskoy** (2:12)
Don't go anywhere without talking about the Lakers. It's spectacular news.

**Kelly Evans** (2:17)
Okay, so I'm watching this, but shares of MSGE were up 11% yesterday.

**Charles Babrinskoy** (2:24)
So they reported really good numbers. Their adjusted operating income, which adds back depreciation, which is very important for a stadium, was up about 18%.
And the concert business was extremely strong. This is not just about the Knicks having more playoff games. The concert business, Taylor Swift getting married in the garden. The Rockettes did very well. It was a really good year for the concert industry, and that's why MSGE is up so much.

**Kelly Evans** (2:52)
Although they also benefit from how well the Knicks and the Ray, they mentioned they share concessions and things like that. I don't know. The larger point has been made time and again. By the way, I think it was Peter Bookvar who was talking about trimming the stock and citing valuation.
For these companies, are you in that position yet?

**Charles Babrinskoy** (3:08)
I'm glad you brought that up. So MSGE, which owns the garden itself, the real estate, has about doubled in the last 12 months. And we are getting to a point now where it's not the table-pounding buy that it was. Things can still go well if Penn Station gets remodeled and they are treated fairly in that. So we still think it's trading below its intrinsic value, but this is not the table-pounding buy it was. Same thing goes for the NYX themselves, which is owned by MSGS. That stock has also about doubled over the last 12 months.
They're going to spin off the Rangers, which is great. There's a chance they'll sell the Rangers, which is great, but it's a similar situation, not as table-pounding cheap as it was.

**Kelly Evans** (3:52)
All right. I mean, we really have to stop talking about this, but did you think that price point, $12.5 billion for the Lakers, what does that tell you and is that justified? Is that a big increase from $10 billion a year ago?

**Charles Babrinskoy** (4:06)
You know what it tells me, Kelly, is that this is like beachfront property. It is a limited supply of these things. There are only 32 franchises in the NBA. They do not trade off of cash flow.