Squawk on the Street 2ND Hour: 12/31/25

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SPEAKER_2 (0:30)

What made you confident that you could do something that hadn't been done before? I have no fear of failure.

Julia Boorstin (0:36)

Trailblazing women changing the game.

SPEAKER_4 (0:39)

One of my favorite pieces of advice, think about what your boss's boss needs.

SPEAKER_5 (0:44)

Leadership can look in many, many different forms. It really does come down to just trusting yourself.

Seema Modi (0:48)

Life is short and you just gotta think big to accomplish big things.

Julia Boorstin (0:52)

Julia Borsten hosts CNBC Changemakers and Power Players. New episodes every Tuesday wherever you get your podcasts.

Sara Eisen (1:00)

Good Wednesday morning. Happy New Year. It's midnight in Seoul where they are already ringing in 2026 Happy New Year in Asia. Welcome to Squawk on the Street. I'm Sara Eisen here with David Faber. We are live from post-night of the New York Stock Exchange. Carl Quintanilla is off this week. Coming up this hour, Mohammed Alarian will join us with his big takeaway from a largely upbeat year for markets and a list of the key questions facing investors in 2026

Plus, the CEO of Applied Digital is with us. That stock is more than 200% this year and just announcing plans to spin out its cloud business. Nike, the third worst Dow stock this year, but CEO Elliot Hill is putting his money where his mouth is and betting big on a rebound. We will fill you in. But first, David, promise more charts, right? Charts of the year and charts that really defined, I think, some of the major macro themes of the year. So, we talk a lot about affordability and how inflation still feels high and is straining household budgets, even though the top line numbers have been better than expected. One area that's really been a pain point, coffee prices, right? So, one of my charts is the price of coffee. It's not just about tariffs. Actually, I would say, if you read some of the research on this and talk to the analysts, it's mostly about the weather and supply shortages in places like Brazil and Vietnam that were really a while ago, but that hit the market with the lag, and that's why prices have gone up so much. The tariffs didn't help, certainly, in places like Brazil, because that's where we import a lot of coffee from. But the president did announce some relief on the tariff front in places like beef and coffee, and then coffee prices did decline about 6% since he announced that, so that should be helpful. The other good news story here is that...

David Faber (2:43)

But that does give you a good sense. It's been painful. Yeah, significant expenditure increase, certainly.

Sara Eisen (2:49)

Absolutely. I think the good news, though, is that supply has improved. And so with the lag, in a few months, we should be looking at lower prices. But if you're feeling that at the grocery store, that is why. I mean, prices of coffee have shot up a lot. All right, the other big theme has to be the capex, the spend from the major hyperscaler tech company. So we put all of them together in a bar chart of how much they're spending. There's the numbers, we always talk about how staggering the amounts are. This is the annual spend from the biggest spenders on building out our AI infrastructure. Amazon at the top, about 125 billion. If you add all these together, you get more than $400 billion.

David Faber (3:30)

Yeah, you get an enormous number, and that's the key to the market in so many ways. Now, Amazon, to be fair, remember, they do have an enormous retail business that they are still spending a good amount of capex on. You can't drive without seeing an Amazon truck. Five years ago, that was not the case. I mean, they have spent and continue to spend at distribution centers and robotics and all sorts of things going in there that are not related necessarily to where the bulk of the spending is taking place, which of course is Amazon Web Services and obviously the cloud computing ability.

Sara Eisen (3:57)

Sure, but it's spending, and it's boosting the economy, it's boosting capex, it's boosting the market. And when you look at some of these numbers, I mean, Meta in itself, which doesn't even have a cloud or enterprise business spending $71 billion, you put it all together. And I was looking back, the financial crisis bailout, the TARP funds that were actually allocated to bailing out the auto sector and AIG and some of the banks was in the realm of $450 billion. I mean, more was allocated for it. But just to give you a sense of the size and the scale of what is going on here and that what is driving this market and the economy. And then finally, and we've talked about this a lot, but I think it's going to be one of the key questions going into the new year, which is the unemployment rate is rising and GDP is rising. And this might have to do with AI, but this is unusual what you're seeing, right? Unemployment rate rises and usually that's recessionary, that growth slows down. What's going on here where you're not seeing a ton of hiring, but growth is really strong? Part of it might be all the investment in AI and what companies are deciding to do.