CNBC Halftime Report
2026-07-15 · Hosted by Scott Wapner · CNBC
Executive Summary
Goldman Sachs CEO David Solomon told CNBC's David Faber that the AI infrastructure capital-formation cycle is in its "early innings," pointing to net revenue up 39% year-over-year and record ROE as Goldman shares surged over 7% to a new record high near $1,121. The episode's central story was IBM's historic 25%+ plunge — its worst day ever — after CEO Arvind Krishna admitted the company "faltered" as clients redirected spending toward AI hardware, a move the panel debated intensely: Brian Belsky and Rob Sechan said they continue to hold IBM in their value portfolios (up 60% even after the drop), while Josh Brown argued the plunge is a "gut punch" to the idea that legacy IT/software names are immune to the same pressures that hit the broader "SaaS apocalypse" cohort. Cybersecurity names (CrowdStrike, Palo Alto, Fortinet, Okta) hit new highs as IBM's own letter cited client spending shifting toward cyber. Bank earnings broadly beat (JPMorgan, Bank of America, Citigroup, Wells Fargo, Goldman), with Citigroup reversing from green to red on the day. Fed Chair Kevin Warsh's congressional testimony and a reversal of Trump's proposed Strait of Hormuz toll also featured prominently, alongside a Keybanc downgrade of Apple to underweight.
Key Stories & Changes
1. Goldman Sachs' Record Quarter and the AI Capital Cycle
Goldman Sachs CEO David Solomon told David Faber the firm is in "a technology super cycle that's accelerating," citing net revenues up 39% year-over-year and 18% sequentially, earnings up 78% year-over-year
Solomon: "I think the cycle of this capital formation for the AI infrastructure build... we're in the early innings"
Stock rose over 7% to a new record high (~$1,121/share)
Solomon pushed back on "bubble" characterizations: "the deployment of capital to invest in this technology... I don't think that's a bubble. I think that's a trend that's going to have long, secular legs"
Solomon noted headcount was roughly flat (down 2%) but not due to AI displacement — partly a Q2 snapshot effect ahead of hiring 2,300 new graduates in Q3
Solomon declined to confirm timing but said Anthropic and OpenAI are "big companies that one day we'll have to go public," and Goldman wants a lead role
2. IBM's Historic Collapse Sparks Debate on Software Durability
IBM shares fell roughly 25%, the worst day in company history, following a preliminary earnings miss
CEO Arvind Krishna: "these conditions require our teams to execute perfectly. In this quarter, we faltered. We did not adapt and move quickly enough, and numerous large deals failed to close on the timelines we expected"
Brian Belsky said his firm still owns IBM in its value portfolio (bought around 12x earnings, still up ~60% even after the drop) and views the pre-announcement as "under promise, over deliver"
Josh Brown called the news "a gut punch" to the thesis that IBM-style enterprise software is insulated from the same pressures hitting pure-play SaaS names, noting the stock first cracked last week on reports Starbucks was looking to cut IBM and Microsoft from some workflows
Rob Sechan said the pivot in spending toward AI infrastructure "threw cold water" on the thesis that AI integration would strengthen the software business, but called it "not necessarily... prologue"
3. Cybersecurity Diverges From Broader Software Weakness
CrowdStrike up 10%, Palo Alto up 6%, Fortinet up 3% (record high), Okta at a 52-week high — all cited directly from IBM's own shareholder letter, which said clients were "distracted with rapidly evolving industry-wide cyber security concerns"
Josh Brown noted CrowdStrike, fresh off a 4-for-1 split, would be trading above $800/share if unsplit, calling it one of the biggest S&P 500 winners of all time
Brown: "the IGV is actually green on a day when IBM blows up" — evidence the market is "getting smarter" and differentiating within software rather than treating it as monolithic
Panelists cited DataDog and Snowflake as software names decoupling from the "SaaS apocalypse" narrative due to cloud infrastructure focus
4. Bank Earnings Roundup
GS: Goldman Sachs — +7%+ (record high) — Solomon: AI-driven capital formation "early innings"
JPM: JPMorgan — Gains — Record equity trading flows, strong M&A
BAC: Bank of America — Gains — Diamond, Moynihan reiterated consumer/economy resilience
C: Citigroup — Reversed green-to-red — Turnaround "complete" per Josh Brown, but no ROTCE guidance raise disappointed
WFC: Wells Fargo — Mixed — Sharf highlighted execution on turnaround plan
Josh Brown: June saw 23 billion shares of equity flow with volatility down 30% — a "new class of investor" engaged in equities regardless of market direction
Panel noted wealth management (not yet highlighted in Q2 results) could be a standout for banks like Morgan Stanley in H2 given rising volatility
5. Fed Testimony, Oil Reversal, and Apple Downgrade
Fed Chair Kevin Warsh testified before Congress, pledging Fed independence and to "get monetary policy right," while declining to detail his economic outlook or reaction function
President Trump reversed his proposed 20% toll on the Strait of Hormuz, replacing it with unconfirmed trade/investment pledges from Gulf nations
KeyBanc downgraded Apple to underweight with a $250 price target, citing slowing iPhone builds amid price increases and weaker device subsidies; Joe Terranova disagreed, arguing "significant deterioration in global economic conditions" would be needed for the thesis to play out
Josh Brown remained bullish on Apple, calling it "the most powerful lock on the global consumer of any publicly traded company anywhere"
Trends Identified
1. Software Sector Fragmentation Accelerates
The panel repeatedly emphasized that the market has moved from treating software as a single trade (the "SaaS apocalypse" narrative from earlier this year) to differentiating sharply between legacy enterprise vendors under AI-driven budget pressure and infrastructure/cyber names benefiting from the same trend. IBM's plunge, paired with cyber's simultaneous rally, is described as a leading indicator for how semiconductors and memory could similarly bifurcate.
2. AI Capital Formation Cycle Still Seen as Early-Stage
Goldman's Solomon explicitly framed the AI infrastructure buildout as in its "early innings" with long secular legs, pushing back on bubble concerns despite acknowledging near-term "speed bumps" and recalibrations. This framing was echoed by panelists discussing IBM's disruption as part of the same broader capital reallocation wave.
3. Pricing Power Erosion in Legacy Enterprise Software
Josh Brown suggested IBM's failed deal closures may reflect clients pushing back against years of automatic contract escalations, using Salesforce and Adobe as parallel examples — a structural shift in enterprise software pricing power rather than a purely cyclical AI-driven reallocation.
4. Equity Market Engagement Broadening Across Investor Demographics
Joe Terranova highlighted record June equity trading volumes (23 billion shares) even as volatility fell 30%, describing a durable, demographically broad increase in retail and institutional equity engagement independent of market direction. ---
Sentiment Analysis
Overall Market Sentiment: Bifurcated Bullish
The panel was broadly constructive on markets and the AI capital cycle, but sharply divided on legacy enterprise software, reflecting a market rewarding differentiation rather than uniform optimism or pessimism.
Risk Factors Highlighted
IBM demand destruction vs. deferral: Unclear whether lost Q2 deals represent permanently lost revenue or timing shifts.
Software contagion beyond IBM: Panelists explicitly warned "I honestly don't think it stops with IBM," citing Starbucks' reported efforts to cut vendors.
AI capital cycle "recalibrations": Solomon acknowledged fast-moving markets could see mispriced capital and periodic resets even if the long-term trend is intact.
Bank valuation stretch: Concerns raised about banks trading at historically rich multiples (e.g., JPMorgan-style ~3x tangible book, referenced in other reports) even after strong results.
Apple growth deceleration risk: KeyBanc's downgrade cites slowing iPhone builds, weaker upgrade rates, and pressured services growth from price hikes.
Data center political backlash: Referenced in the context of AI infrastructure buildout facing headwinds beyond just chip supply.
Oil/geopolitical policy instability: Trump's reversal on the Strait of Hormuz toll, following criticism it violated international norms, adds unpredictability to energy markets.
This episode was covered in today's [The Market Signal — 2026-07-15](https://marketsignal.beehiiv.com/p/the-market-signal-2026-07-15), a cross-source synthesis of multiple podcast reports.