← CNBC's "Fast Money"
CNBC's "Fast Money"
AI and Software Stocks Struggle… And the Best Buys in Biotech 6/22/26
00:43:09
An AI and Software slump kicking off the week in a tech sell-off with Google, Amazon and Microsoft all ending the day in the red. The traders break down what tech investors can expect from the losses and if this is the start of a bigger trend. Then, will a luxury property tax in New York City spark market unrest? Sotheby’s International Realty president and CEO Philip White breaks down NYC’s ‘pied-à-terre tax’ taking effect next week, and how he believes people will react. Plus, Chevron and Microsoft strike a deal, why now is the best time to invest in biotech, and can Netflix recover from its losing streak? Fast Money Disclaimer
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- [00:02]
A
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B
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C
SIPC live for the NASDAQ market site right here in the heart of New York City's Times Square. This is fast money. Here's what's ahead. We'll call this the ABCs of a stock drop. Alphabet leading the mega cap meltdown. Growing AI fears sparking a tech sell off. Software names getting caught as well. The start of something or a buying opportunity. The B is a breakthrough in some Biotech with the Chartmaster Cs in store for the C. Brian The C, thank you very much. Count Seymour. The C is for Chevron inking a massive 20 year power deal. But there is a lot more than just the ABCs because that'd be as easy as 1, 2, 3. Also ahead, Netflix continues down stream and how traders are positioning out of Surabra first ever public company earnings. Hi everybody, I am Brian in for Melissa Lee tonight and tomorrow night, coming to you live from Studio B at the nasdaq and on your desk, Tim Seymour, Courtney Garcia, Dan Nathan and Gaia. All right, there is much to do, but kind of like the weather here in New York, it was downright gloomy in big cap tech today. In fact, Google parent company Alphabet fell 5%. That's a lot. In fact, it's enough to make it its worst trading day in more than a year. And that wasn't all. More mega Cap, a little less mega. Today, Microsoft, Amazon and Meta all getting hit and continuing their June swoon. In fact, all three stocks now down more than 10% so far this month. And here is a little bit of trivia you didn't ask for. No, you probably don't do. But you know it, Tim, you're going to get it. Microsoft right now pacing for its worst month in more than 25 years. That wasn't all more software slump. Also topping the tape. ServiceNow, Oracle, Palantir, all being sold. Salesforce has now fallen 14 straight days. That is a record long losing streak for the once red hot company. All right, take a breath. There is a lot to chew on here. So guy. Yes sir. Dealer's choice, welcome. Thank you. Dealer's choice AB or C, Google, Microsoft software, whatever else you want to talk about. What should be the first thing that our traders and our investors and our viewers and listeners and think about today?
- [03:28]
D
Well, I'm partial to Chevron and welcome as usual but I understand why people would say to Google so let's play the Google game. And the prior all time high in Google was made back in February. The stock sold off was about 345. We traded down there today. There are a lot of reasons, I guess people can say, you know what, I'm bearish in Google. I don't think valuation is one of them. But I will tell you, two engineers picking up and leaving is certainly not one of them. Now they priced that $80 billion offering what week and a half or so ago. I understand why people got a little upset about that. I don't think it was a big deal. But today in my opinion, Brian's a complete overreaction to what I think was that news.
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C
Yeah, I just can't see to your point, Guy. And it's, you know, sometimes I do agree with you. Rarely it's hard and sometimes it hurts.
- [04:13]
D
But I'm going to lousy album as you know.
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E
No way.
- [04:17]
C
Two engineers leaving caused tens of billions of dollars in damage to the stock. Is this a bond yield story for tech timing?
- [04:25]
F
Well, I think first of all, I think we all have to agree that that's one of your best ties that you've ever worn and we appreciate it and we appreciate you. I think this is Satya Nadella saying cheaper models are the way let's push down prices in AI. This felt like a deep seek, you know, 3.0 day. This felt like a day when you know, big cap tech doesn't all sell off in unison like this. Unless there's some type of a more existential and it's not existential, but it really is. When you think about the moves that some of these companies had today and the fact that Microsoft, who's been as you said, I mean 25 years ago, that's dot com stuff almost, you know, so you can make an argument that you could have bought Microsoft only 4% lower 4 and a half years ago. So I think today was about. It is about the bond math, it is about the fact that these are not net cash companies anymore. I think it's all one. It's all about the capex concerns we've all had. It's a sector that has invested on tomorrow without necessarily knowing what they're going to earn.
- [05:22]
C
I think, Dan, there's a bigger question that people, I don't know, you probably get this all the time, which is, is the meg, is the Mag 7 trade over, right? Is the big cap tech trade over everything, kind of waiting for it to be over. Every time the market goes down, we ask it that the market goes back up. This feels a little different.
- [05:39]
G
Well, I think the hyperscalers have been in the box for a bit. Right. If you look at the Mag 7 in general, we've been talking about that underperformance for a while. And if you just look at those names, I mean most of them are down on the year, right. And so when I look around tech, you just mentioned software. I mean it's a bloodbath. We've been talk about the SAS apocalypse for a long time. If you look at the names that are traditional Internet names, they're all down in the year. Ironically, the only one, maybe Airbnb is flat in the year. Ebay is up 20% on the year. It kind of fits the narrative of what we've been talking about with the intel and the Cisco and the Hewlett and some of these other names that were like poster children for the last bubble. So I look around here and I say, as it relates to tech, there's plenty of good stories, there's plenty of good scenarios where at least the supply demand dynamics. If we look at memory, we look at storage and we look at some of the semi names, you know, it's fine, but that's the last bastion. And when we get Micron after the close on Wednesday, they're going to put up a big quarter and they're going to put up big guidance and our investors going to buy this thing up here after the rally that it's had. And so if you look at for the fever sort of breaking, there's examples. If you look at a Palantir, for instance, this was again one of the stories within software where you could demonstrate that they are getting orders because of their AI platform. Well, for some reason their numbers continue to go higher, their guidance continues to beat in a big way and the stock has not been able to get out of its own way. For six months, months now. So again, I just think that if you're focused on just the hyperscalers and I think Tim's point about Deep SEQ being hosted on Microsoft Azure, it's pushing down, it's commoditizing everything that goes on the vertical nature of this sort of thing. And I think the last batch will be when does that pullback happen and what does it mean for memory and storage which we're just late to the party here.
- [07:15]
H
Yeah. But I do think this really is part of a broadening out story. I think this is what people have been talking about, are really waiting for this to happen probably over the last like a year or two when you look what you point out very correctly here, the Mag 7 is down like 2% on the year but if you look at the other 495 and the S&P 500, they're up like 13, 14% this year. So I think what you want to be doing is it's not that we're in a bubble or you know, at the end of this bubble I guess I should say I think there's just so many other areas of opportunity and when it comes to AI, we're just questioning what that CapEx story looks like. And you want to look at the companies that are going to be additive to the AI story. So you want to think of your energy companies, your material companies, the one who are building out the infrastructure for this because the need is there but you just want to make sure that the revenue is there. And I think that's what people are really finally actually putting their dollars shifting
- [08:00]
C
from the spenders to the beneficiaries of the spending.
- [08:04]
I
Exactly.
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C
Because Amazon's down 12% this month, Microsoft down 12% this month. I don't think guy that a broadening out which I don't put words your mouth but I think that's what you're talking about. I don't think it's a bad thing.
- [08:15]
F
No, no.
- [08:17]
D
But you also need a broadening out on the earnings front as well. I mean the earnings have been spectacular, but the earnings have been spectacular because 15 names have been dragging up in a meaningful way. So if you get participation on the earnings front, I would say yes. And in terms of the beneficiaries since you mentioned Chevron. Yeah, but look at Caterpillar and you know, I don't want to necessarily get in the debate but valuation, I still think it's reasonable that plays in this all world and Bloom Energy, a name that we've talked about not Extensively on assessed we brought up a number of times continues to do its thing, think it made an all time high today. So this whole power generation side of the equation is Brian, that you're familiar with continues to work.
- [08:52]
C
By the way Caterpillar, that Chevron Microsoft deal, that's going to be a 20 year deal where you get you know these big turbines that power gas, Chevron's using the gas. The two companies providing the turbines, Caterpillar and ge, Vernova, those are two companies are going to provide the actual equipment.
- [09:08]
F
I think Courtney did say broadening, I think she nailed it. I mean you've got a, you've got a dynamic. This is actually a really, this is a good day in the market Also let's not forget semiconductors closed at an all time high and a new relative high to the S and P. So we are talking about the biggest market caps in the world that struggled today. But there's a lot of people on the leading edge of growth that had a great day. But you know XLV health care is up 60 bips, financials are up 65 bips, transports were up 80 bips. Even energy. So I think it's, it's an interesting time but I don't think there's any question when, when Microsoft gets out there and says we actually want to drive prices down in AI and that the three biggest AI companies in the world shouldn't dominate the world. I think that's a message and I think it's a message that a lot of this Capex, I don't think it suddenly says wasted Capex but I mean that, that's what that deep sea. What was that? Was it August? When would we have our deep sea?
- [10:02]
C
January 20th, January 26?
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G
Oh no, no, it was a 25
- [10:07]
F
summery day in January. But, but the point is there was a lot of evaluation as to what was all this money being spent on and I think when Microsoft who seemingly people think we're losing says let's throw a low cost model in there because we actually think it's getting commoditized, I think that has a huge impact on the biggest spenders.
- [10:24]
G
Yeah, listen it's easy to make a case for a 20 year deal in turbines right for this 2 gigawatt plant or that they're going to build down there. So you look at Caterpillar, they couldn't get enough of it today up 3.7% closing literally the close of the day was the dead all time high. It's up 20% in just a couple of weeks here. If you think that is a way to play this trade right now, after the Stock's been up 250% in a year, it's just not going to work out that way. So the moment, the moment that you see a pullback in Capex and you know the Microsoft story is pretty simple, right? Right now they're expected to have $185 billion in capex. If you don't think that that is going to get pulled back if they start hosting the R4 deep seq model on Azure because you're going to see price compression all the way down, up and down. Right. This entire vertical. So what do you think is going to happen to some of these contracts? They're going to end up getting pushed out, right. And the market has already priced them into.
- [11:16]
C
So what happened? Okay, we got to get the dirty in just one second. What happens then? If, and that day where someone says, you know, we already had a data center by the way, canceled in Wyoming two weeks ago, market didn't really seem to care. But if Microsoft says, oh, we're going to pull back on something, whatever, what happens to them?
- [11:31]
G
Talking about the push, there's dozens of them that are going on for a whole host of different reasons. And not just access, you know, to energy. I mean like I can't tell you, are some stocks that have been absolutely beat up like Microsoft, which is down 30% from its all time highs a year ago, does it end up benefiting if they say, oh, we're only going to spend $120 billion which is up, you know, 70% from where they were two years ago? Possibly, but I think it takes a lot of air out of a guy.
- [11:53]
C
Quickly guy. Domi caterpillars are 37 times earnings and six and a half times they just,
- [11:59]
D
they just ratcheted up their forward earnings. And you look at it in a forward basis, it's not ridiculously expensive. I mean the price appreciation has been extraordinary. But I don't. We had this conversation last week. I don't think it's a particularly expensive spot stock, especially in the environment that we find ourselves in.
- [12:15]
C
All right, so let's, let's broaden the conversation out. For more on all these threats, the tech trade, let's bring in Deirdre Bose who's probably champing at the bit. Yes, it is champing.
- [12:24]
F
Shopping, not shopping.
- [12:26]
D
You look at me like I say, chomping every day.
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C
Deirdre Bosa, we were debating, you broke the news of the deep sea story. Maybe you can Clarify the date. I think it was January 26th. But you get the broader talk about that and talk about more in the tech trade, the AI trade.
- [12:45]
I
Well, first of all, you guys have been doing an amazing job. I could listen to an hour of you guys disappearing, discussing this. It certainly was January 2025. I remember it very well. And I remember the last year and a half because a lot of folks have said to me, you know, you overhyped this thing. Deep Seek hasn't had much of an effect, but the effect has been quietly going on for the last year and a half and you're starting to see it really show through. I mean, the data that I look at, it's been showing and climbing steadily. The adoption of not just Deep Seq, but other Chinese models like the ones from Mini Max, from Jeep, who, which I'm sure we're going to talk about from Alibaba's Quinn. I mean, these models have just been gaining adoption among developers and that is typically what happens before enterprise. What we've been seeing over the last few weeks in the few months is enterprise leaning into it because of things like token maxing, because costs have been eating away at margins. You saw that last earnings season. I think you're going to see more of it. So these open source models, right, they you can actually host them yourself. There are a lot more fish. And I think we have a chart that we can show you as well. Just to compare, you know, Anthropic's top model versus a Deep SEQ model. You will see that it is much, much more expensive to run. So I think Tim has really sort of hit the nail on the head. Is this Deep Seek 2.0 and it has to do with this model from Jeep that everyone here, it feels like in Silicon Valley is talking about. It's called GLM 5.2 and not only is it more efficient, but it's incredibly capable. It is at or very near to the frontier models that OpenAI and Anthropic are charging a heck of a lot for. Now, when you talk about the trading day and Brian, you started by saying, what's the most interesting story? If I can give you my take, I will say that it is Google because it does raise this question, do you even want to be a frontier model anymore? The space has become so commoditized.
- [14:35]
C
The Chinese model, does that mean frontier model? You mean like I'm not wearing like, you know, suede in front of a mountain range, although you'd like to the
- [14:44]
I
highest of the high end. So like The Google Gemini Anthropics opus models chat GPT 5.5 the best of the best that are closed and you got to pay a lot of money for relative to the open source ones that are not frontier. So frontier model just means the best and they've had the market over the last few years. But that is certainly changing.
- [15:06]
G
Yeah, you know, I think we can all agree, despite Tim's great analysis that there's few better than the Debo doing this stuff. She's been literally epic.
- [15:14]
C
On January 27th we are both wrong.
- [15:17]
G
Just following was January 2025. We were in Miami, you know, 27th of 2025.
- [15:22]
C
Sully, I was also in.
- [15:23]
G
Geez. Hey D, really quickly as you've been reporting on these, these Chinese frontier models, you know, when you think about everything that's going on and who are hosting these models over in China, all you have to do is maybe look at Alibaba and say, okay, price compression is not probably that good for some of these hosting platforms. The stock's been cut in half over the last so six to nine months. Is that something that's legitimate to take away from that?
- [15:50]
I
So this is a really good question and I think this helps break down even sort of the trade here because it is certainly splitting. So yes, you look at Alibaba, it hasn't really reaped the rewards in terms of its stock price. But look at Jeep, the parent company is Knowledge Atlas Technology, something like that. It's listed in Hong Kong. I think the ticker is 2317 and it has been off to the races. It's up nearly 2000% this year is up another 15% last night. Americans can trade these stocks because they're listed in Hong Kong, not mainland China. Mini Max is another one. These companies, these AI Pure Labs, they went public at the beginning of the year. They have been reaping the warts. Now that leads us to the question of hosting Dan, which you just asked me. I think that's why you're seeing the splitting. The model makers like the Googles have lost a bit of steam, but the infrastructure trade, the chip makers, the power stocks, they have not because you still have to host these open source models. They still require Nvidia chips, they still require all of the infrastructure that the frontier, the highest end models need. So that can continue to hold up. And a lot of the folks I talk to think that this part of the trade is going to be okay. But it's the model makers. You got to wonder if OpenAI and Anthropic were public right now, what kind of a day they would have had?
- [17:03]
C
Well, we might have to wait too long for that. I know both have confidentially sort of filed or sift around the IPO as well. Deirdre Bosa, glad you were on that story. Thank you very much. We're gonna shift gears, go to healthcare. Cause we got a news alert on Pfizer. Angelica Peebles, what's going on?
- [17:19]
J
Hey, Brian. Well, we just got results from a closely watched experimental lung cancer drug from Pfizer, and it failed that phase three trial. So this drug, Sigvotatu Vylodin, or sv, a little bit of a long name, but it didn't show a survival benefit versus standard chemo in patients who had already progressed on one or more other lung cancer drugs. And so this trial enrolled people who had already received one or more lines of prior therapy. And I just talked to Pfizer's head of oncology, Jeff Legos, who says that this post hoc analysis they ran showed that people in their second line of treatment actually saw a bigger benefit. And that gives Pfizer the confidence this drug is active and it could be even better for newly diagnosed patients. So Pfizer is already running several Phase 3 trials of SV, including one for newly diagnosed lung cancer patients receiving SV and Merckx immunotherapy keytruda, and we're expecting those results next year. So Pfizer's Lego says that that is a much larger opportunity and that this is a type of lung cancer drug called an antibody drug, conjugate, that could be used for people who aren't eligible for targeted therapies, which Pfizer's Lego says is about 70% of lung cancer patients. So although this is clearly a setback, you can see that stock down about 1 1/2 percent. They're still going forward and they're excited about it. Brian.
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C
All right, Angelica, thank you very much. Tim Seymour, Pfizer. Any change? Reason to trade on this news?
- [18:33]
F
No, but I mean, I'll say that part of the reason I'm long the name is because I think the story has been somewhat deep risked. I don't know that there's a whole lot built into what I think is is a very strong oncology effort. These look, the company's interpretation of this result is one where, not surprisingly, their glass is half full. This isn't a reason to go out and sell Pfizer. This is not the reason you own Pfizer. The reason I own Pfizer is I think the company's actually been, as I said, de risk. I think the valuation is interesting. It's not, you know, less than a 6% dividend yield at this point. And their oncology business is leading edge.
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C
Are you basically buying Pfizer for the dividend at this point?
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F
No, you don't buy any stock for
- [19:10]
K
the dividend, I don't think.
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C
Wow, that was indignant.
- [19:14]
F
Well, I mean I like to be clear.
- [19:16]
C
Like it had to be clear to be clear cut and clear. On a much more serious note today, a legend in monetary policy in the financial markets died. Alan Greenspan died this morning from complications of Parkinson's disease. He was 100 years old. Greenspan served as the chairman of the Federal reserve for nearly 20 years. He was hailed by many as the greatest central banker of all time. From his irrational exuberance comment to the briefcase indicator to the creation of even Fed speak, sort of parsing every word that he said. Alan Greenspan was a larger than life presence in the world of finance. Any comments on Greenspan's legacy?
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D
He made being a Fed governor, Fed chair cool. I mean Al Volcker was my guy back in the day but everybody knew who Alan Greenspan was. He lived a tremendous life, rest in peace. But what an extraordinary human being. 100 years is a great and his
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C
spouse is our our friend and colleague Andrea Mitchell as well from msnow.
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F
So he, he made the fate the Fed bigger than life. He presided over some of the most important moments in the Fed that I think the followers then from Bernanke onward were really following in the Greenspan wake. And you know the argument that the Fed has gone too far. You can make an argument that Greenspan was the guy was the strong and the fearless leader that took it in that direction.
- [20:45]
C
He spoke, everybody absolutely listen and markets moved fast money back right after this.
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L
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F
Sometimes AT&T business Wireless connecting changes everything.
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C
All right, a lot of breaking news tonight. We got some more happening right now out of D.C. so let's go to Eamon Javors with the details.
- [22:36]
O
Yeah, Brian, what we've got is a new statement here from the central bank governor of Iran, who is more or less directly contradicting something we heard from President Trump here at the White House earlier this afternoon and also from Vice President Vance in Switzerland in a presser earlier today. What the central bank governor of Iran is saying is that the agreements discussed over the weekend do not include an obligation of the Iranian side to purchase what they're calling US Agricultural inputs. Now, the central bank governor goes on to say that if the price is right and if there's no other obstacle, then they might go ahead and purchase American agricultural products. But they're not obliged to do that under the agreement that's being hashed out in Switzerland. Now, that's a little bit at odds with what President Trump said in a gaggle with reporters here in the Oval Office earlier this afternoon. He emphasized the value of having the Iranian purchase products from American farmers as a result of this peace agreement that he's hammering out in Switzerland. And we saw Vice President Vance earlier today suggest that Jared Kushner had floated an idea with the Qataris that the US Would actually have approval over how the Iranians spent any development money. No indication that's been agreed to either. But he's also suggested that could result in the purchase of a lot of American agricultural products. So I think what's going on here, Brian, is both sides are sort of spinning this heavily toward their direction. The Iranians saying, hey, we didn't agree to anything. We're not locked in. And the president highlighting a potential silver lining here as he sees it, for this peace deal, which is that American farmers could have a new customer in the Iranians. Back over to you.
- [24:12]
C
All right, Amy Jabbers at the White House with that news. Eamon, thank you very much. All right, so as we mentioned before, right at the top of the show, there was a big deal in the energy and AI space today. Chevron partnering with Microsoft to fuel a massive new data center in Far West Texas data center project is named Project Kilby. It's expected to consume or use about 2.67 gigawatts of electricity should start receiving power around 2028. Earlier today I sat down with Chevron's new energies president Jeff Gustafson to talk about the build out.
- [24:47]
P
It's a dedicated behind the meter power plant so not grid connected to start so no competition with Consum partners in the area. We signed a long term agreement as you noted 20 years a 20 year power purchase agreement with First Power expected in 2028. So a really big day for us. A win win for both Chevron and Microsoft.
- [25:09]
C
Chevron shares did end the day higher a little bit up about 8/10 of 1%. We already notice guys Microsoft down about 3% but guy Dom, you briefly referenced Chevron at the top of the show. It's the first of its kinds a 20 year natural gas supply deal, big deal.
- [25:25]
D
And again it speaks to the importance of the energy sector in the world that we live in and people have discarded it. Less than 4% of the S&P 500 I think in terms of weighting and maybe deservedly so but people I still think are underweight the space and you know these stocks have pulled back rightly so maybe on the back of the underlying commodity but the pullbacks have been shallow. Pope and Marathon petroleum for example NPC you look at it the move from I think 275 to where it's currently trading as a blip in comparison to what it's done. So I think you stay long all services names like Marathon Valero, even the big cap integrated names like Exxon and Chevron.
- [26:01]
C
Well a lot of these are trading on kind of every, every back and forth headline Tim around Iran straight.
- [26:07]
F
Well the nice thing about buying Chevron here is you've taken out more than the oil the war premium and you're back to kind of early February levels. I mean the market was kind of sniffing out in the oil space as we know the integr rated is we're starting to get a rally really from the beginning of the year and so maybe you haven't taken it all out but but let's be clear, I mean Chevron's one of the few that can actually deliver on this and this. The real focus here is on LNG and it really is on the Permian and I think that's a dynamic for investors to continue to look at. I think LNG will continue to be a lot more strategic. I also think that the utilities I own Constellation. I think Constellation is very well positioned in LNG also, but in Nat Gas. And I think, I think that's part of the confluence of these two trades. I think it are the, it is the energy producers, but it is also those power utilities that are positioned to actually be an additional supply scheme. So I would be buying Chevron not because of this news, but this is just reinforcing your, your thesis.
- [27:01]
C
Yeah. And by the way, in the rest that interview which is up on CNBC.com Gustafson was telling us, listen, this might be the start of more deals like this. And sometimes natural gas prices in the Permian are negative. People, you have to pay someone to take your natural gas. And so even as natural gas prices that we show the future market falls,
- [27:21]
D
I would pay Brian to take my natural guy.
- [27:22]
F
Let's not go there, you know, talk, you know, let's just not go there.
- [27:26]
D
It's happened before.
- [27:27]
C
Yes, it did. Yes, it did. But we'll see if Chevron can make more deals like this.
- [27:33]
D
Yes.
- [27:34]
C
Right around all kinds of natural gas. Coming up, a streaming giant in free fall. The drop in shares of Netflix. Where does this end? Talk about that and more Fast Money live at the NASDAQ market site right here in Times Square. We're back right after this.
- [27:57]
Q
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- [28:37]
N
Not every sale happens at the register. Before AT&T business Wireless, checking out customers on our mobile POS systems took too long. Basically a staring contest where everyone loses. It's crazy what people will say during an awkward silence. Now transactions are done before the silence takes hold. That means I can focus on the task at hand and make an extra sale or two. Sometimes I do miss the bonding time. Sometimes.
- [29:01]
F
AT&T business Wireless Wireless connecting changes everything.
- [29:08]
C
All right, welcome back to Fast Money. Now, overall, stocks began the week pretty mixed. The Dow was actually up at 148 points. Has to be down a bit about 4/10 of 1%. But as we've talked about or if you're just joining us, big tech was the story. The Nasdaq dropping more than 1% inside the market. We got to talk about Netflix. Netflix down again today. Stock down almost 6%, down 15% already in June and it's on pace for its worst month since April of 2022. Of course, that was after the big Covid related spike. Netflix falling more than 41% in the past year and now closing at its lowest level since October of 2024. Courtney, what do we do?
- [29:54]
H
Yes, I think this is a company where we used to look at this and people say, well, it's untouchable. Like consumers are never going to cut Netflix out of their budget. But I think that conversation is really changing. I mean, they have enough competition now that people are starting to push back on their price increases. And it is a mature business. They've really reached most of the US Audience here. A lot of like the higher incomes abroad too. At a certain point, they're not going to be able to increase their prices forever. So I don't think this is the same kind of growth story it was in the past. So I don't think this is something you want to be jumping into. I don't think it's going to go down forever here, but I don't think it's going to have those kind of gains that we used to be this
- [30:26]
C
feels, it's feels like more than just subscriber churn or maybe that's what it is. I mean, I don't know when the last time everybody sort of talked about a Netflix show, you know, after since Stranger Things. When's the last time everybody in the collective squid game, Stranger Things, where's that collective consciousness? I wonder if that's what the stock trades on. I don't know.
- [30:46]
H
Well, they're going to live sports. I mean, they are finding other ways to get into the get into different content. You're also saying they're trying to get, you know, advertising revenue. They're trying to shift the model here to keep those eyeballs. But yeah, it's becoming a game of how do we keep them as opposed to we're innovating, we're ahead of the game. It's a chasing game at this point, the organic growth.
- [31:04]
D
Listen, I thought all the whole way down from last fall until the lows that we saw, I guess in February, I thought there were periods of time where it made sense. That was clearly not the case. But then when the Paramount, Warner Brothers thing got sorted out, the stock Rallied and it should have rallied and I thought the rally would continue.
- [31:20]
M
You.
- [31:20]
D
We're now lower than we were I think back in February at the trough, which is shocking. And now what the market I think is saying is, you know what, the organic growth days are over and now they need to sort of buy growth and they're going to overpay. And I think that's part of the concern, along with the fact that Reed Hastings seemingly out of nowhere stepped down. So I get it. But I still think the stock is way too cheap.
- [31:40]
G
Yeah, I think you'll probably see a Spotify merger. You know, you got a $300 billion market cap, you got 100 billion market cap on the Spotify. You kind of put those together by Spotify. Yeah, I mean it looks like a merger, but like this is company, you know, Netflix has 50% gross margins and you look at Spotify at 33% and you say to yourself, these are both double digit growers. They got good balance sheets here and you take out a lot, a lot of costs. So to me, I think if you see pressure on Tim.
- [32:06]
F
No, I don't want to cut you off.
- [32:08]
G
I think this would have been a lot easier, like five.
- [32:10]
D
Okay, now what is that? What is.
- [32:12]
G
I just got a little.
- [32:13]
D
I mean, that is not fair.
- [32:15]
F
I mean, look, to me, when you say provocative thought, the question is I'm not sure a merger with Spotify is going to help the stock. I mean, I think people would be concerned about that. I, I hear you. It actually makes some sense.
- [32:25]
G
I think it would be a behemoth, I really do. From, you know, if you think about it from a subscriber situation, you could actually really do a bundle and you could take out a lot of costs and it would make some sense. If you think about Spotify pushing into podcast, Netflix is doing that unscripted is really a big part of it.
- [32:40]
F
You know, video, they go together part they go together. But Spotify is not cheap. And my guess is the, you know, they'd be probably overpaying on some kind of a merger. I just think that, look, the, the, the hours per sub numbers were not good. The operating margin dynamic is something that you need to see. And they've, they've been very conservative on this over the last couple of years and they usually tend to beat. I think there's some feeling Jefferies has a note out that talks about also how these bans on social media for under sixteens is something that's net Netflix positive. I think it's, it's a Lot of little things. I don't, I don't actually think there is a big thing here here. I think and again, as we always say, valuation side, a reason to go buy a company. And my guess is if Carter is here or Katie or one of these people that talks charts all the time. It's not a chart people want to go out and buy, but it is a company I would like to go out and buy and I, you know, I would probably start adding to a position here.
- [33:30]
C
Well, Carter is here, okay. He's just not talking about Netflix or Spotify.
- [33:35]
F
Well, you know, maybe ask maybe.
- [33:37]
C
That is a nice, that is a nice easy slide segue. Loved it. Into what we call in the industry 80s love that. Which is a promotion of what's coming up.
- [33:46]
F
I understand.
- [33:47]
C
And that will be Carter Worth, the chart master looking at biotech on Netflix. Squid game in the commercial break. Full return. Tune in to find out. Hopefully it's your time. All right, welcome back to Fast Money Everybody. AbbVie shares up 8%. The company announcing it is going to buy a company called Apogee therapeutics for about $10.9 billion. We'll round that up to 11. That gave the stock by the way its best day since 2020. Although the news I think came out after the market was closed. The biotech M and a race is starting to speed up. And guess what, the chartmaster seeing more upside for the sector. Carter Braxton worth here, not a break down his call on biotech. Carter, you bet.
- [34:39]
R
I mean obviously many ways to look at this. Been a great area of the market year to date, of course past one year. But it's still an area that's playing catch up to itself and to the market on a longer term basis. Let's go to some charts and try to figure it out together. First chart, basically two year chart. Talk about a orderly uptrend. I mean it is north by northeast, higher, higher, ever higher, gently higher. 45 DEGR, 45 degrees. You see the trend line next iteration. It has responded to this trend line to the penny. To the penny. To the penny. What's not to like? And one could say where's the lagging part? It looks great. If we look at this same chart and look at it longer term, the same annotations, this tells the tale. Biotech peaked in February of 2021 some five plus years ago. And so it's really still playing catch up with itself. And then of course to the market. So next chart, the price objective would be of course that former high. Good day to day good, absolute and relative. And I think there's more to come. Final is a relative performance chart. So this is looking at the xbi, the ETF that captures the theme of biotech relative performance to the SPX. And of course you see that peak in 2021 and we've been down into the right ever since. Since that peak, the S And P is up 90, 92%. Health care as a sector is up 28, 29. Biotech is down 18. But it's bottoming. That relative performance chart has all the elements of a bearish to bullish reversal. So we like it absolute as a catch up and we like it relative to the S and P like it
- [36:20]
C
bearish to bullish reversal. Gaidami, BioTor's point. BioTor tech's been until recently kind of
- [36:26]
D
just completely ignored, totally ignored. And those five very distinct bottoms on that chart, the ETF that he speaks of, I think it's 150 stocks. So you can sort of figure out the weighting of each of them are in the index. Now you can do that. And I think you're going to be right. You can get granular. Their names we talk about Karen's GPCR has had a couple of decent days in a row. And I will continue to say there's going to be more M and A in the space as we get to the second half of the year. So you want to be long biotech in one way shape or form.
- [36:52]
C
All right. Coming up, luxury homes, luxury taxes with the CEO of Sotheby's International Realty Season Store, New York City and other markets. In fact, what a market he calls undervalued. And it's one you may not be thinking about. Philip White will join us right after this. All right. Welcome back. Despite some negative talk, it appears the sky may be the limit for luxury real estate even here in the Big Apple. Well, we're going to have a what they call a pied, a tear tax getting rolled out on Wednesday. Sotheby's International Realty says the luxury market is strong and may get even stronger. Philip White joining us now on set. Philip, good to have you back on.
- [37:35]
K
Thank you so much.
- [37:36]
C
I mean, listen, we're cnbc. So a lot of wealthy people that are on this network that watch this network that are your clients, probably some people I know are predicting doom. You are not?
- [37:47]
K
No. Well, we outperformed the market by 3.3x last year. You know, luxury just continues to do well. A lot of it is the wealthy buyer is insulated from interest Rates and, you know, the stock market has, you know, the S and p is up 80% from 23 to 25. I mean, that's just fueling this market. And it's across the board. It's not even just in the United States, but it's international as well.
- [38:14]
C
I wonder if the goal is to get people to establish the residenc here. I understand we have a New York City tax. Taxes are high in the state. And I get that you had a tear. Taxes hit for people that have second homes here, third homes, fourth homes, whatever it may be. If this is your primary home, maybe the. Maybe the hit is. Is less. You think people. I know it sounds counterintuitive, Philip. You think people could. I think residency here.
- [38:40]
K
I think it's going to play out a bit. I have heard of that. I've heard of people doing that. That.
- [38:45]
C
Okay, so it's not totally insane. Guy. Domi was giving me a look.
- [38:48]
D
No, I was not.
- [38:49]
C
Brian, when he gives me a look, that means.
- [38:50]
K
But I've only heard a few instances. So it's not across the board. It's not been a big impact to our business at this point.
- [38:57]
D
What is the existential risk, if there is one? Because people were worried about the new mayor was going to collapse real estate. And obviously none of these things happen. And I think what appears to be happening is people say, you know what? I'm not going to wait for prices go down, down, because they don't go down. But there has to be something out there that will scare people.
- [39:15]
K
Yeah, I mean, I think you're right. I mean, I do think, like you said, I mean, I think New York City is undervalued. I mean, you know, and what's flipping a little bit? What's interesting, like last week there were 22 sales. 12 were co ops, over $4 million, 12 were co ops and 10 were condominiums. It's usually the opposite of that.
- [39:36]
L
That.
- [39:36]
K
So I don't know if that.
- [39:39]
C
Those were cash, Philip.
- [39:40]
K
I mean, most of them, you know, I mean, 80%. 80%. 80% of 4 million.
- [39:47]
C
Where's the money coming from?
- [39:48]
K
It's coming from here.
- [39:50]
F
It's coming from the stock market. It's coming from selling another property.
- [39:52]
K
And it's coming from transfer of wealth. There is a, you know, a huge transfer of wealth and that's, you know, from one intergenerational wealth transfer. And it's tax free.
- [40:02]
S
Free.
- [40:02]
F
So what is that demo doing? Where do they want to be? Where are the folks? The, the. Those that have inherited this Maybe they're in their 40s. And what's different about this buyer, either location wise or in terms of really what they're looking for?
- [40:19]
K
I mean, we're seeing them look for, you know, like wellness kind of things. They're looking for longevity there, you know, so they're not. They're looking for the long term. So it's not just an in and out thing. So they have a long term mindset, which is different than what we view, than what we're used to.
- [40:39]
C
Okay. I teased a market outside New York City that you think looks pretty good. And somebody told me what it was. It was in Texas, but it wasn't Dallas and it wasn't Houston. San Antonio.
- [40:52]
K
I mean, San Antonio is a great market. So is Austin. I mean, they, you know, have had expect.
- [40:58]
C
Right. All the tech money that's there. Oracle, San Antonio until recently, I guess, Tim, but San Antonio, why?
- [41:04]
K
I mean, you know, you have a great lifestyle there and I just think, you know, people are attracted to that. The prices are not as high as those other markets you mentioned, so it's more affordable, which could be a driver. And Texas is an attractive state with respect to, you know, state income tax.
- [41:24]
C
What's amazing is that everybody's been predicting doom and gloom for New York City for a long time. And I get it. The mayor and people have their beef with them, I suppose. Man, this city just.
- [41:33]
K
You can't count.
- [41:34]
C
It's the greatest city on earth.
- [41:35]
K
You just can't count it.
- [41:36]
C
The greatest city on earth. Respectfully, to all other cities. I've been all over the world. This is an awesome city.
- [41:41]
K
I mean, it's the most resilient city
- [41:42]
C
in the world, but we've been through a lot.
- [41:44]
K
Yes, exactly.
- [41:46]
C
You know, and I like how he's got the optimism.
- [41:50]
F
Do we have time for more questions?
- [41:51]
C
Sure.
- [41:52]
F
Well, I just don't know. I don't want to, because I'd love to hear about the international buyer who historically was the marginal buyer in essentially places like New York.
- [42:00]
O
Where are they?
- [42:00]
F
Where are the Chinese? Where are the Eastern Europeans? What's going on?
- [42:03]
K
I mean, we do have a big international network and that really has helped us certainly with, you know, some of the higher end condominium sales. You know, we handle the sale of 111 57th Street. It's almost sold out. We saw international buyers there. Not everybody is an international buyer, but we saw them there. We have a new project at 262 Fifth Avenue, which is. Which is a, you know, state of the art building. We're seeing international buyers there. And we're focusing on international buyers because we think that is the profile of the buyer for that.
- [42:35]
C
They're not going to be scared off by this P tax.
- [42:37]
K
No.
- [42:37]
C
If you're that rich, I don't think
- [42:39]
K
you're going to, I mean, you know, it's, you know, a six year thing. So it's not permanent. Right. At least, at least at this point it's not.
- [42:50]
C
You know, it could be Garden State Parkway and Turnpike were supposed to be free once they got paid off.
- [42:55]
K
Yeah. Okay. Good luck with that.
- [42:56]
A
Yeah.
- [42:58]
C
70 years later they took charging. Phillip White, it's really great to have you on though.
- [43:02]
K
Thank you so much.
- [43:03]
C
I like the bullish view, the optimistic view.
- [43:04]
K
Appreciate it.
- [43:05]
C
Thank you very much. All right. All right. Switching gears from real estate semiconductor Cyril Bras. Results are on deck. How options traders are sliding into the semiconductor stock ahead of its first public company earnings. All right, welcome back. Cerebras. Cerebras reporting earnings for the first time tomorrow after going public last month. Month shares of Cerebras are down from their post IPO highs and options traders are sliding into the semi stock ahead of the results. For more on Cerebras here. Apparently I've been mispronouncing the company's name from day one. So you forgive me for just one to highlight that is pronounced Cerebras.
- [43:55]
E
I just looked it up before they hit to make sure. Brian Implied volatility in Cerebras earnings is very high. Options are predicting a 13% after earnings swing for the stock. For perspective, that's an even bigger move than what's currently priced into Micron earnings Wednesday options trading has been muted in Cerebras compared to other AI plays with just under 26,000 contracts traded today for just shy of $30 million with about an even number of calls and puts. But that could certainly change if the stock exceeds its implied move to the upside tomorrow. At least one bull we saw has hope buying just over $290,000 of the 460 strike calls expiring mid October, a trade that needs the stock to more than double to pay off. But that was a notable exception to overall flows. Six of the top 10 trades by volume today were puts. And the most popular contract by dollar amount and volume was the in the money230 strike put that expires on Friday.
- [44:53]
G
Brian yeah, this is one. You know, usually you have companies that come out of the eight and they're going to leave a little something for that first quarter. And if you Just think about how some of these semis are trading. This has a high short interest here, small float, that sort of situation. So we shouldn't take much to get the stock going. But a lot of folks, if you look at just the price action, it looks like it's on its way back to that $185, you know, IPO price. And I think space X and the performance that that has over the next couple of days will probably have a lot to do with that kind of test investor appetite for some of these new issues.
- [45:23]
C
All right, good stuff. The company again.
- [45:26]
F
Name of the company.
- [45:27]
C
You forget Seymour Oliver.
- [45:31]
F
He's got a nice can't wait to
- [45:32]
C
see in Chicago in a couple of days, maybe forever. Oliver Renick, thank you very much. Your final trades. Tim, final trade time.
- [45:42]
F
Brian, great to have you.
- [45:44]
P
Really.
- [45:44]
F
We explored a lot tonight. Chevron, I think exploring real opportunity in the Permian where they already were. I think you stay on the spot.
- [45:50]
H
Courtney Caterpillar, we talked about this earlier, but this really is an energy trade. I think it's something you want to stay in here.
- [45:56]
G
Yeah. Keep an eye on these consumer discretionary. It acted horrible today. My McDonald's closed at an all time low. Not all time.
- [46:03]
C
Okay.
- [46:04]
D
Do you get more handsome over the weekend?
- [46:06]
C
I did. That's hard to. That's why really is true. Benjamin Button, Sullivan Marathon Petroleum. Brian, thank you very much.
- [46:14]
D
Ty, by the way.
- [46:14]
C
And folks, it's thank you very much. Thanks for watching Fast Money Mad Money starts right now.
- [46:19]
S
All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable. But neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy and it should not be relied upon as such. To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer At Etsy, we
- [46:52]
Q
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