← CNBC's "Fast Money"
CNBC's "Fast Money"
AI Ripple Rally Boosts Copper Miners… And The Fed’s Next Move As Rally Rolls On 10/8/25
00:43:32
The AI ripple effect hitting another industry, as Copper miners get a boost. How the data center buildout is lifting those names, and the amount of metal needed to fuel the AI surge. Plus Fed Minutes giving investors more details behind the Central Bank’s rate policy. What to expect at this month’s meeting, and if the record rally on Wall Street can keep running. Fast Money Disclaimer
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A
Live from the NASDAQ market site right here in the heart of New York City's Times Square. This is fast money. Here's what's on tap. A AI ripple effects. Demand from data centers been sending copper prices soaring and the miners are the big beneficiaries that trade today. How much higher can these names run? Gold price hitting their 44th record of the year. But the chartmaster says going gains could be about to go dull. All plus Eli Lilly gaining ground hitting more than 5 months highs. We are getting ready to kick off earnings season with two big names reporting tomorrow. And Zeta Global CEO David Steinberg will join us straight from his company's investor day. The big trends he is seeing how he is looking to shake up the ad business using AI. Hi everybody, I am Brian Sullivan and once again from Melissa Lee. Coming to you live from Studio B at the NASDAQ market site. On your desk tonight, Steve Grasso, Karen Feynman, Byrne1isoN and Gaia Dami everybody welcome.
- [02:05]
C
Oh Brian.
- [02:06]
A
Hello Brian. All right, let's start out with the markets and your money. The NASDAQ and S& P, you guessed it, closing at new record highs today if you are keeping score and your money certainly is. The NASDAQ now up nearly 20% this year. It's been a heck of a run and we're going to have more on the macro in moments. But let us start with with a slightly different, less talked about groove that's maybe getting an air adjacent lift and that guy Dami.
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C
Yes sir.
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A
Copper, copper prices rising again. Demand from data centers, electricity pushing the need for copper wiring, all that helping the miners, you know the ones that take this stuff out of the ground. Case in point, Freeport McMoRan jumping more than 5%. Southern Copper closing Also at a record. And take a listen to what BHP CEO Mike Henry had to say about future growth.
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C
All of these data centers are very copper intensive. And so on the demand side of the equation you've got the traditional drivers of growth, population growth, overall growth in the economy. But you add to that the energy transition data centers and we're seeing a compounding of copper demand growth. So we're expecting demand to grow by up to 70% by 2050.
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A
So Guy Dami.
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C
Yes sir.
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A
Can will the trade continue to push demand for the copper miners?
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C
Well, it's not just AI and copper, but yes. Steve talked about this a couple of weeks ago. Tim has been talking about it for a while. Freeport should actually be a lot higher. I think copper prices are up. What, what's today?
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D
October.
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E
What?
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F
8Th.
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C
12% already this month, I think up 27% for the year. Back above $5 a pound. Yeah, copper is going higher. Now we can talk about whether it's inflationary or not. It's probably the most important commodity not named crude oil. But things are moving up now how that moves the needle in terms of what the Fed's doing and inflation is anybody's guess. But I'll tell you, names like Freeport, which is still too cheap in southern copper, I think are going higher.
- [04:03]
A
The weird thing Steve, is I'm trying to figure out what changed here because the demand story is not new, the electricity demand story is not new. And it's like the market suddenly kind of woke up and realized that demand for copper was going to go up. Where's the market been? Right. So you had tariffs. You have that headline back in August 1st. Not, not the original tariff day, the, the one with copper, the one with more commodities. But think about this data centers, originally a data center. What do you think a data center for AI uses in copper more than. Originally a data center uses three to ten times the amount of copper. Wow. So I think people thought it was a copper play. They didn't realize to what magnit skewed. A copper play is plus that mine with FCX, that's 3% of the supply globally. Just the one mine. So you have demand going through the roof, you have supply going, going to the basement. Those two things are a recipe for higher prices. It can go on longer than people think because it's taken a while to get the trade going. Karen, are you a fan of Freeport, Mac Brown, BHP or others?
- [05:12]
B
Well, the Freeport thing, sort of interesting. 3% is offline. It is their 3% which obviously you know, but so I understand though, the supply dynamic shrinking and of course prices. I'm wondering, Steve, you might have an answer to this. We've seen a bunch of these investments by the government in, you know, whether it's magnets, MP or lithium, whatever. Why would Freeport be a potential target for the US government?
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A
Yeah, and that's why I've held on to my position because I think eventually there is to be some sort of a government stake within it because it is a 70 to 75% of Freeport's revenue is from copper. 30, 25, 25 to 30% is from gold. So you get both the things that are, that are very strong. I think the government is going to look at them as a strategic stake. That's. I know nothing. That's what I think, that's why I'm staying in there.
- [06:08]
D
But it's on trend and I think Freeport gets a lot of the attention right now. But there are other players in the space for sure. BHP Rio to boot. I think bhp, you're talking about kind of like the revenue segmentation. If you look at EBITDA, BHP, it's like 45% of the EBITDA is driven from copper. And then if you take Rio, if you want to kind of play the catch up trade, which we're starting to see, that's really why this rally is sustained and had legs because there has been this catch up type of mechanism there. So if you want to play, you know, it's a higher beta play, a riskier play, but it's also a restructuring and post litigation play. Rio actually looks pretty interesting there. I think it's kind of flying under the radar. It's not getting the attention. Clearly FCX is probably like your highest leverage play to copper and clearly that's going to drive the headline risk. But if you're looking for another way to play it, I would look at those other two.
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A
Well, I want to go back grass. I loved your hot take about the potential. And you're not saying there will be. We're speculating, we're having fun here. But the idea that the copper from Freeport Mac Brands mines are strategically important, it's a national security issue. Like we saw the equity stake in intel, like we've heard about from some other metals, some by the way, incorrectly. I want to point that out because Southern Copper, a lot of people don't realize this. It's a Phoenix, Arizona company, but it's ostensibly a Peruvian company, it's in Peru. They've got a mine In Mexico as well. The technical headquarters are in Arizona. My point is you've got foreign government risk with some of the big competitors to fcx. Yeah. So that, that leads you to believe that eventually they would, I think Howard Lutkin, that's his name, right, Nick. Let's see. That's why I checked it, because it felt wrong when it came out of my mouth.
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E
So.
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A
So Barry, this is what I'm saying. So I think when you, when you look at this, he said it's on brand, Bonoit said it's on brand. I think it really. The stars do align for a government stake. I would think that Freeport would be the one. To your point that they would do.
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C
It in no idea what the government's going to do. I mean they're picking winners and losers all over the place. You mentioned Southern Copper. You're right to mention the fact that although domiciled here, it's really not a U.S. company. But you want to see the difference? Pull up a longer term SCCO chart and look at it against what Freeport has done. I mean this has been lower left, upper right and it's made itself almost $110 billion company seemingly over the last couple of weeks. So the copper story is not going away anytime soon. Again we've pointed out the national security risks around copper having these industrial metals and a lot of people listen. It's a land grab for a lot of different things. The Chinese have been way ahead on this one. We're starting to catch up at these stocks should go higher.
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A
But I love your scco for the uninitiated is Southern Copper and to your point, a five year chart, 32 to 100.
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C
Yes sir.
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A
And 32. But a company that's super quiet. I've reached out to them, haven't heard. By the way, Southern Copper, you're out there. Come on cbc any time, we'll talk about it. Kind of a quiet company. All it's done is print money.
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C
Mm. And, and I think, listen, valuation might be getting a little stretched here but I think what the market is saying, you know what, valuation be damned, especially in names like this. I mean look, finally you have participation in the gold miners for the first time in a very long time. And I think in terms of these copper stocks, and we mentioned three of them, I don't think this is just the beginning, but I think we're definitely in the early innings of what I think is going to be a continued move higher.
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A
Let's stay on the metal, let's stay on the digging stuff out of the ground for money theme and turn to gold. Gold settling at a record the 44th time this year. Ate the hardware guy now solidly above the 4000 level. The Chartmaster Carter worth calling for a breakout for gold back in July. Great call. Except now he says this precious metal might be a little bit too precious. Carter Wirth of Worth Charting joining us now. It was a great call, Carter. Congrats to you anyone who listened to you. Now what do you see? Well, for starters, very kind. I got duds around the world, but so far so good. Good call. But now what? Right? Only as good as your last trade. Gold. This is the setup, right? Gold converging trend lines worked into that symmetrical triangle. And then of course, if you look at the next chart, we have this massive breakout since July. So the pattern is resolved. Now there's something known as a measured move. And while it doesn't have to be as precise as this, it's a good price objective for when a pattern has concluded or taken place. So what that is, let's look at the third chart. Here is you take the width of the range from the low and high point of that triangle and then you project that higher and the width of that range is about $550 an ounce. And that gets us to final chart almost exactly where we are today. So today's recommendation to clients was simply, hey, book some profits, take some off. And I would point out, of course, Brian, as you know, it's on the COVID of every magazine, literally the so called magazine indicator, every article from the Wall Street Journal to New York Times, it goes on. It is as loved now as it was abhorred or hated two, three years ago. Is this really, Carter, you think like the debasement of the dollar type trade or is there something else going on here? Well, you know, there are gold bugs that make living believing in gold or don't make a living. And some believe gold goes higher because of inflation, some deflation. But the debasement story has always been there, 20, 30, 40 years. And so while it's a new moniker, it's not a new moniker, it's an old moniker. Debasement of currency, fiat currency and so forth. I'm not really in the why business, right. I'm in the what business, as you know. And we. What I see is just too steep, uncorrected, unsustainable guy, you are in the Y business. In fact, I try to be in the wide in your name.
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C
Yes, there is. There's no Y. And Brian no, you could name it.
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A
Those are incorrect. Those were misspelled. Brian's.
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C
Well, now, you know what, that's, that's unfortunate because there are many Brian's with a Y that are watching right now. Hello, Brian with the Y. I'll say this, it's not just retail that's driving this, it's central banks. And it's been going on for the last now four and a half years. Almost five China at the head of the class. But they're buying record amounts seemingly every year. Why? Well, it's the debasement trade. The dollar is having its worst year in 50 years. That's part of it. But I also think they're hedging the inevitable, the things that they created. They're sort of hedging against their ineptitude. So I think Carter's probably right. Gold RSI and monthly levels above 90 for the first time in history, which means it's ridiculously overbought. Gold will sell off, though, on the back of a market sell off. We've seen it before. So if we were to see a dramatic sell off in the equity market, gold will not be spared.
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A
Buy one.
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D
Yeah, and I think that's the concern because I think gold is actually being used as a hedge to kind of give people a bit of safety as this market continues to expand, we continue to see PE expansion, we continue to see this rally continue with legs. And so I get it, like, I like the trade right now out of gold into more industrial metals because one, you have the supply demand shocks, but two, you actually have this industrial use. And if this data center theme is to continue, then you really have a use case there. I wouldn't get too far away from gold though, and I would look at some of the miners because I do think there are still looming macroeconomic risk and I do think that is the safest way to play that. I mean, the alternative that you might look at is like a bitcoin. But I think historically and in terms of the allocations that one is able to make, depending on what your mandate is, you know, you're going to probably have some gold allocation within that.
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A
Because I'm old enough to remember last night where Karen Feinerman said I, gold's fine, but I would much rather own bitcoin.
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B
Right. I mean it's all, all the macro story part of the same. Right. Debasement of the currency and, you know, inflation that's going to go along with our deficits, all kinds of things. But also the digital gold aspect of it.
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A
Right.
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B
The new generation of investors that this is not their father's gold, this is digital gold. And then on top of that layer in, you know, this administration, we've never seen an administration so crypto friendly. And so it sort of opened the floodgates of institutional investors and others. And so I'm in bitcoin, not gold.
- [14:18]
A
You have bitcoin when you can't even compare the performance in bitcoin to gold. Bitcoin eclipses gold's performance. And now the same people that have been buying gold will wind up buying cryptocurrencies. But if you go back from 1914 to now, the purchasing power of the US dollar is down 97%. Are we going to print more money or less money going? You could buy the median priced house with a bar of gold in the early 1970s and right now you can buy a median priced house with a bar of gold. The value of gold hasn't changed, it's gone up, but it hasn't been debased like the US dollar. That's correct. And when you look at all the reasons that guy said why central banks are going to diversify away geopolitical printing money and if rates are coming down, the cost of carry on gold is actually less than it was. So I agree with Carter. Maybe you take some profits off the table, but I think ultimately gold goes back to that number, to the number $5,000. $5,000. I like it. Steve Grassell, thank you. All right, Carter Worth, thank you very much. Meantime, another beneficiary of the infrastructure boom. Power companies, they moved higher. Qantas Services, they make power lines. Constellation, they make power. Vistra, ge, Vernova, nrg, Steve Grass are some of today's big winners. They're all kind of different to my point, but the world is waking up to what I know. Somebody's been talking about this for a few years. This demand for power trade is not you, isn't going away anytime soon. I agree. And you could throw a dart at that board and any one of them are going to be recipient of more revenues. So we need more copper, we need more power. Everything that we're doing here and with crypto and with AI is going to need more power. All those companies should in theory trade. But I will, I will warn people, not that it's my job to warn anybody, but I'm going to warn them.
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C
Through say public service announcement.
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A
It's one to grow on, as they would say, to see exactly all those companies put the board back up. They're not created the same Some of them have contracted energy out to utilities that's regulated so you can't raise prices too much. It's a board. Some of them you could sell to the highest bidder. That's where all this alpha sort of is coming from. But at some point, I think Guy, there will be a breaking point where areas, people, even data centers might say there is a limit to what we can pay for power.
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C
We're not there. I mean, we're not there yet. I mean, you've brought up a number of times how inflationary this is and how energy costs are just going to go up. Well, utility costs are going to go up across the board in this country for people. And that's happening right before our eyes. You're right. Your point is well taken in terms of not all these companies are equal. Tim Seymour talks about it. Look at Constellation Energy. Look at the move that it's had today and the recent move. I mean, these companies are levered to exactly what you're talking about. And despite the fact that they seem rich, I think a CG you can still own here as well.
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A
Cg, Constellation Energy, preview of your final pick.
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C
No, we don't do that here, Brian. Because if I were to say that now, what good is that? And people might say, you know what, I got to watch the rest of the show for.
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A
Anybody remember?
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C
And I might not remember at my.
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A
Age, 45 minutes away. Remember what exactly? Coming up, all the headlines from CNBC's big interview with Nvidia CEO Jensen Huang right here in this building. What he had to say about AI demand and what he was surprised by in AMD's recent big deal with open air plus packing on the pounds, why Wall street sees gains ahead for Eli Lilly and how the weight loss drug maker can tip the scales. Don't go anywhere. Fast money back into this ad is only 15 seconds. In that amount of time, there are likely to be an average of over.
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15,000 cyber threats to all business.
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You confident that you could do something that hadn't been done before? I have no fear of failure. Trailblazing women, Changing the game One of.
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My favorite pieces of advice Think about.
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What your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish big things. Julia Boorstin hosts CNBC Changemakers and Power Players New episodes every Tuesday, wherever you get your podcasts.
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A
Nvidia CEO Jensen Huang joining the Squawk Box crew this morning, weighing in on all things AI, including surging demand and why he was surprised a bit by AMD's recent deal with OpenAI. Christina Parts and Evolves Joining us now with more on what we learned, Christina.
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B
Well, we know this is the most valuable company in the world, becoming the industry's preferred lender. The company plans to invest $2 billion in Elon Musk's X. AI is part of a $20 billion funding round. 12.5 billion will be raised as debt through a special purpose vehicle that's important that buys Nvidia processors. That's according to Bloomberg, which then rents out for another five years. Nvidia CEO told CNBC about the importance of investing in the ecosystem to listen.
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The only regret I have about Xi.
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We'Re an investor already.
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D
The only regret I have is I.
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Didn'T give him more money. We've made some really terrific investments and and largely my only regret is that we didn't invest more.
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B
And that confidence you can see is backed by some serious capital. Between $100 billion commitment to OpenAI, a $6.3 billion cloud service purchase from Core, we've where it already holds a 7% stake and venture bets on over 100 at least AI startups. Nvidia has amassed over $100 billion in exposure across the ENT ecosystem, but there is somewhat of a pattern we talked about on cnbc. In the Core deal alone, Nvidia plays the role of supplier of chips, equity investor, financier and customer with Xai Nvidia is again both investor and supplier, although Nvidia spokespersons, and they've said this in the past, have said that the companies they invest in are not required to buy Nvidia chips. The question is no longer whether Nvidia dominates AI hardware, it's whether the company is using its huge cash hoard to prop up demand for its own products, especially in the near term.
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A
Is it.
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B
It's a question I would leave for our investors.
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C
She's a journalist. She's not going to answer that.
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A
I was asking you. I was looking right at her. Yeah, but it doesn't matter. Yeah, I was looking at it, but I was talking to you, just looking at her.
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C
I mean, of course that's part of the game. I mean, let's listen. There's nothing illegal what they're doing. I want to be financing whatever you call vendor finance around a long time. But a lot of, if you go to Twitter to the extent that anybody looks at anymore, there's a lot of these Venn diagrams or whatever you want to call it out there showing the circular nature of exactly what Christina just described. So it works, I guess, until it sort of doesn't work. And there are a lot of other people now out there talking about the return on invested capital one needs to get on the amount of money being spent on this capex stuff. And it's an astronomical number. Now everybody's geeked up because the capex is there and I get it. But if you were to see a slowdown, which is inevitable, capex will get cut and this whole sort of built, this system that's been built on each other starts to sort of fade away, I think.
- [22:30]
A
And what phase do they do? So if it's not illegal, which it's not, what phase does this normally happen in business? It's usually when you're a little over your skis and extended. And if you think about it, the chips business was always a commodity based business. It was always a boom, bust business. So when do we get the bust? So I think I extended that. But it seems to me that Nvidia is sort of extending their own lifespan. Here's the bottom line is that Christina, tell me right or wrong. OpenAI makes not a lot of money. About 12 billion annual reoccurring revenue. They revenue, just revenue. They lose tens of billions. I mean, the company is losing billions of dollars every week, every month, whatever it might be.
- [23:14]
B
11 billion is what the information was saying for just this year.
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A
For just this year. So the company loses huge money because they're building out in video. To your point there, the banker, they have the money they have. Do we know at which point open I might start to make some of that money back.
- [23:32]
B
If we knew that then we could just price out this entire market and determine to guys point when this bust will come or you know, just keep riding high.
- [23:40]
A
Is that the whole point of the show?
- [23:41]
B
The whole point too is we have to reiterate. It takes several. It takes a while to build out this air infrastructure. Especially here in the United States. If we talk about immigration and how that has changed the game when we're talking about workers, you bring up power all the time. So I think that the question for a lot of these stocks is how long is every investors patience? Because yes, we're going to see a lot of buying in this next earnings cycle. Why? Because most of These deals with AMD are coming out in the second half of 2026, the opening eye. So that's going to be helping the next year or the next four to five quarters. But then what happens after that?
- [24:14]
A
Well the pace, your point bottle and I don't know, you might know is the pace sustainable because as we talked about a little bit last night, how much of this is 10 years of earnings and investment being pulled forward to now? Like right now we're buying 10 years, 20 years of earnings in revenue. 20, maybe none.
- [24:39]
D
20 scenes on the long end. I mean the truth of the matter is like nobody knows. Otherwise it would just be like a math problem, right? You would have a close in form, you'd have a solution and you could go on about your business. What I will say is what gives me some confidence is that if you look back to 99, 2000 we were talking about this type of, well not this type of investment but substantial investment being made in pre revenue companies. And I would argue that Nvidia would be highly criticized if they stood pat and did nothing. They're in a position where they can widen out their customer base. How many times have we said look at the customer concentration. It's only the hyperscalers and they know that we know that they're going to come out and compete now they're expanding that target addressable market, they're increasing that target addressable market. So for me it makes sense if you're in a position where you can do it and you know you're kind of taking a really, you're helping these companies I would argue particularly in the, in the, in the leasing because now they don't have the capex spend, they don't have the depreciation. They're able to kind of operate a much more cost efficient method.
- [25:40]
A
So General Motors helping car companies build roads or build it, right? In a way, yeah. You can't sell a car if there's no road. So you help the help the road build.
- [25:48]
B
Risk is being pushed off to the neo clouds that are renting out the GPUs. Nvidia doesn't have to do it. They're relying on others to do so. And the same thing with Micro, Microsoft.
- [25:55]
D
And Nebulous I think if you have a five or ten year lease, clearly you have that situation locked in. And the person who, who holds that obsolete risk is the, is the lease.
- [26:04]
B
So then you are concerned about neoclouds then?
- [26:06]
D
More so than in video for certain. For sure.
- [26:10]
A
Okay, sounds like we have a discussion built for another Night Neil movie when.
- [26:15]
C
Paul Newman was building the road. That's a great cool hand Luke.
- [26:18]
A
That scene that is now Steve, you don't even care. You could have went NeoCloud or Paul Newman. We're bringing in the NeoClouds into the show. Christina, thank you very much.
- [26:27]
B
Obscure references, I don't know. Sorry. I know our viewers are going to be like, how dare she say that.
- [26:32]
A
It's actually one of the 10 or 20 most popular movies ever made. There is a lot more fast money to come. Here's what's coming up next as Christina watches YouTube in the commercial break.
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E
A weight loss drug maker gaining some weight.
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A
We dive into the continued move in.
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E
Eli Lilly shares and how much higher it has to go. And speaking of rallies, stocks trading near record highs. But can the moves keep coming? How today's Fed minutes impacted stocks and what it says about the central bank's next rate decision. You're watching Fast Money live from the NASDAQ market site in Times Square. We're back right after this.
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What made you confident that you could do something that hadn't been done before? I have no fear of failure. Trailblazing women, changing the game.
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One of my favorite pieces of advice.
- [27:26]
B
Think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just got to think big to accomplish big things. Julia Boorstin hosts CNBC Changemakers and power players. New episodes every Tuesday, wherever you get your podcasts.
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All right.
- [27:48]
A
Welcome back to Fast Money. Now to our call of the day. Guggenheim boosting its price target on eli Lilly to $948 a share from 875. That is more than 12% upside from today's close. Shares of Lilly up more than 16% since President Trump unveiled plans to lower U.S. drug prices last Tuesday. Anybody with a take on Lilly?
- [28:13]
B
Well, I'm Long Lilly.
- [28:14]
A
That's your take.
- [28:15]
B
I'm long Novo. I think Lilly is expensive, but it's worth it. You know, this was an interesting piece. It talked about higher average selling prices and more volume and, you know, strong U.S. numbers. So it's not inexpensive for sure. But I do think we'll continue to see very good growth here. But also I've been adding to Novo, which is, you know, the poor man's Lilly. And I think that the valuation differential is gigantic, as it should be. But I think that makes Novo an interesting.
- [28:47]
A
So we just talked now about Novo and Lilly for their weight loss drugs. They do a lot of other stuff. Novo Nordisk had a lot of stuff done related to diabetes and blood work. Lilly had an entire company, believe it or not, before weight loss drugs came around. I feel like do those drugs, do those revenue streams get the yes, investor love they deserve?
- [29:08]
C
Well, I mean we can back it out. I mean if you look at Eli Lilly, which is probably Karen has this in front of her 26 times next year's numbers, it's, you know, trading more than double the valuation of a Bristol, probably close to three times the valuation of a Bristol Myers and a Merck. So if you would just have those businesses, that's what it'd be valued at. But you're getting the basically two, three standard deviations on the back of GOP one. I'm with Karen on Novo. I also think there's going to be a huge valuation catch up trade in the Merck's and the and the Bristol Myers of the world.
- [29:41]
B
Agree with that completely.
- [29:42]
C
So I answered your question.
- [29:44]
A
Thank you. Coming up, what today Fed minute why suggest is next for the central bank and how it's going to impact the markets. And you're in your next guest. We'll break it all down fast money back into. Welcome back. Stocks bouncing back after snapping their win streak yesterday. We're up seven days in a row. Coming into yesterday we're down but today up again. In fact, the NASDAQ up more than 1%. The Dow unchanged. Who cares. The NASDAQ up 1.1%. Utility industrial sectors also notching all time highs. And speaking of industrials, shares of Caterpillar jumping more than 3% today. That comes as President Trump reportedly weighs a $10 billion aid package for U.S. farmers impacted by tariffs. Cat stock now up more than well almost 40% this year. Shares of Dell also surging today. Company raising its long term revenue and profit from forecast yesterday. Dell saying it's capitalizing on quote the unprecedented pace of change in technology perhaps or particularly in you might guess, say with me guys, I thank you. Meantime, the Fed minutes out today reflecting division a little bit over the direction of rates. A slim majority of Fed governors expecting two more cuts this year but the central bank overall currently dealing with with a darth of data. Darth. Darth.
- [31:13]
C
Darth. Darth.
- [31:13]
A
Darth Vader.
- [31:15]
C
Darth.
- [31:15]
A
Thanks to the government shutdown. I mean seriously, the September jobs report.
- [31:19]
C
Darth of. I mean you're. Don't give me the daggers.
- [31:25]
A
It's dearth.
- [31:26]
C
Yes it is.
- [31:27]
A
That's it. Darth is from the movie. Is he Ludwig or whatever you've seen earlier. It's like my 40th hour of TV this week riding around. Ben Emmons, thank you. Coming on the program, you turn the proper off. Let's have a good time. Ben, anything in the Fed minutes that makes you think about change the way you think about these markets?
- [31:51]
F
Well you actually said it Brian, this slim majority. So there's a group there that wanted to keep rates on hold, even voting for it to make the case. I thought that was notable. That wasn't I think exactly out there the last time when we had the statement or in the press conference, you know, a little tick up in the 10 year yield that's sitting right at a 550 day moving average and kind of watching that because if this Fed turns a bit more cautious either because they don't have a dearth of data, right. Or there's just this uncertainty.
- [32:19]
A
The Dutch guy's making fun of my English. You know, how about, how about this words I've never used before. The amazing thing about the bond market is and I've never, never started a sentence with that. But, but I two guys, to quote Guy Tommy. But I will say that the 10 year yield hasn't done anything for about a year and a half. It's unbelievable. It's exactly where it was like 18 months ago.
- [32:44]
C
Why?
- [32:46]
F
I guess it's more like in trading as you say in a wedge, right? Lower highs, higher lows, waiting for some kind of a breakout that we really get confirmation that this is going to be a big burst of next inflation or we're going to go the other way, we're going to go down south with the economy. That's why I think it's sideways with a fact that ratchet up high rates initially but then when very careful with rate cuts and no surprise from the Fed really in between. I think that explains mostly.
- [33:14]
C
All right, so let's go to Japan for a second because the yen has been weakening at an alarming clip over the last couple of weeks for a myriad of different reasons. And JGBS yields have been going higher. So there's some relationship problem there that at some point makes its way into our bond market. And there are equity markets speak to that.
- [33:32]
F
Yeah, it remains that issue guys like the 40 year JGB yield is kind of sort of in the man no man's land. It does have correlation with our 30 year. And if you take our 30 year and you take the UK and Australia and all the others, it's kind of an unrelenting trend. Just keep trending higher with this JGB market being under pressure because the bank of Japan has to raise rates because inflation is too high. But we're getting a different political climate now that says maybe you should not hike rates here because you know, not good for the economy. That's I think the tension in the yen currently and that's why yields go higher.
- [34:07]
B
Let's talk about the Fed's balance sheet. How do you think this plays out?
- [34:12]
F
So last time I was on we talked with Steve about like we thought that maybe they would stop the cut, the quantitative tightening program. Interesting. In his minutes. They just want to continue with that. But we are at a level of reserves that's I think a critical level just below 3 trillion. Silicon Valley bank crisis, when that happened, there was sort of the same level of reserves at that time. So there's something about this tightening in the system that's building that could affect the banking system if you have too low reserves. I do think they're getting to a level of reserves where they're going to have to start really thinking about putting an end to that program.
- [34:46]
A
Jerome Powell has a couple of meetings left. We know he's, you know, lame duck for the most part. Whoever comes in, we know they're going to be super dovish about rates. Will the market care? Will that help the stock market?
- [35:01]
F
I think at the margin it would be because if you have this with the sort of ministry, this caution that becomes say more hawkish tone that would be not good for the stock market. So I think leaning more dovish overall probably is at the margin. But it's about the economy ultimately, right. It's like is that the right direction here to drive the economy higher. If we're getting faster rate cuts, I think yields are going to go again higher from here. Reflecting that you're pushing a lot of stimulus back into the economy. With the stock market record highs, it.
- [35:30]
A
Feels like the economy is AI and kind of everything else. Ben Emmons, Gressel, what do you make of the Fed minutes or the Fed right now? Yeah, so what I think is odd is that the market continues to make record highs with all of this stuff. That sounds sort of in a gray area. The market doesn't know if the Fed's going to be on a rate cutting cycle or a rate watching cycle. Yet the market keeps making new highs. Does the market, because it doesn't maybe doesn't care about, I mean I hate to say it. Does the market care about the Fed? Well, the market probably has has already. It's a decay value on Powell. They know Powell is going to be replaced. So they know that lower rates are coming whether you like it or not. Also, you said that the 10 year hasn't done anything. I know you didn't mean that because the 10 year has gone from 334 all the way up to 5 and then somewhere 334 it was there for like one week in April during the tariff pay. It had a brief blip but it's been stuck at 54142 for but it was at 5. So the market, I think that's why the market is actually rallying because the market wasn't sent a shock signal that longer term rates are not spiking. And I think as long as they stay low, the market goes higher. Well, I mean everything I say, including what you said earlier, it's called, it's pronounced myriad of reasons, not mirrored. I didn't say you said it's a myriad of reasons.
- [36:50]
C
I said, I said which is like.
- [36:52]
A
A town in Lord of the Rings. What that is red flag playback. Thank you very much. Reasons why I'm mad about marketing without a myriad of AI reasons. Coming up, the CIA of CEO of ad tech firms at a global joining us to lay out his company and how they are implementing AI tools into the space. David Steinberg, your guest coming up Next. Stick around.
- [37:20]
E
December 11 Join Melissa Lee and the team of traders in New York City for an all access celebration. Live and on air. Fast Money Live trading the holidays. Get your tickets now@cnbc events.com fastmoney.
- [37:42]
A
Snazzy graphic. All right. Welcome back to Fast Money everybody. As companies try to figure out how to incorporate AI, your next guest says the ones that, say, will succeed are those using AI as a business tool. Zeta Global is an AI marketing cloud company, has integrated AI natively into its marketing platform. CEO David Steinberg joining us now. That just came out with earnings. He had good numbers. You also did your biggest deal ever. David, good to see you again.
- [38:06]
E
Good to see you, Brian.
- [38:07]
A
All right, so you're actually in the mix. So tell us how AI impacts a business like Zeta Global. What do you, what do you use it for?
- [38:15]
E
Well, first we started programming in artificial intelligence in 2017. So most companies have been doing it for seven or eight months. We've been doing it for seven or eight years. Really what AI allows organizations to do is process information faster and get to intelligence faster when used properly. And at Zeta, we're ingesting trillions of signals about individuals and then using artificial intelligence to synthesize. What do they intend to do next? Are they going to buy a new credit card, A new car? Are they going to turn off a wireless platform? And our technology helps very large enterprises to more cost efficiently manage their marketing and CRM.
- [38:58]
A
Is it possible to quantify what AI and those tools you just talked about, David, mean for your bottom and top line?
- [39:04]
E
For every dollar a enterprise client spends using our AI and software, we return 5 to $7 in revenue today. Our goal is to continue to evolve it. We made a very large deal last week. We bought Marigold's enterprise business and part of that was a big loyalty platform. So we're now going to be able to ingest SKU level data. What are people buying down to the item to train our algorithms. And our goal at Zeta, Even though at 5 to $7 return for every dollar that's spent through us is 100% higher than our next closest competitor, we want to get to a $10 return using our data and our artificial intelligence to more efficiently run things.
- [39:47]
C
David, $325 million acquisition you're not getting credit for. I don't think in terms of the stock. In an environment where nobody has clarity in terms of what's going to happen next week, you're giving numbers out to 2030. So explain how that's possible.
- [40:02]
E
So we have been public now for 17, 16 quarters. We've been public 17. We reported 16. So I'll be careful here. For 16 quarters in a row, we have beaten our guidance and raised our guidance. One of the things I like to talk about is if you look at publicly traded companies, right, There are about 512 publicly traded technology companies today. Eight of us have grown on an Organic compounded growth rate of greater than 20% over four years while simultaneously adding to operating margin every year. The other seven trade at greater than 50 times EBITDA. We obviously do not.
- [40:41]
A
Why are you better than your next largest competitor? So what is it that you're doing differently and how do you maintain that moat?
- [40:48]
E
That's a great question. First, we own. You're welcome. We own one of the world's largest data clouds. None of our competitors have first party data. They're using third party data. Second, in 2017, we made the decision to throw out our then legacy marketing platform and re architect an entirely new technology. We launched it in 2021. It's called the Zeta marketing platform. Obviously we've got great naming capabilities and when you think about it, we were able to put artificial intelligence and data as core to the application layer of the platform. Why is that important? Our competitors have a marketing cloud. You step out of the marketing cloud to do a query, the query then does a data dip into a data repository, goes back to the algorithm, and then applies the intelligence. That latency destroys return on investment. We can make the same or better decision in a millisecond on behalf of our clients, which allows us to create substantially better return on investment.
- [41:51]
B
So it seems like you have a lot of media companies as your customers.
- [41:55]
E
We have 567 global enterprise clients, including 44% of the Fortune 100.
- [42:02]
B
So that would you say there's media concentration? How do you see that evolving?
- [42:07]
E
So our largest vertical is retail, makes up about 17% of our revenue. We have 15 different verticals. None of which makes up a real concentration issue. We don't have a lot of media companies. We partner with a lot of media companies. Now we did buy a company called Live Intent a year ago, which is the preeminent platform for helping media and publishing platforms to monetize. So that might be what you're referring to. So we have a lot of media customers. With the purchase of Marigold, we picked up four different major assets, one of which is called Sail through, which is the preeminent messaging platform for publishers. We already own Live Intent and we own Discuss, the world's largest commenting platform. We're combining that into what we're calling our publisher cloud because what we're seeing today is in a post Gemini and OpenAI World, the vast majority of queries that are going on on Google, by way of example, they all used to go to publishers to get answers. Today they're answering the vast majority of those questions on platform. So we have A business that helps publishers to drive traffic and monetize which we think is going to be very important in a post open air in Gemini.
- [43:23]
A
Well Guy Guy said earlier you weren't getting much love. I will Your stocks up 5% in the after hours because of you guys.
- [43:31]
E
So thank you.
- [43:32]
A
That guy David Steinberg, thank you very much. Coming up, it is that time again. The names gearing up to kick off earnings season. What our traders expect out of tomorrow's reports are back right after this. It is October 8th. We are on the eve of third quarter earnings season with Delta, Pepsi, Levi's all set to report tomorrow. Investors largely keyed in any comments on the impact of the partial government shutdown tariffs, consumer and much more. So Bono and what are you watching in tomorrow's numbers?
- [44:09]
D
Probably watching Delta. I think Tim has mentioned that these are the greatest trading vehicles. I think that that pretty much holds true. Looking at fuel costs, I'm actually looking at the international segment and the business and first class versus the back of the plan. I really want to see that revenue segmentation and get an understanding there.
- [44:27]
A
Do you care about Pepsi at all? Levi? Sure.
- [44:29]
D
I mean not so much Levi's. So Pepsi. I'll focus there. I really want to understand the consumer segmentation as well and margins. Is there going to be continued shrinkflation? Are you going to continue to see customers flock to that brand?
- [44:44]
B
I'm sort of concerned about GLP1 impact for Pepsi given you know how big that snack business is. That's why I'm long.
- [44:52]
A
Lilly long Lily. Good for Levi's though because if your body shape changes, you need new clothes.
- [44:59]
C
As you're speaking from experience.
- [45:01]
A
Up next. Yeah, I bought your final trades AKA final picks. All right, final trade time. Grass. I'm gonna finish where we started. I'm gonna go with fcx. We talked about Copper. I'm long it. I'm staying long. And who knows, maybe Lutnick announces something. There you go. Karen or Ludwig.
- [45:27]
B
All this talk about GLP ones. No, I'm not going toward Lily, which I do own. But also I am going toward Novo in vo.
- [45:34]
A
Like it here.
- [45:35]
D
I think if Agri Leaf does indeed materialize that Deere will be a benefactor.
- [45:40]
A
John Deere.
- [45:40]
C
Brian, we love you which is why we have so much fun with you and we've enjoyed your company.
- [45:45]
A
Which Brian Sullivan. Why?
- [45:47]
C
Or I with a Y. You should change it. No, by the way, for a murder of different reasons. Zeta Global.
- [45:56]
A
No, I like that Stein Hamburg already left. Thank you very much. Appreciate everybody. Thank you very much. For watching Fast Money Mad Money starts right now.
- [46:05]
B
All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their 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 what made you confident that you could do something that hadn't been done before? I have no fear of failure. Trailblazing women, Changing the game One of.
- [46:54]
A
My favorite pieces of advice?
- [46:56]
B
Think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish big things. Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday. Wherever you get your podcasts.