← CNBC's "Fast Money"
CNBC's "Fast Money"
Alphabet And Tesla Report… And Tariff News Causing Global Market Moves 7/23/25
00:43:38
Alphabet and Tesla kick off earnings season for the Mag-7, and Deepwater’s Gene Munster is weighing in on the tech results. Plus, Stocks jumping on the latest tariff news, including Trump’s trade deal with Japan. And even more earnings action with Chipotle, IBM and Las Vegas Sands all reporting. Fast Money Disclaimer
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- [00:00]
Melissa Lee
What does it mean to live a rich life? It means brave first leaps, tearful goodbyes.
- [00:08]
Steve Grasso
And everything in between.
- [00:10]
Melissa Lee
With over 100 years experience navigating the ups and downs of the market and.
- [00:15]
Mackenzie Seagalas
Of life, your Edward Jones financial advisor.
- [00:18]
Melissa Lee
Will be there to help you move ahead with confidence.
- [00:22]
Dan Nathan
Because with all you've done to find.
- [00:23]
Melissa Lee
Your rich, we'll do all we can to help you keep enjoying it. Edward Jones Member SIPC on WhatsApp, your personal messages stay private between you and whoever you send them to. So things like the passport numbers for your honeymoon stay between you and your fiance. And that video call for your grand's 80th stays in the family. Even your streaming password stays between you and your college roommates who still ask for it every week in your group chat. Because on WhatsApp, you your personal messages are yours. No one else can see or hear them, not even us. WhatsApp message privately.
- [01:06]
Guy Adami
Live in the NASDAQ marketsite in the heart of New York City's Times Square. This is fast money. Here's what's on tap tonight. A monster night of earnings. From big tech to EVs to a burrito. Bummer. We are diving into the numbers from all of tonight's reports bringing you all the trades plus a deal done. The S and P and NASDAQ closing in new records. And Japan's Nikkei soaring after the two countries reached a trade agreement. Agreement. The details on the deal and what more is to come. And an electrified gain. Shares of GE Ver Nova surging 14% on the back of its earnings this morning. Is this just another sign that the trade is alive and well? We'll get some answers. I'm Melissa Lee, come to you live from Studio B at the nasdaq. On the desk tonight, Steve Grasso, Banu and ice and Dan Nathan and Gai Adami. And we start off with the kickoff of big earnings, big tech earnings. Alphabet, Tesla and IBM reporting results within the last hour along with a slow slew of other names. We've got full team coverage from coast to coast. Christina Parson, nebulous watching IBM. Kate Rogers is all over Chipotle. Contessa Brewer digging in on Las Vegas Sands. Villa Bose got Tesla's numbers. We start off with Mackenzie Seagalos who's watching. Alphabet shares now Positive. Up a percent after an early drop. Mac, what's the latest?
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Mackenzie Seagalas
Hey, Melissa. Alphabet shares moving higher in the after hours after that initial drop despite a top and bottom line beat and strong results across search cloud and YouTube. We saw search grow 12% YouTube 13% and cloud surged 32% which was well above expectations. Now search remains Google's core business, but it's also most exposed in this new AI paradigm. CEO Sundar Pichai just said on the call that AI features are actually driving more search activity. Now Cloud, which is a key test of Google's massive infrastructure bet also delivered. Capex is being raised to $85 billion for 2025 to build data centers to power Gemini and enterprise tools as it tries close the gap with AWB and azure. And then YouTube ad revenue nearly hit $10 billion just now $1 billion behind Netflix and Pichai also highlighting strong subscription growth with shorts now matching or even exceeding in stream ads and revenue per watch in some countries. Back to you Melissa.
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Guy Adami
All right, Mackenzie, thank you. Keep us posted. Mackenzie Seagalas on Alphabet as we are going into we were coming off of a massive winning streak. It was 10 straight days until today guy. So the setup wasn't good. But here we are at 1%.
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Banu
You're a fan of the Mark Twain, I'm sure. I mean you went to school, a fine school at Harvard, Uncle. The reports of my reports of my death greatly exaggerated and that's probably in this quarter, at least for Google. I think that's what you're seeing. And we knew YouTube was going to be good. I think we knew probably I was going to be good. Capex was probably baked in a little bit, but the fact that search was up 11.7%, the street was looking for 8% that's going to give us some Runway here. And now people will say, you know what, maybe the valuation is cheap and maybe the reports or the rumors or the talk about the death of search, at least for now is greatly exaggerated. You get a close above sort of 196ish195 and that head and shoulders formation is thrown out the window.
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Christina Parson
Yeah, just say the search thing and this is one where you have the overlays is probably one of the first real quarters or full quarters where you saw these overlays. And so again that must be helping in some way shape or form. You know the, the issue wasn't cloud and it wasn't YouTube. It was going to be what is the degradation to the search? Are they going to cannibalize themselves? So pretty good. I mean the cloud stuff is better than expected. 32% year over year is something that reaccelerated. That was one of the reasons why I think the stock got going a quarter or so ago. And I'll just go Back to what Guy said, I mean this is one of the only MAG7 that's trading below a market multiple when you think about it's trading below, you know, where a lot of its peers are also. But the one thing is, and I think at some point, like folks are going to say what does this remedy look like by the doj, by the ftc, whatever is going on over there. And you know, you can make the argument that maybe this is better if they were forced to like, you know, split up. I don't think that's going to happen. I think the whole thing works better as a whole. But that's the next piece of the puzzle. And then folks are going to continue to worry about what does it look like when you have perplexity to launch a browser? When you have OpenAI launch a browser. I mean they have I think 80% of the global browser and I think a lot of that search ad revenue comes through that.
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Guy Adami
Yeah, that forward P is just about 20 here and there is no answer on the earnings call in terms of questions that could answer your question about existential threat, which is what you think.
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Dan Nathan
I mean, I do think, I still think there's an existential threat. And even though search is up and Gemini has helped search, you don't get the clicks when you, when you go through an AI search, you're not getting the clicks that you would normally get when you go through a Google search. So when you go on a perplexity search for me, I just see the summaries. If you see the summary with Google, are you clicking on anything and how does that affect revenue going forward? That's something I'm concerned with. I wouldn't be a buyer of Google.
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Guy Adami
All right.
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Philip LeBeau
I mean, I think they'll find a way to address that. Frankly. You know, we've heard in previous quarters and it was just reiterated here, that has led to more search. I think the next step before we get the massive rollout is that they're going to find a way to actually integrate more ad views, dollars, engagement via. I'd be shocked if that's not at the forefront of their minds. Add in the fact that they've, you know, essentially reassured us on Capex, you essentially get the autonomous for free. I think there was a lot of worry about this stock, rightfully so. I mean, I'm with Steve in terms of it is an existential threat really. The really fact of the matter is whether or not it's a credible threat and life to date, it seems like it's not I mean, people are going to.
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Banu
In this, the market that we find ourselves in where you can make a great case on valuation. We've had that conversation now for the last week and a half. This gives the stock a pass, I think, for the foreseeable future. And all those things are correct. Like, I'm not convinced they're out of the woods yet either. But the market's going to buy first, ask questions later.
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Christina Parson
Yeah, I'm not so sure though. Like, when we hear reassured Capex that that's such a good thing. They've gone up to like $85 billion if you think about it. Microsoft for, you know, is basically taking down Capex as a percentage of their revenue right now. If you think about this, you know, Google is expected to have $330 billion in revenue this year. They just talked about an $85 billion number. At some point, you know, you're going to have Microsoft and these guys who are early in some of these investments really start to flex a little bit. And it could be the sort of thing and I'd love to get. I know Jean's coming on in a little bit. I just think there's a really important metric and I think it's going to flip at some point between some of those who are trying to play catch up, who are still spending on this infrastructure bill to some degree. And if they're really playing from behind, you know, like Google is right here, it might turn into a negative sort of thing. The more they have to spend to kind of stick around in this game. It's like, you know, they're, they're pretty much a distant number three behind Azure.
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Dan Nathan
And I'd actually like to hear on the big beautiful build, the way Verizon carved out how much they saved somebody like a Google, that must be a ton of money that they get with the new tax policy. I would like to hear that because that would give me a little bit more of a tailwind than some of these companies. I think the CEO should be breaking those out.
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Guy Adami
Let's move on to Tesla. Keep you posted on the Alphabet call. Tesla missing top and bottom line estimates saw its second straight quarter sales decline. CNBC's Philip got details ahead of the conference call. Stocks flat right now. Phil.
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Philip LeBeau
Melissa, there's very little, when you look just at the earnings report, there's very little that you look at and you say, hey, this is pretty good, pretty optimistic. They missed on the top and the.
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Guy Adami
Bottom line earning 40 cents a share.
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Philip LeBeau
The street was expecting 43 cents a share revenue coming in light of expectations at 22.5 billion. And then the numbers within the numbers. Listen to this. Free cash flow year over year, down 89.1%. Automotive revenue down 16.2%. Energy storage revenue down 7.5%. We've already talked about what's happened with deliveries in the first half of this year, down 13.2%. By the way. The Street's expecting deliveries to come in at 1.66 million vehicles this year. We'll see if they give us some guidance on the conference call and if.
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Mackenzie Seagalas
They do, if it's going to be.
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Philip LeBeau
Another year of declines. Last year was a decline, same with where they're tracking this year. One last note, Cyber Cab production, the target still remains for mass production in 2026. Melissa, that's about all you get from the actual earnings report from Tesla. Again, the call starts what, 20, 25 minutes.
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Guy Adami
We'll be on it.
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Philip LeBeau
Let you know if Elon has anything to say that perhaps moves the market or gives people some optimism if they're a Tesla shareholder.
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Guy Adami
Yep. Phil, thank you. Phil LeBeau from the Earnings deck. They also say that they will launch the launch of the vehicles that were scheduled to launch in 25 still on track, including production of the low cost vehicle, which could start happening in the first half, which you would think be very positive because Tesla bulls are really looking for that.
- [09:53]
Philip LeBeau
They are. I really just don't think the automotive numbers really, really matter to Codan a whole heck of a lot. We've just seen declining numbers quarter over quarter now, year over year. And you continue to see the stock kind of basing. You know, clearly we're up from the lows and you know, we've rallied from that April level. But I just think that, that people literally, as you think about X and now they're talking about whether or not there's going to be co investment across these various companies. It just seems like the narrative really is being pushed towards AI, physical AI, autonomous and robotics. And until that story breaks, I think that's really the risk factor that you have with the company. The automotive numbers to me seem to be kind of secondary tertiary at best.
- [10:33]
Dan Nathan
When you look at the last quarter, they had record energy profits and they had powerwall deployments and they had the supercharging network that was rolling out. So that took away or mitigated whatever low deliveries that they had. In the automotive section. When Phil started off his, his summary, those numbers are down. So it's very hard, I know it's up after hours, very hard to be Positive about it. When everything is down, they're all putting their eggs in one basket. It's Robotaxi.
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Banu
This was just an auto company. This quarter, the stock should be given where it is, should be down 15 or 20%. And that's not an exaggeration because free cash flow numbers were a disaster. Margins continue to go the wrong way in terms of the auto business alone. It's a melting ice cube, without question. There's no way to say otherwise when you look at these numbers. What people are betting on, though, is this is a loss leader and it's everything else, and they continue to get a pass on that. But at some point they have to sort of deliver on both the Robotaxi, autonomous, autonomous driving, all the other things, all their other aspirations, because the longer it goes, the worse this looks.
- [11:35]
Christina Parson
Yeah, the EV business has to kind of fund some of these aspirations. Right? So you're seeing this business. It really is very bad. And we've been talking about this. I mean, we don't even have to say the term hilariously bad. I think we've been saying that quarter after quarter for. Well, some of us have been. My fellow panelists might have been too, over the last few quarters here. But when you think about this, I mean, okay, it's the Future. Is it $25,000,000 car, who knows if we get there? But this quarter Q3 is going to be really important. We know those federal tax credits go away on September 30th. Let's see what sort of demand they pull forward for Q4. Let's see if there is demand for it. I think North America feels pretty saturated when it comes to EVs. We know that some of these hybrids are doing better from some of these companies in Detroit. So at the end of the day, I think Elon, you know, he has a choice to make. He has to go all in. I know he has on this Robotaxi and you know, the optimists and all this sort of stuff, and they're going to buy X, they're going to buy that thing, they're going to merge it all together. I know a lot of folks say they're not going to, but he's going to have to kind of continue to tell a different story than the story because the story is done. I mean, the notion that they're going to reaccelerate this in a meaningful fashion. And you think about what's going on with China and BYD and Huawei and all these, you know, makers over there, there's really not Even an awesome opportunity for them in Europe as there's more demand in these other parts of the country or other parts of the world. So it's just a tough story. I don't find it particularly investable until you get some sort of benchmarks on this Robotaxi or the Cyber Cab and when they're going to really go into full production, because I think we all learned over the last 10, 15 years, you've got to take the over on when he says they're going to be able to do something. And listen, I think we can all agree Cyber Taxi, Robotax, it's going to be great, it's going to be a great business. I just don't think it's going to be a great business.
- [13:12]
Dan Nathan
And what I think it keeps the story alive is that he is, along with byd, the only profitable EV company that's out there. So if you look at the host of all the just specific EV companies alone, standalones, they are the only other profitable companies. So that keeps the story going. But to Dan's point, there's a lot of things that have to have to really work their way through. What keeps people on the stock is that he can have a headline tomorrow that kills shorts. So that's what you always have to watch out with Tesla on the short side.
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Guy Adami
All right, let's get more on these earnings moves. Bring in Gene Munster, managing partner at Deepwater Asset Management. Gene, great to see you. Let's kick it off with Alphabet, which is pretty much at, after our session, highs up about 3% here. What happens? What's happening on the call?
- [13:59]
Steve Grasso
Well, the call has been all about air and this would have been the quarter we would have seen a crack in that search. Keep in mind, the GPT is users went from about 350 million dailies three months ago to 500 million. We've just seen this accelerating use of ChatGPT and that really kind of got the narrative going. I'm, I'm very much on, on board with this idea that search is under attack. And this would have been the quarter we seen a crack and the crack would have been a fractional miss in the search business. Instead, what we saw was search growth actually accelerated. I mean, it was fractional 11% ish versus 10% ish in the March quarter, year over year. And so that was a surprise. They also mentioned on the call that paid clicks were up 4% year over year. And just a really shocking number. If we rewind back to the first part of May when Apple Eddie Q was Talking about this decline in search within Safari, it would be hard for me to have imagined that paid clicks are going to be up 4%. So when I put all this together, Melissa, somebody like myself who's been bearish over the last six months, I'm in the camp that this stock is probably going to move meaningfully higher over the next few days. 5, 10% higher in part because we should have seen something this quarter given everything that's going on. And what underscores is this is Google is a habit. It is habitual for 3 billion people daily, 5 billion people monthly. I mean, it is really hard to change that behavior even if those other products are so compelling like GPT.
- [15:33]
Guy Adami
So does it put to rest that bear case about the existential threat to search or does that still linger? You're going to wait for another data point or another data point.
- [15:42]
Steve Grasso
It's going to linger in part is so they gave the metrics around how much is the usage in AI Mode? There are 100 million monthly active users. So that compares about 5 billion monthly active users for search. They haven't started the monetization. So on the call they're talking about starting to feather in some more monetization with AI mode. Undoubtedly they were doing that. But I was listening to Steve's comments. Steve, I was tracking what you were saying about the clicks and ultimately just adding monetization to AI mode doesn't necessarily mean that people are going to click on that if they just get their answer. And so I think to answer your question, Melissa, is that there's going to be a relief rally in this and it may go on for days, it may go on weeks. But this narrative around how does Google navigate AI isn't going to be solved until investors can actually see, see how they have integrated this, these, these sponsored opportunities within AI mode.
- [16:37]
Christina Parson
Yeah, and Gene, you know, it sounds like the kind of formula for monetization for a lot of these models is going to kind of play out over the next couple of years. It's not going to be over the next couple of months or the next couple of quarters. Just curious. You know, you just mentioned that Eddie Q comment about search on Safari. This was a couple of months ago, I think. What would it mean for Google search in general if they lost that exclusivity on Safari? Obviously we have installed base of about one and a half or, I don't know, 1.8 billion users on iOS. Is that something you're starting to model in right now?
- [17:08]
Steve Grasso
And what does it mean for Google if they Lose that.
- [17:10]
Christina Parson
Yeah.
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Steve Grasso
For Google. So they're paying about 20 billion a year for this. That means they're getting more than 20 billion from this. And so think of this as they probably are getting 30, 40 billion of kind of economic value from that arrangement from Apple. And so that's really talked about like how could Google negatively impact it? Because the general thinking is that if they get displaced then people will just naturally come back because it's so habitual. But there would be a step down, it would be material. We're talking 15, 20% of kind of operating income hit search 55% of revenue, 70 plus percent of earnings. It would be a material impact.
- [17:48]
Guy Adami
Gene, I want to get your quick take on Tesla's quarter ahead of the call.
- [17:53]
Steve Grasso
We talked about earnings of down earnings, operating income down 42% year over year. It was bad. But the reason why the stock hangs in there, they have a chart in their investor deck. They don't give the exact numbers but you can kind of eyeball it. They added about 1.2 billion miles driven by FSD. That compares to about 600 million in the March quarter. So basically doubled quarter over quarter in terms of those miles driven. That's all plays into the narrative about autonomy is the future. And when you're, when you show some of those data points it's hard to, you can debate how much time investors are going to give them but it feels like things are really moving. That affordable model, they reiterated their time frame on that but no one really expected it to be on time. So that was a net positive.
- [18:36]
Guy Adami
All right Gene, thanks. We'll check in with you a little bit later on. Gene Munster, Deepwater Asset Management Again, Tesla shares are hanging in there. They're about flat right now.
- [18:44]
Banu
Yeah, which probably makes some people trying to figure it out. I'll go back to Google real quick. I'm sort of with Gene on this one. 207 I think ish was the all time high back in February. I mean this quarter should take us there on this tape. When people are looking for value plays that are seemingly making sense, you put in the cash. The fact that again ad is hanging in there. Google looks okay.
- [19:03]
Philip LeBeau
Yeah and I read a one of Jean's points in terms of there likely being a relief rally particularly as we have all of these indexes reaching all time highs. And then you add in the fact that Alphabet has essentially lagged the other magnificent seven. I would expect a catch up trade and I like that a lot more than maybe stepping down into small caps looking for beta.
- [19:21]
Christina Parson
Yeah, all Right. This is probably going to be totally wrong here, but you know, with Google.
- [19:24]
Guy Adami
The other things you've said.
- [19:25]
Christina Parson
Right, so. So, you know, by the way, people were really good friends. I really believe we've known each other for 15 years. We've been on the same pit now.
- [19:35]
Guy Adami
That's why.
- [19:36]
Christina Parson
So with Google up a little bit here and Tesla flat, I think the both implied moves about 6%, I could actually see Google selling off tomorrow and Tesla rallying a little bit. Because listen, the Google quarter, it's good, you know, like Jean just laid it out, it was brilliant. But like there's not. I mean, was there enough there? You know what I mean? It's had a nice run into this. Tesla, on the other hand, it seems to do this all the time. We knew the bad news it was coming with the stuff that people are positive about, we just don't know. And that's the stuff that kind of is out there in the ether. And I could see, folks, this thing's been going sideways for a bit. I could see them going in and buying it on that.
- [20:08]
Guy Adami
Also the conference call, Elon Musk presumably will be on that call. And if he sounds really committed to Tesla and he's going to be the CEO who sleeps on the floor again, maybe investors will also be re energized by that.
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Dan Nathan
He's got to sell. He's got a story, he's got to sell that story. And to the point on Google, there's a reason why the stock did nothing the entire year and then ran up into earnings right now because there was a lot of things that were factored in. So I would be a seller of Tesla Google here.
- [20:35]
Guy Adami
All right, coming up, we'll bring you all the details from Tesla's and Alphabet's earnings calls. Get you the details and results from Chipotle, IBM, Las Vegas Sands and more. Plus the market reaction to the latest trade deals. How to trade the moose here in the US and abroad. Do not go anywhere. Fast money's back into.
- [20:54]
Melissa Lee
A Capella University. Learning the right skills could make a difference. That's why our business programs teach you relevant skills you can take from the courseroom to the workplace. A different future is closer than you think with Capella University. Learn more at Capella Eduardo on WhatsApp. Your personal messages stay private between you and whoever you send them to. So things like the passport numbers for your honeymoon stay between you and your fiance. And that video call for your gran's 80th stays in the family. Even your streaming password stays between you and your college roommates who still ask for it every week in your group chat. Because on WhatsApp, your personal messages are yours. No one else can see or hear them, not even us. WhatsApp message privately CNBC make it's online.
- [21:42]
Steve Grasso
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Christina Parson
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Christina Parson
Register now@cnbcmakeit.com Personal Brand.
- [22:00]
Guy Adami
Welcome back to Fast Money. Chipotle shares sinking after hours after the Burrito chain cut its same store sales forecast as foot traffic slow slowed. CNBC's Kate Rogers spoke with the CEO in just the last hour. Kate?
- [22:11]
Mackenzie Seagalas
Melissa, that's right, EPS, right in line for Chipotle this quarter. Revenues slightly below analysts estimates. Same store sales came in lower than expected. They were down 4%. This is its second consecutive contraction for same store sales, also the biggest since the second quarter of 2020. The company did report though a positive comparable sales return and transactions in June. But for the full year, as you said, it cut its guidance to about 4 flat for full year comp sales down from low single digit growth. This is its second guidance cut in a row. Here's what CEO Scott Boltwright told us about the consumer in the quarter last hour.
- [22:46]
Steve Grasso
We saw a bit of a step.
- [22:47]
Christina Parson
Down in the low income consumer in.
- [22:49]
Banu
The April May timeframe. We think that's in large part due to really tough compares from prior year.
- [22:55]
Christina Parson
But we've seen that rebound with our summer campaign.
- [22:59]
Mackenzie Seagalas
It did note inflation across several of its key ingredients, primarily steak and chicken. Melissa and on the call, Boatwright and other executives talking about some things that they have planned as catalysts in the second half, including new limited time offerings, whether they're center of the plate or sides. A campaign targeting college students, a big core demo for them. And also leaning even more into the catering business, which they said is just 1 to 2% of sales right now and it could grow much more than that. Back over to you Kate.
- [23:26]
Guy Adami
How is their pricing and what's, what's sort of like the average check? I'm just wondering because this is sort of a more expensive, right. Quick serve option.
- [23:34]
Mackenzie Seagalas
Absolutely. And if you look at stock performance of the other more expensive for the consumer, names like Sweetgreen and Kava, they are also underperforming. But Boatwright said on the call, you know, we think about value differently and in most places in the country you can get an entree here for about $10. So as you Said a little bit more expensive for the consumer. But the company doesn't discount in the way a lot of its fast food competitors do. Right. So they're thinking about it differently. They feel this is good value proposition and said their sales trends kind of track along with consumers consumer sentiment. So you saw it dip, you saw their sales dip. And they believe that things will get back to positive momentum in the back half of the year.
- [24:08]
Guy Adami
I'd like to know where that $10 entree.
- [24:12]
Mackenzie Seagalas
Not in New York or San Francisco, but yeah.
- [24:15]
Guy Adami
Kate. Thank you, Kate.
- [24:17]
Mackenzie Seagalas
Roger, thank you.
- [24:18]
Guy Adami
All right. Not quite a blowout here.
- [24:20]
Banu
This resident blowout expert. Well, they're good burrito blowouts. And it's like, are you a good witch or a bad witch? This is a bad burrito blowout. And it's bad because two consecutive quarters now of declines. That's not good. Margins declining, not good. And that's a pretty significant decline. 18.2% versus 19. 7. So now people are going to laser focus on valuation, which has always been unreasonable. 46 ish was the low back in April. That's where it needs to hold.
- [24:48]
Guy Adami
I mean, what does this tell you about that consumer? That kind of consumer who goes to a Chipotle or sweet green or Cava. We're not going there anymore for whatever reason.
- [24:57]
Christina Parson
Well, he obviously eats a lot of burritos. Just take a look at him. I eat a lot of salads. Right. So if you look at the sweetgreen and you look at the words do hurt. I'm just saying, you know, those stocks have had a really hard time. Right. And they're all competing in this kind of higher end zone, you know, and you look at a McDonald's and McDonald's and we just heard what CEO had to say. This lower end consumer having a tough time. McDonald's has never confirmed the highs in the S&P 500. It really has kind of been stuck in the mud a little bit. And so maybe this is that perfect combination of where there's inflationary pressures from the companies, their inability to kind of pass through some of those costs, and then a weaker consumer starting to feel the heat a little bit.
- [25:34]
Dan Nathan
Yeah. And I think the average check size in New York is closer to $20. So it's double what the company says, easily double. Losing Brian Nicole Nickel is a big thing. If you look at Starbucks and you overlay the performance here, and I'm not crazy about Starbucks. Starbucks is up 5% for the year. This one has done nothing but go lower. And there's a Lot of things. Everything that is inflationary is on their menu. And I have a. If digital is not growing with them. Have you been in a store where you're trying to order more than one thing? It's impossible. So I never order more than one thing. My kids do, but I don't. It's a very bad, bad setup for. You need too deep in people making these, making these bowls because I don't want to clog up the line behind me. So it's a bad, bad scenario for that.
- [26:20]
Banu
Bulls do that for you. Bulls clog up. Oh the lines.
- [26:25]
Guy Adami
Anyway, my good.
- [26:28]
Philip LeBeau
Well, quite frankly, this was a growth story that you're just not seeing the growth in. And the multiple reflects of the PG multiple reflects it. You know, same store sales down 4% revenue, top line revenue up 3% and most of that is coming from expansion. So you're essentially continuing to invest and you're not finding that kind of equilibrium where you actually have true repetitive organic growth. I think ultimately that's there and without that growth, the multiple simply just doesn't, doesn't justify investment at this moment.
- [26:56]
Banu
Can I just say one thing?
- [26:58]
Guy Adami
You've already started, so go ahead.
- [26:59]
Banu
Are you a fan of Cher by any chance?
- [27:01]
Guy Adami
Cher, sure.
- [27:01]
Banu
Everybody loves Never Ages, Never Ages. But she had a song and one of the lyrics was words are like weapons. They hurt sometimes. And you know, Dan, your words hurt sometimes.
- [27:12]
Christina Parson
I'm getting it over here from Mel. You know what I mean? Yeah, I'm just gonna keep moving on.
- [27:18]
Guy Adami
Coming up, even more after hours action. Shares of IBM Las Vegas Sand Service now and more on the move after reporting the numbers out of the quarters next. You're watching Fast Money live from the NASDAQ markets at in Times Square. Back right after this.
- [27:37]
Melissa Lee
Is it time to reimagine your future? The right business skills may make a difference in your career. At Capella University we offer a relevant education that's designed to focus on what you need to know in the business world. We'll teach professional skills to help you pursue your goals like business management, strategic planning and effective communication. And you can apply these skills right away. A different future is closer than you think with Capella University. Learn more at capella. Edu.
- [28:08]
Steve Grasso
Squawkbox Tomorrow, former NFL quarterback turned businessman Eli Manning, the two time super.
- [28:14]
Christina Parson
Bowl champion discussed this is his latest investment.
- [28:17]
Steve Grasso
Stay ahead of the market squawk box tomorrow 6am Eastern and streaming on CNBC.
- [28:22]
Christina Parson
Plus.
- [28:27]
Guy Adami
Welcome back to Fast Money. Another earnings alert. This one on IBM shares dropping in the after hour session despite beating top And Bottom line estimates a conference call kicking off. The top of the hour. Kicked off already. Christina Parsonevolis is here on set with more on the quarter. Christina?
- [28:41]
Contessa Brewer
Yeah, they spent the first 20 minutes just going over all of their numbers. I guess to reiterate, you know, that they beat on the top and bottom line. They raised their free cash flow which is largely expected. I think going into this earnings report you had so much, you had high expectations. The stock ran up over 23% versus the S&P 500, about 8% year to date. So there's really been an uptick. What do we see? We saw software grow, but it's growing at a decelerating rate. The company did say that Red hat was up 14% year over year. So that is strength within the software category. Consulting was up 3%. So they're starting to see some weakness over there. They said that customers are cautious when it comes to spending. We've heard this before and really focused on cost efficiencies infrastructure, which really encompasses all of the hardware. They just launched a Z17 mainframe which helps with generative AI. I know, I don't like using the nomenclature because it gets so confusing.
- [29:34]
Guy Adami
Right.
- [29:34]
Contessa Brewer
Especially with all the chips. All you need to know is it's, it's a giant mainframe. It's going to help with Jenny. They just launched it at the end of the quarter. They're saying that that really helped their infrastructure business. It should help it going forward. They also talked about their book of business which isn't actually, you know, concrete dollars just yet and how it's increasing for AI. So I think IBM is really focused on AI software, those two categories right now. But you have to think of all the other categories that are contributing to the business that are, you know, consulting. It's still 30% of the biz, still relatively flat right now. And there was a run up, high expectations.
- [30:05]
Guy Adami
Yeah, I mean we're just off of the highs from the end of June, guy.
- [30:09]
Banu
Software is the problem and not that it's a problem. It was up 10%. The street was looking for more. They're going to sell first, ask questions later when you have that kind of valuation. But Steve talks about this and I still believe in the IBM story technically. Go back and look where it topped out at earlier late last year, earlier this year to 68, went lower from there, traded back there and failed. Past resistance becomes support and we are right there now. So I don't think you run that far from IBM here.
- [30:36]
Guy Adami
Just take a look at the valuation 25 times forward. So not cheap.
- [30:40]
Dan Nathan
This should have been the original company. This should be the Quantum company. They've had such a lead on so many others in the, in the, in the space. The problem is, as Christina said, there's a lot more segments within their umbrella that actually drag the story down. But I still think there's a tremendous upside to IBM. People don't think of it as a growth story story, but I think you should start thinking it like that.
- [31:02]
Contessa Brewer
You said so many upsides, so many other portions of the business we just talked about. But then that's what makes IBM great, a defensive play. So wouldn't you think that that could be something in the near term like still keep IBM in the back books because it's still a defensive play because it's exposed to all these other segments of business?
- [31:17]
Steve Grasso
Yeah.
- [31:17]
Dan Nathan
For four years though, that didn't work. It's only worked as of, as of late. This was my secular short when we did this 10 years ago and I looked, I looked really great for a decade and now it's actually rearing, rearing back up. So it looks good. It looks good. It's a great diversified bet. But people are looking for real growth, things to stick their teeth into.
- [31:36]
Guy Adami
Christina, thanks. Parts and evil is coming up. The latest tariff details out of D.C. as the trade deadline inches closer. We know about Japan, the EU and how it's impacting the markets. Not go anywhere. Fast Money is back into.
- [31:52]
Steve Grasso
The.
- [31:56]
Guy Adami
Welcome back to Fast Money. Stocks jumping on some trade optimism. The S and P and Nasdaq both closing at fresh record highs. The Dow surging more than 500 points. Points closing less than four points from the record close set all the way back in December. Shares of Lamb West End jumping more than 16% today. The biggest gainer in the S&P 500, the French fry maker beating top and bottom line estimates, giving better than expected guidance. Shares of CrowdStrike marking its eighth down day in the last 10 sessions. It has lost more than 10% from its intraday high earlier this month. Bank of America meantime, raising its dividend by 8% to 28 cents a share and authorizing a $40 billion stock repurchase program. And some more earnings movers. T Mobile and ServiceNow higher after beating top and bottom line estimates. Molina Health Care missing earnings estimates. Alaska Air down on weak guidance. And CSX topping EPS expectations but missing on revenues. And you won't want to miss an exclusive interview with the CEO of CSX tomorrow, 10:30am Eastern time on squawk on the street well, the iShares Japan ETF soaring almost 5% to all time highs after President Trump announced a 15% reciprocal tariff on Tokyo last night. European stocks also getting a boost with reports signaling a trade agreement with the EU could be just days away. Let's get to Megan Casella for the very latest. Meghan hey, Mel.
- [33:12]
Mackenzie Seagalas
So that preliminary Japan deal is the first one that we've seen with a top five, five U.S. trading partners. So top line details here. Japan agreed to invest $550 billion in new capital in the US and then in exchange, President Trump will impose tariffs of 15% on all Japanese exports to the US including cars and car parts. And that was considered a big win in Japan as it is a sizable step down from the 25% auto tariff that is already in effect and down from the 25% across the board rate that Trump threatened for Japan just last week. But at the same time, it does suggest something of a new floor for these country specific tariff rates. So take a look at this here for the five preliminary agreements that we have details on. So far, countries will still see a tariff rate of between 10 and 20% on all of their exports to the US even after striking an agreement. And the latest reports out of Brussels today suggest the EU could be next in line and it could fall right in this range. EU's EU officials are saying they're close to a deal with the US that would involve 15% tariffs on all exports out of Brussels. Now we talked with the White House about this and an official told me that things are very fluid and that close is relative. So it's very possible. But it's a fast moving situation here. And 15%, Mel, would still be significant, but markets do seem today to be breathing a sigh of relief.
- [34:32]
Guy Adami
Melissa all right, Megan, thank you. Megan casella, Obviously relief here. We saw the Nikkei rally. We saw yields go higher around the world basically on this, from the point.
- [34:44]
Dan Nathan
Of reference, if we go back to April and where we thought tariffs were going to be at and what they thought they were going to do, the overall market hasn't happened. So now all of these are wins. So we had the UK of the EU. EU is 27 different countries. That one, in my opinion, was the hardest or equally as hard as you, China. All these are getting done and you start to gain some momentum for the overall market.
- [35:06]
Christina Parson
Yeah. Peter Brookvar, Blakely Advisors was on a couple of weeks ago. He did a little math. Some of us are not so good at math, but I'm going to try to do a Little math like Peter did, okay? So if we have three and a half trillion dollars of annual imports to this country, last year we had about a two and a half percent tariff on those imports, right. Corporate tax receipts in America are about $500 billion. If you put 15% on that three and a half trillion, you're basically doubling. Okay? You're basically doubling. Okay. What 500 billion? 500 billion. Someone's going to eat that 500 billion. Right. Like if you think about it. So you know, the markets. Your point about April, I get it. You actually got my face one day in early May and you told me never get in your grill, just like earlier. But my point was you're like, we kind of know what the worst case scenarios are and you were 100% correct on that. But here's a scenario that you, year over year, it looks very different, right? Like somebody's got to eat that. The importers have to eat it, you know, somewhere in the supply chain and definitely going to work into consumers alike. So I just think that that math is going to be really interesting to kind of think about because we didn't have a lot of tariffs, now we're going to have a lot of tariffs, even if 15 doesn't seem like 25%.
- [36:12]
Guy Adami
Wasn't that the math though when the markets pulled back in April?
- [36:15]
Christina Parson
No, I mean, I mean that numbers, no one knew what the math was going to be. Remember those ridiculous formulas and stuff.
- [36:21]
Dan Nathan
I think the only thing that, that we're leaving out, the market discovered that after that budget bill was done, the average per household is $5,000 lower in taxes. So it more than mitigates the tariff exposure. Corporations 21% and they also get full depreciation. So it mitigates a lot of these headwinds.
- [36:39]
Christina Parson
That, by the way, that number about households, it's not, it's not skewed towards middle class and like lower income earnings. It's really for higher earners. Right. So it's just an average across the citizenry.
- [36:49]
Guy Adami
I want to talk about Japan politics though, just briefly before we have some comments from Elon Musk on the call. I want to get to that. But in terms of connecting the dots, what this means, the Prime Minister who lost his majority in both houses, the first Prime Minister to have no majority in either house for since 1955, his grasp on power is now much less because this trade deal has been announced. He said he was going to hold on because he's got to get a trade deal through. If he's gone, his successor is more likely to opt for fiscal stimulus and it's met, which has a huge ripple effect.
- [37:22]
Banu
I mean, go down that road for a second. Yes, they clearly have an inflation problem. Their 10 year yields, the highest JGBs are high as they've been since a 30 year, 45 year all time high, a currency that's going to start to weaken again against the backdrop of higher yields there. They can try. Well, they can pull whatever levers they want. They have a problem. And this, what we're talking about now does not mitigate that in any way.
- [37:43]
Guy Adami
All right, we do want to get to those comments from Elon Musk on that Tesla call. Let's bring back Gene Munster who's been listening in.
- [37:49]
Steve Grasso
Gene, I'm Lissa. The big one was right out of the gate. He talked about having half of the US Population having access to Robo Taxi by the end of the year. And then through the caveat on pending regulatory approval. He's had positive comments about this in the past. This is as aggressive, I think, as he's been in terms of the pace of the rollout. I think what you can read between the lines there is, there's no way that that's going to happen because it's not going to get regulatory approval to get to those cities. But what do you think he's telling us is that we're probably going to see more cities. He talked about adding San Francisco by the end of the year. We're probably going to see more cities getting added. So that was one takeaway, basically the first nine minutes of the conference call related to Autonomy, fsd, Robotaxi. But then he shifted and talked about batteries and said that this is gigantic. Their energy business often gets overlooked. He's planning the flag, I think to talk more about energy and while he should, that that's going well for them.
- [38:47]
Guy Adami
All right, Gene, thanks for keeping us posted. Gene Munster stock is flat right now. Coming up, even more after hours action. We're watching shares of Las Vegas Sands after their results. CEO Robert Goldstein will join us fresh off the company's earnings call. That is next. Best Money's back in two. Welcome back to Fast Money. Shares of GE Vernova surging more than 14% today, hitting another all time high. The company beating EPS and revenue estimates thanks to strong demand in its power and electrification segments. GE Renova also raising its full year forecast for free cash flow, said sales for the year would be toward the higher end of its previously stated range. The stock is up more than 90% already this year, basically they're riding this AI boom, the demand for power. They've sold out basically through 2028. Guy.
- [39:37]
Banu
It's pretty remarkable. Tim talks about it. He's not here. I'll talk on his behalf. I mean, if you look at the EPS growth, probably 60% ish year over year EPS growth, which doesn't completely justify the valuation, but it makes it a tad more palatable. So I think you continue to sort of ride this train. I know it's sort of deep into the pool stuff, but these trades, all these names in this world are working.
- [39:58]
Guy Adami
Gas turbines specifically. Sold out through 2028 with more orders coming in for 2029. All right, coming up, Las Vegas Sands surging after earnings. CEO joins us next with more on the quarter. More fast Money into. Welcome back to Fast Money. Shares of Las Vegas Sands jumping after the casino operator beat top and bottom Line estimates. CNBC's Contessa Brewer joins us now with CEO Robert Goldstein, fresh off the call to talk results. Contestants.
- [40:27]
Mackenzie Seagalas
Melissa, thank you very much. And Rob, it's great to see you. I got to say I was surprised on the call not to hear more superlatives about the amazing results in Singapore because as far as I can do, I did some quick research. There has never been a hotel, casino property anywhere in the world in any quarter that achieved what you did. $768 million. No, no, no. I just. You're right, it's a big deal.
- [40:55]
Robert Goldstein
You're absolutely correct. I've been doing this 40 years. No building anywhere industry came close to these numbers. It's an incredible performance and incredible market. We're very lucky to be there. Right place, right time, right market. But you're right, the numbers and the performance there is. It's historic.
- [41:10]
Mackenzie Seagalas
Okay, well, some of it was luck and you said high hold to the tune of 100 million plus. That being said, when you're guiding to two and a half billion dollars in adjusted property EBITDA in a year, how do you keep fueling that?
- [41:26]
Robert Goldstein
Well, obviously you keep providing experiences people want to come to. The market in Singapore is extraordinary. We have a great building. So you keep doing the right things by your customers and keep hoping they show up. And I think we're doing that and momentum is with us and the building is superb. So to your point, it is historic, it's unprecedented and hopefully it continues. We believe it will. We're just in the right place, the right time and we're very fortunate to be in Singapore with a extremely supportive of government. And tourism there is booming for the super luxury customer.
- [41:57]
Mackenzie Seagalas
And we're showing right now some of the renditions you're pouring in. And just back from a groundbreaking in Singapore because you're going to invest $8 billion in a new property in Singapore, so clearly you're expecting a return on that investment. In the meantime, in Macao, you were getting a lot of questions on the call because you said right at the top there's been a shift in strategy there. What was not working for Las Vegas Sands and Macau and how are you changing things?
- [42:23]
Robert Goldstein
Well, the market's gotten more competitive in Macau and we may have been reliant on our buildings, which have always been best in class, best in market. We've shifted our strategy. We had to pivot away from that approach and add our buildings to a more competitive approach, which we think will fuel more ebitda, more market share. We'll do fine in Macau in the future. We'll come back. We took too long to get there. We're there now in the right place as far as our competitive environment. And I think the future Macau remains very bright. It's always been our premier market. You couple that with what we're doing in Singapore. We'll soon be exceeding our highest EBITDA creation, even during the pre Covid years. So feels pretty good both in Singapore and Macau for the future.
- [43:02]
Mackenzie Seagalas
We have just started to see month over month the kind of gains investors have been hoping to see post pandemic in Macao. How much do geopolitical concerns weigh on you there? If, if there's the tit for tat tariff war? If China and US relationships are not solid and strong, is that something that affects the property?
- [43:23]
Robert Goldstein
Well, obviously we need a very strong China economy. We hope that these countries will resolve their differences. Tariff war will go away, but it doesn't help us because we need a strong China economy to prosper. And we are seeing, in spite of the geopolitical concerns, we are seeing a much stronger Macao, as you alluded to, and hopefully that continues in the future. A 30, $32 billion market. Macau, the difference in the world to us and the competitive set. And I think you'll see that Macau is just too powerful. It's the most. It's the primary place to gamble for mainland Chinese and for most Asians in that region. So obviously want to see resolution of the geopolitical issues and resolution is good for the whole world. Hopefully that comes to be. And a strong China economy is very important to us too, obviously.
- [44:09]
Mackenzie Seagalas
Well, Rob, the stock is up 5% or so in the Post market. Thank you so much for joining us. I appreciate it.
- [44:16]
Robert Goldstein
Thank you as always.
- [44:17]
Mackenzie Seagalas
You're welcome. I know I'm coming off as being very excited about this, but I don't understand how they ask these questions and then they're so calm about it. Like wow, that was a great performance in Singapore. You did really well. I just like wow, that's so amazing. There it is.
- [44:33]
Banu
Playing it close to the vest. As they should, by the way they should because it's been in an eight year downtrend real quick. The crack staff and EC can look from $80 seven years ago. It's been a series of lower highs. But you know what? You get a close above current levels. You have broken that downtrend major double bottom. I'm with contests on this one. I like the name.
- [44:52]
Guy Adami
All right, up next, final trades. Thanks. Time for the final trade. Stephen Lucid.
- [45:02]
Dan Nathan
You know I like outsized bets and if you look at lucid. Go on Perplexity. I'd say to perplexity. List me the top 10 best bullish things about Lucid.
- [45:13]
Guy Adami
You're going to buy the stock. So what you did, is that how you got to this?
- [45:16]
Dan Nathan
No, no, I did it after.
- [45:20]
Philip LeBeau
Speaking of outsize, I thought the move in GM on the back of the Japan trade deal was really more geared towards their local manufacturers, but better sell of GM here.
- [45:29]
Guy Adami
Dan.
- [45:30]
Christina Parson
Yeah, IBM, you guys had some nice things to say about the quarter. I just wouldn't be a buyer here on that quarter.
- [45:35]
Banu
I'm going to go to CM later tonight and get a burrito. Yeah, hopefully that'll help.
- [45:39]
Christina Parson
Burn it.
- [45:40]
Guy Adami
Get your chicken no tomatoes.
- [45:41]
Banu
PSX will get you done here.
- [45:43]
Guy Adami
Thanks for watching Fast Madam Money. Jim Cramer starts right now.
- [45:50]
Melissa Lee
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 andor 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 Is it time to reimagine your future? The right business skills may make a difference in your career. At Capella University, we offer a relevant education that's designed to focus on what you need to know in the business world. We'll teach professional skills to help you pursue your goals, like business management, strategic planning, and effective communication, and you can apply these skills right away. A different future is closer than you think with Capella University. Learn more at Capella Eduardo.