← CNBC's "Fast Money"
CNBC's "Fast Money"
Alphabet Reports Results… And Pharma Stocks Diverge In Weight Loss Drug Race 2/4/26
00:43:37
Google parent company Alphabet on the move as the tech giant reports results. The details and numbers from their latest quarter, and why tech analyst Gene Munster sees the stock topping the Mag7 group this year. Plus Eli Lilly and Novo Nordisk heading in opposite directions as the weight loss drug race enters its next leg. Why one top health care analyst is flagging management confidence and pricing algorithms as the difference makers. Fast Money Disclaimer
Loading summary
Transcript192 lines
- [00:00]
Jean Munster
Thy ticket, Lady Jennifer of Coolidge.
- [00:03]
Melissa Lee
Well, many thanks, good sir. Here is my Discover card.
- [00:08]
Strayer University Announcer
They accept Discover at Renaissance Fairs?
- [00:11]
Melissa Lee
Yeah, they do here. Discover is accepted at the places I love to shop. Get it with the times. With the times.
- [00:19]
Strayer University Announcer
You're playing the loot.
- [00:22]
Melissa Lee
Yeah, and it sounds pretty good, right?
- [00:23]
Tim Seymour
Discover is accepted at 99% of places that take credit cards nationwide, based on the February 2025 Nielsen report.
- [00:32]
Strayer University Announcer
Strayer University, we help students like you go from is it possible? To anything is possible by offering access to up to 10 no cost gen Ed courses so you can reach your goals affordably and fast. Visit Strayer. Edu to learn more. No cost Gen Ed is provided by Strayer University affiliate Sophia. Eligibility rules apply. Connect with us for details. Strayer University is certified to operate in Virginia by Chef and has many campuses, including at 2121 15th Street north in Arlington, Virginia.
- [01:02]
Melissa Lee
Live in the NASDAQ markets in the heart of New York City's Times Square. This is fast money. Here's what's on tap tonight. You got to spend money to make money. Shares about Fed higher by almost 3% right now after forecasting a big jump in Capex this year. What it says about the state of the air trade and how it could impact the hyperscalers and highs and lows. A handful of stocks trading at milestones today. But how is the desk playing the moves and what do the charts say about what the next move for the names are? We'll find out. Plus love for Eli Lilly after earnings strategy deep in the red as Bitcoin continues to fall and Uber in reverse. Why investors are giving the stock a one star review after earnings. I'm Melissa Lee. Come to you live from studio. Be at the NASDAQ on the desk tonight, Tim Seymour, father when ICE and Carter Wirth and Guy Adami. And we start off with that closely watched earnings report out of Alphabet. Shares of the Google parent are higher by more than 2 1/2% right now after the company beat on the top and the bottom lines. Forecast cap spending for 2026. That is nearly double last year's total spend. The conference call is underway right now. CNBC's MacKenzie Segalis has got all the details.
- [02:05]
MacKenzie Segalis
Hey, Mel. So Alphabet logging its first ever $400 billion plus revenue quarter. But the headline in Q4 is CapEx Google nearly doubling AI infrastructure spending every year since 2024. And now they're guiding to a range of up to $185 billion for 2026, topping even Microsoft's $150 billion annualized run rate and it comes as the Cloud business surges 48% from a year earlier. 1.5% billion dollar beat. Alphabet is the underdog in the cloud wars, but Google's been gaining momentum off a strong street reputation for its in house AI chips. And CEO Sundar Pichai talking up that new Apple partnership on the call, not just pointing to the fact that Gemini is powering Apple's rebooted Siri, but also specifically saying that he was pleased that they're collaborating with Apple as their preferred cloud provider. That might be why we're seeing Capex double to get ready for Gemini to power Apple's two and a half billion devices. And check out who's also winning. Apple after hours broadcom up nearly 6% right now. They manufacture Google's TPUs and recently landed a $21 billion order from anthropic for Google's two TPU which is a huge endorsement of their in house silicon. Though Pichai did say they'll be among the first to offer the latest Vera Rubin GPU platform for Nvidia. And last thing here, Mel, the bear case for Alphabet is not playing out. Search revenue hit $63.1 billion topping estimates 20. No sign that it's giving way with Gemini cannibalizing any part of its core business here. Back to you.
- [03:41]
Melissa Lee
All right, Mack, thank you. Mackenzie Sagalos on shares of Alphabet higher by about 1 1/2% right now. Guy, what's your quick take on big numbers?
- [03:48]
Guy Adami
I mean in the CapEx guide is clear, not scaring anybody I'm sure. Nvidia sires. Well here's my quick take. It is a very strong quarter and you know, I guess the rumors of the death of Google 6, seven months ago were obviously exaggerated, greatly exaggerated. But the problem I think now is back then you can make a very compelling valuation case now, not as much so at 31 times ish. I'm not saying you got to get out of Google here, but I think you have to be aware that valuation is probably priced almost to perfection unless.
- [04:16]
Melissa Lee
You look down the pike and you think that additional spend, all that extra spend is going to make the monetization of all the different parts of its business that much stronger.
- [04:25]
Tim Seymour
Well and you look at the little glimmer you got of it in this last quarter and again on a, on a price to earnings growth on a peg ratio, that 30% growth against, you know, a 30% multiple on the, on the trailing gets you to a really actually attractive peg ratio. I, I think the Numbers that were shocking here, that that cloud growth number. And I realize it's not as sexy of a business, but at a time when the cloud competition is heating up, I love to see that 47%. I do think that the dynamic around Search though their core business, that bogey. First of all, the bar was really high. The bar was 16, which was significantly higher than they were. And they come in at 16.7. The core business. We all know what Gemini seems to be doing. I love the Apple talk. I think this is good for Apple too. Which is also at some point when we talk about the market, we can talk about Apple's defensiveness. But I just wonder what the stock would be doing if they actually came in line on the capex. I wonder how high would it be?
- [05:16]
Melissa Lee
Very same question to an analyst.
- [05:18]
Tim Seymour
What do you say? He doesn't know. He's not on fast money. On fast money, we actually played through that and my guess is this stock would have been up 5 to 7%.
- [05:25]
Melissa Lee
He likes that CapEx number. He likes it. It shows confidence that they're getting out of it.
- [05:30]
Bono
Yeah, I tend to agree. The street probably would, you know, kind of reward them a little bit more in the interim if they had scaled it back just slightly. But again, I do think that is kind of a sign of good faith going forward. The last thing that I want to mention is the margin defense here up around 30%. I mean, that was another concern that you had coming into the print. I think they're hitting on all cylinders. The last thing I'll say is that this is pretty much a fully integrated stack company. You have TPUs, you have, you have the defense of. Well, you know, ads were okay. YouTube ads were okay. But you have Search that was essentially defensible. You have margins, you have the robust cloud growth. I think it's kind of setting up as very well. Vertically integrated firm.
- [06:05]
Carter Worth
Well, I think the market's response is the answer. It's barely up. Right. So the stock was 352 days ago. It's indicated now in the aftermarket. I feel a para 2,339.
- [06:16]
Melissa Lee
So, so, so holding on to these gains. What gains are holding on to the year to date gains.
- [06:22]
Carter Worth
The 2% gain.
- [06:23]
Melissa Lee
No, no, no, not the two.
- [06:24]
Carter Worth
Okay, which one?
- [06:24]
Melissa Lee
The G here.
- [06:26]
Carter Worth
But here's the, on the, on the, on the tariff low, there's $140. It's now 355. Yesterday's high. 350. We just got a good number. All cylinders and. Which is true. But the market is saying it's come too far, it's full. I would sell calls against it or trim my lungs.
- [06:43]
Melissa Lee
Would you agree with that interpretation? Because that's a glass. I feel like that's a glass half full.
- [06:46]
Guy Adami
That's just.
- [06:48]
Melissa Lee
I feel like the glass half.
- [06:50]
Guy Adami
I'm not, I'm the half full guy. I'm the half full guy all the time.
- [06:53]
Melissa Lee
Half full is that I know it is enough to hold on to the gains that it's made over the past few months.
- [06:57]
Guy Adami
What Tim will say correctly is some of the parts of stocks a lot higher. He's right to point out that without the Capex, where is it? But valuations I think sort of do matter. And just to sort of play the other side and sort of line up with Carter, all we've done here is get back what we lost today. So we're pretty much where we started yesterday to Carter's point.
- [07:18]
Tim Seymour
Selling calls and trimming a position that's run a lot is what I was doing over the last couple of days, both for myself and for clients. I just think you're not going to feel bad taking a little off the table in the tape we have for Google especially because that position has become oversized for most people. I think you have to be careful about that.
- [07:36]
Melissa Lee
Here's a question that I have based on Alphabet's report. Is this actually a stamp of approval for the trade across the board or does it make other players look relatively weaker, relatively less well positioned then Alphabet?
- [07:53]
Guy Adami
I think it's a good thing that you see that that Capex guide higher is for everybody and it's good for everybody for the hardware, for the percent.
- [08:02]
Melissa Lee
But for Microsoft, for I think, I.
- [08:06]
Guy Adami
Think software is its own animal right now. We'll have that conversation. I will say this as well. What I heard from Jensen Huang over the weekend might in some ways mitigate what we're hearing from Google in terms of the sanctity of the spend that they were talking about six or seven months ago.
- [08:21]
Bono
I'm never going to argue against prudent risk management and I think that's what Tim and Carter are both saying. So I really don't have a reason to argue there. What I will say and what I think is being lost though is if you kind of juxtapose Alphabet's performance against what we've been seeing in the larger tech space overall. So sure it's a 2% move just today, but if you compare that relatively to what's been happening within the space, I think it speaks. I mean it Gives you a more complete picture.
- [08:44]
Melissa Lee
Do you feel better or worse about Microsoft's print?
- [08:48]
Tim Seymour
I feel okay about Microsoft's print and I think Microsoft is, is at the, at the end of a period where the stock has been correcting and consolidating and I, I think, I feel even better though when I think about what I might be getting from Amazon tomorrow. I think also a stock that looks a lot more interesting on valuation trades, you know, I mean compared to Wal Mart these days. I know we're not having this conversation. I just started it. I like, I like the thought of Amazon tomorrow based upon Google today, sorry.
- [09:17]
Carter Worth
Amazon set up is what Google was right before this huge move, meaning Google was rangebound, underperforming and then it caught up with the market and caught up with semis. I think Amazon is the play.
- [09:28]
Melissa Lee
All right, for more let's bring in Fast money friend Jean Munster, managing partner at Deepwater Asset Management. Gene, what's your take on Alphabet's quarter?
- [09:37]
Jean Munster
I think back to Guy's comments that this really shows this capex guide was remarkable. 100% growth, hard to imagine really speaks to the breadth and how early we are. This whole conversation that we're at the cusp of AI starting to slow down is just totally off base and I think that that plays through. So the more important point for me so far has been a read through for the broader AI trade. As far as Google's business, you've already kind of framed in and all I can add is that on the call so far they've been reiterating that this momentum can continue. And specifically when we look at the growth within cloud, they said that there's not only existing customers amping up their spend but also new customers coming in. That was really important to kind of keep this flywheel going. And so I think when I put this together, this reminiscent of last week when Apple's numbers came out, the stock didn't do what I had expected it to do. We're seeing kind of the same scenario here. I would have suspected given the stock was essentially flat over the past week that the Stock would be up 5, 10% on this print. It really is a remarkable print and a show of force at them and Metta showing how they can use AI to really accelerate revenue growth in a.
- [10:54]
Melissa Lee
Remarkable way in terms of the trade what we've seen is hardware do really well. Software getting killed. Does that, do those narratives continue and maybe continue with a vengeance based on that CapEx number?
- [11:10]
Jean Munster
I think they do. And that's kind of one of the dynamics, kind of a strange dynamic around this whole software trade down is that there's this narrative that, you know, doesn't have utility to it. But at the same time, investors are really queuing in on what's going to happen with software growth next year. It's not about this year. It's how this, this whole phenomenon impacts that. And I think at the end of the day is that this, the news tonight, obviously a good read through for the infrastructure and a negative read through for the software companies. I think just to kind of, I want to put some perspective on like the magnitude of this is that going into the print, the street was looking for 30% capex growth for Google. That was kind of in line with Amazon and Microsoft. Meta was at 74% and they just got it to 108. And so these are big numbers getting bigger. That means the brain of AI, the infrastructure, the brain is getting bigger. That means that the utility will get bigger. That means that software is going to be under more duress.
- [12:11]
Melissa Lee
Does this make Microsoft look weaker or worse given its print last week compared to what Google's putting up?
- [12:21]
Jean Munster
Yeah, absolutely. I mean we had kind of the growth in Azure was, what was it, 37% in the September quarter, 39 and the December quarter. And then what we saw here is going from low 30s for Google Cloud to 48%. So you're seeing just kind of, you know, that gap. They're doing just a lot of right things. We use these models. We use it with a product that we have that does just uses machines to predict stock movements. We also use it in our research process and I can attest that what's happened in Google and the underlying Gemini model has been significant in terms of its improvement. I'm using that a lot more than other and using a lot more than Microsoft products as well.
- [13:03]
Melissa Lee
All right, Jean, keep us posted on that call, which is still ongoing. Gene Munster, Deepwater Asset Management what do you want to hear from the call? What are you curious about at this point?
- [13:13]
Guy Adami
What are you. The capex. I mean, that's exciting. What are you seeing out there that justifies was 150, I think was 115 billion. Right. And then they got it up to 170 to 200. I mean, where did that, where did that come from? And you know, the stock reaction seems to indicate that people are excited about that. So obviously you think there's, you're going to get the ROI that everybody's been waiting for.
- [13:34]
Melissa Lee
All right, meantime, the software slide continues. The IGV down For a seventh day in a row. That's its longest losing streak since 2024. Applovin Palantir, Oracle, Unity Software among the big laggards. But CEO Jensen Huang says the sell off is overdone. Here's what he had to say at the Cisco AI Summit last night.
- [13:52]
Tim Seymour
There's this notion that the tool in the software industry is in decline and.
- [13:58]
Bono
We'Ve replaced by AI.
- [14:01]
Guy Adami
You could tell because there's a whole bunch of software companies whose stock prices are under a lot of pressure because.
- [14:06]
Tim Seymour
Somehow AI is going to replace them. It is the most illogical thing in the world.
- [14:12]
Jared Holtz
And time will prove itself.
- [14:16]
Melissa Lee
He says. Basically the next sentence that he says is if you're going to use a screwdriver, are you going to use a screwdriver? Are you going to invent a new screwdriver? You're going to use that screwdriver. You're just going to use it better based on the new tools that are out there. But what do you make of that? Because the slide is undeniable.
- [14:31]
Bono
Von and it is undeniable. I mean, I think he has a reason to kind of like defend the space. Right? So it's not as if this is an objective opinion. What I will say is that there is a lot of buy in and switching costs associated with this. And so the uprooting your entire enterprise stack and bringing in in house capability. I doubt that every single, both large cap and micro cap are going to be able to kind of install this on their own. So I think that probably the truth is somewhere in the middle where I do think there will be some AI disruption at the margins. But at the same time I do think that the scale, kind of the processes that are embedded in like the large enterprise stack will kind of persist and remain.
- [15:12]
Melissa Lee
Let's get a take on the charts. Carter, what do they tell you?
- [15:16]
Carter Worth
Let's look. Now this is old Lang Syne standing here at this. 23 years ago we first started telestrating. And the telestrator is back. Let's get to work. There are three lines. The middle line is the whole, that is the tech sector and you've got two of the parts. One plunging, that of course is software and one surging, that is semis. What's starting to happen now of course is that semis are succumbing and ultimately it means that there should be lower prices for the tech sector. But you can see quite clearly this spread again, this versus this. And on a three year basis the sector is up 100 semis, up 150 software up 50 that is semis have tripled the performance of now this same chart, let's hold the whole as a constant. So if you look at the next chart, this is going to be the tech sector unchanged, held as a constant to expose the two parts. So the hole again is there in the middle and then you see this incredible spread. And what I think the play here actually is to bet against semis we'll get a nice green arrow. And to play this for mean reversion. Nothing to do with any fundamentals, nothing to do with whether this is the end of software because of AI. Nothing to do with the long term structural growth in semis. They're no longer cyclical and just in computers now they're in your refrigerator and every other darn thing. It's just a trade play it. We like for mean reversion.
- [16:43]
Melissa Lee
All right, so mean reversion on one hand do you agree with that? But then on the fundamental side do you think that there's still more downside fundamentals or fundamentals Funny mentals according to Carter Worth.
- [16:52]
Tim Seymour
Yeah, I heard funny man.
- [16:53]
Guy Adami
Yeah.
- [16:54]
Tim Seymour
Yeah.
- [16:54]
Guy Adami
Well first of all he terrifies me. Walking over there I was wondering where he was and if they ever asked me to go over there it's going to be a problem.
- [17:00]
Melissa Lee
You like how he put his jacket on in order to be there but then when he comes back here he's going to have no jacket.
- [17:05]
Guy Adami
Here's why I think this could actually play well. First of all, let's see how semis trade tomorrow. Theoretically they should trade well given what we just heard. However, let's sort of shove that for a second. Microsoft, which by the way I thought would rally post earnings obviously did not. But then we subsequently thought we could fill that gap we had back from the spring with today's action. We basically did it. So if you put a short term bottom in Microsoft, a big component of the igv, Carter Worth might be on to something here.
- [17:31]
Tim Seymour
Yeah, I like that call and I, I believe Microsoft has priced in a lot of pain and a lot of concern around a core business model that still is a very high margin business. I think Carter is right to point out it'd be less to me that I would be looking to bank on a recovery in software that semis and as someone that has felt for the market overall until I see semis really underperform the S and P I'm long this market and semis will take us higher Semis even after today are I don't know, you know 7%, 8% off of all time highs that had it up at one point, up almost 20% this year. This isn't really even a pullback yet. So I feel like we could get more of a pullback. It's not my reason to go out and buy software stocks, but will we.
- [18:17]
Melissa Lee
Get that pullback with that capex spend that Google put out? Huge capex going into the likes of an Nvidia as well as a Broadcom which are higher in the after hours.
- [18:25]
Guy Adami
Session, which is what you know, that's how I started by saying they theoretically should trade. Well tomorrow the tell will be if they give it up. We've seen it before so I think Tim is spot on. He's been dead on. Right. With these semi stocks and the broader market, the pullback we've seen is not all that meaningful yet. I still think to Carter's point though, IGV for a bounce here makes a lot of sense.
- [18:46]
Melissa Lee
All right, coming up, we will be keeping an eye on shares of Google. They are fairly lower right now and bringing more headlines from that conference conference call as we get them. Plus all the after hours action in Qualcomm, Arm holdings and Snap. And the crypto carnage continues. Shares of MicroStrategy, Robinhood, Coinbase aren't immune from the drop. What is next for this space and just how far Bitcoin could tumble? Don't go anywhere. Fast money's back into.
- [19:11]
Tim Seymour
This is Fast Money with Melissa Lee right here on cnbc.
- [19:19]
Jean Munster
Thy ticket lady, Jennifer of Coolidge.
- [19:22]
Melissa Lee
Well, many thanks, good sir. Here is my Discover card.
- [19:27]
Strayer University Announcer
They accept Discover at Renaissance Fairs?
- [19:30]
Melissa Lee
Yeah, they do here. Discover is accepted at the places I love to shop. Get it with the times.
- [19:36]
Strayer University Announcer
With the times. You're playing the loot.
- [19:40]
Melissa Lee
Yeah. And it sounds pretty good, right?
- [19:42]
Tim Seymour
Discover is accepted at 99% of places that take credit cards nationwide. Based on the February 2025 Nielsen report.
- [19:50]
Strayer University Announcer
The Jack Welch Management Institute at Strayer University helps you go from I know the way to I've arrived with our top 10 ranked online MBA. Gain skills you can learn today and apply tomorrow. Get ready to go from make it happen to made it happen and keep striving. Visit strayer.edu Jack WelchMBA to learn more. Strayer University is certified to operate in Virginia by Chev and has many campuses, including at 2121 15th Street north in Arlington, Virginia.
- [20:19]
Melissa Lee
What made you confident that you could do something that hadn't been done before?
- [20:23]
Julia Boorstin
I have no fear of failure.
- [20:25]
Melissa Lee
Trailblazing women, changing the game. One of my favorite pieces of Advice. 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.
- [20:39]
Julia Boorstin
Think big to accomplish big things.
- [20:41]
Melissa Lee
Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts. Welcome back to Fast Money. Crypto in a rut as investors continue to rotate away from the risk on assets. Bitcoin hitting 72,000 today, its lowest since November 2024. The token is on pace for its worst week since November of 2022. And take a look at crypto proxy Strategy down another 3% today. It closed below $130 a share at its peak. Remember it was nearly 500. We've been talking about what happens when the average holding price is higher, which.
- [21:21]
Guy Adami
We are now through. So I think they, I think Strategy owns over 700,000 bitcoin and approximately $76,000 a coin. Ish. You see where we're trading, I think collectively on the desk we have said that the market will challenge that average price at some point and a couple of times it did and it bounced. But the bounces were not particularly robust and now here we are. But I've also thought, and maybe you saw signs of it today, that the overlap between the crypto investor and the tech investor is probably pretty large and you'd start to see some carnage. You're seeing it around the edges. But I don't think the crypto sell off is over by any stretch.
- [21:53]
Tim Seymour
Yeah, by the way, it's not everyone. It's Guy that pointed out that level on MicroStrategy's average Bitcoin cost. So good call, Guy. And I think the dynamic in high multiple tech, so what we would deem is not necessarily even profitable tech, but certainly trekking tech tech that trades it north of a of a 25 times revenue sales to price to sales. Revenue is something that's really been under a lot of pressure. So there's no question that there's overlap. There's no question that there's a demographic that believes in this new world era. The problem is, and you get back to software, I just don't know how much enterprise spend can go into all these software companies that were $100 billion software companies six months ago. Part of it is just the crowding out of that. But there's no question this is a momentum crowd and it's the revenge of the value investor.
- [22:41]
Melissa Lee
Yeah, Bitcoin winter.
- [22:42]
Bono
Here it is. I mean, and it's tough. I mean we mentioned it before. If you, whether you want to play bitcoin or whether you want to play strategy, I mean, you really need to understand that like the legacy business is moving sideways. This is not a core growing asset. It really is a levered bitcoin play. And then you look at the 2028 and you kind of have this convert overhang, so there's this refinance overhang. So, so, you know, on the downside, strategy is going to underperform bitcoin. I don't see that trend changing at all. It's really a matter of do you want leverage to the upside and if so, I think strategy is the way to play.
- [23:14]
Melissa Lee
It used to be 550. Carter.
- [23:17]
Carter Worth
Yeah.
- [23:18]
Melissa Lee
How does this chart look?
- [23:20]
Carter Worth
I mean this is the definition. Look, momentum is a powerful force both on the way up and on the way down.
- [23:24]
Tim Seymour
So is leverage.
- [23:25]
Carter Worth
And leverage is a very gearing the Brits call it. But either way, both of these things are in effect and gearing they're in the wrong direction.
- [23:32]
Tim Seymour
British term, Right?
- [23:33]
Melissa Lee
Yeah, That's a Carter's leverage. Stay away. Right. How about the bitcoin chart though?
- [23:39]
Carter Worth
Same thing. I mean, now, interesting. Right now, as of now, bitcoin is even with the S and P on a five year basis. Not to say that even with the S and P, but with a whole lot more variability. So risk adjusted basis even is worse.
- [23:51]
Tim Seymour
I thought one of the most powerful things Carter said last night on this show was about the bitcoin uptrend broken over the last decade. That's, that's powerful. Boom.
- [24:01]
Melissa Lee
Coming up, more after hours action and shares of Qualcomm. The details from that report, how traders are handling the move in the chip maker. You're watching Fast Money live from the NASDAQ marketsite in Times Square. Back right after this. Oh, could this vintage store be any cuter? Right? And the best part, they accept Discover. Accept Discover in a little place like this? I don't think so, Jennifer. Oh yeah, huh? Discover's accepted where I like to shop. Come on, baby, get with the times. Right, so we shouldn't get the parachute pants. These are making a comeback, I think.
- [24:39]
Tim Seymour
Discover is accepted at 99% of places that take credit cards nationwide. Based on the February 2025 Nielsen report.
- [24:47]
Strayer University Announcer
The Jack Welch Management Institute at Strayer University helps you go from I know the way to I've arrived with our top 10 ranked online MBA. Gain skills you can learn today and apply tomorrow. Get ready to go from make it happen to made it happen and keep striving visit strayer.edu Jack WelchMBA to learn more. Strayer University is certified to operate in Virginia by Shev and its many campuses, including at 2121 15th Street north in Arlington, Virginia.
- [25:17]
Melissa Lee
What made you confident that you could do something that hadn't been done before?
- [25:21]
Julia Boorstin
I have no fear of failure.
- [25:23]
Melissa Lee
Trailblazing women, Changing the game One of my favorite pieces of advice 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.
- [25:36]
Julia Boorstin
To think big to accomplish big things.
- [25:39]
Melissa Lee
Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts. Welcome back to Fast Money. Qualcomm shares plunging after hours after the chip maker gave disappointing guidance, the company did beat on the top and the bottom lines. The conference call, I think it's still underway. Christine is here with the latest.
- [26:00]
Julia Boorstin
Yeah, I have my earpiece right here. I was just listening to it moments ago. But much like amd, intel and aam, the guidance just wasn't enough. On the earnings call, Qualcomm CEO said it was, quote 100% related to memory. The entire Q2 guide range missing consensus. I was able to catch up with Qualcomm CEO earlier who told me, quote, memory is going to define the size of the mobile market. Phone makers, according to him, are adjusting purchases and inventory based on memory availability and pricing. Smaller manufacturers and he pointed out especially in China, will be more impacted, making it hard to guide beyond Q2. But they want to say that there's a silver lining. Qualcomm is concentrated in the premium tier handset market where the CEO says demand has been, quote, very, very strong. They said it a few times, fundamentals are good but both for Apple modems and within the Android ecosystem, the theory is premium consumers can absorb higher memory prices better than the mass Market Auto IoT. Internet of Things also continue to grow as the company diversify, diversifies. And lastly, just on the Internet moments ago the CFO said, quote, we expect to return to our prior run rate and growth trajectory for handset revenues when these conditions normalize. But the question is though when? When is when and whether memory supply catches up before demand destruction sets in.
- [27:16]
Melissa Lee
What is it more the price of memory at this point or the constraint? The lack of memory? Lack of memory, the lack of memory.
- [27:21]
Julia Boorstin
Correct.
- [27:22]
Melissa Lee
So the whole notion about the premium tier handsets being able to absorb the memory cost, well, the lack of the.
- [27:28]
Julia Boorstin
Supply creates those prices. So I guess. But the initial problem the chicken or the egg thing is the supply which is therefore increasing prices because they're shifting to higher margin memory like let's say high bandwidth memory over DRAM dynamic memory. And so because of that they have to absorb the cost, it affects margins and then they think because they cater to a more expensive market people can absorb the price.
- [27:54]
Melissa Lee
I was just trying to figure out if they were actually, if the premium tier was actually constrained as well as the lower tier. Yeah, they're just paying higher prices and still getting their memory but.
- [28:05]
Julia Boorstin
No, they are, but they think that they can pay for it. Pass on to them.
- [28:09]
Tim Seymour
Speaking of premium tier, how about just Apple and Samsung moving more in house with, with their chips? I mean this is something that I think this to me is the biggest problem. And how much is that offset by Internet of Things and auto which are exciting higher growth areas.
- [28:23]
Julia Boorstin
Remember Apple is going to be pushed off the books in the next few quarters.
- [28:26]
Melissa Lee
Right.
- [28:26]
Julia Boorstin
Because the relationship between Qualcomm and Apple is ending which is why the focus is more so on the Android market. So I don't necessarily think they're going to say it's not going to bother them that much because we've known for quite some time that Apple is not.
- [28:40]
Melissa Lee
Part of the equation.
- [28:41]
Julia Boorstin
But Samsung in house chips. Yeah, you can make that argument like Nvidia.
- [28:45]
Melissa Lee
Right.
- [28:46]
Julia Boorstin
Everybody's going in house is going to be competition down the line.
- [28:49]
Guy Adami
125, believe it or not we're approaching lows we saw in April of last year which is remarkable in the tech in the semi space. If you just think about it, valuation, it's always been cheap. The guide is scaring people. I don't know. I think you take a flyer here on Qualcomm if it gets worse than 136, I think, you know, right around 130, which you probably can get to. I mean I think you take a shot here on the long side.
- [29:10]
Melissa Lee
How does that chart look there?
- [29:12]
Carter Worth
Well here's a fact, it's the same price it was five years ago. That says a lot, right? I mean so many things have happened. You could be short things that have gone out of business, you, things that have quadrupled. What a waste of time and indicated lower tomorrow. I wouldn't touch it.
- [29:23]
Bono
Yeah, I think you could have made the same argument for IBM. In fact I think I did make that same argument for IBM and I was wrong. So I guess there is some, some upside in terms of the pricing. Just reflecting that, you know, we've essentially kitchen sinked it that guide is concerning. It's the the lower end of the range that they gave. So I, I really don't see a lot of tailwinds to this name. The Apple news, the Samsung news is quite concerning. I'm not sure if Internet of things and automotive are really going to be able to grow in a meaningful way to both make up that loss and then show meaningful growth on a go forward basis.
- [29:59]
Melissa Lee
Christina, thank you. Thanks Christina. Parts Nevillis Coming up, the pharma gap between Lilly and Novo. What's sending those stocks in vastly different directions today? And what Mizuho's Jeremiah Holtz. He's next in the weight loss drug race. Fast Money is back in two.
- [30:14]
Tim Seymour
Missed a moment of fast. Catch us anytime on the go follow the Fast Money podcast. We're back right after this.
- [30:27]
Melissa Lee
Welcome back to Fast money. Major markets closing off their lows of the session. The dow more than 250 points higher. The S&P falling half a percent and the tech heavy NASDAQ dropping one and a half percent. It had been down two and a half percent at Lowe's casino stock. MGM more than 8% higher as its bet MGM app swung to a net profit thanks to strong growth in Igaming and online sports betting. Caesars Penn and win also higher today. The Invesco Solar ETF hitting its highest level since August of 2023 led by a big jump in Enphase which posted better than expected earnings and guidance last night. Shares of chemical Manufacturing Co. FMC dropping after a Bloomberg report it is expected exploring strategic options including a possible sale. And networking company Sienna will be added to the S&P 500 effective this Monday. And some more earnings action. Elf Beauty and ARM holdings heading in different directions after topping earnings and revenue estimates. Shares a snap higher after beating revenue expectations. And do not miss an exclusive interview with SNAP CEO Evan Spiegel. That's tomorrow 11:00am Eastern Time right here on CNBC. Well, Eli Lilly ending the day up over 10% after blowing past quarterly estimates thanks to soaring demand for its weight loss drugs. The zeppelin maker also giving Stronger than expected 2026 guidance forecasting the sales could rise by as much as 27% this year. That stock faring far better than rival Novo Nordisk, which announced yesterday that it expects sales to fall between 5 and 13%. Novo shares down 6% today after its earnings call, bringing its losses over the past two sessions to nearly 20%. For more on all this, Mizuho health care sector specialist Jared Holz joins us here on set. Jared, good to see you you too. What do you make of that staggering Novo decline? Is it warranted, is it overblown?
- [32:09]
Jared Holtz
It seems like it's a little bit overblown, but at the same time, you know, now that you have the context of the Lilly quarter and their guidance, I mean these are just two companies on two very different paths. At least now it's kind of amazing what's happened because you know, we've discussed this sector so many times and, and the data and the products don't seem that dissimilar. But the stocks have just taken completely different paths.
- [32:31]
Melissa Lee
How do you view that? The decline in sales that Novo's forecasting 5 to 13% down versus what Lilly is forecasting.
- [32:39]
Jared Holtz
They seem a little bit more cautious on Medicare, like the Medicare Medicaid reimbursement timeline, it seems as though they believe is going to be towards the end of the year, maybe even next year. Eli lilly is saying 2026 mid so sometime maybe during the summer, it's really hard to tell. And then I think the pricing dynamic is just so different and the IRA lists semaglutide on it, but tide not. And so I think investors at first thought okay, once Novo hit the ira, Lilly would be impacted. Doesn't seem like that's happening, at least not very quickly at these levels.
- [33:15]
Guy Adami
To me, Jared, Novo's trading like that's the only business are in is weight loss and that's not true at all. And in your notes it says they might be better and it's not going to happen. But would they be better off without it? So the point is, are they not being valued for everything else?
- [33:30]
Jared Holtz
Well, I guess what I wrote this morning is like when you consider that the stock is at a five year low, we've discussed them hundreds of times for this massive market that they're in that they still have 30 to 40%. I think the stock would fare better if they had never gotten into this business. That's what the market is telling us, that if they just stick, you know, with diabetes and maybe did a couple tuck in deals, the stock would be higher. I mean look at the way the pharma sector is trading. You've got all time highs for so many single stocks. This thing is nearly near at a decade low. Something doesn't compute. And they've done deals. I think they're trying to shift the narrative but it's just too late.
- [34:06]
Tim Seymour
What about the insurance dynamic? And should we care that a lot of the wegovy, the pill and the data we're getting are cash pay customers. And is that, what does that say for the rest of the sector? And is it, does it, you know, does it shine even a better light than on Lilly? I'm just curious.
- [34:21]
Jared Holtz
I mean, it's good and bad. I mean, we thought, you know, when we saw that 200 patients or 200,000 patients are already on the pill after one month, that's a staggering number. Unfortunately, they're only paying $150 per month. Right, right. So that's a basic, a fifth or a tenth, depending on how you want to do the math of where the pricing was just two years ago. So I think that's the issue that Novo is having. On one hand, you want to build this consumer oriented market because there's massive power in numbers and volume, but at 150amonth, it's just not enough.
- [34:52]
Bono
How does this change the biotech landscape? If you're a burgeoning biotech firm that has leverage to GLP1 weight loss type of drugs, are you no longer an acquisition target? Do you continue your R and D spin? Are you looking to shore up cash?
- [35:08]
Jared Holtz
I think you still are. I think there are a select few, but you've got to be pretty close to prime time. Like, I think a lot of the large cap pharma companies and biotech companies have missed the boat already. I mean, Pfizer doing Metsara a couple months ago for 8 or 9 billion. That seems like it may not be that great of an asset med. Sarah, obviously, I think it's incredible that they sold and they obviously should have. I think now that we see some of the data, I don't think it's necessarily too late, but you've got to come with something a lot better. And I think what we're finding is it's very tough to find something better than either Novo or Lilly.
- [35:40]
Melissa Lee
And I mean, Warfor is in the, in the pipeline, but also Retatrutide. I mean, they have other sort of next gen weight loss drugs there. How does Novo stack up in the rest of its pipeline? Because in addition to Retatrutide and Orphor, I mean, Eli Lilly's got all sorts of other drugs. They're doing, you know, for instance, genetic, genetic gene editing, gene drugs. And so I mean, how does it stack up the entire pipeline, not just weight loss?
- [36:07]
Jared Holtz
I don't really think it does. I mean, Lilly's done a lot of acquisitions over the past few years. They're trying to diversify. They're saying in many different ways that they want to obviously focus on this core business because it's been so excellent. But take the opportunity to beef up other segments. Rare diseases, for one. Like you mentioned, I don't think Novo really has anything that I think can really pack a punch the way that Lilly can.
- [36:30]
Melissa Lee
So what does it need to do?
- [36:32]
Jared Holtz
I mean, they, they have to do more deals, of course.
- [36:36]
Melissa Lee
I mean, Metzar, it looked like they dodged a bullet with Metcera in a way.
- [36:39]
Jared Holtz
In a way, it's really tough to know what happened there because of the. All the FTC around it. Did they bid the price up so someone would pay more? Part of me feels like that's what they did and were successful. So maybe they didn't really want it after all. We'll never really know. But I think some more tuck in deals that are maybe even adjacent to this business. Cardiovascular wouldn't be a bad idea. But again, it just seems so late in the game and I think if they do do something relatively big, then it's going to be viewed as defensive. They still do have Kagar Sema. I think there's a little bit more excitement for that just because they've redesigned parts of that trial. Maybe the data is a little bit better, but they don't really have much.
- [37:17]
Melissa Lee
All right, Jared, thank you. Jared Holes of Mizuho. Tim, how are you feeling about your Novo?
- [37:22]
Tim Seymour
Well, one thing that makes me feel better about Novo is everything that seems to be wrong with them is that they can't communicate. They have, they have certainly no. They have no street cred with the street. They have no street cred with the investor community. There's no question to me, this is a company that's in a better position today than it was six months ago. And yet the share price is probably down 40%. I think there's been significant change at the top. I think we still need to see this. This CEO really, I think, established what the game plan is because outside of this drug, people really don't know. I like Novo a little more cheaper today than I did yesterday, but I hate the numbers were fine, the guidance wasn't great and the communication was worse.
- [38:03]
Melissa Lee
What does the chart look like to you?
- [38:04]
Carter Worth
Well, same as last night. I would just, you know, this is a failing bearish to bullish reversal. And so take measures, reduce your exposure or get out.
- [38:13]
Melissa Lee
Yes.
- [38:14]
Guy Adami
You know what the N in my junk is?
- [38:16]
Melissa Lee
Yes. Troubled. I mean, between unity and this. I don't know where your junk is right now.
- [38:22]
Guy Adami
Neither do I, actually.
- [38:23]
Tim Seymour
It's soft. Yeah. I mean, it's not, you know, just.
- [38:26]
Guy Adami
Lousy flailing, miserable flailing. Stinks, but it's a long trade on Novo. Just quickly listen, what Jared said sort of resonated with me. If they never got into business in the first place, where would the stock be? It's not just a weight loss company, but it's being priced as a loser in the weight loss space.
- [38:44]
Melissa Lee
Do not miss Jim Cramer's exclusive interview with the president and CEO of Novo Nordisk on the back of its earnings. That's the top of the hour on Mad Money. Coming up, Uber shares hitting the skids. Why the rideshare stock is getting hit after this morning's report. The profit pinch that had investors selling out the details and fast money returns. Another check on shares of Alphabet down by a little bit more than 2%. Gene Munser has the latest from the call. Gene?
- [39:14]
Jean Munster
Melissa, yes, shares faded as they talked about this supply constrained on cloud. Obviously Cloud had that monster quarter, 48% growth and they talked about that monster guide on Capex. They said that half of that big guide up on Capex would be related to supplying capacity for Google Cloud and the majority of that's going to come in the back half of the year. And so as you kind of think that through, it basically adds a little bit of uncertainty to what Google Cloud growth is going to look like over the next couple quarters. They didn't explicitly break that out, but after they had those comments, you started to see the stock slide in the toy department category. Credit Mark Mahaney here for asking the question, what do you think about this big software sell off? Sundar said these software companies need to re engineer themselves basically as an AI first company. He did add that those big software customers which use Gemini think about like Agent Force, for example. He did say that the amount of token usage in the December quarter was, his comment was very robust. I think you read between the lines. These software companies get it. They need to get up to speed in a hurry.
- [40:25]
Melissa Lee
All right, Gene, thanks for keeping us posted. Gene Munster, thank you. Sort of a different tone from Jensen Huang saying that the sell off is illogical. I mean really dismissing the entire sell off here.
- [40:35]
Guy Adami
I think it's very logical and it's logical based on what he said over the weekend. It's his words that, well this was in motion for a while, but his words over the weekend fact that that hundred billion dollars is not etched in stone. I think that just sort of put gas on the fire, which makes it logical to me.
- [40:50]
Melissa Lee
All right, Alphabet shares down 2.4%. Meantime, shares of Uber down 5% after reporting mixed results this morning, even with strong bookings and record active users, the rideshare giant missed earnings estimates, setting higher tax rates and customers opting for lower cost rise on the platform. It also gave weak profit guidance for the current quarter. Uber is now down nine and a half percent so far this year. What do you make of Uber?
- [41:13]
Bono
I mean the operating expenses are a concern. I think this is two or three quarters in a row where they really have not managed that or at least, you know, kind of hit expectations there. And it seems now that they're kind of following the way of Tesla and putting everything into autonomous vehicles. And my concern there, and I think the Street's concern there is that you're now competing with Waymo and Tesla in that space. So if that is essentially your pie in the sky or your path towards more robust growth, I think there's just increased competition there.
- [41:40]
Melissa Lee
Tim.
- [41:41]
Tim Seymour
I think this is a case of a company that's not, they're not that profitable and I think at least some of their profitability is. We heard about why it was less profitable this quarter and you get to a place where I just think this is what the street has been punishing. This stock is, is just when it was breaking out. Looks like it's taking you all the way back to kind of mid last year. And I think it probably has lower. There's nothing wrong there. But I do think they have a pricing issue. I think their rights are too expensive.
- [42:06]
Melissa Lee
Coming up, the ups and downs of the recent market swings. How our traders are handling the stocks having new highs and new lows amid this volatility and whether the good or bad times times will continue. More fast money into. Welcome back to Fast Money. A trio of names touching all time highs caught our eyes today. Deere, Cisco and PNC Financial all hitting records. But are they worth a buy here? Tim, I think you're looking at Cisco.
- [42:35]
Tim Seymour
I like Cisco. I think their software business is a high margin business and it's the one part of their business that's actually doing okay and they're not being branded a software company. I mean it's about routers and switch in enterprise spend and a lot of this build out that is very, very helpful to Cisco. You're essentially back through those dot com highs. I think the stock has been one of those slow ones to finally get back there among it. I think it's going higher.
- [42:56]
Melissa Lee
Bono and which would you nibble at?
- [42:59]
Bono
PNC and I probably nibble here. I approach it with either call spreads or buy. Right. But I mean you've got 21% EPS growth, you've got net interest margin growth. We've got deposit bait based on growth. I think what you're seeing is real strong fundamentals. Now what concerns you is that the stock has just run so much and it's probably getting into overbought territory. Which is why I look for kind of a cost controlled way to get into the stock guy.
- [43:23]
Melissa Lee
You have one that you don't like in this group.
- [43:25]
Guy Adami
Well, it used to be called John Deere. Now it's Deer and company. Tim actually owns many of their products. Clearly it's been helping but you know if you look at it, they report a thing on the 19th. This. Why the wah. Why the wall?
- [43:38]
Tim Seymour
I don't know. I mean I'm a proud deer owner.
- [43:40]
Guy Adami
No, I know. I think that was in response to fade it.
- [43:42]
Melissa Lee
Not yet. Not because you own Deer products.
- [43:45]
Guy Adami
I interpreted it the same.
- [43:47]
Melissa Lee
Not all about you.
- [43:48]
Guy Adami
All about you. So. And I look at the reversal in Caterpillar today and say to myself, two times normal volume, all time high. I don't think this one. You want to initiate a long position at these levels.
- [43:58]
Melissa Lee
Carter, which chart do you like here?
- [44:00]
Carter Worth
I like Cisco.
- [44:00]
Melissa Lee
Okay.
- [44:01]
Carter Worth
Yeah, Cisco's just remarkably think it's high. At the dot com peak it was in March, it was $82 a share and it's literally right there now. Trend here now.
- [44:11]
Melissa Lee
All right, and the other side of The Coin, Netflix, PayPal, Boston Scientific, all at or near 52 week lows or even worse. Some agreement on Netflix here tonight, Tim?
- [44:22]
Tim Seymour
Yeah, I mean I can own Netflix with a lot of comfort here. I'm not sure how much the overhang around WB will, how long it will continue. Sure I, I worry about a more asset heavy model, but there's no questioning their leadership, their dominance, their pricing power and the fact that they are a free cash flow machine or that used to be. This is an opportunity.
- [44:42]
Melissa Lee
When I say agreement on the desk. All you guys like Netflix. Yeah, yeah, I know. I wanted to point that out for a reason.
- [44:50]
Bono
Yeah, with a little, with a little bit of, a little bit of a caveat. I think this is where you kind of start to establish a long position. I'm not saying that I think in the next week this is going to get turned around. So you, you probably start to nibble at it, understanding that you probably will lose on your first entry point. But the Tim's point, I think the WBD situation is overblown. They are in a transition. They are going from asset light to asset heavy. They will be spending more money. But I think live and sports ultimately are going to lead them higher.
- [45:16]
Guy Adami
I'm with Tim and with Bono and clearly as well when he's going to say something. I would have said this 15 to $20 go and I probably did. But I think once this Warner Brothers, Paramount, Netflix and gets sorted out, regardless of outcome, I think you finally get the bounce that Netflix owners have been waiting for. And I think you're going to look back in a couple of months and say man, I wish I bought Netflix in the 80s.
- [45:37]
Melissa Lee
So it is consensus here on the desk to like Netflix make it for.
- [45:40]
Carter Worth
I mean you know, to bonds. It doesn't mean it has to bounce, but you're dunking down 41%. One thing, if you dropped in one day you would say this is a mature, deliberate eight, nine month decline. This is exactly where you should get some sort of counter trend.
- [45:55]
Melissa Lee
All right, up next, final trades. Time for the final trade. Let's go around the horn. Do you know what your final trade is?
- [46:13]
Tim Seymour
Why wouldn't I? Of course. How about them casinos, Las Vegas Sands. You know casinos are trading at probably 2/3. Another was a third cheap to where they were pre Covid in terms of Ebitda. Get in there.
- [46:24]
Bono
Let me start by wishing my youngest son a very happy first birthday. You and your brother are my everything. As for final trades, cbx, I just think structural cash return and macro hedge.
- [46:36]
Carter Worth
Carter, what is the exact same one as last night? Sell semis.
- [46:40]
Guy Adami
Mel, I know you know this Artemi Panera and big fan of the show. Maybe the best free agent signing in New York Ranger history.
- [46:47]
Tim Seymour
Maybe a New York Sports gave him away for nothing for a song.
- [46:50]
Guy Adami
He's probably on a plane now to LA GM under pressure. Goodbye Artemi Halliburton.
- [46:56]
Melissa Lee
Thank you for watching Fast Money. We're off tomorrow, but I'll see you in overtime. Mad Money Jim Cramer starts right now. All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy and it should not be relied upon as such.
- [47:33]
Strayer University Announcer
To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer the Jack Welch Management Institute at Strayer University helps you go from I know the way to I've arrived with our top 10 ranked online MBA. Gain skills you can learn today and apply tomorrow. Get ready to go from make it happen to made it happen and keep striving. Visit strayer.edu Jack Welchmba to learn more. Strayer University is certified to operate in Virginia by Chev and its many campuses, including at 2121 15th Street north in Arlington, Virginia.