← CNBC's "Fast Money"
CNBC's "Fast Money"
Apple Reports Results… And Market Impact From The Fed’s Rate-Cutting Pause 1/30/25
00:43:48
Apple on the move as the tech giant reports. The results moving that stock, and the impact on the broader tech space. Plus Stocks ticking higher, as investors digest a rate-cutting pause out of the central bank. What it means for the markets next move, and the chances of any other rate cuts in 2025. Fast Money Disclaimer
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- [00:00]
Melissa Lee
Our state has changed a lot in the last 140 years. We know because Multicare has been here guided by a single making our communities healthier. That comes from making courageous decisions, partnering with local communities to grow programs and services, and expanding healthcare access to those who need it most. Together, we're building a healthier future. Learn more at multicare.org@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 course room to the workplace. A different future is closer than you think with Capella University. Learn more at capella. Edu Live from the NASDAQ marketsite in the heart of New York City's Times Square, this is fast money. Here's what's on tap tonight. All eyes on Apple taking a leg lower in just the last last few minutes. Now at after hours lows, the tech giant missing iPhone revenue estimates seeing a big drop in China sales. We've got all the details on the numbers and we'll bring you the trade and break out or break down to bellwether stocks doing big about faces this week. Are these moves a change in trend or just a temporary blip? We'll dive into the charts to find out. Plus, UPS doesn't deliver. Comcast sees its worst day since 2008 and an old school tech stock hits all time highs today. I'm Melissa Lee, come to you live from Studio B at the nasdaq. On the desk tonight, Tim Seymour, Karen Feineman, Guy Adami and Michael Katopoulos, director of fixed income at Richard Bernstein Advisors. Welcome Michael. We start off with Apple results. Big tech giant reporting its fiscal first quarter results in the last half hour. Shares right now are down about 1 1/2% after a rare miss on iPhone sales. The company did beat on top and bottom lines but posted an 11% drop in China revenues. Apple's conference call started just moments ago. Cnbc. Steve Kobach is at Apple headquarters with more. Steve.
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Steve Kovach
Hey Melissa.
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Melissa Lee
Yeah.
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Steve Kovach
The big headlines out of here. IPhone sales down. China sales down. That's despite beats on the top and bottom line. Let me give you some of the numbers here and then we'll talk about what all this means. EPS was a beat by 5 cents at $2.40 revenue. A slight beat by a couple hundred million dollars. $124.3 billion there. IPhone though this missed expectations. 69.14 billion. Street wanted 71 billion and by the way over sales year over year for the period down about 810 of a percent there. Services though that is the bright spot. The last several quarters here up 14% and beating expectations at $26.34 billion. And then Greater China, this is the big one, down 11% year over year to $18.5 billion. I did get a chance to catch up with Tim Cook on these Apple earnings and talking a little bit about AI and how that's driving iPhone demand. That is the big question of course going on in here. Let me tell you what he said. Quote, we saw that in markets where we had rolled out Apple Intelligence that the year over year performance in the iPhone 16 family was stronger than those where markets where we had not rolled out Apple Intelligence. So basically saying here Apple Intelligence, at least in the areas where it was available, that's the United States and some limited other countries last year and limited languages last year it did outperform where it was not available. And then China, of course we talked about that and what went on there with sales down 11%. He gave me three reasons here. Part of it is that no Apple Intelligence in China, they're waiting for government approval before they could launch Apple Intelligence in that country. That includes partnering with a Chinese AI company, whether that be Baidu or Alibaba or even Deep Seq to replace the ChatGPT functionality which is banned over there by the way. They also have to get their own Apple Intelligence models approved as well before they can launch. He also told me they're working with regulators to get Apple Intelligence approved, but no updates on progress there. He also in China blamed some channel inventory problems and government subsidies that went into effect for some electronic devices this month. It's unclear how that impacted last quarter, but I'm expecting to hear more on the call from Tim Cook on that about what really went down in China. We should be getting some more details on that soon. And then also tariffs. I did ask him about the potential tariffs from the Trump administration that would impact Apple probably more than any of the big mega cap tech companies we talk about. He said they're monitoring any potential tariff impacts that would have on the company, but really declined to comment further. Whether or not President Trump has given any indication that Apple will miss out on tariffs like they did in the last Trump administration. Like you said, the call is just getting started. Now we should be getting some guidance from the new CFO and also some more commentary on these disappointing China numbers. Right now though, you see shares are down about a percent and a half.
- [04:57]
Melissa Lee
Melissa, those government subsidies that you mentioned on electronic Steve, is that government subsidies for homegrown brands, for domestic Brands, it's unclear.
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Steve Kovach
So we're hoping to get more details on that. He did say, I believe he told me that Apple is involved in that in some way. But we're waiting for more details on that. But this is again for this year, not the December quarter we're talking about. So I'm not sure if the implication here is whether or not people were holding off on their iPhone purchases for these subsidies. We're going to find out in a few minutes, hopefully. Melissa.
- [05:30]
Melissa Lee
Okay, Steve, keep us posted. Thank you. Steve Kovac, A lot of the issues that Stephen mentioned in terms of the weights on the quarter we knew, especially the China ways, but China was down 11% and maybe that was, I don't know, worse than expected. Guy, what do you make of the quarter?
- [05:43]
Guy Adami
I think that's what people are probably expecting. I mean for me, yeah, people will look at China, 4% revenue growth, maybe 7, 8% EPS growth services went the wrong way in my opinion. We're down about 22% of overall revenue with that revenue growth. I would have liked it to see better. And then you say to yourself, you know what, again, understanding this is backward looking. The stock just, I think just got a little more expensive. Now 220 was a level that we held. We actually talked about it on this show. That had been prior support. I think the bounce that we've seen up to 240 probably did it a disservice into this print. I mean I don't think you have to run away from it, but it wasn't all that exciting for me.
- [06:20]
Karen Finerman
So we expected weakness in China. This was weaker weakness, more weakness for sure. So are we near the end of that? Who knows? Probably not. You would think, right? We haven't even gotten into, I guess this weekend starts off tariff season apparently. So we'll, you know, we'll see. I think that I was surprised wearables actually didn't do a little better. I thought that holiday season was, was good, I would have thought. I mean it's relatively small portion but I would have thought that would have done a little better. So I mean, to me, nothing super shocking, just a little weaker than I thought and leaves me lukewarm on it.
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Melissa Lee
No timeline sees me on Apple. Intelligence seems to be very troubling. I mean it gets to a point where if people are buying domestic brands with AI features already, what is the time lapse that has to happen between the purchase of that, you know, Huawei phone or whatever it is and then right domestic in China and the next Apple purchase? I mean at some point they're sort of forfeiting market share just by not having that AI feature and who knows when those customers would come back, if they come back at all.
- [07:24]
Tim Seymour
Well, I don't think anyone should be surprised by those China numbers. I mean we just got fourth quarter numbers in China two weeks ago. We knew they were, those were down 15, 13% for the quarter. We know where they've been losing market share, where they're in third place, etc, etc. We know that the local administration has been supplying subsidies for low to mid tier phones. So by the way, Apple's not a low to mid tier phone. So you could make an argument that that really shouldn't be eating into their market share. But, but tell me, who's even close to Apple everywhere else in the world, that includes China 2.0 and you know, which is India at least in terms of a smartphone market that's I would say in its infancy and you're not going to find one. So to me the fact that the services business was up, you know, better than expected, north of 14% that the margin on that business, that the asps on the phones are selling everywhere else in the world and by the way haven't priced in any AI, these numbers were fine. This wasn't even about the quarter by the way. There was nothing in this quarter we expected to be good. And the fact is I think you got a better number on services. The biggest issue I have for, for Apple right now, that's not China are regulatory dynamics in Europe which are a big deal when 30% of your app store revenues, 30% of your services revenues come from the App Store so that's something to worry about. But as someone who's long Apple and you know, I'm not, I'm not pounding the table on Apple here but you can't tell me there's a lot of good news priced into Apple. This is a stock I want to own because there's zero and deep seek.
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Melissa Lee
If anything shows an Apple. Is there enough bad news priced into Apple?
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Tim Seymour
I don't know. I mean haven't we been talking about China for six to nine months in Apple and that's related to the handset sales and some tariffs. I mean, I think the tariff is still an unknown dynamic but again, and we know that Apple caught a bit on the day of deep seek because the sense is that the efficiency for AI to the smartphone could happen and proliferate faster. So I, you know, again I sometimes I feel like I have to really defend Apple here. It's I'm sure most people are long Apple, but it doesn't seem like there's much sentiment in favor.
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Guy Adami
All fair and the margins were better. And you know, I'm going to beat you to a question you typically ask, which is what do you want to hear from? What's your first question on the conference call?
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Melissa Lee
What is your first question?
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Guy Adami
Free cash flow. Ms. I think the street was like 36 billion. It came in at 27 or so. And again, I'm just trying to do the math, which I can't do that quickly. But, you know, where did that come from? But Tim's point, we've been talking about potential weakness in China for quite some time. The flip side of that coin is, though, this was supposed to be and maybe it's going to be a couple of quarters, you know, the big upgrade cycle vis a vis and those things, I mean, for these numbers suggest that didn't come to fruition.
- [09:54]
Melissa Lee
You know, the tariffs, there is soft retaliation in terms of the response from Beijing. May not be tariffs. It may be, hey, Apple, you can't have your partner here and you're just going to have to wait and you will wait long enough so all those people who want to buy AI handsets will go and buy a domestic handset instead. And you're just going to have to wait until all those people want to upgrade and then maybe you'll get a shot at getting them back. I mean, that's, you know, in the scheme of tariffs, the sort of that's the realm that's sort of unquantifiable. Right. It's sort of the how do we get you back without hitting you with an actual tariff?
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Guy Adami
Yeah, I mean, I think that's absolutely right. And what we've seen from President Trump in the past is that, you know, that unpredictability can can really sort of, you know, move markets and move sentiment. And, you know, I would expect more of this throughout the year. And we saw today with maybe we'll talk about in a bit, I saw it with Canada and Mexico, too. And so, you know, it's that uncertainty, I think that could leave a bit of an overhang in certain parts of the market that are exposed to, you know, tariff retaliation.
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Melissa Lee
For more on Apple's quarter, let's bring in fast money friend Gene Munster. He is also an Apple shareholder. Gene, what did you make of the quarter?
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Gene Munster
Melissa there's some challenges that I wasn't anticipating. And as Tim said that the street was widely aware that the China Number was going to be soft. But if you factor in what happened in China and look at what happened in the rest of the world, that was a miss too. And so I was expecting rest of the world to be up 4%. It was up about 1%. And I just kind of want to drill into that for one piece is I've been bullish on what Apple Intelligence could do back in September. My optimism has slowed slightly as this, as the rollout has been slowed, but I have remained optimistic that Apple can beat their iPhone numbers based on this huge upgrade pool from 2021. That's the year where iPhone grew at 35%. And the December quarter is the first quarter where we start to see the real fruits of that upgrade cycle coming from a few years ago. And so I was expecting the rest of the world, even without Apple Intelligence, to kind of power this higher. So that was one piece that stuck out to me. And then I want to highlight something else that you said, Melissa, on this. Tariffs and potentially restricting Apple with a partner to do AI. To put it into perspective, Huawei's business was up 15% in the quarter. And so Apple China business iPhone was probably down 12 to 13%. And so what that tells us is maybe it's because Huawei has this Celia assistant that is an AI assistant that's gaining traction. But there's also kind of a question of is there a little bit of a shift in terms of how Chinese consumers are viewing these Western brands? Put Samsung in the Western category. They struggle to. All of the other non Chinese brands were down in the quarter. Some of those have AI assistance. And so that was the bad news. And Melissa, it's only fair for me to point out the good news because I am a shareholder and I do believe where this company is going is Tim Cook said on the call that their active install base was up. He gave the math back into math was up 7% year over year to 2.35 billion active devices. That's impressive. I mean, to grow that number at that rate. Testimony that despite any sort of variance in what's going on with the iPhone in any given quarter, the fabric of that flywheel and their customers remain loyal, which I think ultimately is going to be something that Apple investors are going to take some, some confidence into tonight as they think about these numbers.
- [13:19]
Melissa Lee
You know, Jean, going into the numbers, there had been sort of a drumbeat of downward revisions, rerating Apple lower. There's been a couple of downgrades, price targets being lowered, estimates being lowered, etc. And I'm just wondering if you think Apple, given the quarter that it just printed and granted we don't have the guidance yet, maybe we should factor in a much slower iPhone trajectory in here. And so if you, if we're going to say that iPhone growth is going to be, I don't know, 1% or whatever it is year on year from now on, what is that multiple that Apple is worth and can services make up for that?
- [13:56]
Gene Munster
Well, I think just first on iPhone, expect that the iPhone guide is probably going to be below where the street's at for March, just given what they reported. And that kind of sets up iPhone for the full year. The street's looking for around 3% growth for it probably to be kind of around that 1%. And then like your point is, what's the right multiple on this when you put services into this? And at the end of the day, I still come back to this belief that this is a consumer staple company. We saw that active install base. This should have comfortably a multiple on the out year numbers. That would be calendar 26, somewhere in the 25 to low 30s number. I mean, go back to the. We've talked a lot in the past. The Coke, the Clorox, Procter and Gamble, those types of companies have those kind of multiples even though they don't grow. I think Apple is that kind of staples company and does have upside to it relative to some of these things with Apple intelligence. Apple intelligence is going to have an impact. Steve Kobach reported that from Cook. It's going to have an impact. It's going to take longer than what I hoped. Well, a lot of people hoped it's probably 26. But as you play this forward, think about the Apple investor. Now we're seeing downward revisions to numbers, but then you start looking out over the next several quarters, you should start to see accelerating revenue growth off of that.
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Melissa Lee
All right, Jean, thank you. Let us know if you hear anything from the conference call. Well, Munster, so how do you look at, at the picture now? Granted, we don't have guidance yet.
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Karen Finerman
Right. Well, I like to. This is why I always say you've got to listen to the call. You want to hear the body language and you want to hear, you know, also the questions are really important. I'm, you know, the point you brought up, I think is a really important one. Gene sort of touched on. So how much went to Huawei, that was really pretty good growth. And Apple was the reverse. The mirror image is that a customer lost forever. That was your point. Sort of leaving the Ecosystem. Right. And then how does that figure into the multiple of going forward? What?
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Melissa Lee
You just bought a Huawei phone, right? Are you going to buy another phone? You might have that phone for three years or however, and then you might.
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Karen Finerman
Be in the Huawei ecosystem.
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Melissa Lee
Right, Right.
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Karen Finerman
So I don't know want to hear about that?
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Tim Seymour
Yeah, but, but again, I think we know the share losses in China are going to continue. Are we? The question is, are we worried about share loss anywhere else in the world than China? And if we're not, this is an ASP story. This is a margin story. I, I just, again, I don't think you've priced a whole lot in. And remember also this stock, when it broke out from around 190 to, you know, 195 is to the current range, it had done nothing in two years. The stock has done nothing for a long time. That's not a reason to go buy a stock. Except for the fact that if you think about where we've been in the world of technology and innovation and efficiency, and this stock has not participated.
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Guy Adami
You know, we don't cover individual stocks at rba. But I did find something that Gene mentioned super interesting in that he views Apple's consumer staple. Yeah, look what happened in 2020-2022. Apple was down something like 27% and the broader tech sector got completely hammered. Staples were not. Staples did quite well. These are. Technology companies are cyclical and they're also going to follow the global cycle. And if the global cycle slows, that's just something, you know, I think investors should pay attention to not saying that it will.
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Melissa Lee
Right.
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Tim Seymour
But Huawei's assistant, Celia.
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Guy Adami
Does that make you think about Celia?
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Tim Seymour
Celia?
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Guy Adami
Well, Cecilia, you're breaking my heart.
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Tim Seymour
You're breaking my heart.
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Guy Adami
And for people that are long right now, a little heartbroken, but not all that much. That's a Paul Simon song.
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Tim Seymour
Simon.
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Guy Adami
Simon. Did Paul do it by himself?
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Tim Seymour
Let's let Art back.
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Melissa Lee
Do you have anything else to add?
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Guy Adami
I have a lot to add. The free cash flow thing, I mean, I wonder if it comes up and it's a valu. I mean, Tim says it's a valuation story. What are you willing to pay? And again, services gives them a premium valuation. But it's funny, and we've said this a hundred times, when this was a growth company a decade or so ago, it was trading with a 1213 multiple. Now that it's basically become, I don't know, value company issue trades at a pretty expensive multiple. So something's a bit askew. Here.
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Melissa Lee
Meantime, President Trump announcing that he will decide tonight whether or not to impose oil tariffs on Canada and Mexico. Megan Casella has got the details. Megan? Melissa, that's right. Those tariffs a little up in the air, but some others firming up this afternoon. President Trump formally announcing he'll be putting 25% tariffs on Canada and Mexico this Saturday. He had threatened these last week, but there had been some expectation that if the two countries took action to tighten their borders and stem the flow of fentanyl that the tariffs could be avoided. But Trump being firmer now, saying that he's taking action not only because of immigration and the flow of fentanyl, but also because of trade deficits. I'll be putting the tariff of 25% on Canada and separately 25% on Mexico.
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Tim Seymour
And we will really have to do.
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Melissa Lee
That because we have very big deficits with those countries.
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Tim Seymour
Those tariffs may or may not rise with time.
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Melissa Lee
Now, Trump was also asked whether oil specifically would be included in the tariffs and he said maybe he said he would decide probably tonight on that point. And he also seemed to downplay the impact of the tariffs, saying that US the US has all the oil and the lumber that it needs. So this is the clearest language that we've seen yet from him on these tariffs. We do still have about 48 hours until they would take effect. So a little bit of time left to wait and see if anything changes. MELISSA all right, Megan, thank you. MEGAN casella, we may have enough lumber, we may have enough oil, but there are plenty of other things that we get from Canada and Mexico. In fact, Cardinal Health CEO on his conference call today was talking about the impact of tariffs on that company that is a health care, health services, health products company. There are impacts far and wide that we're not even thinking. That's not just oil and gas here.
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Tim Seymour
Right. And the near showing that so many industrial companies in the United States have, have taken part of in Mexico. I think they're not going to be thrilled about this. So the, the, the analysts are already coming out and trying to what is the impact of, you know, I saw UBS report that said 25% tariffs on Canada and Mexico equals 80 basis points drag on GDP but not a terrible increase in inflation. In fact, they say on an annual basis 10 bips.
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Melissa Lee
What do you think?
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Guy Adami
Yeah, I mean I think it can't be underappreciated the amount of inputs that come in from, from Mexico into the US to, to build stuff. Right. And so it really does, it does bite quite a bit it will not help the jobs market in the US and don't forget the agricultural aspect as well. We do a lot of agricultural trade with, with Mexico. Listen, this is just the beginning. And even though this specific announcement might not be broadly inflationary, the general tariff tone and where that's going likely is not going to help inflation get back down to target. You know, there's this lens of winning or losing and if you see a deficit, it assumes that we must be losing. But all it really means is we're just our good. Their goods are attractive for our economy and for our consumers it's not a win or a loss. That's just the way the economy works. So I think if you look at it through that lens, it makes a lot more sense. But these tariffs, to your point, I don't think people really, fully, fully realize the ramifications.
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Karen Finerman
Yeah, to that point, what, what are they going to do back and who is that going to hurt? Right. So we sell vehicles, whatever to Canada. Right. I don't know what you do if you're Canada. Do you tit for tat or do.
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Steve Kovach
You, what do we do?
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Tim Seymour
Sort of guy.
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Guy Adami
So, you know, it's an interesting question. Well, we, you know, we have a lot of great Canadian hockey players here in New York. Some of them not playing as well as they probably should.
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Melissa Lee
Not really that interesting Coming up. Well, keep an eye on Apple shares. Bring you all the headlines in the conference call as they come in. And we've got more earnings action to bring you. In the meantime, shares of intel on the move after reporting results. The numbers out of that one next. And speaking of earnings, IBM, Caterpillar and Comcast all making major moves on the back of their results. The details behind the swings and how our traders are handling the action do not go anywhere. Fast money is back into what's at.
- [21:42]
Guy Adami
Stake when administrations change.
- [21:44]
Karen Finerman
From the first 100 days and beyond.
- [21:47]
Guy Adami
EY brings insights on the issues that matter.
- [21:50]
Melissa Lee
Executive orders, regulation of AI, the fate of billions in tax credit, global trade and workforce stability. No matter the policy shifts, EY helps business and government leaders remain resilient and seize dynamic growth.
- [22:03]
Guy Adami
Ey navigate the geopolitical and economic landscape with confidence.
- [22:09]
Melissa Lee
For 140 years MultiCare has been in Washington prioritizing long term solutions, partnering with local communities and expanding access to care. Together we're building a healthier future. Learn more at multicare.org@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 course room to the workplace. A different future is closer than you think with Capella University. Learn more at capella. Edu welcome back to Fast Money. We've got a little bit of a turnaround in Apple shares in the after hours session on the conference call. The company just giving out guidance for its fiscal second quarter, current quarter, saying it's going to be in line with what the street was estimating. So we're up about 3% right now. Yep. Meantime, an earnings alert out of intel shares higher after hours despite the company issuing weak guidance. CNBC's Christina Parson Ellis has got the latest. Christina? Still no word on a permanent CEO though.
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Christina Parts Nevels
No, it's progressing but they've told many analysts before it's going to take about four to six months. So that's as of last month. So who knows in the next three months or so. They said on the call right now that it's underway. We cannot be all things to all people. And more specifically they admitted they're not yet participating in the cloud AI data center market market in a meaningful way. So much so that they were supposed to launch this Falcon Shore gpu, their own gpu. And they just announced that they're simplifying things and they are no longer bringing that particular chip to market. It was interesting to the co CEO. I was able to chat with both of them in the 3 o'clock hour, just about the fact that the Q1 guide was light. They blamed seasonality. They also said that a lot of the purchases were pushed forward into Q4 because of tariff concerns. But the other thing is margins, margins taking hit a little bit lower than expected for Q1. And they said that what they're doing is they're taking parts for their chips like memory and then taking it from the vendor and literally selling it at cost. So they're really not making much money on those chips and they're planning on doing that for the entire year I guess in a way to stay competitive. And so that's why margins will stay lower until they ramp until into 2026. And then of course the foundry business is still part of the equation, $4.5 billion, but they spent a lot on it and they anticipate that still to grow. And it's no word yet if anything's going to change in that environment.
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Melissa Lee
What is the interpretation of them not pursuing to market that Falcon chip? I mean it would seem like it's a good thing if they, if they know they can't win that battle, why go ahead with that chip?
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Christina Parts Nevels
I Think that is a reflection of maybe the criticism around Pat Gelsinger the CEO who stepped down that maybe he over committed and tried to do too much. You know it was five, four nodes in five years or five nodes in four years. All of these promises and it was interesting that on the call the co CEO Michelle she even said I am, she's not over committing she used those words and so I thought that was kind of a maybe I'm interpreting as a dig or anything like that but that could be why they're showing like look we're going to get rid of a few products here. We're going to focus on our 18A which is more of an AI related chip and more advanced nodes and the foundry business.
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Tim Seymour
Well so the foundry business exactly is a place where they should be focused or at least seems like people want to throw money at them and this government so so what's happening with that and can you make some assessment? I don't know if these numbers are really available yet if you've gone through but balance sheet wise I mean the sense is this is a company that actually I mean they've been cutting staff, they've been. It's almost like you're worried about free cash flow in a way that is this company's balance sheet imperiled. But you know all the foundry business that we want in this country and we want for intel costs a lot of money and takes time.
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Christina Parts Nevels
Right. And to your point that they laid off a lot of people the packages and stuff like that, the cash flow is still pretty strong. I don't have the exact number with me right now for the foundry business. On the call they, the co CEO said that they have a strong pipeline of customers specifically names of customers. They went, they don't provide that. So it appears like things are still rolling ahead. But when you try to get names or any word about, you know there's been rumors about buyouts, there's been all kinds of stuff going on with this company and I think that's not a good position when even at that you don't even have a CEO CEO going forward. So how could you streamline and focus when the CEO is going to take it and change things around possibly.
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Melissa Lee
Christina thank you. Christina Parts Nevilles Stacey Razg on Bernstein noted chip analyst said earlier today that it almost doesn't matter what they say in the quarter. All we want to know is who's going to be the CEO. Like all the numbers are nice but that's not what really matters.
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Guy Adami
Yeah this quarter Though by Intel standards is a huge win, I think. And the people say the guide's not great. You know what, the guide's not great. But you know, that quarter alone speaks to the cost cutting and Tim and Christina were just talking about and it's seemingly working. So when this stock no longer goes down, the bad news is still not, you know, it's still not bad, but it's getting a little less bad. As Tim says. This should have been the I in somebody's acronym this year.
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Melissa Lee
I think it could have been. I thought.
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Karen Finerman
I think it is.
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Tim Seymour
I think Dan's got it.
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Melissa Lee
Oh, and Jenny, I think Jesse.
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Guy Adami
Oh, does.
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Karen Finerman
You're right.
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Melissa Lee
Yeah, you're right.
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Tim Seymour
He should stuff that in there.
- [27:04]
Melissa Lee
All right. All right. Meantime, UPS sinking 14% for its worst day ever. The company saying that it's planning to cut deliveries for its largest customer Amazon by more than half, in turn taking a bite out of revenue going forward. Listen to what UPS CEO Carol Tomei told CNBC about that Amazon partnership. We knew if we didn't take action, it would have diminishing returns. What that means in terms of the guidance is simply this. In the United States, our volume will decline in 202020 by 8 and a half percent. Our revenues will decline by about 2%, but our profit will increase by 14 and a half percent. She actually said Amazon is the largest customer, but it is the least profitable customer. So that, that's the reasoning behind it. Karen, what did you make of the quarter?
- [27:54]
Karen Finerman
Well, I'm not. Well, it's more the Amazon going forward thing. That was the. So obviously she talks about it as a huge customer, low margin business and sort of dismantling some of the infrastructure that they have made to handle the Amazon business. I never like shrinking in a. Right. In a business that well, it's never good in general. I understand why they're trying to do it, but it's still not a good thing that this business. It's low margin, but you do want more revenue.
- [28:26]
Melissa Lee
Okay, we do want to get back to Steve Kovach. We're getting some more color from Apple's conference call. Steve, what's the latest?
- [28:33]
Steve Kovach
Hey there, Melissa. Look at shares of Apple. They've turned around. They're up three and a half percent now after being down one and a half percent when the call started. This is from guidance from Apple CFO talking about despite some foreign exchange headwinds, we all know the dollar is getting stronger. They do expect to see March quarter revenue grow again in the low to mid single digits. Also saying for the services segment will grow in the low double digits year over year. That's pretty much in line on the services front from what we've been seeing for the last several quarters. They are expecting, though, an effects headwind of about 2 on revenue of about 2 and a half percent compared to the year ago quarter. We see shares going up even more here now in this up 4% now, Melissa.
- [29:15]
Melissa Lee
All right, Steve, thank you. Steve Kovac, Yeah. Apple shares up more than 4% right now. We'll keep you posted on that conference call which is ongoing. There's a lot more to fast money to come. Here's what's coming up next.
- [29:26]
Tim Seymour
The major averages may be muted today.
- [29:29]
Melissa Lee
But a couple names seeing big moves. The headlines behind the action in Comcast, IBM and more next. And speaking of big moves, a coffee chain brews higher and a chip giant gets crunched. The recent moves in Starbucks and Nvidia and what the charts are saying about any potential breakouts or breakdowns. You're watching Fast MONEY live from the.
- [29:55]
Tim Seymour
NASDAQ market site in Times Square. We're back right after this.
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Guy Adami
What's at stake when administrations change from.
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Karen Finerman
The first 100 days and beyond, EY.
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Guy Adami
Brings insights on the issues that matter.
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Melissa Lee
Executive orders, regulation of AI, the fate of billions in tax credit, global trade and workforce stability. No matter the policy shifts, EY helps business and government leaders remain resilient and seize dynamic growth.
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EY navigate the geopolitical and economic landscape with confidence.
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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@capella.edu. welcome back to Fast Money. A couple of earnings movers today. Shares of IBM jumping nearly 13% after its earnings report last night. Shares closing at a record high. Caterpillar falling nearly 5% on weaker than expected revenues. And shares of Comcast dropping 11% after reporting a decline in broadband and cable TV customers. It was the stock's worst day since October 2008. And some after hours movers here. Deckers outdoors dropping despite beating EPS and revenue expectations. The company reporting full year revenue guidance just below analysts estimates. Shares of Walgreens dropping after hours. The pharmacy chain announcing it is suspending its quarterly dividend that Stock is down 6.6%.
- [31:45]
Karen Finerman
Karen, pick one or Walgreens.
- [31:48]
Melissa Lee
I don't know. You can choose your.
- [31:50]
Karen Finerman
I just, I mean do you know what was happening October of 08?
- [31:54]
Melissa Lee
Bad things. The world is falling apart. The world was falling apart and it's the same decline.
- [32:00]
Karen Finerman
Yes. So that's not ideal. Yeah, there was not a lot to like in that Walgreens. Good for them for suspending the dividend they get. They. They can't afford to pay it. So the stock will be down but it has to be.
- [32:12]
Guy Adami
I hate these gap hires like IBM saw but so it probably does back and fill. But even with that you got to be. You have to admire what they've done over the last couple of years and valuation despite this move. Maybe it's a little stretched but it's not completely ridiculous. So good for IBM.
- [32:28]
Melissa Lee
Coming up, two big names making big moves this week. What the technicals are saying about the recent pop and drop in Starbucks and Nvidia. We're diving into the charts on Fast Money returns. Back into missed a moment of fast.
- [32:43]
Tim Seymour
Catch us anytime on the Go follow.
- [32:45]
Gene Munster
The Fast Money podcast. We're back right after this.
- [32:58]
Melissa Lee
Welcome back to Fast Money. Nvidia and Starbucks so far having very different starts to the year. The long struggling coffee chain which hit two year lows, rose in July, already up nearly 20% in 2025, hitting its highest level since May 2023 today. Meantime, Nvidia, who shares rose triple digits for two years running, is trading near October lows. For a closer look at where these two names are headed next, let's go off the charts with blue chip Daily Trend Report founder and chief technical strategist Larry Citarella. Larry, great to have you with us. What do you see in these two names? How strong are these trends?
- [33:30]
Gene Munster
So Starbucks is really picking up. It looks very good. It broke out this week after earnings and it closed today at 20 month highs. So it's got a very bullish move underway. Nvidia is a little bit trickier right now.
- [33:45]
Melissa Lee
Why?
- [33:47]
Gene Munster
Well, Nvidia started to break down. It had a big high volume breakdown on Monday. It closed below the 200 day moving average for the first time in about two years. And it does have quite a few bearish trend signals right now. So Nvidia is much more cautionary.
- [34:03]
Melissa Lee
Are there levels that you're watching that could mean that Nvidia is headed lower? Levels that it would have to break in order to head lower?
- [34:11]
Steve Kovach
Sure.
- [34:12]
Gene Munster
115 is the key level right here. So 130 was prior support, it went through that pretty quickly on Monday. So right now 115 is really the last line of support. So we're holding above that right now about 124. But if 11515 breaks, it probably brings 100 into range.
- [34:33]
Melissa Lee
And then for Starbucks, what level do you want to see in order to confirm that it is actually a breakout?
- [34:39]
Gene Munster
So I'd want to see it hold over 100 if there's any pullbacks. It's had a big breakout this week. 116 is the next key overhead level. So if it can clear 116, that should set us up for new highs. But it's a very bullish chart right now. And as long as it stays over 100, I'd stay on the long side.
- [35:01]
Melissa Lee
All right, Larry, great to have you with us. Thank you. Larry Tantarelli. It's very symmetrical here. 115 on the downside for Nvidia for a breakdown, 116 to the upside. Starbucks per break out here. Where do you stand on that?
- [35:13]
Guy Adami
Well, Tim's been bullish on Starbucks. A lot of them talk and it broke a four year downtrend in video. We talked about this. Go back to last March, Engulfing Patterns stock went down 28%. Happened in June, went down 35%. Same thing happened the day after earnings when it made an all time high. 153 and change. Closed lower and it's been going lower effectively ever since. So today was a good day. Closed higher. I get it. But it's under pressure for sure.
- [35:35]
Tim Seymour
I think with Starbucks. Part of the excitement here is this is the first quarter where actually you could actually, you know, put a little bit of Brian Nicholl fingerprints on this. Certainly the messaging in terms of what they're going to do and what they're not going to do. They're not going to give the house away. They're so they're going to clean up the house. It's going to be that, that third place again. I just think you get back to the multiple on the company. If you take the lower end of the range that's been the range over the last five to seven years and you put, you know, the number of most people the street has somewhere around four bucks a share. I mean, this is a pretty interesting story. I think this is a story that actually gets you, you know, you can make an argument for 120 bucks on the stock by 26, but let's, let's wait and see where margins go. This has been part of the story that needed to improve.
- [36:13]
Melissa Lee
Right. And the backdrop to the Starbucks story in terms of the economic picture is actually a pretty good one. You were saying that the economy is much stronger than people, people appreciate. So we actually, even though they're, they're saying that they have pricing pressures and consumers are, are worried. Consumers are actually in very good shape.
- [36:27]
Guy Adami
Yeah, consumers are in great shape and the unemployment is low. We saw jobless claims today beaten were quite good. Consumption was very strong as part of gdp. So the consumer is really rocking. You know, there's no real.
- [36:38]
Tim Seymour
Can you speak from channel checks by any chance? We joke because Michael is a proprietor of a coffee shop too.
- [36:46]
Melissa Lee
What are they named? What are they called again? I forgot.
- [36:49]
Guy Adami
Sunshine Coffee Roasters. That's right. That's right. Listen, what's good for Starbucks tends to be good for the industry. And there are R and D. So not so bad.
- [36:58]
Karen Finerman
Yeah, I miss, I mean kudos to you. I just thought that Brian Nichols the day he was announced and the stock was up so huge that it would be so hard to overcome that. And he has so good for him.
- [37:11]
Melissa Lee
Coming up, trading in the lap of luxury. Is the high end retail space about to see a rebound. The names that could see a lavish leap ahead plus shares of Visa on the move after their latest report report the details in the numbers in that quarter with fast money returns. Welcome back to Fast Money. It's been a rough ride for luxury retailers in the past year. Lvmh, Burberry and Kering among the biggest decliners, all down double digits. But some analysts are betting the group can make a big comeback in 2025. CNBC's wealth editor Robert Frank aka Mr. Patterson. Robert, it's always great to have you here.
- [37:58]
Tim Seymour
Good, good to see you, Mel. A lot of optimism right now in luxury. HSBC saying today this is the end of the downturn and the start of the upgrade cycle for luxury and the American wealthy are the main drivers. Luxury companies say U.S. sales soared right after of the election. LVMH reporting this week a slight increase in revenue. That stock gaining some ground a little bit today after that big decline on Tuesday. Burberry and Richemont both beating on sales and lifting the sector jewelry right now is the shining the brightest. Right after the election.
- [38:31]
Gene Munster
There was a clear winner and I think it brings.
- [38:33]
Tim Seymour
Clarity and probably a greater consumer confidence which we need to. You need that feel good factor to succeed in the luxury world. Now one concern as we've all been talking about is tariffs. Although LVMH CEO is telling me US consumers because they're so wealthy and they travel, might just buy their bling in Europe.
- [38:54]
Guy Adami
We have the opportunity to cater to clients that are basically across the world and travel across the world as well. So if they buy a piece in the US or they buy a piece in Europe, it's the same for us.
- [39:04]
Tim Seymour
So one of the reasons Europe is so strong right now for LVMH and others is that it's the Americans that are traveling there strong dollar and buying goods there. So that's lifting Europe. So that's add that on to the US Sales and you get the Americans replacing the Chinese as the big drivers of luxury. Now the question is how long can that continue and will China ever come back even close to where it was before? That's what's going to be the decide on whether these stocks can really gain ground from here.
- [39:33]
Melissa Lee
You're just talking about the reduction in the Shanghai flagship location as being a terrible indicator of their forecast for China.
- [39:41]
Karen Finerman
Yes, because I think of Arnault as such a long term investor and so, you know, we're in a tough spot now in China, but he has, you know, that prime real estate is difficult to get.
- [39:51]
Melissa Lee
It is.
- [39:52]
Karen Finerman
And so to, I don't know if they've kept the real estate but not built the, built the store. But do you think though, when you look at like a Burberry, which is a difference in a turnaround.
- [40:01]
Tim Seymour
Yeah.
- [40:01]
Karen Finerman
Versus a Richmond, which just put up very, very good numbers, does that seem like more potential upside? Because there was so much down.
- [40:09]
Tim Seymour
If you had told me a month ago that Burberry would outshine LVMH on earnings, I would have been like, no way. But that there were, those expectations were so low for Burberry and so high for lvmh. So I think there are a lot of questions about whether Burberry's price point, which is very high, can be maintained. But lvmh, you know, there's a lot of optimism, especially in watches and jewelry. Mel, you mentioned in China there's a lot of hope now, at least in China, that the Chinese are buying homegrown brands more. And so the question, they're even making luxury watches which people didn't expect. So that's a big threat to the Swiss watch industry. And so the question is, even if spending comes back in China, will it go to local brands or these European brands?
- [40:53]
Melissa Lee
What are the names of some of the local. I'm just curious.
- [40:56]
Tim Seymour
I don't even know, but I've been told by the Swiss watchmakers, they're Making very good Rolex, not Rolex rip offs. They don't look exact but they're very high quality luxury watches and that's a threat.
- [41:06]
Melissa Lee
Robert, great to see you.
- [41:07]
Tim Seymour
Thank you guys.
- [41:07]
Melissa Lee
Always see you all in person.
- [41:09]
Tim Seymour
Awesome.
- [41:10]
Melissa Lee
Good looking, well dressed, much better dress than any of you guys. Not much, I mean the bar is kind of low but oh, you could put LVMH in your band and make it bland.
- [41:22]
Tim Seymour
I look, I may have to because based upon last year, I need all the help I can get. I will say something as we talk about the impact of China on luxury. You look at the charts and you lay a China, a chart of China or Chinese equities over LVMH or Burberry. They all look very similar and I mean a 20 year chart. So the question is, is the demise of China something that's a little bit more of a headwind than cyclicality?
- [41:44]
Melissa Lee
Coming up, the earnings keep rolling in. Shares of Visa on the move after reporting results of details and numbers out of the quarter. Next, more fast money into. We've got a news alert on Vertex. The FDA approving its non opioid treatment for moderate to severe acute pain. Shares are currently just up 4.10of a percent. We've got another earnings alert here. Visa reporting better than expected quarterly results. Shares are higher after hours. CNBC banking reporter Husson has got the latest. Hey Hugh.
- [42:20]
Gene Munster
That's right, Melissa. Visa reporting a beat on both the top and bottom lines today as global payments growth improved from the previous quarter. The company's total payments volumes jumped 9% in the period compared to the 8% rate of the previous quarter. Visa also issued new 2025 guidance saying that both revenue and EPS growth will be better than previously stated. EPS for the year will rise by a low teens percentage rate compared to previous guidance of a low double digit increase. As we've seen from Amex and Mastercard, results at credit card giant show signs of a still healthy consumer with spending volumes picking up at the end of last year. That trend has continued so far this month with Visa CFO Chris saying that payments volumes were quote off to a strong start. Back to you.
- [42:59]
Melissa Lee
All right, Hugh. Thank you Houston. And of course mastercard shares in today's session hitting a record high of a very strong quarter. Cross border volumes up 20% just to Robert's point, right? Yeah, exactly. Strong dollar and buying their purses in Europe. There you go, up 20% cross border. What do you make of the payments space?
- [43:17]
Tim Seymour
I think bet against these companies at your peril. I think they're going higher. I think the multiples that they look there's cyclicality here but your long term trend again, pull up a 20 year chart on visa and you're going to be shocked at what's going on here. The multiple does matter, the cyclicality does matter. But secularly they're where they need to be and I think that's their slogan, transaction processing.
- [43:37]
Guy Adami
I mean pull up a chart. Tim's right. I mean this is lower left, upper right. Couple of pullbacks along the way. Yeah. Valuation gets stretched but they seem to grow into it every single year. You stay long.
- [43:46]
Melissa Lee
MasterCard and Visa up next, final trades. Welcome back to FAST money. Let's take another check on shares of Apple up by 2.8% so giving up a little bit of its after hours gains. A conference call just wrapped up. Deepwater's Gene Munster is back. So Jean, what were the highlights?
- [44:16]
Gene Munster
Melissa, Three takeaways. First is the December quarter wasn't as bad as it looked because they chimney down some of the inventory levels that had a negative impact on the results and they basically moved those over into March and so that's why you had that more favorable March guide. Second is that the March guide does not include any new regions with Apple intelligence, which they said had a positive impact in the December quarter where it was available. And the third piece is that Cook said that there were his comment was lots of devices sold during COVID and that is an opportunity to upgrade in the quarters ahead. So overall my sense is it just wasn't nearly as bad as it looked. Just a reminder that there is there's some fluidity between quarters but the trend remains positive.
- [45:00]
Melissa Lee
Jean thank you Gene. Deepwater, it is time for the final trade. Let's go around the horn.
- [45:06]
Tim Seymour
Tim Seymour, ups. You don't need to go out and buy this one today but if you think about a company that's really found a way to think about their margins and turn it around, this has been a two year downtrend that I think you start to to nibble at.
- [45:17]
Melissa Lee
Karen yes, Gap Gap stores.
- [45:20]
Karen Finerman
I like the turnaround. We're not going to see the results until early March but long here. I think it's good value.
- [45:25]
Melissa Lee
Michael Kantopoulos of rba.
- [45:27]
Guy Adami
Economic growth is strong and we think it's going to continue to performance is going to continue to broaden. We like small and mid cap stocks.
- [45:34]
Melissa Lee
Thank you for joining us. Great to have you in the break.
- [45:38]
Guy Adami
I learned that Dark roast that this.
- [45:40]
Melissa Lee
Is revolutionary really is important. This is the more, you know, kind.
- [45:43]
Guy Adami
Of thing weaker coffee than the blonde roast.
- [45:47]
Melissa Lee
You learned that from Michael.
- [45:48]
Karen Finerman
Thank you Michael.
- [45:49]
Melissa Lee
Agnico Eagle Much thank you for watching Fast Money. See you back here tomorrow at 5. Mad money starts right now. 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@ 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.