← CNBC's "Fast Money"
CNBC's "Fast Money"
Apple Sinks on New Tariff Threats, and Should Novo Do a Deal? 5/23/25
00:43:53
Apple shares extended their losing streak after President Trump said the company needs to pay at least 25% tariffs on any phone made out side the U.S. How realistic is the threat and what’s it mean for the stock. Plus Novo Nordisk shares have been cut in half over the past year. Would some M&A be the antidote for its slide? Fast Money Disclaimer
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- [00:00]
Melissa Lee
A rich life isn't a straight line to a destination on the horizon. Sometimes it takes an unexpected turn with detours, new possibilities and even another passenger or three. And with 100 years of navigating ups and downs, you can count on Edward Jones to help guide you through it all. Because life is a winding path made rich by the people you walk it with. Let's find your rich together. Edward Jones, Member, SIPC on WhatsApp, no one can see or hear your personal messages. Whether it's a voice call message or sending a password to WhatsApp, it's all just this. So whether you're sharing the streaming password in the family chat or trading those late night voice messages that could basically become a podcast, your personal messages stay between you, your friends and your family. No one else, not even us. WhatsApp message privately 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. Fallen Apple, more terror threats, sinking shares of the iPhone maker. The stock losing $90 billion in market cap just today. Can the longtime market leader stage a comeback? Or are its days at the top in the rearview mirror? In Novo's next steps, the pharma company back under pressure since ousting CEO. What does it have to do to get growth growing again? We'll break that down. Plus, U.S. steel soars on a quote, planned partnership with Japan's Nippon Steel. Nuclear stocks seeing major gains after next a new wave of executive orders. And we're counting down to Nvidia earnings, the options action ahead of next week's big report. I'm Melissa Lee, come to you live from Studio B at the nasdaq. On the desk tonight, Tim Seymour, Bono and ice and Steve Grasso and Mike Koh. We start off with another big down day for Apple, the tech giant sinking another 3% today, bringing its losing streak to eight strengths straight days. That is the stock's worst run since January 2022 and takes its market cap back below $3 trillion. Apple is the only Mag 7 stock down this month, the only one down in Q2. And it is the worst performer of the group so far this year, losing nearly a quarter of its value since January. The latest move lower coming after President Trump said this morning that Apple must pay tariffs of at least 25% on iPhones made outside the United States. And in comments this afternoon, he said rival Samsung could face similar levies. But can Apple realistically bring manufacturing back to the US Here? And what does it mean for investors if it can't. Tim, what do you say?
- [02:35]
Tim Seymour
Well, I think investors aren't really even focused on this issue and they probably. They have to be. But we thought we were at least away from it. And again, I say that because I think investors are more focused on the week that was also, Johnny, I've. The week that was, you know, effectively, we just learned about at least a ruling on the services business that may affect App Store, App Store Dynamics. The fact that we've been worried about gross margins, that we've been worried about the overall iPhone kind of unit demand, and that's something that I think is really overall, then dropped inside of the AI story that most people feel like isn't really going Apple's way. So throw on the tariffs. And I get why the stock's under pressure. I think the. The dynamic here is one where we really don't know where this is going to end up. But I agree it's going to be very difficult for Apple to suddenly change where their manufacturing is, even though they just told us they're going to be 50% India at some point very soon. And that's something that I still think is hard to believe. But again, the core for me was not the headlines today from Apple. It's what we had before we got here today.
- [03:36]
Bono
Well, I believe Apple deserves some credit for trying to be nimble in terms of moving manufacturing away from China, kind of, you know, strategically maneuvering with regards to its supply chain, making sure that us that goods were headed for the US Were produced out of India, and just finding a way to. To at least on the surface seeming like they were making efforts to comply with the new regulatory framework. And I think today was a bit of a shot across the bow, but I don't know how much real, how serious to really take the threat. It's almost as if the tariff thing has been kicked up again. 25% seems to be somewhat of an arbitrary number. Like, how realistic is it for them to be expected to kind of completely uproot supply chains and then move them here? Like, what are the cost implications? And for me, my real question is, are they really trying to circumvent the 25% tariff? Or is there a situation where the tariffs actually get raised to a higher level because they say, listen, it's actually more cost effective for us to just go on ahead and pay this tariff and keep our manufacturing where it is. And I don't think 25% is sufficient enough for them to even explore looking at manual manufacturing alternatives. So for me, it just seems like it's somewhat of a way of a governmental land grab. And to me, that somewhat flies into the face of the spending bill, the tax cut bill that we're, that we're seeing pass through the House. So for me, I really don't know what to make of it because on one hand it's like we're, we're preaching fiscal discipline. On the other hand, we're looking at 3.8 trillion and we're looking at this tariff number that seems to just be a drop in the bucket. And I really can't make heads or tails of it for now. I really think the downtrend in Apple is just continued erosion of their underperformance on the AI front and also some, some opaqueness around the whole Google.
- [05:19]
Melissa Lee
I think all of these issues that you guys outlined prior to the headline today, today, you add headline today and it really underscores the issue that there is no regulatory framework. It's sort of regulatory shots that the administration chooses to fire at this point. So there's no guidance. It can be 25% today and it could be something different tomorrow, which is what we've seen. They move to India. And then there's something else. Also we should note that Tim Cook was at the White House on Wednesday. So this is after they met. There does seem to be a real target on Tim Cook's back. He was highlighted in Saudi when the President was in Saudi Arabia. Tim Cook is not here. You know, what is up with the relationship between Tim Cook and the President? It's not favorable, doesn't sound favorable.
- [06:02]
Steve Grasso
And I think, you know, when I look at it on a chart, if you go back a year ago, you had the WWDC, it was 193 63. Back a year ago, it bottomed out pretty recently. I think Today's low was 193 46. That to me is a technical bounce level. It's also way lower a couple of weeks ago. And if you, you brought it up where deep seek that headline. Apple was the only stock to actually trade up on the Deep Sea Cat line versus all the others. So those are the good things. Bad thing is what you said. The White House relationship with Tim Cook seems strenuous at best. I think you actually buy the stock here. I think you're walking into WWDC June 9th, right. Probably going to announce something in Apple Intelligence, another investment. They have to. I think for me, when I look at it on a chart, it's constructive. When I look at it with the White House, it's not constructive. But that 25% you, you both said it, Bono and yourself. It could be 50 tomorrow or it could be gone tomorrow. So it's a moving target with the President. You could get back into his good graces. You could fall off again. But I think just the way I look at the stock, it looks like it's trying to build a base of maybe a little bit higher lows and I'm happy where it is. You stick to me in the low 190s in Apple. What else are we going to see at this point? I think you're sort of buying negativity. Is it peak pessimism? I think so at this point.
- [07:41]
Melissa Lee
Mike CO I don't know. It seems like the options market, given the volume and the direction, there might be some pessimism being built in here.
- [07:48]
Mike Koh
Yeah, that's a good bet. I mean we're going into a three day weekend so this isn't the day that you'd expect to see way, way above average options volume, particularly in a name like Apple that already trades quite a lot of volume. But it did trade two and a half times its average daily put volume today mostly near term close to at the money put buying. The 195s and 190s that expire at the end of next week were the two most active contracts. And of course implied volatility has been ticking up going out across the curve which suggests that it's going to chop around here for some time. I mean the way I look it's not like the stock is overwhelmingly cheap. We're a low single digit top line grower. It's supported to the downside I think as Steve has suggested by basically technical factors and maybe the fact that you always continue to have that incredible cash flow as a stock buyback regime. But I think the upside is probably going to be pretty limited for the near term until you get out from under this cloud.
- [08:42]
Melissa Lee
Yeah, I mean WWDC was a major catalyst raffle a year ago. It's a completely different setup going into this year's WWDC is a set of good or bad. You can make the case for either.
- [08:53]
Tim Seymour
I think, I think the bar is low. I think the bar is extremely low and I think Apple intelligence. One of my bullish arguments for Apple along is I don't think we priced any AI into Apple and why, you know Apple's absolutely going to be a part of this and I do think the refresh cycle was, was over anticipated and it wasn't. I Mean, Apple intelligence did feel a little bit more like a scramble to catch up again. This was a week when AI related hardware, you know, is that an issue for Apple in the short run? I still believe until proven otherwise, 2.7 billion in terms of an installed base is something that I wouldn't want to reckon with. And I think they're going to be there. They have to pick their spot.
- [09:30]
Melissa Lee
All right, for more on Apple, let's bring in Dan Ives, global head of technology research at Wedbush. Dan, great to see you.
- [09:36]
Dan Ives
Great to be here.
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Melissa Lee
You're always coming prepared, well dressed, ready to go. We appreciate that. In terms of the Apple picture, where do you stand on this? I mean, it's you. You had a note out early on saying it's a fairy tale to move production back to the United States. What do you think the administration is after here? What can Apple do?
- [09:50]
Dan Ives
Yeah, I mean, it's a Pinocchio story, a fairy tale. The reality of actually having iPhone production in the US because in my opinion that would take 4 to 5 years, 20 or 30 billion even to move 15, 20% of the supply chain. And then if you actually produced iPhones in the US you'd be looking at $3,500 iPhones. And so I view it as Apple's situation is they try to pivot around India and that was a smart strategy. And now there backs against the wall. It was a Twilight zone day today for any Apple investor. Given Apple's done all the right things in terms of pivoting out of China and now saying come to the U.S. that's fairytale.
- [10:30]
Melissa Lee
Right. Secretary Bessen was interviewed on Fox earlier and made some comments around this, but basically saying that, you know, it's a supply chain, particularly for semiconductors, that is a concern and that's where they want to see Apple move their part of their supply chain back. Is there anything that Apple can do more surgically to satisfy the administration in terms of an investment on the semiconductor side in the United States?
- [10:54]
Dan Ives
No, it's a great question. Look, just for someone like myself, 25 years, spent so much of my time in Asia, in China, Taiwan, Vietnam, the reality of doing this, it sounds great behind a microphone, the beltway, but the reality is when you walk through fabs in Taiwan and you walk through what you see in China, that that's going to be here again. If you want $3,500 iPhones, we should make them in New Jersey. And I think the problem is, is that from when it comes to the semi world, and I think Jensen And Nvidia are seeing this firsthand is that it's the IP of the supply chain, how is it built? Where are the chips, where are the raw materials? And that's why for Apple, look, especially WWDC is going to be a strong event and they are in a massive position in my opinion from an installed base perspective when it comes to, you know, I, but they are right now back against the wall that they've been put into because they're in the eye of the storm in terms of this tariff trade war.
- [11:48]
Steve Grasso
And when you look at the president say it's not just about Apple, it's any other phone company, does that make you feel a little bit better that maybe there's a quasi bottom put into Apple and, and you just to pick up where you left off. Wwdc, do you see any outliers or what do you think they're capable of announcing?
- [12:06]
Dan Ives
I mean it's like me and you, we're stuck at New York Airport for six hours together. I mean, yeah, we're together but it's still best. And we actually have you like, I mean it could be, it could go either way. But, but, but to your point, the reality is like look, WWC is like that's going to be another key event in terms of that strategy they play in from clearly behind, you know, the eight ball. But this is an opportunity for them to actually show where they could ultimately get to when it comes to AI. But the problem is that it's clouded because of ultimately what we're seeing here.
- [12:40]
Melissa Lee
Okay, so let's say that 25% is the number and that is going to be the number. And Apple says, you know, it doesn't make sense for us to move production back. We'll pay 25% on the iPhones that we sell in the United States made overseas. How when you think about that price increase, pass on to the consumer, where is demand destruction? What is that point where it's too expensive, it's going to be a headwind. They haven't raised their price on the iPhone in years and now they're at this point where they are going to raise their prices potentially because of all these great AI features that they're going to unveil. But then there also has to be another price increase theoretically with the tariffs. Yeah.
- [13:16]
Dan Ives
And I think if everything's equal, they're not raising prices on the iPhone 17. But then it comes down to they're not going to eat it, they're not eating at 25%. And if you pass this to the consumer, I mean you have what could be 3, 5, 7% demand destruction. And part of the issue there is that for Apple they're not, they're just in, they're in this situation. Like what do they do? Which side did they go? I think the reality now it comes down to how they navigate this. Is this a game of high stakes poker in terms of negotiations with Trump? Do they say something in the next five years we'll commit to x percent iPhone production by 202720 just to sort of play that game. But what they're going to invest in, it's AI, it's serve. I mean iPhone production in the US to me it's just not feasible.
- [14:05]
Tim Seymour
So. So Dan, I thought by the way, I thought like seersucker and Lennon fuchsia corduroy jackets weren't before Memorial Day. I mean it's a big move for you out here. You're out, you're out, you know, a couple more days. I mean it's open season but it is exactly. You look great. So. So before today's announcements, what were your biggest issues with Apple Again? Let's go back to Johnny I've this week let's go back to app store concerns. Let's talk about some of the regulatory stuff. Let's talk about Google revenues. What has you most what's your bear case in here for an Apple bull?
- [14:34]
Dan Ives
Look I think to me first off I cook what he's been able to do hall of fame performance in terms of navigating from China to get to India year in 10, 50, 60% and that's herculean to get there. So in terms of like I clearly behind but I believe WWDC is going to be a step in the right direction. It's about that developer community, it's about the install base. China has been a headwind but now you're starting to see what I believe could be growth as you go into the next few quarters. So you don't have so much to be excited about in the near term. But that's not the story. The story is the consumer AI revolution comes through Cupertino. The problem now is in terms of this tariff they need to navigate this situation because like what you're asking the demand destruction, where does that ultimately transfer this?
- [15:18]
Melissa Lee
But then also they don't have an AI partner in China. I mean they thought they had an AI partner in China but that's going to be under scrutiny and so there might be no air partner in China. So they're really, you know the U.S. market is sort of in jeopardy in terms of 3, 5, 7% demand destruction. And then in China they can fall further behind because they cannot offer air.
- [15:36]
Dan Ives
Features when Alibaba obviously that being such an important partner for them that they need in China because it comes down if you look at even despite what we've seen in the US as AI is introduced, you did see significant demand increase anywhere that that's been introduced in terms of Apple intelligence. But look, Cook, 10% politician, 90% CEO. So the point is every time back against the wall. If there's someone I want flying the plane in this turbulence, it's Tim Cook.
- [16:05]
Melissa Lee
All right, Dan, great to see you.
- [16:07]
Tim Seymour
Hard to miss him.
- [16:08]
Melissa Lee
It's true.
- [16:11]
Tim Seymour
He always does good. He gets away with it like any wardrobe.
- [16:14]
Melissa Lee
Dan, good to thank you. How are you feeling about Apple now?
- [16:17]
Bono
You know, I have a hard time not referencing the 8 diffusion rule. It just felt like it was just yesterday where all the chip makers we were concerned about Nvidia, where they going to lose 13, 20% in terms of, you know, the Chinese market, the Taiwanese market where they were looking to circumvent export controls. And it seems like that whole sentiment has been flipped overnight. And so I do think there's a bit of a whimsical nature here. And so it's hard for me. I'm with you, Steve. I think that the sentiment is so negative and to Tim's point, there is no I priced in what else could happen. I don't think the terror story is really going to drive my investing decision because I don't think it changes anything when it comes to their manufacturing or supply chain.
- [17:03]
Melissa Lee
Well, Apple wasn't the only target of the President's terror threats today. He also proposed higher levies on the European Union. CNBC's Eamon Javros got the latest on this. Eamon.
- [17:13]
Tim Seymour
Hey there, Melissa. Yeah. The President brought reporters into the Oval Office earlier this afternoon and he was asked in that Oval Office session how he could get to a deal so quickly with the European Union given what he put in his social media post earlier today. Here's how he responded to that.
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Melissa Lee
I'm not looking for a deal. I mean, we've set the deal, it's at 50%, but again, there is no tariff if they build their plan. Now, if somebody comes in and wants to build a plant here, I can talk to them about a little bit of a delay. But you know, while they're building their plant, which is something I think that would be appropriate, we're going to see what happens. But right now, it's going on on June 1st, and that's the way it is.
- [17:56]
Tim Seymour
And we now have our first response from the European Union officials after that 11am conference call with Jamison Greer. The European Union official saying spoke with Jamison Greer and Howard Lutnick. The EU's fully engaged, committed to securing a deal that works for both. EU Commission remains ready to work in good faith. EU US Trade is unmatched and must be guided by mutual respect, not threats. We stand ready to defend our interests. So a bit of a prickly statement there, Melissa. I think you have to say from the EU responding to the president. They don't like that kind of rhetoric that they're hearing. They don't like what they see as threats, and they're saying they're ready to defend their interests. So maybe this relationship is sort of at a standoff point as we go into the long weekend here on the US Side. And one other thing, Melissa, I heard you guys talking about Apple. I asked the president what makes him so confident that Apple can actually manufacture iPhones in the United States at a price that consumers will pay. He said he just believes that computers and technology make it possible to do that manufacturing here in the US At a competitive price. That's, you know, you've got all the analysts around the table to tell you whether they think that's true or not. But that is something that the president of the United States has as just a core belief, and that's sort of underlying this whole dispute with Tim Cook. Melissa.
- [19:16]
Melissa Lee
All right, Eamon, thank you. Eamon Javers, Mike co. In response to this heightened trade tension with the eu, you saw some activity in the options market in Germany, I believe.
- [19:28]
Mike Koh
Yeah, it was the ewg, that's the ETF that tracks the German market. That one traded over three times average daily put volume. And it's targeting the date essentially that Trump is talking about. You know, he said June 1 is the day they go into effect. And it was the June puts, 41s and 39s that were most active in that one. So, I mean, and it makes a lot of sense, right? If you're, if you're uncertain. We've gotten a lot of choppiness and volatility out of these kinds of announcements. And they can change on a dimension. Tough to short into it. But to buy some puts just in case it actually happens, I could see why they would do that.
- [20:00]
Tim Seymour
Well, it makes a lot of sense to take out protection or to stay in the trade, as Mike's pointing out. I mean, you know, ewg, especially because it's currency implied to this day. By the way, the dollar was 90 basis points weaker and it looks like, you know, dollar could weaken up again. These kinds of headlines are exactly what move the currency lower and actually move the German markets higher. So if you think about it, and it doesn't surprise me that the, the Europeans are a little focused on tone and a little bit more on manners and things like that. I mean, you know, get a deal done, but if you don't get a deal done again, I think Europe is, is behaving as if they have other options here. And I would not run too far away from Germany or the European trade.
- [20:37]
Melissa Lee
All right, coming up, US Steel soaring after President Trump greenlights a deal of sorts with Nippon Steel. What it means for US Manufacturing and jobs next. Plus the president also juicing uranium stocks thanks to his latest executive orders, how he hopes to expand the nation's nuclear power grid and what it means for investors in the space. More Fast Money into With leading networking and connectivity, advanced cybersecurity and expert partnership.
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- [23:02]
Steve Grasso
Yeah, he the president had to do something. This was definitely consensus view whether you're a Democrat or whether you're a Republican. President Biden was the same way. He didn't want to let the deal go through. President Trump didn't want to let the deal go through. But I knew that you that price of $55 which was the original price for the Nippon deal, they had to do something to get it back there because you felt as if the shareholders and the workers were sold out at this point with a trading of 54 or so in trade of 52. But I'm going to hold on a little bit longer. But this is the top for me. I don't think there's no. This is more of a ceiling than a floor for the name. I don't see how realistically short term US steel trades higher. I'm long it from $30. I don't see it trading at 60 or 65. 55 was the deal price. I'm going to exit as close to 55 as I can.
- [24:01]
Melissa Lee
Mike, what do you think?
- [24:02]
Mike Koh
Well, yeah, I mean and that's what the arbs are doing too. So there was a lot of activity in it. But the activity was actually selling out of the 50 line. That was open interest that was opened ahead of this announcement. So you know, the activity usually is that you're going to have a couple of the arbs in there and they will play it for the last couple of percentage points. What they'll typically do is own the stock and then they'll sell some upside calls at the deal price up and around 55 bucks because that's going to be the lid on it. I mean there's not going to be another buyer coming in in this environment. I don't think.
- [24:33]
Tim Seymour
Yeah. So therefore I don't know why you're trading for for the extra three bucks. I mean it's not like there's a feeding frenzy around these assets. I mean I do think that and again we talked about how Cliff's resource not in a position to even be at the table. So when you're left with the core steel business that's getting enhancements by the way they had 22,053 employees at the end of 2024. I'm not sure how this leads to 70,000 jobs, but let's see, I just, I just wonder how much more there is in this asset. So great trade and in fact I see, you know, the delta between here and a deal price. You know, you've had a good run and I think, look, U.S. steel is, was valuable. I think we've all said we thought that the company without this deal was worth owning. And I just don't think the steel industry is so exciting here. Even with those improvements coming up, could.
- [25:19]
Melissa Lee
A big acquisition heal an ailing pharma stock? The skinny on what obesity Drug maker Novo Nordisk needs to get shares growing again. But first, the president signing not one, not two, but four executive orders aimed at restarting the nation's nuclear energy industry. The biggest winners next. You're watching Fast Money live from the NASDAQ markets at Times Square. Back right after this.
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Melissa Lee
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- [28:56]
Tim Seymour
For a while and I think it's a volatile trade and you get these kinds of headlines but, but the executive orders here again Defense Protection act makes it a national emergency that we're having to get uranium essentially enrichment inputs from Russia and China. It's a no brainer. I mean we should be doing this and this, I think this is very bipartisan. It's interesting too that the price of uranium, so the price of uranium per pound is actually been well off of its highs. But I mean I think that's, this is obviously a tailwind for that, but it's certainly a tailwind for those producers like Cameco, ccj, Denison Mines. I mean there's, there's other ways to play this. I also think this is a validation for Constellation Energy which I'm long but I mean that deal wasn't necessarily about AI data centers, it was about nuclear. And their acquisition of Calpine was, you know, very important part balancing Nat Gas against nuclear nuclear. And I just think people should be looking back at those utilities that are exposed to nuclear and that's a great trick.
- [29:50]
Bono
Yeah, I tend to agree there in terms of like discussion the markets I'm trying to stick there like I think definitely is one of the winners here just because like they're actually supplying power as opposed to nuclear reactors. In terms of me just trying to be complete in my analysis and point out the negatives as well. Clearly from a national defense standpoint, there's really no argument there. Seeing what we are seeing in terms of some of the undermining of regulatory bodies. I do think that is a concern and what I would like to see are very clear swim lines and guidelines in terms of how we're going to be dealing with nuclear waste and what regulatory body will be in place and be given the proper authority authority to oversee this properly.
- [30:27]
Melissa Lee
Mike?
- [30:28]
Mike Koh
Yeah, I mean Oklo, Cameco and Ura, just those three alone actually were over 1% of today's total options volume kind of speaks to that and I think it's sort of a play. Instead of going into something really speculative like SMR, which is NuScale, you could play in the construction space that also has small modular reactor exposure name like Fluor, which saw about 10 times its average daily call volume.
- [30:50]
Melissa Lee
Coming up, Novo Nordisk stock under the weather this year. But can a big buy boost this obesity drug maker? We'll sit down with Mizuho's Jared Holes for a closer look at how Novo can turn itself around. Missed a moment of fast.
- [31:05]
Tim Seymour
Catch us anytime on the go.
- [31:07]
Melissa Lee
Follow the Fast Money podcast East.
- [31:09]
Tim Seymour
We're back right after this.
- [31:19]
Melissa Lee
Welcome back to Fast Money. Stocks in the red to end a losing week after President Trump threatened new tariffs against the EU and Apple. The Dow down 256 points, the S&P losing 2/3 of a percent and the Nasdaq dropping 1%. All major indices down about 2 1/2% on the week. Meanwhile, government contractor Booz Allen plunging after announcing it would restructure its federal civil business in response to White House spending changes. And the retail rout hitting Deckers and Ross stores after both companies ditched full year guidance in their earnings reports last night pointing to tariff uncertainty. And finally, Informatica shares soaring on a Bloomberg report that Salesforce is back in talks to buy the AI powered data management company. The original deal fell apart last year. Mike, you saw some interesting activity in Booz Allen.
- [32:03]
Mike Koh
Yeah, I mean we saw a lot of put activity today. But what's even more Interesting about that is that was actually profit taking. Somebody had the good sense to buy the 120 and 115 puts exactly a week ago and they were reaping some pretty good sized profits today.
- [32:19]
Melissa Lee
Nice one. Novo Nordisk, meantime, up 4.5% this week after ousting its CEO last Friday, even with today's pullback. But the stock has lost more than half its value since hitting all time highs last June as the company has lost market share in the GLP1 space rival Eli Lilly. The question now will Novo look to acquire smaller obesity players to boost its pipeline and spur some growth? For more, let's bring in Jared Holz, healthcare strategist at Mizuho. Jared, great to have you with us.
- [32:45]
Jared Holz
Great to see you. Thank you.
- [32:47]
Melissa Lee
I mean, if we were to read between the lines of ousting of Jorgensen, I mean, is that the message, that they are going to do something, that they acknowledged the missteps in terms that they were on top of the world in the same space and maybe you can make the argument that they are still or could be, and they sort of let that go. They ceded it.
- [33:08]
Jared Holz
Yeah, totally. I mean, I think that's one of the considerations here for sure. You know, there are a few different ways to look at it, of course. I mean, when, when he took over, the stock was much lower. So, you know, over an eight year period, you know, you could argue that there was a lot of outperformance in Novo, even with the latest demise over the past six months. I mean, you got to have to give them some credit. But yes, for sure. I mean, when you kind of consider all that's happened over the past year and where the company is now, they've been kind of bypassed by Eli Lilly. There have been multiple missteps. So I think at some point they're going to have to regroup. And as you alluded to, business development has got to be one of the considerations.
- [33:54]
Melissa Lee
They can decide tomorrow to speed up development, to speed up R and D, to, you know, all these different things. But time is not on their side. I mean, it's late and so is the only hope for them to actually acquire a molecule from somewhere.
- [34:10]
Jared Holz
Yeah, I mean, I think one of the things that they're trying to do is link up with PBMs. I mean, you saw that. We all saw the deal a couple of weeks ago with CVS to make WeGovy the preferred drug on some formularies for patients. So that's kind of a positive depending on kind of where pricing falls Then certainly, I think they've got to pick up business development. The thing is, they have been kind of acquisitive over the past few years. They bought dicerna, they bought Forma, and then last year, I think they spent around $11 billion when everything was said and done to acquire all of those Catalan manufacturing facilities just to kind of speed up the development or production of the glp. So they've done stuff. It's just that they've got to do more, and I think the street would love to see them diversify a bit too.
- [35:02]
Steve Grasso
So, Jared, just to, just to piggyback on that, if, if you're having a tough time figuring out your space, whether it's large cap pharma, whether it's bio, biotech, large cap, or whether it's in the xpi, the small cap, biotech, how does the average person find the list of acquirees that could potentially be taken out?
- [35:24]
Jared Holz
I don't know. I mean, simply put, I don't know that the, this backdrop is probably the most challenging I've ever seen it. You've got 800 or so biotech companies trading in the public market, then all of the development and productivity happening at large cap pharma, then all of the private companies. And now the biggest variable that we've got to contend with in some respects is China with all of the development over there. So I think when you combine all of that, it's never been tougher to kind of ascertain where we should be looking as investors or you guys should be looking as investors and where companies should be looking for assets. But I would say in terms of just straight M and A, I do believe that even though it's been more random than not, especially this year, that given the revenue needs at Novo Nordisk or at Merck or at Bristol Myers, putting together a list of companies that have either current revenue or will generate revenue soon is probably the best way to attack it.
- [36:25]
Melissa Lee
Jared, great to see you. Thank you.
- [36:27]
Jared Holz
Thank you.
- [36:28]
Melissa Lee
Jared Holz. So, Tim, you saw the value in Novo prior to the ousting of the CEO. How do you feel better about that, about Novo's prospects with a new CEO coming in?
- [36:39]
Tim Seymour
Yeah, the new old CEO. Right. I mean, I think this is ultimately a guy that's already been at the helm here. This, this move in the C suite was described as essentially an affirmation of the strategy, which, you know, you could take the opposite view. But it is worth pointing out, by the way, Jared has the Knicks in six. We got a big game in New York time basketball and I use that as, as an analogy to you know, if you think about will go be, I mean they were 62% of, of the semi glue tide mark market in 2020 but they're so far ahead and yet the stocks treated as if they've just lost the series. So I look, I think there's a real opportunity here. There is some, some double edged sword here about these, these deals with CBS and Cigna and whether that actually starts to erode pricing but it certainly should keep they and Lilly in the pole position.
- [37:28]
Bono
Yeah. I'm just wondering given the pricing pressure that you were just mentioning and terms of the GLP ones, does it make sense for them to continue to focus primarily on metabolically focused drug solutions or to expand that suite to, to other areas and do they pursue that through strict M and A as you mentioned, or are they doing it in some type of, you know, revenue of royalty sharing as we've seen more prevalent with some of the Chinese manufacturers.
- [37:52]
Melissa Lee
Coming up Diving into Nvidia's monster month as we count down to its earnings report next week. What to expect from the heavyweight and how the options market is setting up for the results. That is next for Fast Money into. Welcome back to Fast Money. Nvidia on deck to release earnings next Wednesday. The Last of the Mag 7 stocks report this quarter. The company coming off a busy week. CEO Jensen Huang presenting at Computex in Taiwan where he called us Chip export controls a quote failure. With more what we can expect here for the company and what the options options markets are saying. We got to turn to Mike, what are you seeing?
- [38:28]
Mike Koh
So right now the options markets are implying a move of about six and a half percent the day that they report about 8% higher or lower by the end of next week. We saw a lot of volume today, over 3 million contracts. Of course it's always one of the busiest single stock options out there. The activity that I was noting was the sale of 15,000 of the 140 strike calls that expire next Friday. Somebody sold 15,000 of those for about $1.71. And I suspect it's probably one of these single stock strategies that are engaged in call overwriting in single stock names like NVDY probably in this particular instance. And we've seen a lot more of that activity. And what that can actually do is ultimately if there's enough of that flow, it can actually restrict some of the volatility in the stock because the market makers are going to own a lot of that optionality.
- [39:15]
Melissa Lee
Oh, that's that's very interesting. What are you anticipating, Tim, in terms of how is it set up in your view?
- [39:21]
Tim Seymour
Independent of market beta, which I know is tough to do because obviously that semis are a big part of market beta. And if we have a tough tariff week like we ended the week, I don't, I don't love the backdrop. But I'll tell you what, you know, Gen sanity is, is coming out of Taiwan and that part of the world and all I'm hearing about are the sovereign deals. So who cares about hyperscalers anymore when you've got countries cutting deals and that actually on some level this is seen as okay. And I tell you what, I think the demand story, we are not going to hear anything about a let up in demand. The question is really what you're going to hear about some of the constraints, but it's just what the market is positioned for.
- [40:00]
Melissa Lee
Export controls.
- [40:01]
Steve Grasso
Yeah, I still, I still have an issue. I get what Tim say about sovereign need and AI and chips and demand, but when you still look at that concentration of four clients are making up 40% of their revenues. It had an amazing bounce back. Nvidia did bounce back off that $90 level or thereabouts. I think it's time to sell it again.
- [40:24]
Bono
Yeah, I listen, I'm typically constructive. I do think if we're speaking strictly about the move going into and coming out of earnings, that move as you mentioned, from 88 or 85 back to wherever we are, 130, 132 I do think is a bit, is a bit concerning only because I don't know what they could possibly say. I mean I think 40, 43 is kind of the whiskey per number. I mean I think Anything north of 45 is a bit of a stretch. 45, 46 is a bit of a stretch. And anything south of 40 I think leads you significantly lower. So I just think the setup going in is challenging. Not so much that I expect them to miss or refuse to guide higher.
- [40:59]
Melissa Lee
We started the show talking about Tim Cook and the troubles with the Trump administration. Ginsanity. Yeah. Which is totally Tim's, you know, making. So.
- [41:10]
Tim Seymour
Thank you.
- [41:10]
Melissa Lee
You know, the Trump administration loves Jensen Huang at this point, at this moment in time, except for the export controls, you know, singling him out when they're in Saudi Arabia, all these deals, UAE.
- [41:23]
Tim Seymour
Just cut a deal. I mean, you know, so I just think that the. And okay, so we've had concentration of hyperscalers who can't get enough by the way and also haven't told us that they're cutting back. How about the rest of the world? Well, they said they're what, going to slow down a data center? I mean, but, but they are.
- [41:39]
Steve Grasso
I think a bunch of them are making their own chips. So it's, there's peak productivity out of Nvidia for those four clients. So I think it was, it was shrewd to be a buyer of it up until this point, but I think the demand is probably shrinking for Nvidia's.
- [41:55]
Tim Seymour
Demand, maybe from those guys. But I mean, you know, how about the rest of the world? I mean, I don't mean just, I mean every other company, you know, I capex and build out is, is only in the early stages. And again, you guys are talking about the move back to the 130s. It's no different than the rest of the market. So again, that's why I'm giving you my independent of market beta, which I know we can't do on this show. But if I'm talking about pure fundamentals with Nvidia, the fundamentals are going to be great.
- [42:21]
Melissa Lee
Coming up, your trading questions answered. We take. We're talking real estate gold. A battle between two big box heavyweights. That is next. And here's a sneak peek at the Kramer camp. Jim is chatting exclusively with the CEO of Universal Technical Institute. Catch the full interview. Top of the hour on Mad Money. More fast too. Welcome back to Fast Money. Ahead of the long weekend, we've gotten lots of your questions and a couple would you rather. So let's see what the fast faithfuls want to know.
- [43:02]
Steve Grasso
Hi, traders, this is Bill from St. Louis. Everything about the Fast Money live event I attended was just first class.
- [43:09]
Mike Koh
I had a great conversation with Guy.
- [43:11]
Steve Grasso
About gold miners and the GDX after he told me I was a gentleman.
- [43:15]
Mike Koh
I think his exact quote was, let.
- [43:17]
Steve Grasso
Me tell you something else. That sucker's not done.
- [43:20]
Mike Koh
But now we're in the home buying season.
- [43:22]
Steve Grasso
My question is something like the Spyder xhb. A better play than gdx.
- [43:28]
Mike Koh
Thanks.
- [43:30]
Melissa Lee
That is an interesting one. Bill. Tim, what would you say?
- [43:33]
Tim Seymour
That was awesome. I can hear Guy. That sucker's not done. I mean, just like talk that through. He yelled it. I, that sucker's not done. I, I don't like homebuilders here. I love gold. Look at the week. That was old school versus new school. New school, of course was, was crypto and bitcoin and whatnot. But gold is old school, new school. Every reason you're buying it, gold is going to rally higher. I think you Want to stay in the miners who are just getting upgrades on the metal.
- [43:56]
Melissa Lee
All right, thank you, Bill, for the question. We're glad you had a great time at the Fast Money live event. Here's another. Would you rather in the retail space.
- [44:05]
Tim Seymour
Hi, Fast Money, this is Mohamed as.
- [44:07]
Melissa Lee
The move from Seattle, Washington.
- [44:09]
Dan Ives
I had an amazing experience at the.
- [44:11]
Melissa Lee
Live event last February. My question to the traders, if I'm going to invest new money, should I add to my Costco positions or should they buy Walmart?
- [44:22]
Tim Seymour
So would you rather Costco or Walmart?
- [44:27]
Melissa Lee
Thank you. That is an interesting one, too. Very good operators, both of them. Banon, what would you say last time.
- [44:33]
Bono
I would you rather, without Mel's permission, I end up in the penalty box. So I'm going to take a chance here. Listen, I like Costco. I think they're both expensive here. But I think ultimately when it comes down the subscription model, I think Costco has done a better job of differentiating what the value proposition is of said subscription model. As we see Walmart migrate more and more into grocery items, I think Costco still is able to differentiate itself on various verticals. So Costco would be my, my choice here.
- [44:59]
Melissa Lee
All right. Thank you, Mohamed. And here's one more question from a fan in Hawaii, Aloka Akiagi, first money team, this is Aulani from our beautiful island of Oahu. I just wanted to send my mahalo Nui Loa for allowing us to attend your Fast Money event back in February. We have an exceptional time. My question, we have a lot of REITs in our portfolio and I was wondering in today's environment over Juju Mahalanu from the island of Owaki. Aloha. Aloha, Aulani. And we love the lakes brought us so they were just magical.
- [45:38]
Tim Seymour
They were. That felt good.
- [45:39]
Steve Grasso
Great to live in Hawaii, right?
- [45:42]
Melissa Lee
What do you say about rates?
- [45:43]
Steve Grasso
So if you look at American Tower, that's the best performing rate. And if you look at office rates, is there a comeback in office space? Probably, but I wouldn't gamble there. Stick to the outperformers, stay there. Don't look for a laggard to become an outperformer.
- [45:56]
Melissa Lee
All right, up next, final trades, final trade time. Mike Coe.
- [46:09]
Mike Koh
As Apple share prices have fallen, their options prices have risen, it's time to take in some of that premium and sell strangles.
- [46:16]
Tim Seymour
Tim, Happy Memorial Day. And I do think the Novo story is one that doesn't need to come back. I think they're right there.
- [46:25]
Bono
Terrorist protectionism, global bond route. Don't fight the bond between Jelani's TLT better seller.
- [46:30]
Steve Grasso
Steven thank you everyone that served and gave the ultimate sacrifice. I'm gonna do the Steel Letter X. They had an intervention with me. You're okay to sell it right now? You have my blessing.
- [46:41]
Melissa Lee
Have a great and safe long weekend. Thanks for watching. Fast 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 and or subsidiaries warrant its completeness or accuracy and it should not be relied upon as such. To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer need money for college?
- [47:29]
Steve Grasso
Down payment for a house?
- [47:30]
Tim Seymour
A nest egg?
- [47:31]
Steve Grasso
I started the club for you. The investing club is about allowing you to be in control of your own money. We do something nobody else does. We tell you what we're going to do before we do it.
- [47:44]
Dan Ives
We're not traders.
- [47:46]
Steve Grasso
We're about creating long term term value.
- [47:48]
Tim Seymour
You want to be a better investor?
- [47:50]
Dan Ives
Join the club.
- [47:52]
Tim Seymour
Join the club and save@cnbc.com join gym terms and restrictions apply.