← CNBC's "Fast Money"
CNBC's "Fast Money"
Apple’s Latest Hardware Updates… And A Buyback Bump 9/9/25
00:46:45
Apple unveiling new iPhones, watches, and AirPods at its product event. How the tech giant is raising prices, and why one top analyst isn’t loving the latest updates. Plus the under-the-radar group of stocks quietly outperforming the broader market. What they have in common, and if there’s more gains ahead. Fast Money Disclaimer
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Courtney Garcia
What does it mean to live a rich life? It means brave first leaps, tearful goodbyes and everything in between. With over 100 years experience navigating the ups and downs of the market and of life, your Edward Jones financial advisor will be there to help you move ahead with confidence. Because with all you've done to find your rich, we'll do all we can to help you keep enjoying it. Edward Jones, Member, SIPC.
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Steve Kovac
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Courtney Garcia
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Courtney Garcia
Without lag, draft emails, summarize documents, create.
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Steve Kovac
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Laura Martin
That's the power of Dell AI with Intel Inside.
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Courtney Garcia
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Melissa Lee
Hi, it's Melissa. Before we jump into today's show, I've got something exciting to share. On December 11, we are hosting a special edition of Fast Money Live Trading the Holidays right here at the NASDAQ market site. You get to watch a live taping of Fast Money, meet and interact with the traders and of course celebrate the holiday season with us. It's stocks and cheers in the heart of the city, Times Square in December. You will not want to miss this. Tickets are available now at CNBCEvents.com fastmoney live in the NASDAQ marketsite in the heart of New York City's Times Square. This is Fast money. Here's what's on tap tonight. Oracle's monster move. Shares surging after the company posted 1500% growth in its multi cloud business. Is this the sign investors needed to see there's even more room to run in the AI trade. Plus a spotlight on Apple, the tech giant unveiling its latest slate of iPhones, watches, AirPods and more. But investors didn't seem too impressed with what they saw. How the company missed the mark and and what it could mean for the stock from here. And Jamie Dimon's warning the JP Morgan CEO saying right here on CNBC that the economy is getting weaker. What he sees for growth and how investors could get impacted. I'm Melissa Lee, come to you live from Studio B at the nasdaq. On the desk tonight, Tim Seymour, Karen Feiderman, Courtney Garcia and Stuart Kaiser, head of equity trading strategy at Citi. And we'll get to Apple's big event later in the show. But we start off with Oracle surging to new records after reporting some blockbuster growth in multi cloud database revenues. The earnings call just getting started. Our Mackenzie Segalis is Got the very latest Mac.
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Megan Casella
Hey, Mel. So Oracle is jumping in the post market as investors look past a slight earnings miss and zero in on its AI and multi cloud momentum database. Revenue from Amazon, Google and Microsoft growing more than 15, 1500 percent in its fiscal Q1, while cloud infrastructure revenue, one of its fastest growing businesses, jumped 55% in the quarter. And then, looking ahead, Oracle's contracted backlog. This is the cleanest proxy for future growth. It climbed more than 350% from last to nearly half a trillion dollars. Part of what's driving momentum Here is a $30 billion deal with OpenAI to expand US data center capacity and a new partnership to run Google's Gemini AI models on Oracle's cloud. Now, the company's earnings call that just got started. We'll keep an ear out for additional guidance and color from Larry Ellison and CEO Safra Katz. Mel.
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Melissa Lee
All right, Mac. Thanks. Mackenzie Seagalos. The quarter itself was not much to write home about, but it is that guidance, Karen. And the notion that, you know, if the street was expecting 180% growth in RPO's remaining performance obligations and it came in at 359, that's a magnitude higher. Yeah.
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Karen Feiderman
Yes, it's staggering. And so we were talking a little bit before the show about, okay, this is a stratospheric number and what, you could put out half a stratosphere and still really, you know, have something extraordinary to report. So you must feel extremely confident that in reaching that stratospheric number, I mean, it really is kind of stunning that we're, I don't know what inning to three maybe, but to have this, you know, monumental shift. So what is the profitability going to be? We don't know that. So that's, that's an open question. But I mean, this is just stunning. I don't know how else to think about it. Extraordinarily huge. We'll see how much actually comes to pass. But they sound like for the next few years this is what they expect the revenue growth to be.
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Gil Lauria
Yeah, and I think the next few years is what makes this so extraordinary. 359 growth on the RPO's is great and crazy. And we've heard some analysts, you know, wax as if this is the craziest day they've ever seen. I would just put it as if you have that kind of visibility of almost 70% CAGR out to fiscal 30. That, to me, is astounding. That, to me is where this is a number that, that at least imputes into a number of other companies out there that must be seeing the same thing. And while I would, I would argue that Oracle has tended to have a few more pom poms on their releases than other companies and they really have, I think it's very difficult to dispute the energy and the momentum and the transformation in their business which we've talked about, which is very much seeking a wider revenue base, maybe at less margin. This is very impressive margins right now, 41 and a half. Let's see where they go. The fact that they are also in a place where they will actually have Google Gemini on their cloud infrastructure, the fact that they are now competing in the same space as some of the other trillion dollar companies means it feels like this is a company that wants to get there.
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Courtney Garcia
Yeah, clearly what you're saying is the demand is there. I mean when you see this kind of backlog increase, like people are still spending on AI and I think something you do want to maybe watch for Here is the CapEx, right. I mean they went from about under $2 billion of CapEx in 2020 to over 21 billion last year. That's presumably going up when you have this kind of a backlog. And I think that's the question when you look at these companies is clearly the markets don't care about these high CapEx numbers. They don't care. The valuations are much higher than their longer term averages but at some point they probably will. So I think in the short term these kind of numbers are absolutely going to bring the stock higher. But I do think that's something you want to watch in the space as we move forward.
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Melissa Lee
I mean it's just amazing that yesterday's narrative was is AI adoption slowing? And then here we are today, we've got this huge massive number, a forecast into the future which really reaffirms the notion that I spend is here to stay at least for the next five years.
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Stuart Kaiser
Yeah, I mean I think it's, I mean we're joking before is classic earnings report, right. Missed earnings, missed revenues guide up and the stock explodes higher. Also think it kind of continues this recent trend out of semis into other parts of the trade. Right. And you know, this type of result I think is just going to kind of further that momentum into the software space and obviously into power generation as well.
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Melissa Lee
I mean where the stock has come also is staggering if you consider that at the beginning. You know, since June the Stock is up 40% so it's not like it hasn't had a run into this Quarter. It has had that run into the quarter and yet here we are still investors bidding it higher.
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Karen Feiderman
I mean there are probably some analysts who argue and it might be right, the stock is better here today than it was yesterday at this price. It's hard for me to buy something up that much. I mean there is, it's not a short squeeze, there's like a tiny short interest here. That's how I mean it's just wild bullishness. And if you look at like a core weave, right, you could see how, I mean that's up 5 or 6% in the after hours.
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Melissa Lee
Right, right, right. But I mean 27 and a half, it's just an extraordinary percent for such a big company to move.
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Gil Lauria
And I don't think Oracle is over owned when you look at least how people have sought to get their exposure across AI and tech and semiconductors. And as Stuart said, this is part of a rotation. We talked about this, we talked about this with Broadcom, we've talked about that. We are seeing some rotation in the space. It doesn't necessarily mean that it's, it's less exciting for the folks we were talking about yesterday. It just means that there are more people. And again if you asked a lot of retail investors and I would say even a few handful of institutions, the names they were going to not be caught underweight were going to be the obvious ones. Oracle wasn't in that basket, let's be clear. And now getting up near, I don't know what's the market cap here? North of 400 billion.
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Karen Feiderman
800 billion.
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Gil Lauria
800 billion. So this is a case where this, this company now is not only a must own but it's a case where in the last, even call it 15 months this market cap has tripled. And that's something that I think a lot of people don't have exposure to.
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Melissa Lee
I mean prior to its cloud business between 2012 and 2022, sales growth averaged 1.6%. And now what are we looking at? I mean it's just an extraordinary remaking of the business here to that point.
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Stuart Kaiser
Almost continues this, this game we've been playing about who are the winners and who are the losers. Right. Like Oracle might have been in, in less winners camp. It is and is now kind of in the more winners cap as well. It is, it is starting. Look at last earnings season, you went into the earnings season MAG7 EPS growth forecast Mid teens coming out of the quarter, it's mid-20s. Right. So it's just massive, massive upside to all of these Numbers. And again, I do think it's really hard to pick the winners and the losers because they, they switch seats pretty quickly.
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Melissa Lee
Yeah, we got a newsletter here. We do want to get to new calls for tariffs out of the White House. Megan Cassell's got the details here. Megan.
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Megan Casella
Hey, Melissa. So this was initially a Financial Times report saying that the US Is asking the Europe Union to impose tariffs of up to 100% on India and China as part of a joint effort to try to pressure Russia to end its war in Ukraine. I can also say just in the last moment as I was coming on here, I can confirm on background as a source familiar, that, yes, the White House has asked the EU to put these tariffs on China and India over Russian oil. Now, the FTSE reporting goes a little bit further. It also says, according to a US official, that the US Says they would be prepared to mirror any tariffs that the EU imposes on, on Russia or China of up to 100%. So that's really significant here. They're saying that if the EU were to impose tariffs of up to 100% on Russia or China over this, that the US would match it. A potential for real escalation there again between the US And Chinese, similar to what we saw earlier this spring. Melissa.
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Melissa Lee
All right, Megan, thanks. Megan Casella, what do you, what do you make of that trying to squeeze them basically through tariffs?
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Gil Lauria
Well, Russian oil has been finding its way to India and China for years. It's interesting. Also, last time I checked, we have all kinds of sanctions against Russia, as do the eu. So, you know, tariff dynamics, there's very little the EU is importing from Russia. It is very clear that, you know, certainly upon the invasion of Ukraine, what had to happen was a scramble to get NAT gas and to get other forms of energy across other places. Like, I think it's, I think it's fantastic. If you think about the relationship Russia has had with, with China and India, China and India are the places that, where their, their demand for oil continues to go higher. If you look at a world where there has been plateauing of at least developed country growth, India's greatest import cost is oil. The fact that China and Rosneft did a big deal, you know, 10 years ago when I was a lot more focused on Russia, this is all in place for a long time. The fact they're going after it now, I don't think it's going to do anything to pressure Putin. I do think it's important to get everybody on the same side of the boat.
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Melissa Lee
All right, meeting time. We do want to get to Alphabet shares jumping to another all time high. This after Google Cloud CEO Thomas Currian made some bullish comments on the company's Gemini AI, saying that nine of the top 10 labs and nearly all of AI unicorns are customers and that more than half of its $106 billion in backlog will convert into revenue in the next two years. Alphabet shares up more than 12% already this month. Courtney, this is certainly, I mean this is all part of this sort of positivity coming out of the trade today.
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Courtney Garcia
Yeah, I mean it's very similar to the Oracle story where you were clearly seeing that AI demand is there and investors still want to invest in it.
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Melissa Lee
Right.
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Courtney Garcia
And I think with Google, one of the biggest things that was overhanging them was the antitrust ruling. And I think now that that has gone in their favor, that's really kind of lifted a cap and it's invited a lot of investors here to come in and they're really rewarding Google with that. So again, I think a lot is probably going to continue. Investors are really excited about this trend. Is that where you should be pouring all your money? That's another question. Is it where it's going? Yes, it is.
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Karen Feiderman
In the Mag 7 space though, Google is still the cheapest despite this very big run up. I mean it's still a just tiny bit over a market multiple for a company that really has so much more going for it than your average market stock. So I mean the margins here are extraordinary. We still have a couple little things out there and antitrust but the big one, the big ones are gone. And then the question of course of search but, and then, but all that Waymo and YouTube I know on fire YouTube get enough embedded credit I think in Google. So I like it staying long.
- [12:40]
Melissa Lee
I mean YouTube is Netflix's biggest competitor at this point.
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Gil Lauria
Bigger than they have much great, much greater percentage of consumption hours out there. And demographically it's, it seems like it's actually YouTube game. I'm not arguing against the move that Netflix has had, but some of the parts we've talked about this would probably be positive for Google in the long run. Even though the news over the last two weeks means you can actually just pile it all into the same holding company.
- [13:06]
Stuart Kaiser
Yeah, I mean Google's a good example to a couple of years ago, will I kill search? Right. And now, you know, Heath Terry on our side did a 175 page report and AI and Google comes out at the top of the Stack across the most kind of verticals, if you would put it that way. So I do. I agree with Karen. I think I, I think Google is way underestimated in terms of how, how many different levers they have to pull in this trade. And again, it's a shift from where we were a couple of years ago in terms of there might be a threat from this.
- [13:32]
Melissa Lee
All right, let's get back to Mackenzie. Seagalas has got more from the Oracle conference call. Mac.
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Megan Casella
Hey, Mel. So we're hearing from CEO Safra Katz now. They expect for fiscal year 2026 an updated capex spend of around $35 billion, adding that demand continues to dramatically outstrip supply. We also got some guidance here. They expect cloud infrastructure to grow 77% to $18 billion this fiscal year. And projecting that out four years from now, $144 billion over the following four years. Still listening in. So I'll come back to you when I have more.
- [14:06]
Melissa Lee
All right, Mac. Thanks, Mackenzie Segalas. Let's get more on both Oracle results and Google's big run. We're joined by Gil Lauria, the managing director at DA Davidson. We know that you're on the last hour and overtime, Gil, and you've had some time now to digest the numbers. Are we going to look back on this day and say this is the day that Oracle got rerated?
- [14:25]
Steve Kovac
Yes, the number is staggering. That 144 billion number five years out is absolutely staggering. That means that they will grow that business 10x in the next 5 years. So plenty of reason to get excited. Let me talk about a couple of things that we do need to consider here. So one of them is that what's happened, this has happened dramatically over the last couple of years, is that the hypers, the big hyperscalers, Microsoft Azure, Amazon Web Services, Google Cloud, have gone to a strategy of offloading their capacity to other data center providers. That's the big nebulous deal. Those were the core weave deals. And now all three of them are taking their capacity and putting it on Oracle. These are not organic customers to Oracle. This is Microsoft, Google and Amazon's customers that will use Oracle capacity. So we have a shift of where the capacity is coming from. So let's keep that in mind. And those are the big deals that Oracle is now putting in its backlog. That's one who is. It's very unlikely that they're going to get to $144 billion of revenue in five years. The bottlenecks to get there are very significant. Electricity. We're going to run out as early as next year. We're not going to be able to 10x electricity capacity in the next five years. Chips. There's only so much that can come through tsmc. Whether it's in video chips or Broadcom chips. TSMC can only grow so fast. And then finally, capital. All these companies are now relying on the ability to borrow tens of billions and now we're talking about hundreds of billions of dollars that were previously not coming through the debt markets. So there's going to be competition for that debt capital not just between Oracle and Core Weave and Nebulous and Crusoe and Lambda. But Metta is now going to the debt markets to borrow. Elon is going to the debt markets to borrow to fund data center capacity. So we're going to have multiple bottlenecks that mean we will continue to grow compute, but we're not going to 10x it in the next 5 years.
- [16:33]
Melissa Lee
So there are a lot of asterisks basically surrounding Oracle's guide. How much do you then put into your model and where does that get you in terms of your price target?
- [16:44]
Steve Kovac
Yeah, so what's important is that next year's number will be a lot higher. So we are all going to increase our numbers. Now keep in mind this revenue coming in at a very low if not negligible margin where the revenue that most of Oracle's revenue is declining and going away at 50% margin. So the mix shift is very dramatically lower. That's why they missed, that's why earnings growth is not going to be anywhere near the revenue growth. But it doesn't matter as long as the is the margins are positive. We're all going to be increasing our numbers based on this and the valuation should be going up. The reaction to the stock is very understandable.
- [17:21]
Karen Feiderman
Gil, it's Karen. Thanks so much for being on. Can you just drill down a little more on that margin from this kind of business versus the higher margin business you talked about? What is it? 1, 2%, 2 or 3? What are you thinking?
- [17:35]
Steve Kovac
Yeah, so even Amazon Web Services, which is the biggest hyperscalers, talked about the GPU business being a very low margin business. Oracle Cloud is an order of magnitude smaller and a price the lowest price provider. So, so they are willing to accept very low margin. So yes, I would say it's very likely to come in at single digit margins, especially for the next few years. Again as the mix is going from 50% margin it's going to go to low single digit margins, but again positive margins on Revenue that that is incremental and that's what they're focused on.
- [18:15]
Melissa Lee
Gil, I have to ask you this because we talked about Alphabet and you cover both stocks. Which, which do you prefer right now? Which would you recommend to investors based on what Oracle has guided and what Google has said during the Communicopia conference?
- [18:29]
Steve Kovac
Yeah, Microsoft. Microsoft's growing Azure 39%. It is by far the leader and again it's the first one to figure out that it doesn't have to do all the capex. It can put the capex on Oracle and Cor we've and Nebulous and others and still get the customers paying it. It marks that up. It continues to grow and again it's leading the way because it's not only growing that business faster than Amazon Web Services and Google Cloud but it's attaching a lot more revenue around that. So they are the winner with Google. We all understand and I think you talked about the sum of the parts argument that they have all these wonderful properties that should be standalone YouTube, way more Google Cloud. They should be selling TPU's, they'd be the number two provider in that market. But realistically speaking that negative catalyst to Google hasn't happened yet. It wasn't about the doj. The negative catalyst that we need to be aware of is that day Chad turns on ads. Because Chad within a year is going to have a billion MAUs. It's going to may even have a million daily active users within a year. At that point they're going to turn on ads and all of a sudden all those Advertisers that are 100% Google search are going to have an alternative and very quickly those guys are going to rebalance. And so there's, there really is still a threat to Google Search. They are so much better off spinning off those rest of the businesses. All those businesses I mentioned would be the leaders in their category.
- [20:00]
Melissa Lee
All right, Gil, great to speak with you. Thank you. Gil Lauria DA Davidson, Oracle stocks still holding on to that eye popping 26% gain on the back of earnings. We're on the conference call. We'll continue to bring you any headlines that move the stock. Meantime, JPMorgan CEO Jamie Dimon raising concerns about the economy in an exclusive CNBC interview earlier today.
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Steve Kovac
The economy is weakening.
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Gil Lauria
You know, whether that is on the way to recession or just weakening, I don't know. And that just confirms what we already thought.
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Melissa Lee
Those comments after the Bureau of Labor Statistics announced the biggest adjustment to jobs numbers on record saying nonfarm payrolls grew by 911,000 less than previously reported in the 12 months through March. Yet the Dow S and P and Nasdaq all closed at record highs today. So almost no response. Bond market also fairly quiet. Were you surprised that sort of the, you know.
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Karen Feiderman
No, I would surprise the market or Jamie's comments about either. About Jamie, of course. I'd rather do that. Yeah. Well, this is his job is to say, all right now, you know, we got to be sober here because things could end up turning quickly. And that's his job to be, to not be irrationally exuberant or exuberant at all. And so I don't, I don't take that as the economy is really slowing. The, the payroll number and the bonds market's reaction to it did surprise me a little bit. I mean I saw the dollar weaken, but then the dollar found some footing and yet yields were higher.
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Melissa Lee
I don't know, Stu.
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Stuart Kaiser
Yeah, I was a little surprised honestly, when the numbers came out. There was like a two or three basis point move in the two year. It wasn't particularly significant, you know, in terms of, in terms of Jamie Dimon agree their job is to kind of like talk stuff down. But I think the point he made in the middle of that statement is the most important one, which is we are slowing, we just don't know where it's going to end up. Right. And I think the investor base case now is you slow but avoid a recession. You have now of negative job growth in June for instance, and you brought your three month average down to a level that's kind of troubling. So I think what he's really describing is there's really poor risk reward right now around the path of economic growth over the next three to six months. He's being cautious about it to current point. Investors are not being cautious about that. And you know, part of that's AI but, but in general, I think equity markets are probably more bullish on economic growth than the economy itself seems to be.
- [22:19]
Melissa Lee
Yeah, I mean CPI and CPI coming out of this week. Yep. That will really shape the discussion here.
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Gil Lauria
One of the more interesting discussions out there is not the year end target on the S and P or where you think how many Fed cuts. It's talking to economists and strategists about where they actually think we are in the economic cycle. I mean, I've got people late cycle, I've got people early cycle, I've got people all over the map. And that is really the biggest question to ask because if we're slowing down and we've actually been oscillating. Look, a year ago September we cut 50 bips because we thought the, the labor market was falling apart and it really didn't. Although maybe it wasn't as strong. That's the big thing. Did, did bond yields actually sell off a little bit today? Because ultimately if the economy is weakening and we're doing everything to cut revenue for the government and stimulate and whatnot, that's probably bond negative. Even though the flight to quality is what you should expect. By the way, if we really have a scare, I think the US is still the flight to quality out there. I think you want to be buying the 10 here.
- [23:15]
Courtney Garcia
Yeah. And I think we definitely have a lot of conflicting data out there. I don't think there's any argument against that. But when you came to these revisions today, this is backwards looking data. And I think that's why the markets really aren't as concerned about it because we're looking back, especially as we were coming up to tariffs and just a lot of uncertainty for employers where of course they weren't hiring. So now you're saying, okay, maybe that's not relevant in today's labor market. I think that's really why the markets are looking past this. You have to look at the data nagara. You have to look at what GDP numbers are, how the consumers coming in. And even though Jamie Dimon talked about the economy weakening, they talk about how strong the consumer is right now. So I think you kind of have to pick and choose what it is. But I would say there's probably a little bit more positive data on the overall economy than negative right now.
- [23:53]
Melissa Lee
We will hear, by the way, from more big bank CEOs tomorrow. Wells Fargo CEO Charles Scharf will be on squawk, box eight, 10:00am Eastern time. And Goldman Sachs chairman and CEO David Solomon will join closing bell overtime, 4:00pm Eastern. All right here on CNBC. Coming up, a major move higher for UnitedHealth. What the insurance giant sees for next year's enrollment that has investors piling in. Don't go anywhere. Fast money's back in two.
- [24:17]
Steve Kovac
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So whether it's in the plants, at.
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- [25:19]
Gil Lauria
So.
- [25:19]
Steve Kovac
You'Ve got your streaming subscriptions sorted.
- [25:21]
Gil Lauria
But every now and then live TV.
- [25:24]
Steve Kovac
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- [25:30]
Gil Lauria
Big football game tonight.
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Steve Kovac
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Gil Lauria
Get the live TV you love for.
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Steve Kovac
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- [25:49]
Melissa Lee
Welcome back to Fast money. Shares of UnitedHealth jumping more than 8% today. The insurance giant saying in a filing it expects 78% of members will be enrolled in top rated Medicare insurance plans next year year which would mean bigger bonus payments from the government to unh. The stock hitting its highest level since May but it is still down more than 30% this year. I mean I guess the bar is so low on UNH in terms of what investors expect. Also in the filing they said they are on track so far to hit guidance. So that is also sort of unexpected by investors who are so used to guidance cuts at this point.
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Karen Feiderman
Well I think the stock would just give a much higher multiple to guidance is real right. Then a low multiple to we don't really know where it'll come in. So there's that the four star thing is good. You saw some other shares sell off. So not everybody gets a four star or four or five star. So this is a good, a good turn of events. I know this is Timmy like you're, you know things go from terrible to just bad.
- [26:48]
Melissa Lee
Yeah.
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Gil Lauria
And I think the I guess down 55 to 60 which is where a lot of the investors put a lot of the money. I think is is probably where we now know they're not going to be. And if the company's at 26 estimates on STAR enrollment then then, then things are a lot better than the stock is priced to and ultimately remind we always bid up the multiple on UNH because of the growth profile of the company, in addition to seemingly their position and their ability to exact the greatest margin from, you know, even parts of their business where margin was getting squeezed. I still think this company is extremely cheap and I still think that a lot of people just don't know what to make of the uncertainty coming out of Washington and what it means for them. And I think you play the long game here.
- [27:35]
Melissa Lee
Berkshire Hathaway got in. I mean they saw that opportunity. Right. And they established a position there in UNH.
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Stuart Kaiser
Yeah, I mean the stock's up 40% since the 1st of August, I think. But to his point, I think it's the uncertainty around the health care sector. Even health care specialists we talk to will say we thought it was all priced in and then a month later it's not all priced in. And you know, and these stocks just continue to face massive headwinds. We still haven't gotten sectoral tariffs on pharma as well. So I think health care in general is a challenge pace space and this stock I think is just kind of gotten caught up.
- [28:03]
Melissa Lee
There is no more defensive characteristic to health care names, whether it be big pharma, insurers, I mean anywhere in the space. It's not defensive at all.
- [28:10]
Courtney Garcia
Yeah. And I think the question though, is it like to down, is it, is it so beaten up you can't ignore it at this point? I think that's what Berkshire. Exactly. That's a first traffic take a look at. But when you even look at the weighting of the health care sector in the proportion of the SB100, it's historically low.
- [28:27]
Melissa Lee
Right.
- [28:27]
Courtney Garcia
So it's, it's under owned right now. So yeah, I think there's a lot of headwinds. I think there's a lot of reasons not to own it. But at a certain point people are going to buy in because it's so cheap.
- [28:35]
Melissa Lee
Coming up, regional bank moves how that group is faring this year as M and A continues into focus and whether we can expect more deals to get done. You're watching Fast Money live from the Nasdaq MarketSite in times Square. Back right after this.
- [28:49]
Steve Kovac
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- [29:19]
Gil Lauria
And now a next level moment from ATT Business. Say you've sent out a gigantic shipment.
- [29:24]
Steve Kovac
Of pillows and they need to be.
- [29:25]
Gil Lauria
There in time for International Sleep day.
- [29:27]
Steve Kovac
You've got AT and T5G so you're.
- [29:29]
Gil Lauria
Fully confident, but the vendor isn't responding and International Sleep Day is tomorrow.
- [29:33]
Steve Kovac
Luckily, AT&T 5G lets you deal with any issues with ease, so the pillows will get delivered and everyone can sleep soundly, especially you.
- [29:41]
Gil Lauria
AT&T5G requires a compatible plan and device coverage not available everywhere. Learn more at att.com/5G Network.
- [29:51]
Melissa Lee
Welcome back to Fast Money. Another check on Oracle shares are now up about 26 for 26.8%. Wow. After reporting 1500% growth in its multi cloud business, the company adding 175 billion to its market cap after hours, passing JP Morgan and Walmart in value, now the 10th biggest company in the S&P 500. This is a record high in the after hours session here. During the regular session, stocks set record closes across the board despite big downward revisions to previous jobs numbers. The dow gaining nearly 200 points, the S and P up more than a quarter percent, the Nasdaq more than a third of a percent higher. Meantime, shares of infrastructure company Nebby is soaring 40% after signing a multi year deal with Microsoft worth up to $19.4 billion to provide cloud computing power for AI workloads. And PNC Financial pulling back after yesterday announcing plans to buy First Bank holding in a $4.1 billion cash and stock deal. CEO Bill Demchak talked about whether he expects more deals in the banking sector in an exclusive CNBC interview earlier today.
- [30:51]
Kate Rogers
Right now the environment is so friendly for banks.
- [30:54]
Gil Lauria
Interest rates are right sizing, credit's good, consumers are spending, so everybody feels pretty good.
- [30:59]
Stuart Kaiser
Nobody wants to to sell.
- [31:00]
Steve Kovac
Banks are usually sold when the economy's.
- [31:04]
Stuart Kaiser
In trouble, when somebody's messed up and there's a crisis. And I just don't see that.
- [31:10]
Melissa Lee
The regional banking ETF slightly lower today, but has risen more than 7% this year. And of course that is the area of the banking sector where people are looking for a lot of deals to start picking up because the environment as Demchak had outlined is very favorable for that kind of activity.
- [31:26]
Stuart Kaiser
Yeah, I mean I agree with them. It's interesting. This is usually a domestically cyclically facing industry that gets sold off when you're worried about economic growth. So either we're wrong about the economic growth Cycle or the M and a premium. And also deregulation is just, just such a huge theme throughout the financials that it does seem to be drawing a line under things.
- [31:41]
Karen Feiderman
Yeah, I would think deregulation, right. For any bank. You know, he said banks get sold, not bought.
- [31:47]
Melissa Lee
Right.
- [31:47]
Karen Feiderman
Which is really interesting thing. But we have just touched on deregulation and I think for, I can't think of an industry, maybe utility, but for a bank this is so, so hamstrung by regulation.
- [32:00]
Gil Lauria
I continue to like the money center banks. And first, you know, obviously speaking about the U.S. citi was just at an investor conference where they upped the revenue guide, their expense cut guide and you know, it's at 18 year highs which by the way takes it all the way back to kind of where it was diving down, you know, kind of in 2008. So it's still got a long ways to go. But it's a different world. It's a, it's a different bank, it's a smaller footprint, it's a much more efficient dynamic. AI and all the efficiencies of Fintech are Citibank's best friend. But if you like US multi center and you like D wrig trends in the US you love them more in Europe. I mean Barclays, hsbc, Deutsche bank, and I know Deutsche Bank's a naughty word in some circles just because we don't even know what that balance sheet looks like. I'm telling you, D wrig in Europe. The European regulators and the European governments also want the same.
- [32:47]
Courtney Garcia
Derek, I think there's a lot of reasons like banks here, we've talked about the deregulation, we've talked about the increase in M and A activity which is likely going to help your investment banks. But also you're seeing a steepening of the yield curve and especially if the Fed does cut rates, you're going to see that continue which will benefit them. Then you also have, there is a huge amount of margin loans that like the retail traders are taking to trade in their accounts right now, which is also going to help things like your Schwab's of the world. And especially as rates come down, you're probably going to continue to see more of that and this bullish activity. So I think for a lot of reasons, I really like the banks here.
- [33:17]
Melissa Lee
Coming up, Apple unveiling a number of new products at its launch event today. The updates and why one top analyst was not loving what she was hearing. Fast Money's back into. Welcome back to Fast Money. Apple dropping a percent and a half closing near session lows. The company's product launch event, which it had dubbed as all dropping, seemingly failed to impress investors. Among today's biggest reveals for iPhone 17 models, including an ultra thin iPhone Air, plus an updated Apple Watch and AirPods Updates on its AI rollout, however, were scant, maybe non existent really. For more, let's get to cnbc, Steve Kovac and Cupertino Steve.
- [33:55]
Kate Rogers
Hey Melissa. Well, who needs artificial intelligence at Apple when you're going back to the basics at what made this company so successful in the first place and that's making cool hardware people want to buy. Like you mentioned, it was that iPhone Air that kind of stole the show. A very thin model, the thinnest ever Apple says it's ever made. Also packing a lot of the power of those expensive pro models into that smaller, slimmer design and package. And by the way, it also has some other Apple magic in there. It's got its own chips for WiFi and Bluetooth. No longer using Broadcon chips for those. And it's got its own Apple made modem, a 5G modem that it used from technology it purchased from intel several years ago. No longer using Qualcomm. You can extend that out guys, and see a world in which all of the chips inside these devices are made by Apple instead of a third party. As for pricing, that was a big thing walking into this as well. The only model that got a real price increase was the Pro model going up 100 bucks to $1,100 that you're seeing here right now. The Air is going to cost 999. That's what the Pro used to cost. There are also some Melissa since sneaky price increases within here as messing around on the Apple website a little bit earlier this afternoon. And notice that when you want to upgrade the storage, you now have to pay double what you used to have to pay to get to that next tier of storage. Instead of 100 bucks per tier, it's not going up to 200. It varies a little bit by model. But that is another way Apple is kind of able to quietly raise the prices and the average selling price of these models without having that big headline price increase number. Obviously helps to mitigate some of the tariffs, protect their margins and things like that. We have not seen a major price increase. And by the way, the iPhone 17, the base model is staying the same price as it was a year ago. Still, as you mentioned, investors not liking what they saw too much Today, stocks down about a percent and a half after Hours. Melissa?
- [35:47]
Melissa Lee
Yeah. Although had its best August in more than a year, so the run up was prior to the event. Steve, thanks. Steve Kovac. For more on Apple's product launch, let's bring in Needham senior entertainment and media analyst Laura Martin. Laura, great to have you with us. You said this whole thing was very disappointing. Maybe your expectations were too high. They delivered on everything that everybody really expected, which wasn't much granted.
- [36:09]
Laura Martin
But what they do is they're fighting to maintain their, their installed base. They've gone on to defense, if you don't have innovation, you can't raise price. And as the genius that just spoke said, they aren't raising price increase. One model has a hundred dollar increase. That's bad because they're including a lot of cool stuff. What we heard is 90 minutes of cool stuff they're including for no price increase or sneaky price increases on memory. That's all bad. That's because they're not innovating. And by the way, their major competitor called Android is backed by Google Gemini's LLM. So they're going to be able to raise prices faster or if Google decides on Android not to raise prices, it's going to have a better product in two or three years while Apple sits around and doesn't innovate. So it will get ever more expensive for Apple to maintain its installed base of customers.
- [36:58]
Melissa Lee
Let's give Apple the benefit of the doubt for just a moment. In terms of the Air, the content, most of the major components in the Air are manufactured by Apple. So they vertically integrated that model of phone. Is it possible that they're doing this in order to have more control over the AI experience. Experience in the next generation to actually integrate that experience into the hardware, which would make it, you know, a reason to buy.
- [37:24]
Laura Martin
Maybe, but remember, so two things. One is I see the Apple Air, which I thought was the coolest thing in there, is a precursor to the Flip phone, which I think is the form factor they're going to announce next year, which sounds very cool to me. Okay, so that's the first thing. And then the second thing is I think that software, like generative AI stuff is a software base, not a hardware base. I take your point that Apple is going to control everything in the iPhone because that helps them with control and margins. All of which is to say annual updates in an environment where generative AI is changing innovation cycles to weeks and months is too big a risk. You and I will not get a new iPhone for one year. That is too long a gestation Period. For us to buy Apple now when we don't know what they're going to do a year from now. And meanwhile, you saw Oracle today. You guys just talked about it. Up 40% on generative, AI and cloud. Why do we want to be sitting in Apple?
- [38:22]
Gil Lauria
Well, so Laura, what do you want to see them do? I hear you on all that? So today was a big, you know, we expect what we got. We expect the innovation is in the pricing. Apparently the news around the Google settlement, so defaults continue, exclusivity is, is banned. Any of this change your view on Apple. But more importantly, what should Apple be doing here to raise the multiple of the stock?
- [38:48]
Laura Martin
Right. So our view is Apple is a single product company. Half of its revenue comes from the iPhone and 100% of service revenue depends on the iPhone. Not the earphone, not the, like the AirPods, not the watch, really, the iPhone. We must have an iPhone replacement cycle for these shares to work. We just got told today that for the next 12 months we are not going to drop. My opinion, what we heard is nothing is going to drive us to an iPhone replacement cycle unless you break your iPhone, which like that, it's already in the numbers. So they must have an iPhone replacement cycle to over deliver the shares above average. And they didn't do that today. So we can wait a year, A year from now we'll see if they do something that gets drives an iPhone replacement cycle one year from now.
- [39:34]
Melissa Lee
All right, Laura, thanks for your analysis. We do appreciate it. Laura Martin of Needham. Were you disappointed, Courtney? Were you that disappointed with the event?
- [39:44]
Courtney Garcia
Well, I mean, no real news came out, which I think what people were expecting. There was a pretty low bar, but they just didn't even really beat the low bar that they had, I think is what's happening. And I mean, it's a great company. They have a really good balance sheet. They're hiking their dividend, they have a lot of buybacks. Like there's a lot of good reasons to like the stock, but none of these are reasons is going to bring it to the kind of growth like we're talking about with Oracle today.
- [40:03]
Melissa Lee
Right?
- [40:04]
Courtney Garcia
I mean, until they have something that's going to have this cycle of upgrades which everyone's talking about thus far, none of this is going to do that. Like unless your iPhone breaks or you have such an old phone that they're going to force you to upgrade, which we were talking about earlier. I mean, for any of those reasons, that's not going to have the kind of growth you've had come to expect.
- [40:21]
Melissa Lee
With Apple, they're going to have to pry that little phone out of Stuart's hands. I mean, that's basically what you said. You're never going to upgrade.
- [40:27]
Stuart Kaiser
I definitely would. It was a blocking and tackling type quarter when you know these other stocks are up 10, 20, 30%, you know, post earnings. So it's, it may be a core holding, but it's just not going to get people excited, I don't think.
- [40:38]
Melissa Lee
Coming up, one year of the coffee grind, how Starbucks CEO Brian Nichols turnaround plans are faring. And if the consumer is sipping on those changes, more fast money into welcome back. We've got a news alert. President Trump posting about new trade talks with India. Megan Cassell's got more. Megan?
- [40:57]
Megan Casella
Melissa, the president potentially looking to smooth things over here with India posting just a few minutes ago on Truth Social, saying he's pleased to announce that India and the US Are continuing negotiations to address the trade barriers between our two nations. He says he looks forward to speaking with who he calls his very good friend Prime Minister Modi in the upcoming weeks and adds, I feel certain that there will be no difficulty in coming to a successful conclusion for both of our great countries. Now, Melissa, to state the obvious here, pretty striking timing and unusual timing with this post given the story we talked about at the top of the hour, which is that two sources familiar now confirmed to me that as of today, the president has been asking the European Union to impose tariffs of up to 100% on both India and China to pressure Vladimir Putin over Russian oil. So you do have to wonder how that might impact these upcoming talks. But of course, there is a lot on the line here for both countries with tariffs now in place on Indian imports of 50% as of late last month.
- [41:54]
Melissa Lee
Melissa Megan Thanks. Megan Casella, meantime, it's been a brutal year for Starbucks, down over 8% since January. Menu changes a strap consumer increasing competition. They all seem to have investors in the coffee giant steamed. CNBC's Kate Rogers sat down with CEO Brian Nickel on his one year anniversary at the helm to discuss what is next for the company. Kate.
- [42:18]
Megan Casella
Melissa, his back to Starbucks plans involve cozier cafes, more seating, the return of Sharpies, of course. But more recently, the company announced a $500 million investment into hospitality. It's called Green Apron Service and that involves smart cue technology to better staff its restaurants. It also frees up baristas to truly engage with consumers and also get them custom drinks in four minutes or less. The hope is to get back on the Path, of course, to same store sales growth, particularly in the US where it's been negative now for six straight quarters. I asked Nicole about what the company's data is showing about customer acquisitions under this new hospitality push. Take a listen.
- [42:56]
Gil Lauria
What we're really excited about is we're.
- [42:58]
Kate Rogers
Seeing both non rewards customers come back.
- [43:01]
Stuart Kaiser
In a big way as well as rewards customers. And you know, that is to me the sign of we're doing the right things both in the store and outside of the store with communication, menu innovation.
- [43:14]
Kate Rogers
And just having the brand show up.
- [43:16]
Gil Lauria
The way we want it to show up again.
- [43:20]
Megan Casella
The metric for success in year two, he says stay the course and he really hopes to become the world's greatest customer service and also customer centric company. So leaning very much into that hospitality angle, Melissa, and also kind of catering to the non rewards customer. Remember that incremental consumer that had been a real challenged, challenged customer for Starbucks before Nickel came on board and the idea of bringing them back and also offering rewards customers deals as well. So you're making both parties happy and hopefully bringing them back into cafes in a meaningful way.
- [43:51]
Melissa Lee
Back over to you, Kate. Thanks, Kate Rogers. Tim. I don't know Green Apron service. Pumpkin spice latte. Does that make up for $6 coffee?
- [44:02]
Gil Lauria
So this guy would coffee the next pumpkin pumpkin spice latte. I have your last oversight ever had and notably would be the last. And boy, I mean on a show where we go from Oracle to Apple to Starbucks, it's like, boy, we really have fallen off and need some caffeine in our investment. I just what I worry about for Starbucks as a longtime shareholder and and a regular customer is can they get that neighborhood back experience in a mass market concept, it kind of doesn't run with the kind of growth that at least they put through. And so there's no question Brian Niccol is, is a marketing guru. He is the best and I think he will get there. And I do think my experience in the Starbucks store in my neighborhood is it was always good. It's even better now. Now that doesn't change the margin profile. It doesn't change the inability to raise prices. There are neighborhood coffee shops popping up all over the place that are pricing the same amount are very thankful to Starbucks, by the way. And I think they're competing.
- [45:03]
Melissa Lee
Yeah.
- [45:03]
Courtney Garcia
And I think what you're seeing, it's just, it's price increase fatigue. I mean consumers are just sick of this. Yeah. But I would actually argue a lot of the local coffee shops aren't quite as expensive as Starbucks. And maybe feel a little more like niche and neighborhoody, which you're not getting in Starbucks right now. And I think, I think the fact though that they did mention that they're getting more of their non loyalty member customers back I actually think is a really good sign. So I think starting to see some of that in the numbers will be a good thing for Starbucks. And also abroad you're seeing a lot of competition like with Luckin Coffee in China for example. So they have a lot of hurdles here. But I do think he's positive. So hopefully we'll start to see some of that recovery.
- [45:37]
Melissa Lee
At least it seems like they're making some progress on the low hanging fruit. Right. In terms of cleaning up the stores. Faster service. Better service.
- [45:43]
Stuart Kaiser
Yeah, I think faster service was the main complaint a lot of people had. And then you hear menu innovation and menu innovation sounds like that will slow stuff down. So it'll be interesting to see how they balance that if they've got a go forward basis.
- [45:54]
Melissa Lee
All right, coming up, another check on Oracle after its blockbuster report. Some of the other names catching a bit as well. More fast Money into. Welcome back to Fast Money. Want to take another check on shares of Oracle holding on that staggering gain in the after hours session. Up by 27%. This is pretty much at highs. This would be a record in the regular session according to our data team. The move adding about $76 billion to former CEO Larry Ellison's net worth and extended trading. Wow. Core we've also up after hours. It had gained more than 7% in the regular session. SAP and Nvidia Rising as well. I mean if the trade needed a shot in the arm, this is exactly what it took here. This on top of Broadcom's quarter, of course.
- [46:37]
Stuart Kaiser
Yeah, it's been across the board. You know, we went through a four or five week period where small cap and value were playing some catch up and it feels like they've kind of ran face first into an AI wall this week. So it's look, it's good for markets. You know what it does to that kind of little momentum trade we have. Building a smaller capital quality though probably trips it up quite a bit.
- [46:54]
Melissa Lee
Yeah, there are some caveats that we talked to Gil Laurie of DA Davidson at the top of the hour and he said, you know, there's one thing to note about all of this demand, that Oracle's booking in the form of RPO's remaining performance obligations, the increase there is that a lot of that is being offloaded, that traffic is being offloaded. From the bigger infrastructure plays like a Microsoft and an us on to Oracle. It's a lower margin, sort of vastly lower margin.
- [47:18]
Karen Feiderman
That wasn't even, it wasn't even close. I mean bigger than the differential I think between Apple's hardware and services which we always talk about what a giant differential that is. This is even bigger than that. So that's why I talk about revenue versus profitability. So we'll see how it evolves in terms of profitability. Still just a stunning backlog and $76 billion in one day for Larry like.
- [47:39]
Melissa Lee
A matter of a couple hours. I mean he's probably like sitting in front of the TV watching Fast Money. Made this much money.
- [47:45]
Gil Lauria
Well you know what? Larry Ellison has been a visionary for a long time and he's recrafted this company about six different times and is now the cto, the Chief technology Officer. He's no longer the CEO, he's chairman of the board. He certainly engineered this and he's done it in an extremely competitive space to be even if they're a distant fifth player here in kind of data center, it's really impressive. They now trade at about 15 times sales. I mean after this market cap move it's extraordinary and I think it's expensive.
- [48:17]
Melissa Lee
But would you buy it? Do you own it?
- [48:20]
Courtney Garcia
We have all of these names in our portfolio. I think you absolutely want to own these things. I still think there's a lot of other areas in the markets that we don't talk about there are a lot less exciting but I think are going to be like the next beneficiary from artificial intelligence. So yes you want to own it but I do think it's worth looking at your portfolios because a lot of people are much more concentrated in these trades. They realize and if that does turn at some point you just don't want.
- [48:40]
Melissa Lee
To be over allocated there time for the final trade. Let's go around the horn. Stuart Kaiser.
- [48:45]
Stuart Kaiser
Yeah, I'll start with utilities. You know, just according to point sort of a beneficiary that spending defensive benefits from lower yields has underperformed a bit and sneaky I exposure.
- [48:54]
Melissa Lee
Thanks for being here Stuart. Appreciate it. Kaiser.
- [48:56]
Gil Lauria
Tim unh again this is a one of the most important companies in our country still and I think the valuation is interesting and the stars result is a lot better than expected. I think it's cheap Karen.
- [49:09]
Karen Feiderman
Yes, so we talked about a little bit before but Citigroup, which I knew is also a Tim favorite, still really like it. It's still trading under tangible book value which is kind of amazing and there's still a lot to go and I think efficiencies here. The AI story for a bank is a huge one. So Citibank and go New York Liberty it is home game. I'm sorry last regular season playoff game court.
- [49:33]
Courtney Garcia
I'll be quick here but same in the banking space and go over J.P. morgan.
- [49:37]
Melissa Lee
All right, that does it for us.
- [49:38]
Courtney Garcia
Thanks for watching Fast Money 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@ Capella University, learning.
- [50:21]
Laura Martin
The right skills could make a difference.
- [50:23]
Melissa Lee
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.