Apple’s Rally Keeps Running… And Trump’s Crypto Plans 12/12/24

Summary

CNBC's "Fast Money" Podcast Summary Episode: Apple’s Rally Keeps Running… And Trump’s Crypto Plans
Release Date: December 12, 2024
Hosted by: Melissa Lee, Karen Feinerman, Dan Nathan, and Guy Adami

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Introduction

In the December 12, 2024 episode of CNBC's Fast Money, host Melissa Lee and a panel of top traders delve into the relentless rally of Apple’s stock, despite disappointing iPhone sales and underwhelming AI offerings. The episode also explores President Elect Donald Trump's ambitious plans for the U.S. cryptocurrency landscape, insights from investment experts, and the latest movements in major companies like Costco and Broadcom. With a mix of market analysis, expert opinions, and timely discussions, this episode provides a comprehensive overview of critical financial trends and investment opportunities.

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Apple’s Unstoppable Rally

Apple Inc. (AAPL) remains a focal point as its stock continues to surge, defying concerns over declining iPhone sales, lackluster AI product reviews, and ongoing geopolitical tensions with China.

• Stock Performance: Apple shares have climbed over 10% in the past month and an impressive 51% since April lows, nearing a market capitalization of $4 trillion (01:50). This staggering growth persists despite Apple Intelligence’s poor performance, including "awkward chat summaries, faulty image editing, and bizarre Gen Moji capabilities" (02:45).

• Market Dynamics: Dan Nathan observes, “It's just a money flow thing as well. So I get it. But with each passing day, it's getting more expensive, not cheaper” (03:29). He attributes Apple's rally to its significant presence in ETFs, making it a favored choice for investors seeking momentum rather than fundamental growth.

• Financial Health: Karen Feinerman critiques Apple’s financial strategies, noting that the company's cash position is a mere 4% of its market cap after debt, and its once impactful $110 billion buyback program now has negligible influence (03:29). She emphasizes that with 50% of sales still dependent on iPhones and limited growth in services and AI, Apple's high valuation remains questionable.

• Valuation Concerns: Guy Adami adds, “I don't really get this... But this valuation here, it's not super crazy but...” (05:23). He highlights the shift towards services, which are more profitable and recurring, yet remains skeptical about Apple’s ability to monetize AI innovations effectively in the near term.

• AI and Market Perception: Despite Apple’s struggles with AI functionality, the stock has rallied 30% since its June WWDC event. Karen Feinerman points out that while companies like Walmart and Facebook are leading in AI monetization, Apple is being rewarded for potential rather than actualized gains, which may not sustain over the next year or eighteen months (05:39, 06:08).

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Treasury Yields and Economic Indicators

The episode shifts focus to broader economic indicators, particularly the rise in 10-year Treasury yields, which have hit their highest levels since before Thanksgiving. This surge is driven by a hot inflation report and increased jobless claims, raising concerns about economic growth ahead of the upcoming Federal Reserve meeting.

• Market Reactions: Melissa Lee reports, “Producer prices rising 4.10% in November, twice as much as expected...” (09:02). Karen Feinerman notes the discrepancy in market expectations versus actual data, highlighting potential headwinds for the economy (09:54).

• Expert Insights: Stephen Whiting, Citi Wealth’s Chief Investment Officer, suggests that despite the U.S. equities’ strong performance, investors should seek diversification. He advocates for investing in small and mid-cap American companies and non-U.S. assets, which are 40% cheaper in forward-looking valuations (11:09, 12:33).

• Interest Rates Outlook: Guy Adami posits that the Federal Reserve is unlikely to make significant rate cuts in 2025, anticipating continued economic growth despite inflation pressures (09:54, 10:15).

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Service Titan IPO Analysis

Service Titan, a cloud software provider, made a significant debut on the Nasdaq, drawing attention from market analysts.

• IPO Performance: Leslie Picker explains that Service Titan’s IPO priced below its private valuation due to a “compounding ratchet” provision, which dilutes the company if the IPO falls below previous private funding rounds (27:46). Despite this, the stock closed at $101 per share, well above its IPO price of $71 (27:46).

• Market Sentiment: Guy Adami questions the sustainability of the stock’s performance, noting that while it closed near its offering price, the potential for insider selling exists once lockup periods expire (29:18, 29:32).

• Industry Impact: Karen Feinerman discusses the implications for future IPOs, emphasizing the need for compelling narratives to attract retail investors as traditional institutional buyers become less prevalent (30:08).

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Trump’s Crypto Plans and Bitcoin’s Surge

President Elect Donald Trump has publicly declared intentions to position the U.S. as a leader in the digital currency space, aiming to make crypto regulation favorable and attract institutional investments.

• Trump’s Vision: Melissa Lee reports Trump’s ambition, stating, “We don’t want China or anybody else... to be the head” (31:55). His vision includes establishing a Bitcoin reserve for the country, leveraging cryptocurrency as a robust alternative to traditional reserves (35:02).

• Expert Opinion: Dan Morehead, founder of Pantera Capital, believes clearer regulations in 2025 will drive institutional investment into crypto, potentially propelling Bitcoin and stablecoins to new heights (32:25, 34:17).

• Market Impact: Bitcoin is hovering around $100,000, with Morehead optimistic about its future growth as institutional exposure increases (31:55, 36:28).

• Skepticism and Challenges: While the potential for massive growth exists, regulatory uncertainties and the lack of clarity on whether cryptocurrencies are classified as securities pose significant challenges for institutional adoption (34:17, 35:02).

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Earnings Alerts: Broadcom and Costco

Broadcom Inc. (AVGO) and Costco Wholesale Corp. (COST) provided notable earnings reports.

• Broadcom: Despite missing revenue expectations, Broadcom's earnings per share beat estimates, driven by strong performance in AI-related segments. CEO Hock Tan highlighted ongoing momentum in XPU accelerators and networking, anticipating a recovery in broadband in the first quarter (16:52, 17:08). Broadcom also completed its $69 billion acquisition of VMware and raised its dividend by 11%, boosting investor confidence (17:59).

• Costco: Costco reported better-than-expected comparable sales and e-commerce growth, with membership fees slightly exceeding analyst predictions. However, the stock remained relatively flat in after-hours trading due to concerns over high valuations despite strong quarterly performance (20:18, 21:35).

• Market Reactions: Analysts discussed the thin operating margins, deferred impact of annual fee hikes, and the robust performance across various product categories, including gold, jewelry, and home furnishings (22:30, 23:00).

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Tern Pharmaceuticals: Advancements in Weight Loss and Leukemia Treatment

Tern Pharmaceuticals is making strides in developing an oral GLP1 drug for weight loss and advancing a leukemia treatment.

• Obesity Drug: CEO Amy Burrows highlighted the effectiveness of Tern’s oral drug, which helped patients lose up to 5% of their body weight in 28 days. Unlike existing therapies, Tern’s drug promises better tolerability and scalability (37:43, 38:05).

• Leukemia Treatment: Tern is set to begin Phase II trials for its chronic myeloid leukemia drug in early 2025, with readouts expected by year-end (38:49, 39:06).

• Investment Perspective: Dan Nathan praised Tern’s financial runway, noting its $380 million cash reserves will sustain operations through 2028, enabling significant milestones and potential breakthroughs (40:54, 41:10).

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Horse Racing's Potential Resurgence

The episode also touches on the resurgence of horse racing, driven by increased sports betting and the return of famed trainer Bob Baffert.

• Market Expansion: Bob Baffert’s return to Churchill Downs and his recent win with a $3.2 million yearling bucks enthusiasm for the sport (42:27, 42:50).

• Innovation and Engagement: Discussions highlight the importance of high-profile events and the integration of sports betting to rejuvenate interest and attract new fans (43:22, 44:07).

• Investment Opportunities: Churchill Downs’ stock remains undervalued despite positive developments, presenting potential investment opportunities for savvy traders (45:02).

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Conclusion and Final Trades

As the episode wraps up, panelists reflect on the discussed topics, emphasizing cautious optimism in current investment landscapes.

• Final Thoughts: Dan Nathan encourages investors to remain patient with strong performers like Broadcom, while acknowledging valuation concerns with giants like Apple (24:04, 18:48).

• Final Trades: The hosts share personal trades and acknowledgments, underscoring the blend of market analysis with personal insights (46:04, 46:30).

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Notable Quotes

• Melissa Lee: “Unstoppable Apple shares just keep going up despite lackluster iPhone sales...” (01:03)
• Dan Nathan: “It's just a money flow thing as well.” (03:29)
• Karen Feinerman: “50% of their sales now come from iPhones. They're not growing.” (03:29)
• Guy Adami: “If you, you know, we always talk about looking at the hardware and the software part...” (05:23)
• Stephen Whiting: “We have rapid growth in our tech companies... more opportunity and cheaper assets for the next 10 years.” (12:33)
• Dan Morehead: “Once they start engaging in this space, it should do well.” (34:17)
• Amy Burrows (Tern Pharmaceuticals): “We don’t think that there’s going to be one winner in the oral GLP1 race.” (38:39)

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Conclusion

This episode of Fast Money provides investors with a deep dive into Apple’s enduring stock rally amid challenging business conditions, the promising yet uncertain future of cryptocurrency in the U.S., and key developments in major companies’ earnings. The insights from seasoned traders and industry experts offer valuable perspectives on navigating the volatile market landscape, highlighting both opportunities and risks for the forward-thinking investor.

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For more information, visit Fast Money on CNBC.

Transcript

[PJM Representative]

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[Melissa Lee]

Live in the NASDAQ market site in the heart of New York City's Times Square, this is fast money. Here's what's on tap tonight. Unstoppable Apple shares just keep going up despite lackluster iPhone sales, less than stellar reviews for its AI offering and continuing concerns about China. What is behind this record run and what does it say about the market we are in? Plus, Trump's crypto boasts the President elect telling Kramer this morning he wants the US to be the in the digital currency space. How his administration's embrace will impact Bitcoin and beyond and later, breaking down service titans. Big first day as a public company, digging in the details of Costco's earnings and giddy up by horse racing could be ready to rebound after decades on the decline. I'm Melissa Lee coming to you live from Studio BE at the nasdaq. On the desk tonight, Karen Feinerman, Dan Nathan and Guy Dami.

[Dan Nathan]

Crap.

[Melissa Lee]

Yeah, yeah, yeah. Pressure's on. We start off with the latest record close for Apple. Shares of the iPhone maker now up more than 10% in just the last month and a whopping 51% from April lows. The stock closing today with a market cap just a stone's throw away from $4 trillion. That is more than the entire GDP of the United Kingdom. This year's rally coming even as the tech giant's efforts in the space fail to impress users. Poking fun at Apple Intelligence's awkward chat summaries, faulty image editing and sometimes bizarre Gen Moji capabilities like making poop hair on a face. Yes, yes, Dan will tell you all about it. Apple also saw iPhone sales in China fall for the third quarter and is struggling in its partnership with Baidu to bring AI to its devices there. So with this rally going strong in spite of these concerns, has Apple become the ultimate defensive play? Does this just tell us the tale of the market where momentum is the word of the day?

[Dan Nathan]

It's the nail on the head. And, you know, you try to figure out why this is happening. I don't think it's happening for any fundamental reasons. Obviously, the market's been doing fine. So you try to figure out what's going on below the surface. A couple of things. I think semis have actually now underperformed since July. Ish. If you look at the chart, Qualcomm, Micron, Texan, names that we talk about all the time really actually have traded poorly. AMD throw it in the mix. So I think in some ways there's been a rotation out of semis, and the other is Apple's in 400 ETFs, of which it's one of the top 15 holdings. So as money flow goes, Apple wins, regardless of what they're saying. It's just a money flow thing as well. So I get it. But with each passing day, it's getting more expensive, not cheaper.

[Karen Feinerman]

Yeah. And, you know, it's interesting. So we used to talk about the cash. We used to talk about their buyback. We used to talk about their dividend. They're like rounding errors right now. If you look at their cash position, it's like 4% of the market cap net of their debt. It's like minuscule. Right. And then their buybacks, you know, remember that day earlier this year, they announced $110 billion buyback. Actually, the stock rallied and, you know, think about. It actually has no impact anymore. So you look at a stock right there, that whole part was a really. From 2012, when they announced that buyback, till, I want to say, about five years ago, that was a really important part of the story. You started off saying defensive, but here's the problem. 50% of their sales now come from iPhones. They're not growing. And this services thing, the AI, you know, this is the next leg of growth. This is the thing that would justify the multiple where it's trading at. It's just there's no there there. So I've never been so right about one thing and so wrong about the other. The right thing was June 10th when they had their WWDC. It looked very obvious to me what was going on there. It was a fugazi. And everything since then has been a joke, except the stock has rallied 30% since June 10th. That's the wrong part right there. So I mean sometimes it just. Both things can be true.

[Guy Adami]

Both things can be true. I think, you know, the buyback thing, what used to be super accretive when they traded a very different multiple is actually not accretive now. But it's interesting. I mean I own a little and I've been sort of surprised with how strong it is. I don't really get this, I was like a little bit today. But this, this valuation here, it's not super crazy but if you, you know, we always talk about looking at the hardware and the software part which we know the multiple, the, the contribution of each is changing towards services which is much more profitable in and recurring. But you'd think that China issues would really affect them a lot. On the other hand though, Tim Cook has been very adept at, you know.

[Melissa Lee]

Cozying up to Xi Jinping.

[Guy Adami]

Yes, yes, if you. That would be one way to say it. And yeah, I think that would be right and it's worked for him. But I think, I don't know, it's just sort of in the melt up. There are other things I like much better, like a Metta, you know, just valuation wise I'd much rather be there.

[Melissa Lee]

That's what's interesting is that you know, with the metastory it really sort of underscores, underscores this notion that I can, the effects can be seen right in real like we can actually see them right now. The impact on its business, the impact on what it sells, its ads, etc. And yet with Apple we don't have that impact. And yet it did levitate from that June date of the WWDC on the AI hopes. And here we are. What are they? Gen Mojis. It's summarizing notes, it's image generation.

[Dan Nathan]

Gene, Gene Munster comes on and talks about that and the hope. And listen, Gene's going to wind up being. By the way, he came out on that same day, June 10th and said it was. I don't, I don't want to put words in his mouth but transformational. One of the biggest events in the history of the company. So good for Gene in terms of the stock, he got it right. But you're right, I mean in terms of AI and we've talked about on this show there are two companies that are clearly winning in the AI world in terms of making and monetizing and it's Wal Mart and you see it in earnings releases the last two times and it's Facebook over their last two earnings releases and they're being rewarded for it in terms of the stock price and the valuation. Apple's being rewarded for something they're not monetizing yet and quite frankly might have trouble doing over the next year, year and a half.

[Karen Feinerman]

So you guys may find this interesting, but I'm going to try to pick apart some of these big names that have supposedly accrued a lot of the value, at least in some of the investments that they've made in Generative AI over the last year. Let's leave Nvidia out of it because we all know that that is deserved. Think the percentage gains are not. Okay. But let's look at Meadow that you guys just mentioned. They are totally reliant on iOS devices for people to use them. For the most part here in America. They will not be in China. Okay. Because they don't make it past the firewall. You could say that those are headwinds. Amazon, they don't own. They're building a model, right. For all intents and purposes, but they have a very competitive landscape as it relates to their hyperscale, their AWS business. Okay. They are leasing basically, for all intents and purposes, anthropics, you know, you know, model and that sort of thing. Microsoft, it looks like this is kind of a dud, this licensing of OpenAI. They haven't been able to do a great job integrating it. Copilot is a big, you know, as you guys say. And then they're just not getting a lot of uptake of the Copilot as it relates to enterprise. So I mean there's things to kind of pick out and probably miss. Oh, Google, you know, Google, this has been a bit of a train wreck. Gemini and integrating it some of the. I think it's better than Apple Intelligence. But. But again, I think there's things to pick out in a different sort of environment. You know, like I'm not sure that these are the ones that get going in 2025. The story has broaden out a little bit.

[Melissa Lee]

Why is not being in China headwind for better?

[Guy Adami]

Yes, yes.

[Karen Feinerman]

Well, there's how many people. You know, how many billion.

[Guy Adami]

Right. But that's been the way it is. It's not like why I know too.

[Karen Feinerman]

Like, I've been there a couple of times. There's a lot of people there. I'm just saying.

[Melissa Lee]

Right.

[Karen Feinerman]

But okay, can I tell you why? Because they have 3 billion people on the. You take a billion and a half out of China and that's.

[Guy Adami]

It's as if that. But they were never in China.

[Melissa Lee]

It's not as if there's nothing evaluation for China.

[Guy Adami]

There's nothing priced in at which is the right price.

[Karen Feinerman]

I understand, but what I'm saying is it's some point they're only going to be able to get so many more people on the planet to kind of use their services. Like that's a pretty good market that you'd want to be in.

[Guy Adami]

I think they're looking to monetize the services more broadly. Not necessarily. I mean more people you have the better. But I mean, I mean, which is what happened.

[Karen Feinerman]

Hundred percent the best story right now in my opinion for a whole host of reasons. And you talk about valuation, but they are squarely. I have the Metta Wayfarer. These glasses, have you guys seen these things?

[Guy Adami]

Yes.

[Karen Feinerman]

They're amazing.

[Melissa Lee]

You're admitting to Zuckerberg gave Donald Trump a preview at Mar A Lago. Yeah. And then he gave him the Ray Ban.

[Karen Feinerman]

These things are amazing. Yeah.

[Dan Nathan]

I mean, what people. No, there are no last words. The last words, there are too many. You see these people, Dan's one of them walking around with these glasses on, talking to themselves and then hitting the little button on the side to take a picture of you while they're talking to you.

[Melissa Lee]

It's confusing to you right now.

[Dan Nathan]

That's creepy. As. You know what, I love it.

[Melissa Lee]

Meantime, 10 year yields hitting their highest level since before Thanksgiving on the back of a hot inflation report and a jump in jobless claims. Producer prices rising 4.10of a percent in November, twice as much as expected. That combined with more people filing for unemployment benefits raised fears over economic growth ahead of next week's Fed meeting. Karen, you said before that you were surprised the 10 year didn't move more on this.

[Guy Adami]

Yes, I would have thought. I mean, we've got ppi, so that's inflation, but then we have the potential for tremendous growth and you know, more deficits and all of that. I mean, that's also why I get to the idea that the Fed will not be cutting dramatically in 2025. I don't know why they need to, especially if the economy is going so.

[Dan Nathan]

Karen said a great job with this, by the way. And you know, I'm still one of the very few people. I think that the TLT is going back to levels. We saw this, well, October of last year, which is about 82 and a half, which gets you to about somewhere between 485 and 5% in the 10 year. I know it sounds preposterous, but, you know, I just think yields are going higher For a myriad of different reasons that are people a lot smarter than I am that are betting on the same Paul Tudor Jones, Stan Druckenmiller for example. And you know, it just makes sense with all the issuances that are coming forth in the first quarter of next year. Something's got to give. They're not going to be failed auctions, but the markets could demand a higher rate of interest to buy our debt.

[Karen Feinerman]

And you guys are saying this. Rates are going lower, yields are staying put, the dollar is, it looks like it wants to break out a range that it's been in for like a couple of years or so. So all of these things, you know, you guys were challenging my headwinds to the tech story. These seem like headwinds to the economy going forward. Just a minute.

[Guy Adami]

Also a little auction as you would call it.

[Melissa Lee]

30 years.

[Guy Adami]

30 years.

[Melissa Lee]

All right. For more on rates and where we can go from here, we are joined now by Stephen Whiting, Cities Wealth, Citi wealth chief investment officer and chief economist. The firm just unveiled his 2025 investment outlook. Stephen, good to see you.

[Stephen Whiting]

Well, thanks for having me.

[Melissa Lee]

So you're looking for growth in 2025 and 2026 but even with that backdrop you think investors are too concentrated in their portfolios.

[Stephen Whiting]

Well look, I mean you step back, this isn't fast money stuff but right when you think about three American companies are worth all of the companies in Asia or all of the companies in Europe, it isn't even a P issue. I mean we have rapid growth in our tech companies. That's great. Multiples are going from 50 down to 30 because of all that growth. But there's been a lot of good fortune here. I mean just think about large cap US stocks have had a 13% return for a decade, right? So what we see is just the opportunity elsewhere. Small and mid cap American companies, growth companies have had a decline in valuation in the last 10 years compared to where we were when Donald Trump was first elected. In US dollar terms, non U. S assets are 40% cheaper in forward looking valuations. It doesn't mean that they're going to come alive and just jump really, really sharply. We went into this election 6% overweight US equities. We got to start thinking about more diversification, some opportunity and cheaper assets for the next 10 years.

[Melissa Lee]

How do you think about this run that we have seen since the election? I mean is this sort of policy hopes and dreams pull forward?

[Stephen Whiting]

It's a lot like when the Donald Trump was first elected. We saw the dollar rise through the end of the year quite discreetly, there probably is less room for significant fiscal easing. There's a smaller majority in the House. We have tax hikes coming. Unless we do otherwise, I think there's legitimate hope for deregulation. Energy and power, infrastructure, financials, banks, a lot of headwinds can disappear. But a lot of this gets priced discreetly just over a period of time and you know, then we move on to other more lasting sources of growth.

[Guy Adami]

So let me ask you, and I'm playing devil's advocate a little because I'm long iwm, but what about this phenomenon that has nothing to do with valuation, but has everything to do about flow of funds into the market into bigger, more liquid. Do you see that changing at all?

[Stephen Whiting]

So I think EPS itself again turning on a breadth of profits that's better. 2025 estimates for small and mid cap look a lot better if they can actually execute on it. I think you'll see performance follow those gains in eps. So far we've had a really narrow economy, especially looking back in the last 12 months. You know, there were a lot of gains for AI infrastructure. But if we look at 12 months ago, half of industries had EPS decline. So quite narrow market. I think again we can get back from that. And corporate profits generally haven't looked as good as the labor market in the last 12 years.

[Dan Nathan]

Love this one. Number two on the 2025 top six is medical devices, which has been out of favor now for a while, probably in the back of glp. A number of different things speak to that because I actually really like that.

[Stephen Whiting]

9% historic dividend growth, 14pmultiples again, it's probably important for stock picking in terms of actual dispersion. But if you think about the two industries of what the economy is becoming, technology and healthcare is what the economy is becoming. We have a lot of confidence in future profits priced into tech, very little confidence priced into healthcare. And so basically healthcare is quite cheap. It looks a lot like the tech recovery from 2022.

[Melissa Lee]

Stephen, thanks for stopping by. Great to see. Stephen Whiting City Medical Devices that is interesting, especially when you think about the medical loss ratios of the insurers are so high because utilization rates are so high. You got to think those devices are going in somewhere.

[Dan Nathan]

Yeah, and its evaluation play is so spot on. Medtronic is a name that comes to mind right off the top of the. I mean just valuation alone, this becomes compelling. And these, these stocks have just been beaten up on what's been a great tape for A number of different reasons, some of which are justified, some not so much so. I love that call in 2025.

[Karen Feinerman]

It's interesting. XLV, you know, if we can pull a chart up maybe a five year for 2021, 2020 to 2023. It was really in a tight range. It broke out earlier this year. It had looked like one of the best looking charts, one of the best stories and now it's down a whole heck of a lot from those highs and it looks horrible. And so when you think about how does the market broaden out? Where does some new leadership come from? We know a lot don't make up enough on their own, you know, I mean to kind of power gains. But I think that's the story. How can you put a couple of narratives together and how can this leadership broaden out if the Jenny trade was to take a little bit of a breather?

[Melissa Lee]

But how do you think about elevance for instance at this point?

[Guy Adami]

Can I just XLV for a second? Which is the E or the the H in my helm trade? Xlv. I play that game correct.

[Karen Feinerman]

How play that game correct.

[Guy Adami]

Health care.

[Dan Nathan]

It's a pass.

[Guy Adami]

XLV healthcare.

[Karen Feinerman]

Great game by the way, that we play every year.

[Guy Adami]

To your elevance question, I mean I think and maybe to XLV more broadly for each, for both potential administrations and now Trump administrations. Here is a great target, right? Bipartisan support until you get the lobbying coming in which happens later. But bipartisan support for, you know, caps on prices or some sort of pricing mechanism that isn't as good and certainly for elevance which does have carillon, which is their PBM pharmacy benefits. That's been weighing on it as well as a couple of other things. It's. I haven't done a good job with this one.

[Melissa Lee]

But you still have it.

[Guy Adami]

Yes, yes.

[Melissa Lee]

Right.

[Guy Adami]

By definition.

[Melissa Lee]

Yeah. We've got an earnings alert here on Broadcom. The chip maker right now is higher by about 4%. In the after hours after its fourth quarter results, the chip maker missing revenue expectations, beating earnings per share. The conference call just kicked off. Seema Modi's got the number. Seema. Melissa.

[Seema Modi]

Broadcom's bet on artificial intelligence seems to be paying off with 2024 revenue growing.

[Melissa Lee]

220% year over year.

[Seema Modi]

CEO Hock Tan on the call just now saying that he sees the momentum continuing, touting its revenue growth which was driven by XPU accelerators and networking. On the non AI business side, broadband he thinks will bottom and the recovery will start in the first quarter. It also closed its $69 billion acquisition of VMware. And integration is complete, he says with a number of new enterprise clients, the company is raising its dividend by 11%. And we've been watching shares of Broadcom outperform the chip sector this year. Stock up over 69% as it partners with the likes of Open Air, Amazon, Metta to help each of them build their own customized chip. All by the way, fab with Taiwan Semi. We'll look for more details on the.

[Melissa Lee]

Timeline and confirmation on whether it is.

[Seema Modi]

Working with Apple to design its own AI chip.

[Melissa Lee]

Right now Melissa shares a broadcom up.

[Seema Modi]

Over 4% in after hours.

[Melissa Lee]

All right, Seema, thank you Seema Modi. And of course there's also the headline today that Apple is working to replace Broadcom when it comes to, you know, having its own in house chip for Wi Fi as well as Bluetooth. So ending the relationship in some instances, building up a new one potentially in others.

[Dan Nathan]

Yeah, you know, that might actually not be a bad thing for Broadcom quite frankly. But that's another conversation. I mean you look at the quarter 62.7% operating margins for this company, slight miss on, I mean really slight miss on revenue beat on Epsilon and the first quarter guide was fine at 29 times next year's numbers. Ish. I mean I think this stock is still going higher. You get through 186, a level we had trouble with. I think you're in a whole new range on the upside.

[Karen Feinerman]

Yeah, I think your point about the WI Fi and the Bluetooth chips, I mean that's something that again, you know, they're going to design generative AI chips so maybe that does offset it. You know, Apple is a huge customer, 70 to 17% of Broadcom. And you know this thing is acting very contrary to many of the other names attached to what we saw. Marvel Tech telling a story about generative AI. Last week it had a huge rally. Gapped up 25% on those earnings to new all time highs.

[Melissa Lee]

Coming up, more after hours action this time on retailers Costco and rh. Those names on the move. After reporting results, the numbers from the quarter next and a big debut for service titan, the cloud software provider surging in its NASDAQ debut. Why investors are so hot on this tech name. Straight ahead. Don't go anywhere. Fast money's back into.

[PJM Representative]

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[Melissa Lee]

Edu when it comes to hiring, the best way to search for a candidate isn't to search at all with Indeed. Don't search Match. Indeed is your matching and hiring platform with over 350 million global monthly visitors, according to Indeed Data, and a matching engine that helps you find quality candidates fast. If you need to hire, you need Indeed. You can even use Indeed for scheduling, screening and messaging to connect with candidates faster. 93% of employers agree that Indeed delivers the highest quality matches compared to other job sites, according to a recent Indeed survey. And since Indeed's matching engine is constantly learning from your preferences, the more you use Indeed, the better it gets. Join over 3.5 million businesses worldwide that use Indeed to hire great talent fast. Plus listeners get a $75 sponsored job credit. To get your jobs more [e-mail] just go to indeed.comsxm right now and support our show by saying you heard about Indeed on this podcast. Terms and conditions apply. Need to hire you need Indeed. Welcome back to Fast Money Earnings Alert on Costco shares are a little bit lower in the after hour session. After reporting a top and a bottom line beat, the conference call began at the top of the hour. Melissa Repko joins us with all the details. Melissa yes, so Costco shares are barely.

[Seema Modi]

Moving despite the company beating on the top and bottom line. The warehouse club said comparable sales rose 5.2% in the quarter and E commerce shot up by 13% year over year. Membership fees also came in on the high side, higher than Wall street expected, totaling 1.17 billion compared to the 1.16 billion that analysts expected. The warehouse club had hiked its annual fee in early September, the first increase in about seven years. But Gary Miller, chip on the CFO on the company's earnings call, said that that actually did not have an effect on on the quarter. He said it didn't have much of an impact yet because of deferred accounting and represented less than 1% of that fee growth in the quarter. On the company's earnings call. He also called out a few areas of growth, gold and Jewelry, gift cards, home furnishings, sports goods, health and beauty aids and luggage were all up double digits. So some sense of what people are buying this holiday season potentially.

[Contessa Brewer]

Back to.

[Melissa Lee]

That's a lot of categories.

[Seema Modi]

Yes.

[Melissa Lee]

With demand. Melissa, thank you. Melissa Repka. Remember when they were selling also platinum. A platinum, gold, silver. And they're all sent. They're selling out people buying the luggage.

[Dan Nathan]

To put the gold bars in to get them out.

[PJM Representative]

Exactly.

[Dan Nathan]

You think I'm kidding around.

[Melissa Lee]

Except that the gold is like this big.

[Dan Nathan]

No kidding.

[Guy Adami]

It's heavy though. A little Troy ounce.

[Melissa Lee]

That's true.

[Guy Adami]

Yeah.

[Melissa Lee]

But we were talking about Costco. Costco of course all time high yesterday. So really performing the valuation could be perceived as rich but they are executing.

[Guy Adami]

I mean in isolation, in a vacuum. That is a fantastic quarter versus other retailers. Right. Up 5.2%. I mean but to your point, 55 plus times.

[Melissa Lee]

Right.

[Guy Adami]

That's not good enough.

[Melissa Lee]

I mean Walmart's at 35.

[Guy Adami]

Yeah.

[Melissa Lee]

Target.

[Guy Adami]

Target's at 14. I mean clearly they're different animals completely. But so this makes me feel a little bit good that I don't own it. That it's down like two or three dollars.

[Melissa Lee]

Like a quarter of a percent.

[Guy Adami]

Right. Oh Karen, you know you take the wins where you can get them. Yeah.

[Dan Nathan]

I mean you say what you want though. I mean razor thin margins. So when they beat by the margins that they did so for example operating margins was 3.53% doesn't sound like a big deal for them. It's a big deal. Steve was looking for less than 3.3. So they're operating better and maybe in the world of AI they'll operate even better than better or better or So I get that. I get the valuation concerns but as Karen will tell you, I mean there have been valuation concerns for the last five years the entire way up about Costco.

[Melissa Lee]

More after hours action here. Shares of RH soaring on a big guidance raise. The company now seeing revenue growth between 18 and 20% in the fourth quarter compared to a 7% estimate. Earnings for this quarter did fall short of expectations though while revenues were in line with estimates. It's a big pop here. You ask was there short interest here? 12% of a little bit.

[Guy Adami]

But this was pretty good though. I think they also talked about strength was in November, good strength there. So that gives them the guidance I think. Imagine what will happen when people buy new homes again in a much right. When existing homes come out of, you know, the cheap mortgage rate block. But this is pretty impressive. However, that having been said still, I think too expensive.

[Melissa Lee]

Yeah. They also said on the conference call apparently that their margins would not be impacted by tariffs, which is a big deal.

[Guy Adami]

That was important.

[Melissa Lee]

Yeah.

[Dan Nathan]

This was not, again, not that it matters. This was a $700 stock in 2021 that just absolutely cratered like a lot of other things. So the move now basically gets us to a 50% retracement of that prior high and the lows we've been trading at for the last, I don't know, year and a half or so, two years. It's going to trade north of 10 million shares tomorrow. I think you got to let it breathe. I think it'll sift back in for you.

[Melissa Lee]

All right. There's a lot more fast money to come. Here's what's coming up next.

[Karen Feinerman]

The newest kid on the block service titan making a splash in its ipo. The details from its first trading day.

[Melissa Lee]

And why the company priced well below its range.

[Karen Feinerman]

Plus bitcoin hovering near 100k. And our next guest says the rally is just beginning where he sees crypto prices heading and what President Elect Trump.

[Melissa Lee]

Is saying about the space.

[Karen Feinerman]

You're watching Fast MONEY live from the NASDAQ market site in Times Square. We're back right after this.

[PJM Representative]

At pjm, expertise across public and private markets today helps build resilient portfolios tomorrow. As a leading global asset Manager with over $1.2 trillion in AUM, PJM has navigated over 30 market cycles with active investing and disciplined risk management. Our combined global expertise and local insights give us these strategic perspectives we need to help you reach your long term goals. Pjum our investments shape tomorrow. Today, is it time to reimagine your future? The right business skills may make a difference in your career. At Capella University, we offer a relevant education that's designed to focus on what you need to know in the business world. We'll teach professional skills to help you pursue your goals like business management, strategic planning and effective communication. And you can apply these skills right away. A different future is closer than you think with Capella University. Learn more at capella. Edu.

[Melissa Lee]

Welcome back to FAST money. Stocks pulling back a bit after this morning's hotter than expected inflation data. The Dow falling 234 points. The S and P and NASDAQ down about a half a percent. Shares of Warner Brothers Discovery jumping more than 15%. The company announcing a restructuring plan to segment its business into linear and streaming units in a move that could simplify future consolidation. This just weeks after CNBC's parent company Comcast announced it would spin out its cable networks and class offer provider Service Titan. Making its debut at the Nasdaq today. It traded as high as $105 but closed exactly where it opened, $101 a share, still well above its IPO price of 71 bucks. Leslie Picker's got all the details. Less.

[Leslie Picker]

It's always weird when it does that closes exactly where it opens. But Service Titan, really seen as a bellwether for the tech IPO market. The software provider for plumbers and roofers and landscapers, etc. Pricing above a boosted range reportedly over subscribed and then as you mentioned, Mel popping in its debut today. Now, a lesser told story is that Service Titan didn't actually have much of a choice. It had to go public. When the company raised private capital back in 2022, it agreed to a provision called a compounding ratchet. This means that the company will need to issue more shares to make whole the investors, the venture investors, if an event such as an IPO or sale comes in below the valuation they paid in the prior round. And the compounding element, which is very, very unique, makes it more dilutive for the company the longer it waits to go public. In this case, Service titan pricing an IPO at 71 dol when it did today was or yesterday. Technically trading today was indeed lower than the latest private round. So the compounding ratchet was triggered. The overall dilution is pretty incremental though for service tightened just about 1% according to estimates. Now, ironically, if the IPO were priced at the levels that it opened and closed at today, $101 per share, the compounding ratchet would be irrelevant. But this type of structure and the prospect of doing a down round has kept many prospective IPO candidates on the sidelines for a few years. So we'll see if the moves today with Service Titan really changes the psychology.

[Melissa Lee]

Mel, Karen's got a question.

[Guy Adami]

Yeah. Hi, Leslie. So on today's day one and who were the inside were insiders selling? Who was selling and when will lockups go expire and they'll be able to sell.

[Leslie Picker]

That's a good point. So the venture investors in the prior round included a bunch of late stage folks that you normally expect to see. TPG was a participant in the prior round and then they had a whole host of other venture crossover investors in the prior rounds before that. Typically these lockups tend to last about six months. I'm fairly positive this one is standard in terms of its lockup provisions, but.

[Guy Adami]

It'S a good point.

[Leslie Picker]

You mentioned because oftentimes when you do see those lockups expire, you see some more insider selling and that can put some pressure on the stocks. Those dates are always really, really important to keep an eye out for.

[Melissa Lee]

All right, Leslie, thanks. Leslie Picker. This is one that really interested you guys on the 12:30 conference call.

[Karen Feinerman]

Right. And we've been talking about as it relates to investment banks like what the backlog looks for and A looks for IPOs coming in 2025. If you talk to VCs, maybe they're wish casting because they need to recycle this cash. They need exits. But the bankers are super excited too because it's been so bad for the last couple of deals. So this is great. It was a down round, but it's fine. I guess the one issue I have is like Leslie just mentioned this crossover investors. So these are large mutual funds. These are the natural buyers of these deals on IPOs. Well, they've been participating the whole time in these growth rounds. And so you start to wonder who are the incremental buyers. These companies have to start telling a really good story to retail investors to get their interest because a lot of the natural buyers don't really exist that much any more.

[Guy Adami]

Yeah, no, I mean I think it's expensive. It feels like this is great for them. Great price. They actually saw them ringing the closing bell today as I was walking in. I'm sure it's super exciting, but when it really starts trading sort of freely, then I think maybe a different story.

[Dan Nathan]

Really dependent on the housing market obviously. So it's a housing play as well. You see Restoration Hardware, you get enthusiastic look at the homebuilders over the last week or so on the downside. So I think you tread lightly here.

[Melissa Lee]

All right, coming up, make crypto great again. President Elect Trump weighing in on the digital asset as bitcoin hovers around $100,000. What he told her own Jim Cramer this morning and why Our next guest says we are still early in this crypto rally. Fast money back into Missed a moment of fast.

[Karen Feinerman]

Catch us anytime on the go Follow the Fast Money podcast. We're back right after this.

[Melissa Lee]

We're going to do something great with crypto because we don't want China or anybody else and not just China, but others are embracing it and we want to be the head. That was President Elect Donald Trump speaking to Jim Cramer earlier today about putting the US at the forefront of crypto. Bitcoin hovering around that hundred thousand dollar mark today. But our Next guest says 2025 could be a big year for both bitcoin and stablecoins. He launched the first bitcoin fund back in 2013. He's here on set with us, Pantera Capital founder and managing partner, Dan Morehead. Dan, great to see you again.

[Dan Morehead]

Great to see you.

[Melissa Lee]

So this is a great year for crypto is going to be even better. And on what? Because a lot of this year feels like pull forward of the expectation that something will happen in the regulatory environment that will be very beneficial for bitcoin and crypto in general. And we don't even know what that is.

[Dan Morehead]

Yeah, I think that's what it was. The uncertainty were holding investors back. And I think over 2025, you're going to get much more clear regulations and that will allow institutions to come into the space. And presently most institutions really have almost zero exposure to blockchain. So once they start engaging in this space, it should do well.

[Melissa Lee]

So this fund that you run is an institutional fund. Correct. So what kind of conversations are you having now to segue into that time when institutions can actually allocate money?

[Dan Morehead]

Oh, it's really changed since the election last summer when the markets were very low and we had very little interest. And since the election, so many people are trying to get figure out what, how to get exposure to this space.

[Dan Nathan]

When you hear a Microsoft, I think Michael Saylor just pitched the whole bitcoin strategy of MicroStrategy to Microsoft. They passed. I think they might have passed in a prior lifetime, but they passed recently. Thoughts on that? That, you know, he is obviously pushing that, but a lot of people are sort of backing away. I mean, is there another company that's to come in to sort of galvanize what Michael's done?

[Dan Morehead]

He's done a great job, you know, raising awareness. But probably most big corporations are not going to have Bitcoin on their balance sheet. Just like they don't have yen or bonds or, you know, gold or whatever. But big institutions, insurance companies, pension plans, endowments, they're the ones that are going to come in and really push this market up.

[Guy Adami]

So what's preventing them right now, those big institutions? I mean, for some of them, I think there seems to be nothing preventing them. But what are some of the regulations that would be lifted that would allow that to happen?

[Dan Morehead]

Well, it's been very unclear what is a security and what is not a security. The regulators in the US are pursuing lawsuits against some of the bigger companies in this space. And so that gives institutions pause. If that gets cleared up, you could imagine institutions wanting to get access to a new asset class. This is very similar to commodities in the 80s or emerging markets in the 90s, or mortgages in the 70s and 80s. It's just a new asset class. Most people don't have exposure to it yet.

[Karen Feinerman]

Dan, people keep talking about regulation or more clarity and the like here. How much of this move do you think has to do with, and Trump had been saying this on the campaign trail, the idea of some sort of bitcoin reserve for. For the country and, you know, is that a big part of this or. Obviously, there's a lot of moving parts here. What are you most excited about? What could come out of this other than regulation?

[Dan Morehead]

I think that is actually a really important thing. When you're the reserve currency of the world, you don't have somebody else's currency to save in. So the United States doesn't have another currency. It stores $600 billion in gold, which is a staggering amount. It's equivalent to 11 million years of American worker wages. So that's kind of crazy. Go to digital gold. Bitcoin. It's much better. And so I do think it's totally rational. The US already owns 1% of the world's bitcoins. Keep that, increase that. So I do think it's, it's. It is actually a really good policy. There's a couple countries that already do own bitcoin. It'd be great for the US to get out in the lead.

[Melissa Lee]

How do you manage the portfolio in terms of, you know, you have outsized positions now just because of the run. And so where, where would you. Where are you trimming or where have you trimmed? And what are some of the more undervalued cryptos out there?

[Dan Morehead]

Yeah. So the fun bit about cryptos, we've been doing this for 11 years, and Bitcoin's almost gone. A little bit more than doubled this year. And so everyone's talking about, isn't that wild? It doubles on average. It's done that for 11 years in a row. Right. So crypto going up double is not remarkable, actually. And so we're normally long because we think the markets are going to go up, you know, another huge amount. Like another order of magnitude, possibly. So we're typically long. We're always just looking at which other tokens are interesting. We have a big position in ton. Telegrams token, Solana Ondo. Those are some of ours.

[Melissa Lee]

All right, Dan, great to see you. Thank you. Dan Morehead of Pantera.

[Dan Nathan]

So you can't. I mean, you know, people say, Michael Sellers, you say what you want. He's very transparent in what he's doing. He's been this sort of, I don't know, Sherpa for the community. And he's done an extraordinary job. But, you know, Dan is spot on. I mean, there's going to be acceptance in the space, and it's very hard to make a bearish argument right now.

[Melissa Lee]

Yeah.

[Karen Feinerman]

You know, it's interesting when you think about Bitcoin. One of the knocks on it is that it doesn't do anything, doesn't create anything. Over the last 10 years, years, it's up 30,000%. You know what else is up 30,000% in video, which has nearly double the market cap. And we know what's going on there. So it's really hard to compare these risk assets. Like, you have to think of it, I guess, the way Dan's talking about it actually as a reserve currency or some sort of asymmetric sort of bet on something that we don't know what it could turn into. It could only go to zero, but on the flip side, and go to infinity.

[Melissa Lee]

All right, meantime, Turns Pharmaceuticals among the many companies looking to get in on that oral GLP1 market. Phase 1 trial results published in September found the company's small molecule drug helped patients lose up to 5% of their body weight in 28 days. But it's not all about weight loss. Tern's also planning to advance its leukemia drug in trial next year after giving positive data earlier this month. For more, let's bring in Tern CEO Amy Burrows. Amy, great to have you with us.

[Seema Modi]

Thank you so much for having me, Melissa.

[Melissa Lee]

So the obesity drug is turn 601. How does it fit into sort of the landscape here? We've got a lot of, you know, candidates out there, oral candidates, including ones by Novo, as well as Eli Lilly. How does yours fit in? And why do you think this could actually be best in class, which is what you said in the press release.

[Seema Modi]

Yeah. Thanks, Melissa. So I know you know a lot about this space. We don't yet have an oral approved therapy, and we also have seen a lot of data from orals to say that we can see effective weight loss. We don't yet have that ideal drug where you see really good tolerability along with that weight loss, something that's very scalable from a manufacturing standpoint and available. I've also heard you talk about different patient segments in this market that different therapies could be appropriate for. So we at turns don't think that there's going to be one winner in the oral GLP1 race.

[Melissa Lee]

Do you see your oral drug being more of a maintenance drug as opposed to the drug that you're on to lose that initial big portion of the body weight that needs to be lost?

[Seema Modi]

Yeah, I think people are talking about that in general about orals, and I think it's really going to depend on the patient and the needs.

[Melissa Lee]

Okay, talk to us about the phase two. Is it on track to start in 2025? When can we expect a readout?

[Seema Modi]

Yeah, it's on track to start by early Q2 and you'll see a readout before the end of the year.

[Melissa Lee]

Okay. You know, last week we had some stunning news from an IPO in the space bioage which halted its phase two. And I know this is not. It doesn't relate to you, but in terms of investors looking at sort of, you know, biotech companies developing drugs early stages, they see the collapse and they think, why not just go to an Eli Lilly or Novo Nordisk? Because you can see what happens when a drug is halted in a trial phase. What can you tell investors?

[Seema Modi]

I'm sorry, can you clarify the question? What do you mean, go to Lilly where you can see what happens?

[Melissa Lee]

Well, Lilly's drugs are a little bit farther out in terms of development. They've got a drug that's already proven on the market, whereas a smaller company is working on drug candidates. They are in clinical trials right now. And you can see what happens when a phase has to be halted because the endpoints are not met or for whatever reason there's an adverse side effect. What can you tell investors about the risks? Because you see a collapse in a company that is also working on an obesity drug in phase two. And I'm sure people are getting cold feet.

[Seema Modi]

I have a lot of respect for my colleagues at BioAge, and it's very sad to see. I would say that, you know, earlier stage drug development is inherently riskier if you look at the statistics and that. But we also know that a lot of drugs and big classes like statins and others, the first market is not necessarily the best or the winner. So I think there's a lot to be gained in investing in molecules that may be earlier in the pipeline, but have the potential to be better.

[Dan Nathan]

Amy, I think you have about $380 million of cash, cash equivalents. What kind of Runway does that give you? We understand that this business is extraordinarily capital intensive.

[Seema Modi]

It is capital intensive. It's still very different if you're developing a gene therapy or a biologic. So that cash actually gets us into 2028 and into some pretty meaningful milestones. Readouts on our leukemia drug, readouts on our obesity portfolio.

[Melissa Lee]

All right, Amy, we're going to have to leave it there. Thanks for your time. We do appreciate it.

[Seema Modi]

Thank you so much, Melissa.

[Melissa Lee]

Amy Burrows, and she had mentioned chronic myeloid leukemia drug which is going to start in phase two next year. So to your, you know, to your question guy, you need the money to fund all of these different trials and.

[Dan Nathan]

They have it through 2028. I mean, it's the market cap is probably either side of half a billion dollars. So we'll tread lightly with this one. But it's one of these fascinating stories that, you know, there was a company called Gleevac years ago. You might want to go back and look at a very small micro cap company that then was subsequently bought for like 100x of what they went public at. So this could be one of those types of situations.

[Melissa Lee]

Coming up, betting on the ponies. Why horse racing could see a huge resurgence thanks to sports gambling and why the return of one famous trainer could help fuel the rundown, the stretch. More fast money in two. Welcome back to Fast Money. The king of the sport of kings is back. After serving a three year suspension from Churchill Downs, horse racing's most famous trainer, Bob Baffert sat down for an exclusive interview with our own Contessa Brewer and shared his take on what could take the sport to new heights. She joins us here on set with more Contessa.

[Contessa Brewer]

Boy, was this a doozy. Bob Baffert is back and it was a triumphant return to Churchill Downs. A couple weeks ago. Baffert won with a two year old horse, Barnes, which incidentally cost $3.2 million as a yearling. I sat down with a Hall of Fame trainer a couple days ago in Tucson, near where he grew up, and I asked him about starting this new chapter.

[Melissa Lee]

We went through some challenging times and we got through it. And it's so nice to have all that in the rearview mirror behind me and I can focus on what's going ahead. And it's gonna be, it's gonna be, I'm having fun. I'm having fun again.

[Contessa Brewer]

Do you think there's any sustained damage to the Baffert brand?

[Melissa Lee]

I think people in horse racing, they understand what went on and it's, it's one of those things where you just got to put it behind you.

[Contessa Brewer]

Baffert was speaking at the University of Arizona Racing symposium. It's his alma Mater and the persistent topic that I heard there, where is this sport going? There's been decades of declining horses, owners, trainers and Baffert thinks there needs to be more high profile events like the Kentucky Derby.

[Melissa Lee]

It's getting bigger the handle they're betting more people show up. And why? Because it's an Instagram moment for everybody. Everybody goes. They're taking their same. I'm here at the biggest party. It's a bucket list race and it's getting bigger and bigger.

[Contessa Brewer]

Baffert's not the only one focused on the next opportunities. I talked with Feller trainer Todd Pletcher, Donna Barton Brothers, the NBC racing analyst who talked about the importance of sportsbooks because gambling funds the purses and widespread sports betting is bringing in all these new fans. And then you guys know Danny Moses of Big Short fame and a friend to Fast Money. He owns horses with other investors in Starlight Racing and he and founder Jack Wolf were out there in Tucson and I heard a lot of talk about gate races to host four year old horses expand their careers. And this is where investors would own the racing positions themselves or the slots. They can buy it, they can sell it, they can trade them. And so it makes the actual race sort of more of a wagering game if you would like. Where are you going to get your return on investment for these positions? There's a lot of innovation that is possible in horse racing, but it's not quite there yet. The next big thing I think is what everybody's looking at to see whether they can make a resurgence.

[Melissa Lee]

Is the audience older? I mean, do we need to bring younger people to watch?

[Contessa Brewer]

Part of it to the point is, you know, you've got the Kentucky Derby, everybody loves it. You have the Breeders cup and then the other Triple Crown races. But he Baffert was like, look, it's kind of like baseball, right? You've got all of these games, you got to fill those stands. How do you do it? You need superstars. So is it the horses that are superstars?

[Melissa Lee]

The jockeys, not the owners.

[Contessa Brewer]

Jockeys. And maybe the owners and maybe it's the trainers. But if you can get one more year of racing career for the horses, the horses themselves could be the stars.

[Dan Nathan]

Well, Contessa is a star. And check out Churchill Downs. Look at the stock over the last decade. Still cheap despite the run.

[Melissa Lee]

Contestants, always great to see you.

[Dan Nathan]

Thank you.

[Contessa Brewer]

Melissa.

[Melissa Lee]

What an interview. Contessa Brewer. Up next, final trades, final trade time. Karen.

[Guy Adami]

Yes. A shout out to my brother Mark Feynerman. Happy birthday. And I still like the IWM Danny?

[Karen Feinerman]

Yeah, I kind of like this XLV. It's at four year support at 140.

[Melissa Lee]

Interesting guy.

[Dan Nathan]

Special final trade here. Jack Duffy in a hospital room in Northwestern. Your kid brother is really proud of you. I know you're proud of him as well, so feel better. On behalf of all your friends here at CNBC's Fast Money, may we say.

[Melissa Lee]

Who the kid brother is?

[Dan Nathan]

That would be Terry Duffy of Frame One and only.

[Melissa Lee]

Yeah. All right, thanks for watching Fast Money. Mad Money with Jim Cramer starts right now.

[PJM Representative]

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 Is it time to reimagine your future? The right business skills may make a difference in your career. At Capella University, we offer a relevant education that's designed to focus on what you need to know in the business world. We'll teach professional skills to help you pursue your goals like business management, strategic planning, and effective communication, and you can apply these skills right away. A different future is closer than you think with Capella University. Learn [e-mail].