← CNBC's "Fast Money"
CNBC's "Fast Money"
Big Tech Earnings… And The State of Women’s Sports 7/22/26
00:44:27
We’re watching shares of Alphabet, IBM, ServiceNow and Tesla after their latest earnings reports. Gene Munster of Deepwater Asset Management breaks down the numbers and how to trade big tech in the second half. Plus, what’s next for the crypto market, and a former WNBA player on the $3 billion women’s sports market. Fast Money Disclaimer
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- [00:02]
Renee Montgomery
Mazda has been named Consumer Reports safest new car brand. It starts with our approach. Every Mazda comes standard with proactive safety features so you're more aware of what's around you, more focused on the road ahead and ready before problems ever start. Mazda more of what matters most to you. Go to mazdausa.com to learn more. Consumer Reports does not endorse or promote
- [00:28]
Melissa Lee
any product the board recommends approving.
- [00:31]
Vanguard Announcer
Regarding that seat on the committee, we're promoting quarterly earnings. Every day shareholders meet to discuss important matters about the companies you invest in. Now you can easily make your voice heard. Vanguard Investor Choice gives you a say in the companies you invest in. With just a few taps, you can set your proxy voting preference for your index funds. Visit vanguard.com investorchoice to learn more. Vanguard investors own shares of our index funds, which own shares of the companies they invest in. Available for Vanguard index funds that participate in Investor Choice. Vanguard Marketing Corporation Distributor
- [01:03]
Melissa Lee
Live from the NASDAQ Marketsite in the heart of New York City's Times Square, this is fast money. Here's what's on tap tonight. A big night of earnings. What tonight's reports tell us about the state of software, AI and more. Plus some clarity on the crypto. Bill G. Renova powers down what Capital One tells us about the health of the consumer. And two time WNBA champion Renee Montgomery will join us to talk about investing in women's sports, why she sees so much opportunity and her pro her picks for the women's championship this year. I'm mostly coming to you live from Studio B at the nasdaq. On the desk tonight, Karen Feiderman, Dan Nathan, Gai Adami and our guest trader for the hour, Mr. Anthony Scaramucci, founder and managing partner of SkyBridge Capital. Welcome back. And welcome back. Way back when Way back. Sit on this desk when I can
- [01:49]
Gene Munster
still come back here actually.
- [01:51]
Melissa Lee
Well, you want to start off with a big slate of earnings out in just the last hour. Full team coverage and all the key reports. John Ford standing by in service now in IBM. Philippe is tracking Tesla. We start off Mackenzie Sagalis on Alphabet. Shares are now down by about 2.6%. The company beating revenue estimates, sales jumping 24% from a year ago. Calls underway. It's been underway for about 30 minutes. Mac, what's the latest?
- [02:14]
Mackenzie Segalos
So Mel, you saw those shares take a steep fall lower with the dip beginning as management laid out its second half outlook. So the company is expecting a slight currency headwind in Q3, reversing the one point tailwind from Q2 with the biggest Impact here expected to show up in search and YouTube ads of course both of well the search segment a miss for the Q for the second quarter. Meanwhile, management still expects strong cloud growth. Says it only has a small portion of existing TPU system sales expected to be recognized this year. Of course we thought we'd see more of that in H2 so that might be part of what's weighing on the stock. But they say the vast majority of that is now pushed into 2027. The TPU, their in house chip, a real bright spot for the cloud business and we are getting an updated read on capex that might also be part of what's dragging down the stock here. It is guiding to a new range of 195 to 200 billion for 2026 CAPEX for the full year. So finally getting some of that forward looking guidance and Those shares down 2 1/2% now.
- [03:12]
Melissa Lee
Mel, Matt, keep us posted. Mackenzie Segalos on shares of Alphabet. Karen. Karen, what do you make of the 195 to 205 billion for CapEx?
- [03:21]
Karen Feiderman
Yeah, I think that's why it's down. So that's 15 in the center mid, midpoint to midpoint, $15 billion of additional CapEx which is, you know, I don't know, 7, 8%. That's not, that's not nothing. So everyone's going to have to do that it would seem. Right. Yeah, I think that the race is still on and so I mean they put a really good number. Certainly cloud was really, really impressive but this I think will end up being the story of the earnings and they're
- [03:49]
Dan Nathan
saying that they're going to for fiscal 27, it's going to go up significantly. I think that was somewhat of the language that they gave when they reported on Q1. But at a time where the market is kind of questioning some of the spend, I think that's important. Also you know when they did that debt offering they announced an equity offering and they had not that not started yet. That's about $40 billion. So you know, on a $4 trillion market cap company maybe that's a rounding error but from a sentiment standpoint it's so sooner or later it might have a little bit of an impact.
- [04:16]
Guy Adami
Revenue is up 24%. Cloud was up I think 82% year over year. That's a staggering growth if you think about it. Which suggests things are still going well. I mean search okay, slight miss maybe. I think the quarter is fine if you're selling it on the back of the spend. I get it We've seen that before. Nvidia is probably higher I would imagine in the after hours on the back of that. But I don't think you run away from Google here.
- [04:36]
Melissa Lee
Well you got higher spend but you also got that ATM that's that you know the issuance that's looming over the stock.
- [04:41]
Karen Feiderman
So I mean that, that seems in the scheme of things, in the scheme of their market cap and it doesn't seem big at all now maybe they couldn't do it between the end of the quarter and now they're going to announce earnings. I mean this, they could quickly do this.
- [04:56]
Anthony Scaramucci
I think this is a day that Greg Abel likes and Warren Buffett likes. They see numbers like this that are decent and they see the long term trend up and if you're going to take it down 3% that's Mr. Market in its short term manic depression. So I think they like days like this. But I, I want to maybe ask Guy this. The, the search being down is a little more than people did expect. And so you have a dashboard of Google search is going down, Gemini is delayed and the capex is not what people are expecting. Yeah, I think that's the problem. Right. Shake that up into a salad and
- [05:30]
Guy Adami
it comes out and that's why it sound, I think, listen the search was disappointing but I don't think it was catastrophic and remember was a year and a half or so ago where people were talking about the existential risk that I presented to Google in terms of the search business. So it's not falling off a cliff. But your point is well taken. I think it's a spend. My instincts suggest it's when the spend came out is when they sold the stock off because the quarter on its own to me was pretty good.
- [05:53]
Melissa Lee
Yeah. By the way search revenue 63.3 billion versus 63.4 billion estimate. So it's just a little miss there.
- [06:00]
Dan Nathan
I mean listen, this company's been executing to guys point on the search that was sort of the, you know, the boogeyman out there and they've obviously quelled those sorts of fears. I think distribution is something we've talked a lot about. You know when consumer adoption was going on with chatbots they were running away with it. Right. And a lot of folks just kind of discounted what Gemini was likely to do or be able to compete with GPT and then Anthropic had clogged come out and wasn't growing anywhere near. If you look at Google or Alphabet in particular, you know they have five properties have over three, three billion users. Right. It's Gmail, it's Chrome, it's Android, it's YouTube. And I think there's one other I'm missing, but you get the point. They have distribution, right. They can embed Gemini there and they don't actually need to charge for it because they're able to monetize it in other places. And I think that's a big part of the bull case Anthony just mentioned. They pushed out the latest sort of Gemini. Maybe it's fine. Maybe it's good enough because it's embedded in all these things and they're creating user behavior that is going to be pretty sticky.
- [06:53]
Melissa Lee
When you use a word like significantly, that's a little bit.
- [06:56]
Karen Feiderman
For which part?
- [06:57]
Melissa Lee
Wishy that.
- [06:58]
Dan Nathan
That go up?
- [07:00]
Melissa Lee
Yes, significantly. In fiscal 27. That. That leaves a lot to the imagination.
- [07:05]
Karen Feiderman
Right. I mean, recently I'd seen estimates of $590 billion for this year in the two coming years for Google. So maybe that. Or Alphabet. It's a little bit low maybe. And so a couple of things though, I just want to add. Services are. Well, search rather is a little bit higher margin. So a tiny, tiny margin. But the Google Cloud, 35.5%. That's. I mean, that's a really significant margin. So we're going to see likely very good numbers from US and Azure Cloud. I would think this isn't great for Meta, though. The spend.
- [07:39]
Melissa Lee
The spend.
- [07:40]
Karen Feiderman
If they are in the arms race.
- [07:42]
Melissa Lee
Well, if you, if you are of the belief, which is what you put out there, that they're raising by 15 roughly. So everybody else is pushed to raise as well.
- [07:50]
Karen Feiderman
They want to be at the table. Right.
- [07:52]
Melissa Lee
Then that's not good for. In terms of this whole. We want to see the ROI because the I keeps going higher.
- [07:57]
Anthony Scaramucci
Would you like to own YouTube as a standalone company? I mean, it's just literally one of the most phenomenal media companies in the world. And if you're a media company, you're competing against YouTube as a colossus. I mean, so just put that whole thing together. Is that something you want to hold for three years? I do love the stock.
- [08:18]
Melissa Lee
Right. So you want to own Alphabet in order to get at it, in theory. Even though it's a small part of the business. I mean, the rest of the business is.
- [08:25]
Anthony Scaramucci
No, I'm just. I'm just making the point. They're all interconnected.
- [08:27]
Karen Feiderman
Spin it, you mean.
- [08:29]
Anthony Scaramucci
I think that thing would be worth a ton of money if they spin it. I'm not saying they're going to do that. But at some point they may do that.
- [08:34]
Guy Adami
Yeah. Tim Seymour talks when he's here, he talks about the sum of the parts. If in fact that would happen. I don't think it's going to happen. Anthony is not suggesting that it will happen but some of the parts Google is more valuable than I think it is as sort of this, the piece as a whole. I will say this again. Look, I get it. The market is scared to spend. Meta is down in the after hours I just looked at makes sense. I think the tell tomorrow is going to be how well does Nvidia trade on the back of this increased spend if it doesn't perform? Maybe that's a bit of a tell because in video has been trading great the last couple of days.
- [09:03]
Dan Nathan
Yeah. One of the takeaways I have here is that they said they're going to expand use of third party AI capacity in Q3. And what's interesting to me about that is that if you look at some of the XI like for instance and you know, know they are basically selling their compute. Meta just talked about doing it. They want to be neo clouds and at the end of the day Google saying that they need more compute, which I actually would impute that that's probably pretty bullish. Right. And so at the end of the day we know that Anthropic has not built out as much as compute as they need. That's why they went to xai. That's why Google went to xai. They did those deals on the eve of the space X ipo. So it says something about Google and it's saying something very different about xai. They overbought, they overbuilt. Now they have excess capacity and they need to sell that off because x was losing $1 billion a month. And those two deals that they did, that's great. They're $2 billion a month. They don't start for a few months. But both sides have a three month out and that could change very quickly. So if Google and Anthropic want to pull back on that, that would be a big problem for X.
- [10:02]
Melissa Lee
All right. Shares are down 2.8%. Alphabet conference call still going on. We'll bring you the updates as we have the meantime, let's get to two software movers ServiceNow jumping after top and bottom line beats ib. The company of course gave an earnings warning last week that censures plunging. John Ford spoke with the CEOs of both companies this afternoon. So John, what you learn?
- [10:22]
John Ford
Well, let me start with IBM. That call is underway. And one of the first things they're saying is we don't see signs that customers are abandoning the mainframe. So I think the theme for both of these companies tonight is maybe it's not that bad on IBM side that's kind of leveraged against what they already announced that preannouncement saying, yes, we did preannounce that there is a spend shift going away at least momentarily from the mainframe business toward these memory issues that the AI situation has created. But look, they're projecting that they have some stable guidance here and that that business is not handicapped in a significant way, that it continues to do what it normally does. I spoke to Arvind Krishna earlier, asked him specifically about that Z mainframe cycle, the way it tends to spike the first year, drop the second year and then stay even in year three. He said that's still the cadence. It's just that the little details within that, the velocity of that drop in this particular quarter that they're reporting now was faster than expected. Now I also spoke to him about what Microsoft is doing. These forward deployed engineers. This was announced in the past few days, maybe about a week ago. They said they're going to take around 8,000 folks and put them out with customers to help them get AI done. IBM of course has a business that's very much about that, their consulting business. And Arvin said, yeah, you know, we're going to be doing more of that. You know, Palantir has done it actually it's part of IBM's legacy that perhaps we forgot about. They will be doing more of that forward deployment of engineers. Also talk to him about open source and open weight models. His argument is that that's going to benefit IBM because of the other business that comes alongside. When customers start choosing what are they going to run on those frontier models that's really expensive and then what are they going to put on some of those open weight models that they're cooking homegrown? IBM is already doing some of that for customers, Arvin told me. And for ServiceNow, John, for ServiceNow, that call also underway. But Bill McDermott's message is that ServiceNow is different from the rest of software. And certainly given the numbers that we saw out of Pegasus Systems earlier this week that were more in line with what we saw out of IBM. That idea that revenue is being sucked in the enterprise away from some of the traditional spend into some of that infrastructure spending, we don't see that in ServiceNow. ServiceNow beat on all of their major categories here and Bill McDermott saying, hey, we're growing as a cybersecurity player. He said that we're the number one cybersecurity grower in enterprise software. Number eight overall is his argument. He says they're going to continue to grow there. And as Gil Lauria was telling you earlier, this whole control tower idea of there being companies who can orchestrate AI across a number of different providers for the enterprise perhaps starting to sink in a bit more as the conversation has shifted away from how much can we spend on figuring out how to use AI to can we figure out how not to spend more than we need to on AI because boy, that that token burn is really expensive. That management idea is not just about spending money. It's also about security as we saw in this Hugging face open air situation. And the ServiceNow argument from McDermott is that they will play a key role in that.
- [13:56]
Melissa Lee
All right, John, thanks for that. John. Ford all over IBM as well as ServiceNow. We should note that when the earnings first crossed or both of them, the stocks were higher and they sort of pared some of those gains back as this session has gone on and as the conference calls have gotten underway.
- [14:11]
Guy Adami
Yeah, I think the more interesting the two for me is IBM in ServiceNow is sort of getting back what it lost during the day. Ish. It's, you know, again, that seemingly has a lot of headwinds. You throw that in the mix with Microsoft and Oracle. I think we understand what's going on there. I think IBM is a little bit different. Now for context, IBM went from 290 to 214 in a straight line on that pre announcement that we talked about on the day of. We haven't recaptured that. But then you look at the quarter and say, you know what, A little bit better than the pre announcements which we were hoping to see. Red Hat is still growing at 11%. It doesn't deserve a market multiple, but it deserves a better multiple than it's trading at now. So I think Bear just initiated neutral with a 230 bar price target. I think that's more than reasonable. I think it should trade higher than that.
- [14:53]
Dan Nathan
We discussed ServiceNow last night. If they were able to come in line and guide in line and actually have some sort of commentary that it's going to be hard to rip out their products from existing customers. And I think the security point is a really good one. John just mentioned the OpenAI agent that accidentally hacked Hugging Face is a collaborative platform where AI models are held. I mean that's one of the things and it's listen, look at Palo Alto Network, look at some of these other security names. They are really outperforming much of SaaS or enterprise software in general. And I just think that's going to be a theme. I think every month we're going to hear about some sort of agent hacking some system that people are not going to be particularly happy about tomorrow.
- [15:32]
Melissa Lee
Based on ServiceNow, based on IBM, does IGB go higher?
- [15:37]
Karen Feiderman
I think a little bit. Yes, I do. I mean I think it's. I, it's a little distress. I don't own service now. It did trade much better very early on as opposed to here, but I think, I think the bar is low. Ish. So I do think IGB trades better. The one thing I just want to add about IBM, we talked about it that day where it really got just annihilated. I bought some the next day. Really on the bet of they preannounced. They are not going to need to really have further bad news.
- [16:08]
Melissa Lee
Right.
- [16:08]
Karen Feiderman
Because one week later that would really be why do that? So a little bit of bounce here is not surprising.
- [16:15]
Anthony Scaramucci
So I want to come at this from a blind perspective. If you're growing revenues at 20%, let's say I just came in as a Martian, I got out of the spaceship saucer and I looked at this company, I'd be like, this is a phenomenal company and it got cut in half. And so then the real question is, do you want to hold this thing long term? I say yes to this. And I bought IBM when the craze started, did well, we've now faltering here, but this whole collection of assets is going higher. May not be going higher right this moment because of what's going on. Sentiment wise. I think people need to see through the sentiment.
- [16:53]
Guy Adami
And if Steve were here, we talk about Quantum. I think, I think IBM said to spend $10 billion in quantum. Obviously we know what the administration thinks about that. So there are other plays that IBM X. Some of the concerns we have about software in general, that's a good game.
- [17:06]
Melissa Lee
If I were a Martian and I
- [17:08]
Guy Adami
saw the stock, you see, Mel says to me every once in a while
- [17:12]
Anthony Scaramucci
might be a Martian. I can't confirm or deny.
- [17:15]
Dan Nathan
Not again.
- [17:16]
Melissa Lee
All right, IBM shares are up about a percent or so. Coming up, more earnings movers. We're watching tonight. We'll bring you the numbers from Tesla's quarter next. With that call kicking off in less than 15 minutes. Plus the road ahead for crypto, whether the updated clarity bill can move the needle for the industry and whether it's enough to bring investors off the sidelines. Don't go anywhere. Fast money's back into
- [17:38]
Mackenzie Segalos
the board recommends
- [17:39]
Dan Nathan
approving regarding that seat on the committee.
- [17:40]
Renee Montgomery
We're promoting quarterly earnings.
- [17:43]
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Dan Nathan
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- [19:11]
Melissa Lee
Welcome back to Fast Money Earnings alert on Tesla. The stock is lower right now after the EV maker reported better than expected revenues. But miss on eps. Philip Bose got some more of the
- [19:19]
Phil Bose
numbers still Melissa that EPS miss it's a substantial one. 33 cents a share is what the company earned in the second quarter. The street was expecting 51 cents a share. As you mentioned, revenue did come in better than expected at more than $28 billion. The street was expecting just under $26 billion. The numbers within the numbers in the second quarter. Energy storage revenue this was light of expectations coming in at 3.12 billion. The street was expecting at least 3.5 billion. Capex a little better than the street was expecting at 5.78 billion. But automotive gross margins roughly 2% below the estimate from analysts. They were expecting 18.5%. They come in at 16.28%. Their FSD subscriptions, which has been steadily growing over the last year up about another 200,000. Up to a total of 1.48 million compared to 1.28 million in the first quarter. And finally, in terms of what people want to talk about, Optimus production, Cybercap production, when it comes to the Optimus robot they are installing, the production lines out in Fremont, California still say that they expect to begin production this year. Melissa, as you know, all of this could change what in 10 minutes? That's when the conference call starts. You never know what Elon has to say. And when he says something that typically moves the stock more than the initial earnings report.
- [20:38]
Melissa Lee
For better or for worse. Phil, thanks. Keep us posted. The LeBeau on, on Tesla. So obviously it was a big EPS miss. They are on target though for a lot of these sort of moonshot, you know, products.
- [20:51]
Guy Adami
So Ron Baron would say, you know, it's not about the quarters, not any of this, it's about the story. I get it. I mean I will say to the extent that people care, free cash flow expected to be minus 3.3 billion was better. It was just about $1 billion. Good for them. But the margins and what Phil was talking about, its ex regulatory credit, 16.3% against 18 and a half. They promised us two years ago that they bottomed out in terms of margins, that they would start to reinflect. It hasn't happened. I mean these are legacy automaker numbers. But if it's not an auto company, none of this matters, right?
- [21:24]
Melissa Lee
So what is it?
- [21:25]
Karen Feiderman
I'll tell you what it is.
- [21:26]
Melissa Lee
Yeah.
- [21:26]
Karen Feiderman
Space X proxy. And so as Space X trades, so will Tesla trade. It's, it's inevitable. Just a question of when. When did they merge them together? So it has to be with the SpaceX.
- [21:39]
Melissa Lee
But you're sharing.
- [21:41]
Anthony Scaramucci
It is so good to be back together with you because it's like I was literally going to say that, but I'm going to add something now. Okay. It's autonomous transport. It's AI and robotics at 349 times earnings. But if you believe in Elon Musk and you believe what Karen just said, you know, it's like owning an option in him and I. There are tombstones of dead hedge funds guy. And I know dead hedge fund dead and buried. I got hedge fund managers, buddies of mine, they shorted Tesla. They own three Teslas and they had to shut the fund down because it was short in Tesla. So I would, I would go anywhere near this Other than long side or neutral on something.
- [22:20]
Melissa Lee
Like if you are a believer in the AI story, you should be a big believer in the physical AI story. And right now, Tesla is one of the leading companies when it comes to physical AI.
- [22:31]
Dan Nathan
It's worth noting. And I get Anthony's point about, you know, lots of hedge fund managers getting taken out being short this thing. This stock has been such a massive underperformer to the S&P 500, the NASDAQ, over the last five years. If you had money in this, it's just been, just been, you know, I mean, like eviscerated relative to what you could have done in the spy in the qqq. And I think that is really important to think about, especially how professionals manage money. Right. There's been lots of opportunities to trade this thing and I know a lot of hedge fund folks who do. I think about it this way, all right, this stock topped out with a 1.7 trillion market cap. And you know, make no mistake about it, the last four years for this auto business have been a disaster. They had margins I think above 25% at some point. Now they're like in the space of Ford and GM at that 16.1x credits and that's not a good business. So if Robotaxi does not come on the way that they expected to do, then the production of those cars are not going higher. They are literally they're exhausted in the US and in Europe. So you better hope that SpaceX that started with a $2 trillion market cap, right, doesn't top out the way Tesla did. And you better hope that it doesn't go sideways for three or four years because there's a good probability that it could do that. I'm not telling them shorted. I'm not telling you anybody should sell it here or whatever. It doesn't trade well. And I think if they didn't have that Xi, I can't imagine where this stock would be trading because it would only be trading on Starlink, which is a good business, but it doesn't deserve a multiple. And then if it's all in the come about Starship and all this other stuff, well then you better not hold your breath for that. And that's the same story as Tesla over the last five years.
- [24:06]
Melissa Lee
Yes, that is the common thread among all the Elon Musk companies.
- [24:09]
Guy Adami
Remember when you and I did the shooting where we drove a Tesla together?
- [24:13]
Melissa Lee
Yes.
- [24:13]
Guy Adami
Wasn't that fun?
- [24:14]
Melissa Lee
Where was the Short Hills Mall?
- [24:15]
Guy Adami
Short Hills Mall. And then we went to snow the
- [24:17]
Melissa Lee
cheesecake Factory cheesecake and we had ticker cake.
- [24:21]
Dan Nathan
How long ago is that by the way?
- [24:22]
Melissa Lee
It's probably 15 years.
- [24:23]
Dan Nathan
So that Model S was the best car they ever made right out of the gate. And no, I mean since then they've all been like hunks and junk.
- [24:30]
Melissa Lee
The article about comparing the cybertruck with
- [24:32]
Dan Nathan
the Edsel, I just want to vomit all over the. I mean what a piece of.
- [24:37]
Guy Adami
Don't do that.
- [24:38]
Anthony Scaramucci
Anyway, he is a human meme. You short him at your high risk. I wouldn't go near that.
- [24:45]
Melissa Lee
But would you Long Would you be long?
- [24:47]
Anthony Scaramucci
I own, as I'll fully disclose you, that I own it. I own Space X and I I'm a big believer in the long term game of what he's trying to achieve. He's an idiosyncratic guy, everybody knows that. But I would not bet against him because he's working right now somewhere, probably under his desk on something that we don't even know what it is that's going to explode in two years and I want to be a part of it with them.
- [25:08]
Melissa Lee
Well, a lot will hinge on what he says on the conference call that starts off in just about five minutes time. Meantime, coming up, some fast movers catching our traders eyes. What is behind the post earnings moves in Vernova at and T&CME group. That's next. Plus Bitcoin back in focus as an updated crypto bill makes waves in Washington. What the mooch season store for this trade straight ahead. Fast money's back into.
- [25:36]
Karen Feiderman
The board recommends approving regarding that seat on the committee.
- [25:39]
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- [26:34]
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- [27:03]
Melissa Lee
welcome back to Fast Money. Stocks muted and Wednesday trading. The Dow and the S&P 500 virtually unchanged while the Nasdaq shed half a percent AT&T popping 3.5% despite mixed results. Net adds coming in ahead of expectations. The company also accelerating its planned buybacks to $10 billion this year. GE Vernova sinking almost 9% despite a Q2 revenue beat and guidance hike. The company seeing declining wind revenues and weaker onshore equipment deliveries. Also warning of addition additional charges related to tariffs. CME Group surging 5% putting in its best day since 2023. The exchange operator beating estimates and saying the first half of 2026 was its best ever start to a year and some more after hours moves on the radar. Texas Instruments lowered despite better than expected top and bottom line results. Las Vegas Sands sinking missing earnings and revenue expectations. Southwest Airlines in the red on weaker results and a nearly $900 million jump in fuel expenses. But United Rentals jumping as rental revenue rose 13% to a record. This is the R in your previous acronym.
- [28:07]
Karen Feiderman
Yes.
- [28:08]
Guy Adami
What was Rentals? One.
- [28:10]
Melissa Lee
It's terrible. That's what it was.
- [28:11]
Karen Feiderman
Yeah, that's one's worse. But no, United Rentals are fantastic. A beat and a raise. They do not raise unless they are absolutely certain they've done a fantastic job. They have these huge projects index. This has been a really, really good stretch for them and I think it's going to continue. It's not cheap, but staying long.
- [28:30]
Melissa Lee
Yeah, Sammy, just quickly.
- [28:32]
Guy Adami
30 million shares average daily volume. It's the third best quarter I think in their history. History is a long time so that you know, the rumors about their demise are greatly exaggerated. I mean this, I get it, there's all new products coming out. But Terry Duffy, friend of the show, friend of ours is always one step ahead of the curve. This was a great quarter and that existential risk that everybody was worried about a month and a half ago, I don't think it's coming to fruition.
- [28:55]
Melissa Lee
Meantime, Bitcoin's recent rally on pause today in crypto related stocks like Coinbase Strategy and Robinhood also lower this as an update to the Senate's Clarity bill would ban federal officials from issuing or sponsoring crypto currencies. Anthony Is that a bad idea to
- [29:11]
Anthony Scaramucci
ban federal officials from sponsoring cryptocurrencies?
- [29:14]
Melissa Lee
Logical. But apparently we do need a law in order to make that happen.
- [29:18]
Anthony Scaramucci
I think the big thing is the Democrats said to the White House, we need an ethic ethics provision that has teeth in it. And so they said, what do you want? And they said what they wanted and the White House gave it to them. And now the Democrats are saying, well, that's not enough. We want state AGs to be able to enforce these federal ethics provisions. So that's a real problem because then you have to redo all of the ethics codes in the federal government because you can't have the state just prosecuting the crypto and not all the other ethical potential violations in the federal code. So they've got to get around that and they've got to have a compromise. But then the biggest problem is the procedural one. You only have 14 days to go before the August recess. So you need what's called the procedural prep for a bill like this to happen before the weekend. Today's Wednesday. That means sometime tomorrow afternoon we're going to have to hear that that's in play so they can get it down to the floor to vote. If it gets to the floor, it's going to pass. That's my opinion. Because I think a lot of the younger Democrats are not going to want to go up against the crypto Bros and their PACs come November. That's my opinion. If it doesn't get to the floor, it dies a brutal death. And then guys like Brian Armstrong, after all the hours and time and energy that they put into this, they start building their businesses off the shore of the United States.
- [30:35]
Guy Adami
My. May I ask Anthony a question?
- [30:37]
Melissa Lee
You may.
- [30:38]
Guy Adami
See, I asked permission, which I. That nice?
- [30:40]
Melissa Lee
Yes.
- [30:41]
Guy Adami
Why is it so difficult? You hear from people. I know. I do. I'm sure you do. The game is rigged. The politicians, whether it's Democrats, Republicans, it goes across the aisle not allowing them to trade. Why is that such a difficult concept? Not just crypto equities in general.
- [30:56]
Anthony Scaramucci
Well, they make money doing that. You know, if you're paying them $180,000 a year and they have insider information, they're allowed to trade on it. They make millions of dollars a year. And so I would rather take a Singapore model, pay them $15 million a year, $10 million a year, and then get really tight on them with the ethics. But we don't do that in this country. They can't afford two houses. Let's say you're A member of the house. You make $180,000 a year. How are you going to live in your district and how are you going to live in Washington on that money? So they have all these different loopholes and they have all these junkets and they have these ways to get them money. And you know, LinkedIn today, I mean, I'll send it to you guys. They showed Nancy Pelosi stock market performance versus the S& P and Warren Buffett.
- [31:38]
Guy Adami
Remarkable.
- [31:39]
Anthony Scaramucci
Okay, so it's remarkable. And so is that fair? Does it make sense? It doesn't make sense. Remember when Peter Switcher's book came out in 2011? They banned it and then they put it back in by voice vote. They didn't even go on the floor because they didn't want C Span to see them voting for it. So they did a conference call and they reinstated it. And so to me, it's very, very bad. But you also have to understand you have to pay these people. If you're not going to pay them, they're going to find ways to make money so they can afford their lifestyle.
- [32:09]
Dan Nathan
All right, Anthony, you were a crypto skeptic, then you became a big bull and you're in on it. I mean, like, bitcoin is your thing, right?
- [32:15]
Anthony Scaramucci
Yeah.
- [32:15]
Dan Nathan
So if you're crypto curious, but you don't really get the underlying, you know, the pillars of it. What about looking at last night? We had a great conversation. Well, I thought it was a great conversation. Maybe I brought it up. That's what was a great conversation. We were talking about some of the institutional platforms. You know, we had talked about Coinbase and what they do. We talked about bullish, we talked about Circle. You throw it all. Are those interesting businesses, whether you believe in bitcoin or not?
- [32:37]
Anthony Scaramucci
You know, I love those businesses. We have a first trust skybridge, Digital Economy, ETF called crpt. And if you look at the list, all of those businesses you just mentioned are in those holdings. And so I'm a big believer in the picks and shovels of the digital economy and this sort of new age fintech. Now, I also believe that the stuff is coming whether people like it or not, because it's better technology than what we have. This is the Uber problem. Okay, let's go back to Uber. Government hated Uber. Mayors hated Uber. Taxi commissions hated Uber. Who liked Uber? The people. And so the people basically burned them off and won out. You don't have enough people in crypto right now to fight back the government resistance to what's going on.
- [33:20]
Melissa Lee
In Washington just quickly. Yeah, Bitcoin, where's it go?
- [33:25]
Anthony Scaramucci
Well it's going to grind higher because the sentiment is terrible. But doing this a long time relative strength index all time low fear is at like a 7 on a scale of 1 to 100 in terms of greed and fear and there's no supply of Bitcoin in the marketplace and there's no interest. And if you go search searchable terms on Google, Bitcoin's down 55% in terms of searchable terms. All of those reasons I think bitcoin is bottom. I don't think it gets much worse in here.
- [33:54]
Melissa Lee
All right, coming up even more coverage of tonight's key tech reports. Deepwater Gene Munster has been dialed into the call. So join us with his analysis when fast Money returns. Welcome back to Fast Money. Another look at the after hours earnings movers Alphabet and Tesla lower while IBM is struggling to stay pos. Deepwater Asset Management's Gene Munster is following all of these moves and all of the conference calls. Your hard worker Gene, what should be takeaway here in terms of what it means, what this all means? Put it in a bag, shake it up for the trade tomorrow.
- [34:33]
Gene Munster
Well the most important piece obviously was related to what the Google Capex guide was 4% higher than the street and that ultimately means that the numbers for all these Capex infrastructure companies are going to be going higher. We saw that in some of the after hours trading with some of the smaller companies like Coherent Invertive all trading up 1 2%. Nvidia is basically flat. But Melissa, the simple takeaway is that this is really good for the infrastructure trade fundamentals. The question comes down to will investors give the trade credit.
- [35:07]
Dan Nathan
Hey Gene, you and I have talked about, you are a hard working guy so thanks.
- [35:11]
Gene Munster
Thank you.
- [35:13]
Dan Nathan
When you look at the deceleration in earnings and sales and margins for Alphabet next year, you know obviously that spend has a big part of the margin and the earnings slowdown. How do you think about that as an analyst, as an investor? Like is that something that should be placed at least a discount on until you see enough reasons to actually see the potential for a reacceleration in margin improvement?
- [35:36]
Gene Munster
Well, you're hitting what is basically the kind of the key connection between Google and Tesla tonight is this margin decline. Fractional mis margin for Google is bigger when it comes to Tesla and this question about how should we think about margins relative to the broader revenue opportunity. CFO of Google said that they have had this caffeinated growth in Google cloud that going from 63 to 83% but they're going to have to go to third parties like space X to continue to meet demand. That's going to push margins lower. And so I want to, I want to get to your answer to your question Dan is what does this mean? Is that it's really important. These stocks are not going to go up unless margins are stable or moving higher. When it comes to Tesla, we had four quarters in a row of expanding out of gross margins ex credits and that just came to like a crashing end here. And so I think it's really important. They don't have to go up into perpetuity but they do need to go up and stay high for I think these stocks to continue to work genus.
- [36:35]
Karen Feiderman
Karen, thanks for being on. So just to get at that margin a little bit more. If they, they do have more demand, demand than they can supply. When do we get to a period where that starts to be somewhat more in line and we can really see what the margins are?
- [36:52]
Gene Munster
Well, that's kind of one of the crazy parts about these Google numbers is that they're just to put into perspective, they did 25 billion in cloud revenue in the quarter. They'll probably do like 130, 140 over the next four quarters. Their backlog in cloud grew 50 billion sequentially. It's now $514 billion. Now those, some of them are several year contracts that they have. But Karen, when you look at those backlog numbers, when you have backlog numbers that are 3x what your next 12 months revenue are, it's almost hard for me to like conceptualize when we're going to get to supply, demand, equilibrium. And I think that's kind of the point here is that these companies ultimately are seeing this massive backlog and saying I'm going to spend whatever it takes to get there. So to answer your question, I don't know when we're going to get that. We may be a year plus out before we feel like we get any sense of where that demand, that equilibrium is. What's most important on that margin topic is investors have to believe it can happen before the margins actually go up, but have to have some confidence that they are going to go higher longer term.
- [37:55]
Melissa Lee
If we could take a look at Tesla stock in the after hour session, a leg lower here. This is a massive capex year, says Elon Musk on that conference call. The stock is down 5%. They originally guided Gene to $25 billion to 2026. So I guess it also follows along the line of Of Alphabet. You said they followed along in terms of margin. They're following along in terms of boosting Capex apparently as well. So is that a surprise to you that they're increasing?
- [38:21]
Gene Munster
Well this was the one. There's a lot of good things on this Google call. I expected margins actually to be up. So I was wrong on that. I was right on this, this CapEx and it was pretty easy to get because we know how important this is for them from the key is not this year that 25 billion number. We'll get the details when the CFO talks about the exact number. The key is next year the street's looking for 21 billion so a step down but that number likely could be up year over year because Elon was selling investors. I listened to the first few minutes of the call on this idea that we really that it's going to pay off. This is the biggest opportunity to print money ever. Kind of a theme when it comes to Capex and so I wasn't surprised by it. And I think, I think like another I mentioned that kind of connection on the margin but there's also connection between Tesla and Google. Very easy connection which is on that CapEx piece. And we've been waiting, we've been talking about the past year and a half for some sort of a slowdown in this. We're just not getting that. And so I think what the simple takeaway is we're still very early in. It's hard for me to wrap my head around that but we're still very early and I think what we're hearing is evidence of that.
- [39:26]
Melissa Lee
Gene, thanks. Always great to get your take. Gene Munster from Deepwater Asset Management. We should note that we are also getting some headlines out of IBM which were interesting. They said one third of those slipped second quarter deals have already closed and they said that the this was deferral and not destruction when it comes to those deals lost. Karen. So they seem to be addressing head on that concern that those deals were going to go away because the spending was going to favor hardware as opposed to what they're selling.
- [39:54]
Karen Feiderman
That's good but the stock is flat.
- [39:57]
Melissa Lee
Yeah, it's not doing much.
- [39:59]
Karen Feiderman
Nothing much.
- [40:00]
Phil Bose
I don't know if.
- [40:01]
Anthony Scaramucci
Two thirds.
- [40:03]
Karen Feiderman
Yeah, two thirds.
- [40:04]
Anthony Scaramucci
Well there's one third that have closed but.
- [40:05]
Melissa Lee
Oh right.
- [40:07]
Karen Feiderman
I thought you said two thirds.
- [40:08]
Melissa Lee
It was one third have. Have closed.
- [40:12]
Karen Feiderman
Yeah. I don't know if this big capex thing is that more of the Capex that IBM was not the beneficiary of.
- [40:20]
Melissa Lee
Right.
- [40:22]
Karen Feiderman
Maybe that I don't know. Right.
- [40:23]
Melissa Lee
I think it's, it's, it's telling that the stock is I agree with, unchanged
- [40:27]
Guy Adami
and it's telling that it's lower than that. Again, again, 214 is where we traded down to on pre announcement. They obviously lower than that. That is a tell. I think it's too cheap. I don't think they're getting credit for the other legacy businesses that are actually doing pretty well. And I put Red Hat in a legacy business. It's long enough now.
- [40:44]
Melissa Lee
Coming up from basketball to the boardroom, two time WNBA champ and Atlanta Dream co owner Renee Montgomery will join us to talk the business of women's sports and the biggest growth opportunities still ahead. Fast Money's back right after this. Welcome back to fast money. Women's sports expected to bring in at least $3 billion in 2026 according to data from Deloitte. For more on the state of play, two time WNBA champion Renee Montgomery joins us now. She's also the USA Sports WNBA analyst. Renee, great to have you with us.
- [41:19]
Renee Montgomery
Let's go. Let's talk it up. Thank you for having me.
- [41:23]
Melissa Lee
Love the energy. You are the first former WNBA player to hold an ownership stake in the Atlanta Dream. And so I'm wondering what has happened in women's sports in the past, I don't know, five, 10 years that have really awakened people to realize that this is a growing area and people have real interest in it and it is lasting.
- [41:43]
Renee Montgomery
Yeah, I think the main thing that has happened is that people actually started to watch the game. As simple as it sounds, the product has always been top tier. It's been the best league in the world. But now you can just tell that businesses are understanding the growth, the fans are engaged as people are following women's sports. It has the most engaged fan base, especially on social media. But then when you want to talk straight business, in fact, in Deloitte predicts that women's sports is market will be at 3 billion in 2026. And so just thinking of that and understanding that that's a 340% increase since 2022, you start to understand why the investments are following because there are surges in and commercial partnerships and the game day growth and even broadcast expansion. I mean right now I'm sitting in the USA Sports studio and that's a new partner of the WNBA and there's others. And so I think that there was a conception that a misconception that women's sports was a charity and that women's sports is like do the Right thing, support women's sports. But now I think people understand it's a real investment.
- [42:46]
Karen Feiderman
Renee, it's Karen Feineman. Thank you very much for being on. Excited to have you. So following this, a few years out, we're going to have a few more teams. The expansion, I'm a Liberty, a Liberty fan myself, so I have to warn you about that. But I really wonder, do you think that we will continue to grow at the same pace or could it accelerate?
- [43:09]
Renee Montgomery
I think the pace is great right now. I mean, we know that Cleveland's on the way. We know Detroit's on the way. We understand that Toronto and Golden State are already here. And when you see what both of those teams were doing, but if we take a spotlight on Golden State and not just leading the league in attendance, but I went to the game when Golden State, when the Atlanta Dream was playing at Golden State, and the way that their fans are engaged and locked in and just tapped in on everything with the team, you. It kind of should calm everybody's fear about the growth. And then you look at Portland and they're selling out and you look at Toronto. And I went to that game as well when the Dream played. And there were fans that came up to me that said they're season ticket members and they're flying to the games. They don't even live in the same city. They don't live in Toronto. But the whole country is supporting the Toronto team. So they travel in four hours at a time, five hour flights to support their team. So I think that the growth is at a good pace right now with the teams that we have coming in. And I also love that. I know some people are worried about the growth happening too fast, but if these recent expansion teams are any indication of what's to come, then the league is in a great place.
- [44:20]
Guy Adami
Renee, the NBA logo is Jerry west from the state of West Virginia. But you're the best basketball player to come out of the state, number one. Number two, what makes Gino like, what makes that program, the UConn program, so special? What does he do in one word or a few words that make it what it is?
- [44:40]
Renee Montgomery
I think it's just the discipline. Like if I had to describe one word to describe coach, it's a discipline and then there's a standard. And it doesn't matter what your standard was before you came to UConn. It doesn't matter what your standard is in your mind of what's hard working, what's acceptable, what's right. Coach Auriemma has A standard that he set at UConn. And when you go there, you meet that standard like he doesn't accept anything else. And so I think it's that, I mean, you could call it a perfectionist, but I don't even think he chases perfection. Even though he's had multiple teams that have had undefeated. I was fortunate to be on 1 and we went 39 and 0. But the way that he trains and the way that he forces you every day to be your best self, I think is what sets UConn apart. And thank you very much. I love Jerry west and love the state of West Virginia. I appreciate that.
- [45:30]
Melissa Lee
Renee, thank you. It is a pleasure speaking with you. Thanks for your time. We will see you on USA Sports.
- [45:36]
Renee Montgomery
Renee montgomery, thank you guys for having me.
- [45:38]
Melissa Lee
By the way, apparently there is a WNBA game tonight on CNBC at 10pm Eastern time. So you won't want to miss that. Coming up, a credit check. Why one? Why Capital One shares were under pressure today. More fast money into. Welcome back to Fast Money shares. A capital one down today despite earnings that beat estimates. The company saying credit losses fell and CEO Richard Fairbank noting that numbers do not reflect the K shaped economy that many are talking about. Was that your takeaway, Karen?
- [46:15]
Karen Feiderman
Yeah, I thought that was interesting. I mean, if you, if one were really concerned about the state of the consumer, capital One is an interesting place to look. And that really is not what the numbers showed there. So there's a little bit of noise because they did that big merger. They did a couple of deals actually. And so I don't know, I thought the earnings were good. I, I'm intrigued.
- [46:37]
Anthony Scaramucci
I gotta pass on this one. I don't have a real opinion.
- [46:39]
Melissa Lee
All right, guy.
- [46:41]
Guy Adami
A lot of analysts raised their price targets. It was not nearly as bad as I thought it was gonna be. To Karen's point, it was actually good. But I still think credit's a problem for the consumer.
- [46:48]
Melissa Lee
Yep. Up next, final trades. Time for the final trade. Mr. Anthony Scaramucci.
- [47:02]
Anthony Scaramucci
Okay, I'm gonna say I bid it and that's bitcoin and it's a buy here.
- [47:07]
Melissa Lee
Karen.
- [47:08]
Karen Feiderman
Yeah. So Alphabet, I thought it was a good quarter. It's not trading particularly well, but if I own that, I'd buy some tomorrow.
- [47:14]
Melissa Lee
Dan?
- [47:15]
Dan Nathan
Yeah, ServiceNow. Nice little pop here. It's obviously gotten killed. This could mark a near term bottom this season for software igb.
- [47:23]
Melissa Lee
Okay.
- [47:23]
Guy Adami
My final trade is Dollar General. But more importantly, I love Anthony Scaramucci like a brother. He's chilling, kind, or is too humble. To say this. For the last 21 years Skybridge have had interns over 300. Here are all of these Skybridge interns at our show this evening. Shout out to the skybridge Group.
- [47:43]
Anthony Scaramucci
Yes, that's the future right there. A lot of intellectual capital.
- [47:45]
Karen Feiderman
Go New York Liberty.
- [47:47]
Melissa Lee
Thanks for watching. Fast Mad Money starts right now.
- [47:52]
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All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer when you partner with CDW, you get more from your devices with solutions that take modern work to the next level. CDW experts are delivering powerful productivity with Lenovo AI PCs, helping users block out distractions, access virtual support anytime, anywhere, and share content seamlessly between devices. Make amazing happen. Learn more@cdw.com Lenovo.