← CNBC's "Fast Money"
CNBC's "Fast Money"
Countdown to Walmart Earnings and What’s Next in the Musk/OpenAI Battle? 5/18/26
00:43:32
Nvidia isn’t the only big earnings report on the calendar this week. Why Walmart could give a better read on the economy, the consumer and the markets. Plus a jury deciding against Elon Musk in his lawsuit vs. OpenAI. What we can expect next and what’s it mean for OpenAI’s IPO plans. Fast Money Disclaimer
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Edward Jones Announcer
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- [01:00]
Melissa Lee
Live in the NASDAQ marketsite in the heart of New York City's Times Square. This is fast money. Here's what's on tap tonight. A blockbuster verdict in the Elon Musk open air case. A jury ruling against the Tesla and Space X CEO. The ripple effects of the decision coming up. Plus, it's not just Nvidia's earnings we're watching this week. Wal Mart headlining a massive week for retail results. What we can expect the big box stores to say about the consumer, the economy and more. We'll break it down. And later, is it time to buy Bitcoin? Regeneron shares sink on some disappointing data. And did Netflix get chilled? The streaming giant seeing two of its weakest weeks for original content streaming. The details and what it could mean for the stock. I'm Melissa Lee. Come to you live from Studio B at the nasdaq. On the desk tonight, Tim Seymour, Dan Nathan, Gai Adami and Katie Stockton, founder and managing partner at Fairlead Strategies. We'll get to the latest on the Elon Musk OpenAI verdict. But we start off with what could be the most important earnings report of the week. Huh, which one would that be? Walmart, of course, posting Q1 results on Thursday before the bell. Analysts expect the retail giant to deliver
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Tim Seymour
earnings of 66 cents a share on
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Melissa Lee
revenues of nearly $175 billion. But the real focus will be on what the company has to say about
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Tim Seymour
the strength of the consumer.
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Melissa Lee
After all, gas prices just about doubled
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Tim Seymour
during the quarter as the Strait of Hormuz remains stubbornly shut down.
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Melissa Lee
Concerns the Fed will have to raise
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Tim Seymour
rates rather than cut them have sent the benchmark 10 year yield above 4.6%
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Melissa Lee
and a preliminary reading of consumer Sentimen for May came in at its lowest level on record.
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Tim Seymour
So what kind of picture can we expect Walmart to paint for the consumer? What could that mean for the overall market sky? What do you say?
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Dan Nathan
Not a particularly good one but I think they went to that. Now here's the somewhat of the problem closed basically at an all time high today same level we saw a couple months or so ago. Valuation obviously a concern. What we've seen the last couple quarters at least is run up into earnings and a sell off post earnings which is what I think you're going to see here. But with all that said, Walmart's the name you want to be in whether you do it before earnings or after earnings. I still think this, this is best in breed for a myriad of different reasons and in my opinion they deserve the premium valuation.
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Guy Adami
I agree with the premium valuation but boy it sure does have it. I mean it's 48 times trailing, it's 45 times forward and you're kind of right up. Katie's I think got some strong opinions on the chart so I'll just say that I'm not sure it's going to get away from you on the upside in terms of the valuation and what they can tell you. I think they're going to talk about resilience, I think they're going to talk about their margin, I think they're going to talk about where us comps, same store sales are going to be very impressive. I think they're going to talk a little bit about their ability to continue to kind of dominate. They can push prices around and they can at least extract as much value as they can at a difficult time. I just don't think you're chasing Walmart here and I think there's other places in the consumer and I would be long target over Walmart.
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Melissa Lee
I hear Katie, they have some strong
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Tim Seymour
opinions on the Walmart chart.
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Guy Adami
Sorry to make you sound like you're so vociferous on this.
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Katie Stockton
I do in a way So I don't feel like it's actually chasing because it has underperformed this month and with that we have just digestion near the highs. I think it's a case of just watching the levels as we come into our earnings we have resistance, resistance at the highs around 135 and support which is pretty strong around 125. So those who own it, especially if they're long term holders it's a really substantial long term uptrend and it still has momentum and no confirmed sell Signals but below125 it would start to look pretty vulnerable.
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Additional Fast Money Panelist
Yeah, so the question you just asked is like what's more important from a market standpoint? I think for like 12 quarters we've been saying that Nvidia is the most important company to report and offer guidance, you know, and again it might be, but this is a situation where this week, you know, we've seen all of their competitors for the most part report and I don't think that the expectations are particularly different than what we've seen coming out of earnings. But Walmart on the other hand, if you go back and look at like five weeks ago, we saw all the major Money Center Bank CEOs talk about a very resilient consumer and that's something that they've been consistent in saying I feel like for, you know, a year, year and a half going all the way back towards, you know, the tariff rollout. And I think it has surprised a lot of people. But what's happened in the last five weeks, and Katie just mentioned underperformance at a stock like Walmart really speaks to, I guess investor trepidation about what might come out from a report like this and what they have to say about a consumer. And if you look around, you know, you're not seeing a lot of great action in many of the retailers. We're going to get a bunch of them, you know, Home Depot and Lowe's and a bunch of others this week. So you know, what does it mean for a stock market that's like 1% from the all time highs? Probably not a whole heck of a lot. But the longer this war goes, the longer the strait of Hormuz is closed, the longer we have oil above $100, it is going to start wearing on a consumer. You know, it really won't matter what a lot of those other retailers have to say. It's going to matter what Walmart does because it's become a very crowded institution. We've been hearing about, you know, the trade down at Walmart I guess goes back to Covid in a way, you know, like a higher end consumer trading down. So to me I find this more interesting because I do think at this point the consumer is kind of the linchpin of the economy. Not so much the AI spend because at some point that's going to decelerate.
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Tim Seymour
I mean the longer oil prices remain high, the longer rates will remain high, theoretically and the more central banks around the world, not just The Fed would consider rate hikes.
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Melissa Lee
I mean keep in mind in other
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Tim Seymour
parts of the world, it's not a dual mandate. It is an inflation mandate. Is inflation in Europe?
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Melissa Lee
Yes.
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Tim Seymour
Well we probably see the ECB raise rates. It might be in the cards there,
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Melissa Lee
it might be in the cards here
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Tim Seymour
according to the pricing and with every hike into an inflationary environment you have
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Melissa Lee
to think is this the right step
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Tim Seymour
and does this introduce a greater probability of a mistake and therefore that's an
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Guy Adami
issue for the markets, a mistake on
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Tim Seymour
how to hand and how to handle the inflation that we are seeing right now.
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Guy Adami
Well, let's just be clear again, what was the trigger for rates last week? There's been so many for a long time and I think we've talked about it but it was in Japan, it was a PPI 2.3% up month over month, 4.9 back of Japan is finally saying it kind of feels like the Fed in 2021 like oh, it's not transitory. And look, I think there's a lot more that we're going to hear on inflation side and I think, I think equities are not priced for it. I think the tax tailwinds for the consumer are great. I think Walmart will continue to talk about resiliency. But I mean you know the most important periods for, for Walmart and Target and Costco are coming up. It's back to school, it's holiday season. I don't think we're going to hear a whole lot but I don't, I don't know why things get better for them. And I think the comps are great and I think the retail is an incredibly narrow trade right now. Outside of those names it's not really pretty. And you know we talked about names like TJX that are vulnerable, that have been darlings, I don't know, equal weight.
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Melissa Lee
Consum.
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Tim Seymour
Discretionary is a terrible chart, right? I mean, yes it is Home Depot
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Katie Stockton
and, and others like it where Home Depot, it's interesting, it's coming into its report with a short term oversold indication whereas Walmart has, you know, somewhat of the opposite as it tests the high. So it'll be really interesting to scrutinize the reaction to earnings as I think
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Dan Nathan
it will be telling Home Depot tomorrow before the bell. So we're going to know pretty quick. I mean, yes, it's probably, is probably oversold but this is a stock that made its all time high a few years ago and the backdrop of the tape that's been extraordinarily strong so something's going on here and I think it speaks to the inflation problem and consumers are strapped in. What is fascinating in my opinion is you have a stock market until recently at an all time high. You have the University of Michigan's consumer sentiment at multi year lows. So something's got to give here. I think it comes in the form of the market quickly. On the bond market, people are not going to agree with me and I'm not suggesting I'm right, but I think the most bullish, if you want rates to go lower, I think the most bullish thing would be the Fed to actually raise rates, not cut rates, because that would speak to the independence of the Fed and the fact that they know that there's a problem here, the bond market's going to go lower or the rates are going to go higher. If the Fed gives a hint that they're looking to ease into what I don't think is an easy situation.
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Additional Fast Money Panelist
Yeah, just say about the consumer, it's not just the US consumer that might be on the brink, it's also China. You saw some of that data, you know, is kind of weak consumer data. We know that the export, you know, situation is really good away from the U.S. i mean, I think they're growing more in their exports like year over year than they were right after the tariff situation. And it's really kind of moved to, you know, it sounds like Europe, it sounds like South America, that sort of thing. But I think a weak China is probably not a great place to be because a lot of that energy inflation is going on in Asia and they're having a bit of a problem. So, you know, a weak global economy right now with inflation right here, that could be a really nasty setup.
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Tim Seymour
I mean, I think the question here for the stock market is in part, you know, how strong is that K shape in terms of the AI trade being able to move higher when the bottom part of the trade moves lower. And at what point, if there is a point, does that bottom trade drag down that AI? Can the AI trade independently? Because for whatever reason, maybe it's viewed as defensive, maybe the AI spend is so secure because you got to invest in AI that it doesn't matter what the consumer does, the AI trade lives on its own.
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Dan Nathan
I think unless something would happen in the economy where companies start saying, you know, we're spending a lot of money here, we're not getting the return on invested capital that we should be getting by now and they're going to cut back. If you do see a pullback in the spend that obviously derails the whole thing. But, you know, you look at all these earnings reports and you haven't seen even a whisper of that. Mel?
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Tim Seymour
Sure.
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Guy Adami
I don't think there's any question about the durability of the AI trade and what we're seeing in terms of demand. It's, you know, ultimately just a question of where the market wants to take a breather. Remember, we, we had 35% outperformance by the semiconductor index relative to the S and P from that more low. And I know we said it was the low. I mean, maybe, maybe it's not the low, but certainly the recent one. So it's been an extraordinary run. I think we just have to remind ourselves that that's what's going on here as much as anything.
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Melissa Lee
All right, our next guest is pinpointing
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Tim Seymour
the date when triple digit oil could spark an economic downturn and send yields sharply higher. Julian Emanuel's Evercore is senior managing director. Julian, what is that date?
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Julian Emanuel
So the work that we did starting in 2022 with the original Ukraine oil spike going back 40 years basically suggests that once you get to a level which we identified this time around, between 93 and $98 a barrel and you stay there for three to four months, and we're giving the economy the benefit of the doubt, like everyone around the table here is that gets you to the Fourth of July. Think about it. There's a concept here where if you are not celebrating the nation's 250th birthday and you're thinking about triple digit oil, that's when it starts to bite in terms of the market and the economy in our view.
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Melissa Lee
So we've got a little bit over
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Tim Seymour
a month at this point in order to open up the Strait of Hormuz. I mean, what is your thing? I mean, you're not a political analyst, obviously, but even if the Strait of Hormuz is open, that could still mean triple digit oil. So an end to the conflict wouldn't override in terms of sentiment, triple digit
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Julian Emanuel
oil, if you opened up the straight, you would get the back end of the curve, start to moderate. And so you'd look through those first few months much the way you did in the beginning of all this, until the back months started picking up to a level that we are, you know, pretty uncomfortable with.
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Melissa Lee
Okay, so Fourth of July happens. We're celebrating.
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Tim Seymour
Tim's got the little.
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Guy Adami
That's a big flag. It's a big flag.
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Tim Seymour
Waving burgers on the ground, fireworks at
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Guy Adami
My house too
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Melissa Lee
high is still triple
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Tim Seymour
digit rates are higher. What does the markets do?
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Julian Emanuel
The market's going to come off. It will come off. I mean and then the other aspect of this, if you go back to March, the end of the world hedging levels we had never seen. We were on here talking about that, which is why you got the degree of the rip that you did. And now you're almost the exact opposite of that where very few people are hedged. And actually over the last several weeks for the options nerds, you've had a situation where the NASDAQ has gone up at the same time the NASDAQ VIX has gone up. And that usually means a pullback is in store and you know, throw in triple digit oil.
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Dan Nathan
I think Julian must be a mind reader as well because I was going to say does it surprise you that The Vix is sub 18 an environment where Japanese bond market is just melting down? I think we would agree. And over here it's not that rosy does.
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Additional Fast Money Panelist
I mean what's.
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Dan Nathan
People just don't feel they need to be hedged right now.
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Julian Emanuel
Yeah, I mean so think of it. Go back to last year, right? And active managers, the public never sold on the way down into the tariff tantrum low active managers spent six months chasing the tape. The decision was this time I'm not spending six months, I'm going to do it in six days or a couple of weeks and boom, there you go. And that's why you got the momentum you got and you're not going to spend money on hedges when you're likely still behind the index anyway.
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Guy Adami
Okay, so let's push you a little bit to not just call a date, but maybe call. Look, I heard you also on your weekly call last week, say based upon you talked about the hedges that essentially have not happened or that were used up and the complete opposite. I heard you calling for a correction. I mean is that fair? And what's that number? Are we talking about, are we talking about technically a correction? Are we talking about 10%? What are we talking about?
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Julian Emanuel
So and again there's another break point before the 4th of July and it's Memorial Day. All of a sudden we're going to
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Guy Adami
be remembering big flags and fireworks at my house.
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Julian Emanuel
There we go.
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Guy Adami
There we go.
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Julian Emanuel
And five and five dollars a gallon.
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Dan Nathan
Yeah.
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Julian Emanuel
Okay. Now our view is again to your point earlier, Melissa, is that the, the upside of the K shape has been relatively immune but the psychology around that changing and horns getting pulled back in in our mind you could get the kind of correction that you got in March was on the order of 10%,
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Tim Seymour
a bull would say. But, Julian, the earnings growth has been there for the s and P500 and specifically for the AI trade. And the job market is holding up,
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Melissa Lee
so why should we really be worried?
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Tim Seymour
All this is fine and it has
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Julian Emanuel
no question about it. You know, again, long term, we are big proponents of the AI trade, and we think that even if you got this 10% pullback back, you could still get a rip to 9,000 if you got through the. The oil issue. But the oil issue is the sticking point. And, you know, the outcome is very, very unknown. And from where we sit, is that in the same way the, the potential for earnings to drive the market higher like it did in April, it's is the potential for oil to drive the market lower now is underappreciated.
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Tim Seymour
Julian, great to see you as always, Julian Emanuel. So we're not positioned for this risk at this point, we being collectively the markets.
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Everpure Announcer
Yeah.
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Additional Fast Money Panelist
So on the closing bell today with Scott Wapner, there was a guest and I, sorry, I can't remember who it was, but they said 85% of the earnings growth the S&P 500 is coming from. We know the names, right? So it's AI driven. Now, that might have been the case for a long time. But when you see the sort of parabolic move that we had in the S&P 500 over the last five, six weeks, at some point you have to start to consider what that has pulled forward. Right. And so you see yields coming higher. This is where, to me, it kind of all comes together a little bit. You have an equity risk premium that is not really that enticing here, especially as the trade gets narrower and narrower. And you do hear about, you know, the broadening out. But I think the guest also said that without those top 10 names, you have S&P 500 earnings growth of 3%. So it's not that impressive right now. So to me, I just think a lot of it has to do with the slope of the gains that we've had in the period in which we've had it. And if you had a pullback in the S and p back to 7,000, which was the breakout level, I want to say, three weeks ago, that's a six and a percent pullback. That seems pretty healthy. And if you start to see the easing of the war, you see crude oil coming lower and you see inflation readings, you know, like, you can make a bet that they're going to come In. Well, that's probably a pretty decent spot to reload if you're really bullish right here.
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Tim Seymour
What do the charts of oil and the S and P say?
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Katie Stockton
You know, I very much agree with Julianne on a lot of points in that the crude oil shocks tend to have a negative impact and it's historically evident. You just compare the two charts, the S and P and crude oil prices and we feel that that obviously hasn't happened yet, so we' on guard for it. As it stands, the s and P500 reached a measured move projection from 2025's Breakout and that was around 7,500. Support is around 7,000. So it'd be a natural place to see a pullback. And yet we're not convinced it's the start of a major correction because listen, breakouts have been working in this environment. So we do have still an actionable breakout in our opinion. So the timeline that Julian presented of July 4 could actually align pretty well with the follow through we could receive from a breakout and ultimate a pullback for crude oil prices. We are looking for them to uphold sort of that, that newfound momentum. In fact, if you look at the daily, the weekly, the monthly charts, they all have upside momentum. It's pretty rare to see that happen and we wouldn't want to fight against it. So we do think that they'll remain an overhang.
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Dan Nathan
I'm sure Tim will agree with me because he brought it up.
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Guy Adami
All right, That's a lot of pressure. No, it's not pressure.
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Additional Fast Money Panelist
Not pressure.
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Tim Seymour
Pressure on him for assuming that pressure.
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Melissa Lee
The pressure.
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Dan Nathan
No pressure is a privilege.
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Melissa Lee
What are you going to say?
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Dan Nathan
The oih, look at the single day move in the OIH today and the fact that it didn't give up during the day and it made a new not only 52 week high, multi year high. One thing we've been saying for a while, the fact that the OIH does not sell off with crude when it did sell off suggests that the crude move in my opinion is far from over.
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Guy Adami
You know what, Guy? I agree with you.
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Melissa Lee
You do agree?
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Guy Adami
I agree.
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Additional Fast Money Panelist
I knew you would.
- [18:32]
Guy Adami
I agree with you. And I also just think, why aren't you buying energy as a hedge for your portfolio?
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Melissa Lee
Exactly. Yep. Bitcoin touching 76,000 at its lows today. The crypto down almost 6% in the past week. But does the recent weakness create an opportunity to buy?
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Tim Seymour
So Katie, what do you see in the chart charts?
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Katie Stockton
You know, I'm interested because with the recent stabilization that we've seen in the price of Bitcoin, the longer term indicators have improved to a pretty strong degree. We have on the monthly chart an upturn in our primary overbought oversold metric. It's an oversold upturn, the first of its kind since the last major low. So it gives us that hint that the February low for Bitcoin was indeed an important one. We can see that with some hindsight here too. Right now the pullback is from resistance at the 200 day moving average, another natural place for pullback to fold. But because of that oversold upturn on a long term basis, and because it occurred above some key long term support including from a big Fibonacci retracement level and former resistance on the chart, that to us was pretty compelling where it ended up ultimately finding its footing. And once we have the short term gauges pick up, that's where we want to revisit it.
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Dan Nathan
I look at Bitcoin and it's, you know, the correlation to tech, specifically AI, semiconductors, I think it's pretty big. So I think you have to think that AI is going to sort of. Not that it hasn't, it's going to continue to move to the upside because this bond move, I think it all hinges on the bond market. Higher yields is negative for Bitcoin in my opinion.
- [19:59]
Melissa Lee
Coming up, a quick decision from the jury in Elon Musk's lawsuit against OpenAI. So what is next after the three weeks of courtroom drama? Right after this. Plus the blockbuster energy deal that might as well be an AI merger inside the utility tie up that would create the world's biggest data center power producer. Don't go anywhere. Fast money's back into
- [20:21]
Fast Money Announcer
this is Fast Money with Melissa Lee right here on cnbc.
- [20:29]
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- [21:55]
Melissa Lee
Welcome back to Fast Money. A jury taking less than two hours to decide against Elon Musk in his
- [22:00]
Tim Seymour
lawsuit against Sam Altman and OpenAI. Today, lawyers for the Tesla CEO saying
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Melissa Lee
they plan to appeal.
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Tim Seymour
CNBC's Kate Rooney is outside the courthouse
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Melissa Lee
with the very latest.
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Kate Rooney
Kate hey, Melissa. So we did get that decision quickly. The judge and jury today rejecting Elon Musk's claims against OpenAI and its CEO Sam Altman. It does cap off a dramatic chapter in this tech rivalry. Musk just now chiming in on X, calling the loss a, quote, calendar technicality. He says he's going to appeal and quote, creating a precedent to loot charities is incredibly destructive to charitable giving in America.
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Tim Seymour
America.
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Kate Rooney
The jury today did decide that Musk didn't file that lawsuit on time. So that actually streamlined the decision. It came down to that statute of limitations. It was an advisory jury as well, meaning the judge actually had the final say. But she ruled just minutes after we did get that initial decision today. Earlier. She it was a lot faster than we did expect. And OpenAI and Altman, she said, are not liable. She dismissed the two claims here, breach of charitable trust and unjust enrichment. She called those untimely. The judge showed some skepticism too, about an appeal. She said there is substantial evidence to support the jury's finding all this. I did speak to lawyers on both sides after that decision.
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Lawyer Commentator
He's a formidable adversary, of course, and he hires terrific lawyers, of course, and he is tenacious in his opinions, of course, and his positions. But we find that the persistent application of legal principles and the remorseless search for evidence is what wins cases, even against Elon Musk.
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Dan Nathan
I have a one word reaction, appeal.
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Kate Rooney
It is a sigh of relief for OpenAI as that AI giant now looks to go public.
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Tim Seymour
Though.
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Melissa Lee
You know, Kate, what came across in
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Tim Seymour
this trial is that both figures are kind of unlikable.
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Melissa Lee
And I'm just wondering how you think that translates as both the companies are
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Tim Seymour
preparing to go public and are seeking a retail base of some of sort. Sort.
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Kate Rooney
It's a great point, Mel. I Mean, even when, as soon as the jury got in the room that was clear that whether it was Elon Musk, whether it was Sam Altman, we heard so much witness testimony, first of all, how much money both of these characters have made in the process of, of building OpenAI and we talk about Greg Brockman too. The billions of dollars that these CEOs have made in the process of building these companies was just unrelatable to a lot of average people in the jury. Both of these companies are looking to get a massive retail base as they are going public. It's not clear. I mean, SpaceX, it seems like there's the Elon Musk effect. It's more of a space company than AI. But with the unpopularity that's really apparent after this case, it seems like OpenAI might have a harder time convincing a large retail shareholder base that ChatGPT and AI in general are something that they want to buy into. Based on what we've seen in this case, based on what we've seen with some of the graduation speeches getting booed recently, I think it's becoming more and more apparent, apparent that this is not an inherently popular technology. And that is one takeaway from this case that it has just brought to light some of the bad sides, I guess the unflattering sides of this entire technology and some of the leaders here. Regardless of the merits of a legal case, there was a lot about Sam Altman that spilled out in this, that it was just unflattering.
- [25:21]
Melissa Lee
Kate, thank you.
- [25:22]
Tim Seymour
Kate Rooney, who's been covering this trial every step of the way. And it's not like there's nowhere else to invest if you want a piece of the AI, AI trade in terms of an ipo, well, there are, I
- [25:33]
Additional Fast Money Panelist
mean Google makes new all time highs every day and they have this vertical integration for the models to the TPUs, to a whole host of distribution. And like, you know, one of the things that I guess is an interesting takeaway here is that if OpenAI, you know, having some sort of judgment against them in this situation, might it have made their IPO roadshow if it comes this year, you know, that much more, I don't know, that much more skepticism about the company and the way it's operated. But you know, what I think is more interesting is about Xai. And XAI is obviously was bought, bought by SpaceX. SpaceX is going public next month. You know, there's a lot of questions about Grok, the model that they built. You know, Elon went out and bought hundreds of thousands of GPUs from Nvidia, and they just did a deal for their first gigafactory, whatever the hell they call it, the Colossus one or something like that. They rented out the entire compute that comes out of that data center to Anthropic. Okay, so OpenAI and Anthropic are desperate for compute, but XAI is leasing or renting out all of their compute. They also did a deal with curse where they're using a bunch of their compute. So the question is whether they're seeing adoption for grok and where does that put them competitively? And then what are Elon's real motives in doing this and trying to slow down maybe what OpenAI is doing. So I think there's a lot of things going on there, but at the end of the day, none of it sounds interesting for grok, if that is really what this comes back to.
- [26:58]
Dan Nathan
I was just thinking that they're both such likable guys. I mean, it'd be so difficult if I were George. It's the picture, you know, be difficult between the two. Choose me.
- [27:08]
Guy Adami
I tell you what, I, I'm reluctant to say this, but I don't think there's a question at all about SpaceX. I mean, I, you know, the fact of the matter is when you're buying SpaceX, you're buying exposure to three different businesses that are part of the leading edge of where people want to be. And as much as maybe as we've just discussed, the likability of these two guys, I mean, Elon, his retail base is, is insanely powerful. Powerful and remain so. So I share the sentiment. I'm not putting words in anybody's mouths, but SpaceX over OpenAI all day.
- [27:40]
Tim Seymour
And by the way, if SpaceX gets
- [27:42]
Melissa Lee
waved right into the NASDAQ 100 to
- [27:43]
Tim Seymour
the S&P 500, then you out there will own a piece of it, whether you like it or not.
- [27:49]
Dan Nathan
Well, it's going to be a fast track from what. So the short answer is, yeah, it will.
- [27:53]
Melissa Lee
There's a lot more fast money to come.
- [27:55]
Tim Seymour
Here's what's coming up next.
- [27:58]
Fast Money Announcer
A $67 billion energy deal that could transform the AI trade. NextEra and Dominion Energy announcing a utility tie up that would create the world's biggest data center power supplier. The details next. Plus, a major blow to Regeneron as its latest cancer drug fails a key clinical milestone. We'll debate what's next for the biotech name as it goes back to the drawings board. You're watching Fast Money Live from the NASDAQ market site in Times Square. We're back right after this.
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Whoa.
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Hear that?
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Katie Stockton
I did it.
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Tim Seymour
Discover Top rated stays Loved by guests. Rated highest by real guests through authentic reviews versus Turbo Book a vacation rental Loved by guests.
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- [29:36]
Melissa Lee
Welcome back to Fast Money. Next Sarah inking a $67 billion all stock deal to buy Dominion Energy, creating the world's largest regulated electrical utility and a company radically change the AI data
- [29:48]
Tim Seymour
center power landscape in the US Dominion
- [29:50]
Melissa Lee
currently powers the world's largest data center
- [29:53]
Tim Seymour
market in Northern Virginia. The combined company would have 110 gigawatt generation capacity with a 130 gigawatt pipeline. NextEra currently plans to build more than 30 data center hubs to meet AI demand. What a deal.
- [30:07]
Dan Nathan
I mean it speaks to. It speaks to the faces, not the demand and all the things we talked about before. It shows no sign of waning whatsoever. And maybe it makes sense that Bloom Energy was down today. I'm not exactly sure why, but this entire space continues to be in play. I don't think it's a stop anytime soon.
- [30:26]
Katie Stockton
You know, when I look at Nextera and others, the long term uptrends are very well established at this point. We had a big triangle formation completed by Nextera last year and now came up against some resistance. But I would see this as an opportunity to add exposure. It's so rare that we get these sharp pullbacks. The support's pretty good in the mid-80s for this stock. Former resistance there.
- [30:50]
Guy Adami
This deal shows that you need size and you need scale and this is where we are. And I think this is. I mean I'm on Constellation Energy. I think the utility space is ripe for consolidation. I think there's a lot more deals on the table. I think you need to have the ability to ramp up quickly and you need diversification in in some of your physical asset base. So I think you stay long.
- [31:15]
Megan Cassell
All right.
- [31:15]
Tim Seymour
We do have a quick programming note. The CEOs of both NextEra and Dominion will sit down with Squawkbox tomorrow morning to talk through this deal. Do not miss that tomorrow at 7:00am Eastern Time only on CNBC.
- [31:28]
Melissa Lee
Coming up, biotech pain trade Regeneron seeing
- [31:31]
Tim Seymour
its worst day in almost a year after disappointing trial results.
- [31:33]
Melissa Lee
Phase 3 trial results towards skin cancer treatment. We'll hear from the analyst who just slashed its price target by almost 20%.
- [31:40]
Tim Seymour
Fast money's back in to
- [31:45]
Fast Money Announcer
miss the moment of fast. Catch us anytime on the go Follow the Fast Money podcast. We're back right after this.
- [31:58]
Melissa Lee
Welcome back to Fast money. Stocks mixed to start the week but all closing well off their lows of the day. The Dow adding 159 points but the S and P and NASDAQ both posting
- [32:07]
Tim Seymour
back to back losses for the first time this month as drops and chip names like Micron weigh on the tech trade.
- [32:13]
Melissa Lee
Meantime, Regeneron Pharmaceuticals having its worst day in almost a year.
- [32:17]
Tim Seymour
Shares are down almost 10% after the
- [32:19]
Melissa Lee
biotech company missed late stage trial goals
- [32:22]
Tim Seymour
for its skin cancer treatment. Libteo BMO Capital Markets cut its price
- [32:26]
Melissa Lee
target on the stock from 900 to 730.
- [32:29]
Tim Seymour
The firm's head of healthcare research, Evan David Segerman, joins us now for more.
- [32:33]
Melissa Lee
Evan, great to have you with us. So it's not just just that there is a failure here in this phase
- [32:38]
Tim Seymour
three trial, but this is a back to back failure in terms of key potential drugs in the pipeline. What does Regeneron have to do at this point?
- [32:45]
S
Well, that's a great question. So let's talk about what has happened. So a year ago they had a closely watched trial for this drug called Ipeticumab for copd, a common condition that didn't work. That was a surprise. And actually last year he wrote that they needed to get the ship on the right track and then this trial was supposed to be be simiplimab plus vianlumab so liptile plus an investigational asset versus keytruda in melanoma. And while you did see a benefit, the stats weren't there and that's why the stock dropped today.
- [33:18]
Melissa Lee
Is there a possibility because as I understand it Evan, you actually removed the
- [33:21]
Tim Seymour
forecast of all of the sales of this particular drug out of the model. But is there a chance it does have another ongoing trial which pits it against A Bristol Myers immunotherapy in this indication.
- [33:33]
S
So there is a chance. But we did that because we wanted to like prove a point in showing that like, they need to be able to develop these drugs. And I'm sick of the, you know, the missteps that we're seeing. I'm a little frustrated with them, as you can tell. So we took it out. There is a chance they may have data from this trial that could show overall survival. And the Abdulag trial you were referring to could be used for a potential package. But just given this failure and the fact that they don't really know what caused caused the failure, I'm very skeptical that this will be a core part of their portfolio.
- [34:05]
Melissa Lee
Do they actually not know what caused the failure or are they just not
- [34:09]
Tim Seymour
disclosing it to the investor community?
- [34:11]
S
Tbd, the stats were done last week, so we need to see the data presented at a medical conference. It could be the patient stratification. It could be over performance of a particular arm. They did highlight that early on in the trial. The separation between the combo investigational arm and Contrudo were not separating as quickly. You got that separation later on. But that's kind of, you know, wonky and they should have adjusted for that in the statistics.
- [34:37]
Melissa Lee
You know, this has been a year
- [34:38]
Tim Seymour
or a year of deals in this space. Evan Regeneron has not been among the company. I mean, is that what they have to do at this point?
- [34:47]
S
I mean, they have 18 billion in cash, 2 billion in debt. So they have a lot of flexibility. I think they're going to buy back shares. They have about 3.7 billion in authorization. Frankly, at this point point they need to do some bigger transactions because we are getting worried about the IAH HD franchise. We put out another note today highlighting some potential IP issues. Dupixent will go off patent at some point. They need to do something and they need to do something large and soon.
- [35:12]
Guy Adami
Evan. David, so I guess the question though is again, independent of this news. There are analysts on the street out there that are very bullish on the stock because they see a growth rate of 12 to 15% top line either way and therefore it's somewhat compelling. Would you agree with that?
- [35:29]
S
So I, you know, I've gone back and forth on this stock. You know, when we have, you know, hype and kind of reason to believe, you know, I'm more positive and I can see the fundamentals supporting that. But with multiple phase three failures, I take pause because there's something going on there that is Just not quite right. And that is the lifeblood of biotech. You have to keep developing drugs and be successful. Successful. One failure, okay. But two that are so hyped and, you know, closely watched. That's where my concern is.
- [35:58]
Dan Nathan
Evan, is there something to do with Sanofi, with Regeneron in terms of.
- [36:03]
S
Well, they're partnered with Dupixent. They need to, you know, figure out how they're going to continue that partnership. Sanofi did have a failure with their investigational atopic derm drug. So they could come to the table, you know, in terms of maybe streamlining the Dupixent partnership. Could be good. There's a duplicative sales force, so there are things that could be done. Sanofi is a new CEO. Maybe there's a better relationship between Regeneron and Sanofi going forward. That's also a possibility.
- [36:30]
Tim Seymour
All right, Evan, thank you.
- [36:33]
S
Thank you so much.
- [36:33]
Tim Seymour
I appreciate it. Evan. David Segerman of bmo. An interesting stock story. What does the chart look like?
- [36:38]
Katie Stockton
You know, it's interesting. It could be one of those scenarios where bad news is good because with the gap down, we last saw a gap down of this nature with very, very heavy volume on May 30th in 2025. If you go back to that, it ended up being a pretty substantial low. It took a few days to find its footing. And in three days from now, the stock should see a counter trend signal from the demarc indicator. So for those that own it, they might want to just see how that plays out, see if we can get some support. Discovery at a Fibonacci level around 608.
- [37:09]
Tim Seymour
But if you marry what you're seeing with the charts and what Evan David Zegerman is saying, it sounds like a value trap as opposed to a value stock.
- [37:17]
Dan Nathan
I mean, the stock's at a decent bounce now since the lows, I think of about what, 490 or so in May of last year. So maybe this sell off was just people looking for an excuse. It feels like there might be more room to the downside, in my opinion.
- [37:28]
Guy Adami
Is it Evan David with a hyphen or. I mean, how are we doing?
- [37:31]
Melissa Lee
I'm just trying.
- [37:32]
Guy Adami
I mean, I love the fact that he's. He's. He's going with the Evan David.
- [37:35]
Melissa Lee
Yeah.
- [37:36]
Guy Adami
I mean, is that the middle name or is it J? Yeah, well, yeah, but I don't think I can pull it off.
- [37:40]
Additional Fast Money Panelist
Say that for like, like assassins and
- [37:42]
Dan Nathan
like, well, David Lee Ross.
- [37:46]
Additional Fast Money Panelist
David Lee Roth was a killer dlr.
- [37:49]
Guy Adami
He's one of the great front men of all time.
- [37:51]
Tim Seymour
Different kind of killer.
- [37:52]
Dan Nathan
Yeah, really.
- [37:52]
Melissa Lee
Do you have anything to say about Regeneron?
- [37:54]
Guy Adami
I like Regeneron. And again, I think this is ultimately a, you know, in the space. I mean, they are still kind of a growth story and it's fair. There should be some criticism out there for these types of failures, but otherwise, I still think that long and strong.
- [38:08]
Melissa Lee
All right, coming up, Netflix's worst weeks ever. The new Nielsen numbers that may be flashing a warning sign for the streaming giant or best money into
- [38:19]
Guy Adami
foreign.
- [38:23]
Melissa Lee
Welcome back to Fast Money. Netflix shares rebounding today after five straight weeks of losses. But the media giant has still lost
- [38:29]
Tim Seymour
nearly 17% since earnings just last month.
- [38:32]
Melissa Lee
There may be new cause for concern. According to new Nielsen data, the company
- [38:36]
Tim Seymour
had no original series in its top 10 for the week of April 13th to 19th. It's worth showing ever.
- [38:43]
Melissa Lee
The best performing series on the service
- [38:45]
Tim Seymour
was Grey's Anatomy and there were old episodes which originally ran on abc. I mean, I know I'm a fan, Dan, but I mean, you flagged this story.
- [38:54]
Additional Fast Money Panelist
Interesting one because remember Max Myers.
- [38:56]
Tim Seymour
Yeah.
- [38:56]
Additional Fast Money Panelist
Our fine, fine producer of years and years. He flagged this and I know he's a big Grey's Anatomy fan. But when you see this sort of data, it is really interesting because you make some wonder, like, why do they want Warner so badly? You know, is that, you know, is the, whatever you want to call it, the catalog or whatever, running thin? And then if the company is obviously losing, not obviously losing subscribers and the margins are under pressure, how much new original content they're bidding for, sports stuff and everything like that. So to me, that is not a good sign.
- [39:23]
Melissa Lee
What struck me too is that, you
- [39:25]
Tim Seymour
know, Tom Rogers always mentions that on Disney, the most streamed show is actually Bluey, which is also not a Disney original. So it's not just Netflix sort of seeing this. It's also other streaming platforms.
- [39:35]
Guy Adami
Yeah. And look, this kind of gets back to the future for Netflix. I mean, this is where they, they were. I'm sure there's a bottom line and a margin dynamic that makes a ton of sense, but no, we want to see what they're doing on original content. I mean, you know, Guy, the Squid games is changed your life.
- [39:51]
Dan Nathan
Changed life. It was life changing.
- [39:52]
Guy Adami
You know, I think, I think Netflix is interesting here and obviously given the tape, I know it's probably a difficult chart and it's got to find some. It's got to find its way. But I feel comfortable owning it.
- [40:05]
Tim Seymour
Is it a difficult chart it is,
- [40:07]
Guy Adami
you know, putting words in your mouth again. I'm sorry.
- [40:09]
Katie Stockton
The slope of the 200 day moving average kind of tells it all for Netflix. But to me, you know, it's, it's closer than it was last time we talked about it. The supports around 75. Momentum is still growing to the downside on a long term basis. So I think it's going to take time.
- [40:25]
Dan Nathan
Patrick Dempsey, by the way, huge fan of the show Shout Out. What do they call him? Like McFry or McDream?
- [40:30]
Guy Adami
McDream.
- [40:30]
Tim Seymour
McDreamy.
- [40:31]
Melissa Lee
Wait, was it McDreamy or was it the other one?
- [40:33]
Tim Seymour
Dr. No, I think it's McSteamy was the other one.
- [40:35]
Guy Adami
Oh, I don't know who's steamy?
- [40:38]
Tim Seymour
The other guy.
- [40:39]
Julian Emanuel
You have a little.
- [40:40]
Additional Fast Money Panelist
Anyway, there's a fun fact of Grey's Anatomy. Every title of the shows is a rock lyric.
- [40:45]
Dan Nathan
Is that right?
- [40:46]
Additional Fast Money Panelist
Go check them out. A rock lyric or the name of a song.
- [40:49]
Tim Seymour
That's news you can use right there. News you can use.
- [40:52]
Dan Nathan
Goldman Sachs had a positive note, note on both Spotify and Netflix. I actually think you can own Netflix here.
- [40:58]
Tim Seymour
A long time ago you said Netflix
- [40:59]
Additional Fast Money Panelist
and Spotify merge those, those two things together. Well, listen, if you think about it, going horizontal would make a lot of sense. And you know, Netflix wants to get into some of the businesses that Spotify is, you know, and they want to do original programming, they want to do live programming, they want to do podcasts. Let's take some, you know, combine those things, take some costs out, raise those margins for Spotify.
- [41:19]
Melissa Lee
Coming up, Seagate sinking after its CEO issued a stark warning about AI driven demand. The worrying words about the soaring digital memory space next. And here's a sneak peek at the Kramer cam. Jim is chatting exclusively with Intel CEO Lip Booten. Catch the full interview. Top of the hour on Mad Money. More fast money into. Breaking news from Washington. President Trump making some comments about potential
- [41:47]
Tim Seymour
military action in Iran.
- [41:49]
Melissa Lee
Our Megan Cassell is at the White House with the details.
- [41:51]
Tim Seymour
Megan?
- [41:52]
Megan Cassell
Melissa, we heard earlier this afternoon that the president said he would be postponing a planned military attack from tomorrow against Iran because the two sides were getting closer to getting a deal. Now, he says that that delay might only be for a short period of time, maybe only two to three days. He says depending on how this negotiation goes. He was just speaking at a healthcare event inside the building and he says that they've had very big discussions with Iran. He says we'll see what they amount to, but that he has informed Israel as well as other allies in the region about this path forward and about this decision to delay what he he says were planned attacks. One key quote I do want to highlight is that the president says here we've had periods of time where we had we thought pretty much getting close to making a deal and it didn't work out. This is a little bit different now, he says. Melissa. So only time will tell whether that continues to be bluster or whether we might be getting closer to some sort of an actual concession and negotiated deal. He says, though, that this is a little bit different from all the times we've been here before. Melissa.
- [42:47]
Melissa Lee
All right, Megan, thank you. Megan Casella, we do know that oil
- [42:50]
Tim Seymour
did respond on news on the post of the the around where President Trump said that he was going to delay action.
- [42:57]
Megan Cassell
It's going to be the same until it isn't. I'm just kidding. I'm with you.
- [43:02]
Tim Seymour
All right, Megan, thank you. So we did see oil come off of the highs of the session. That really helps some, you know, free up some of the other parts of the market like a Walmart, which we talked about the beginning of the show. But that's what I guess is going to be key here, how oil responds and rates.
- [43:16]
Guy Adami
Look, the market has looked past oil and Julian framed it well, he gave us some dates and at some point oil, I mean it obviously matters now. It's obviously feeding through the market. It is totally correlated to oil and so are yields. We know what the trade is. You know what you're looking at in the morning.
- [43:32]
Dan Nathan
Yep, a hundred percent. I mean, this commentary to me is all predicated on the fact that 10 year yields got to 4.6% and oil has a triple digit price tag associated with it. So we'll see. But I will tell you this game of, you know, going back and forth, I think the oil market is going to sniff it out and I still think oil goes higher on the back of this.
- [43:50]
Melissa Lee
There we go. Let's get to Seagate. Shares sliding nearly 7% today after the CEO suggested the memory chip maker may not be able to meet demand.
- [43:56]
Tim Seymour
Speaking at a JP Morgan conference, Dave
- [43:58]
Melissa Lee
Mosley saying building new factories would take
- [44:01]
Tim Seymour
too long and could result in excess capacity.
- [44:03]
Melissa Lee
The comments dragging down other memory stocks,
- [44:05]
Tim Seymour
SanDisk, Micron, Western Digital, all lower as well. And this really calls into question this notion that has ignited the sector that it's different this time around, that business will be smoother, it won't be as cyclical because there is a subscription basically for memory, contracted memory.
- [44:20]
Additional Fast Money Panelist
I mean, I think there's risk to intel too. I mean some of these companies are not great at manufacturing. It's one of the reasons why Taiwan Semi has such a chokehold on all of this business. And I think it's worth noting that Taiwan Semi did not materially increase their capex to build out new capacity until about last year or so. So it just tells you that the, the leader, the market leader, the guys who do it so well and have so much market share are also being somewhat cautious because in cyclical businesses like this, if you overbuild capacity you think you overshot up 4 or 500%, you'll lose at least 50%. You can do the math on that. I know that didn't sound as good as 500% gains, but it's not great. So this is the sort of cycles that you expect. And I would listen to these, these CEOs.
- [45:01]
Katie Stockton
You know, it's a notable loss of short term momentum that we've seen. There are MACD sell signals so to speak and there's also a lot of room to the 50 day moving averages for Seagate in particular, it's about 26% downside and that just goes to show how far and fast they've come. So to me it would be a healthy pullback. It might take some time based on the demarc indicators, but ultimately should be met with buyers given the long term upside momentum behind them.
- [45:26]
Tim Seymour
All right, up next, final trades,
- [45:45]
Melissa Lee
Final trade time.
- [45:46]
Guy Adami
Timbo Constellation Energy Also I think this is a great way to play what is size matters.
- [45:52]
Melissa Lee
Katie Stockton a fair lead.
- [45:54]
Katie Stockton
I'm going with gold or gold to play a short term countertrend signal.
- [45:59]
Tim Seymour
And Nathan.
- [46:00]
Additional Fast Money Panelist
Yeah Nasdaq last week wins the space X Probably some more behind that. Indexing fees, trading fees, a lot of stuff going on there.
- [46:07]
Dan Nathan
Give credit where credit Sue Great weekend Out of shape Tim for the Mets. Enjoy that.
- [46:12]
Guy Adami
Look out.
- [46:13]
Dan Nathan
Yeah, look out. Common cliffs. I think it's just cliffs now.
- [46:16]
Melissa Lee
Thank you for watching. Fast Forward Fast Money Mad Money starts right now.
- [46:22]
T
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.
- [46:55]
Michelle Akers (Bank of America Campaign)
You don't change the game without asking big questions like what would you like the power to do? My answers motivated me to help lead the first US Women's National Team and bring home two FIFA Women's World cup trophies.
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Bank of America Announcer
Bank of America champions US Women's soccer legend Michelle Akers and everyone who does dares to ask what would you like the power to do? Bank of America Proud to be the official bank of U. Bank of America NA Member FDIC.