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CNBC's "Fast Money"
Energy Trade Heats Up… And Starbucks’ Stealth Move 6/11/25
00:43:51
Crude cruising to its highest level in more than 2 months, as geopolitical tensions impact the oil space. Could the energy sector be about to breakout after a lackluster year? Plus A June jolt for Starbucks, as shares of the coffee chain continue a solid move higher. Why investors are sippin’ on the stock, and if our traders are joining in on the java trade. Fast Money Disclaimer
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Courtney Reagan
A rich life isn't a straight line to a destination on the horizon. Sometimes it takes an unexpected turn with detours, new possibilities, and even another passenger or three. And with 100 years of navigating ups and downs, you can count on Edward Jones to help guide you through it all. Because life is a winding path made rich by the people you walk it with. Let's find your rich together. Edward Jones, Member, SIPC.
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Steve Grasso
As America's leading.
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Guy Adami
Business lender, bank of America is on.
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Steve Grasso
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Guy Adami
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Steve Grasso
Learn more@bankofamerica.com LOCALBUSINESS bank of America Official bank of FIFA Club World Cup 2025 Copyright 2025 bank of America Corporation.
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Tim Seymour
All rights reserved.
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Courtney Reagan
Live from the NASDAQ markets out in the heart of New York City's Times Square. This is fast money. Here's what's on tap tonight. We're breaking out. Energy stocks leading the market this week as oil jumps back to two month highs. So can the sector keep climbing and what will it mean for inflation? And Starbucks getting a jolt today. The coffee chain quietly at its best level since early April is Brian Nichols. Overhaul finally starting to bear fruit. Debate plus more upside for the S and P. Why? One top strategist says the benchmark could rise another 16%. We are watching all the moves in Oracle after its latest earnings report. And our Disruptor50 reveal continues tonight. We are joined by the CEO of fintech startup ramp, which climbed to number six on the list this year. I'm Courtney Reagan in this evening for Melissa Lee. Coming to you from Studio B at the nasdaq. On the desk tonight we have Tim Seymour, Steve Grasso, Bono and Eisen and Guy Adami. Well, stocks giving up early gains today initially rising on softer than expected. CPI print and news that the US And China have reached a trade agreement. But things reversed in the afternoon with the Dow S and P and Nasdaq all closing in negative territory. More on that shortly. But first, some signs that the energy trade may be reheating. WTF. Crude surging nearly 5% and hitting its highest level since the start of April. The gains coming as US Officials are reportedly looking to evacuate the American Embassy in Baghdad amid heightened tensions with Iran. President Trump has said he is less confident Iran would agree with agreed to stop enriching uranium in an updated nuclear deal. The S and P energy sector popping a percent and a half. With those gains accelerating into the close. Today's move putting the sector just barely into positive territory though for 2025. Devon Energy, Target Resources, ConocoPhillips and Diamondback leading today's gains. Each of those stocks rising over 2%. So after a lackluster start to the year, are we approaching a bigger breakout for the energy trade? Guy, I'm going to start with you. When you look at those charts, does it make you feel like it's only higher from here?
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Bono
First of all, welcome Courtney. It's always great having you, number one. Number two, there have been many times that I've personally been faked out to the upside on these crude moves, specifically on whatever this is geopolitical risk or concern. But in terms of the stocks you just mentioned, yeah, they do feel like they might have sort of inflected a little bit. I mean, I'll look at Valero for example. Bit of a double bottom. I think it's breaking through about a two year downtrend, close around 134 today. You know, you get this above 136 and I think it's sort of off to the races. So although it's only 3 or 4%, I think of the S&P 500 now, the energy sector, I do think there's something going on here to pay attention to.
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Courtney Reagan
Steve, you had some interesting thoughts that we were talking about. When you're looking sort of at the entire market and what moves with bull cases, what moves with bear cases and you're like, look, people got lopsided.
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Chris Harvey
And if you thought that the market and the the economy was going to go into a recession, you have to be a seller of crude. And if you think, which is the fact that OPEC is continuing to increase supply, you have to be a seller accrued. If that doesn't take place and the market continues to rally and the economy continues to do better, something has to be offsides. In this case it was the energy space was offsides. Those stocks were priced a little bit too low. But let's remember though, the out of the S and P, the energy space is only about 3 or 4%. And when you look at tech, that's 33% of it. So before we get excited about the move, can it last to Guy's point? There's a lot of head fakes in the energy space. I think there's going to be an oversupply. But this is just a minor correction in my opinion.
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Courtney Reagan
Tim, what about the geopolitical reasons behind this move? Does that give you any concern, does it feel more defensive?
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Guy Adami
I would not be buying oil on geopolitics, although buying oil on Russia, Ukraine was the right move and I think a little different than what we have here. It's never really right to buy it on a hurricane. It's never really right to necessarily buy it. Even on we have weekly inventory numbers all the time. There's a lot of volatility in there. I'll say the following though. I mean, Steve's right to point out if there's a growth scare that's to me going to trump almost any of the fundamentals around the supply side. The supply side is very important and it has been under control and relatively stable over the last couple of years. If you listen to the EIA though, you know, the headline yesterday, today, whenever it came out, was that US has peak production on shale. And at least if you think about fracking and some of the drillers here at wti, which is the grade that we trade off of here, actually they're below break even levels right now and where WTI is. So if you think that actually the US is peak in terms of oil production, that's something that, you know, should be constructive to oil prices here. I think if you look at, back to, you know, some of the names guy mentioned, I look at the integrated players and I look at even some of the European integrated, whether it's Total or Royal Dutch Shell and I love the story because I think their, their dividends break even somewhere in the mid to upper 40s. In terms of Brent, I think the, the dynamic around demand and where the economy is I think was also a little overstated, at least for now. I think we're all questioning where we're going to be in the second half of the year. But right now I think this is a trade that actually with a handful of these names, these are, I can own Chevron long term. I'm not worried about it.
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Courtney Reagan
Bona. When we look at the energy sector, are you putting any premium on the potential that some regulation could come off and make it easier for some further investment to go forward? I think we had the Williams CEO, admittedly that's natural gas, but he sort of said, look, we spend more money on dealing with regulation than we do on the steel in the pipelines.
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Steve Grasso
Fair. But if I was going to play the deregulation trader, probably be more concentrated in financials, but I do think it is a possible catalyst. I think you can also point to valuation and dividend yield as also constructive reasons to own the Space. But, but like everyone else has kind of said these are more trading mechanisms, you know, around geopolitical risk and whatnot. They've already spoken to the weighting 3% versus 33%. So in terms of new leadership leading us higher, I'm not sure one, you have the beta or two, you have the waiting for the passive type of flows for energy to really be, you know, a leading sector. With that said, they are often under owned and I think most recently we've seen quite a bit of concentration in the ketchup trade and I think that's really where, where energy has kind of, you know, kind of popped its head up and kind of moved to the forefront. So I think there is probably a short term, medium term catalyst or possibility for you to trade around these names. But in terms of establishing core position, I'll reiterate, I don't think there's enough beta or waiting for that to really be, you know, your core holding.
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Courtney Reagan
That makes a lot of sense. Guy, though, when you look at the move, are you sort of heartened to see that we're broadening out beyond those tech players that we put so much emphasis and emphasis and attention on? Rightly so because of the rating. But maybe we're broadening out to provide some more opportunity.
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Bono
No, if feels that way. I mean today's reversal might be interesting on the back of the headline that we saw a deal and the fact that CPI came in a little bit softer than expected. So we'll see how this plays out. But yes, I'll take, there's some consolation there. But quickly, in terms of you said regulation. Yeah, it's amazing and I don't think a lot of people would think this, but you go back to when President Biden was elected. The oh went from 100 to about 330 during his administration, potentially one of the most energy unfriendly administrations of the last 50 years. That's when these stocks did their best. They all topped out out towards the end of it. But with all that said, I think to your point, they're going to get some tailwinds I think on a number of different factors, not least of which maybe some rotation into this space.
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Guy Adami
I'll just say this about that and you're right, Guy, because we're, we're at post pandemic lows in terms of rig counts and we've been going low. We're down 50 rigs year over year from where we were a year ago. And I think this is something that as much as I have loved Schlumberger and some of the oil drillers. I'm not so sure you want to be in that part of the trade. I want to be in the part of the trade where I don't think energy is going anywhere. Whatever you think the carbon footprint should be for industrials, for people, for cars, whatever. The reality is that I think a lot of these big integrators have said they were going to be carbon neutral by 2030. There's no way that's happening. And in fact I want to own Chevron. I want to, I want to own Exxon and I'm not sure I want to own the drillers. Even though I think Schlumberger, which is a name I'm long, is one that I, you know, I've had a lot of debate over over the last three.
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Courtney Reagan
Weeks, Steve, what about sort of broadening out beyond the Chevrons of the world and thinking about nuclear and uranium sort of, you know, nuclear power grids are going to be all in all sorts of demand as AI moves forward.
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Chris Harvey
I mean, yeah, those names have had a substantial run already. So it's a matter of buying the best quality name in the, in the small nuclear reactor. So smr. So if you think about those names, we've already seen sort of the pop in and those there's going to be an under appreciated asset which is electricity and we've been dealing with that for the last two years. I would rather be there than in fossil fuels but I have no problem owning an ExxonMobil or a Chevron. Long term. These are long term investment plays, large integrated plays that are everywhere rather than a trade.
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Courtney Reagan
It's a long term for. You got it. Well, we do have a news alert on Scott Besant's Senate testimony this afternoon. The Treasury Secretary making some comments on the U S China trade deal. CNBC's Eamon Javers has the latest. Eamonn, what do you got?
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Eamonn Javers
Hey there, Courtney. A couple of things to bring you up to speed on here in terms of the Treasury Secretary's testimony. He testified by the way for by my count, something like six straight hours on Capitol Hill today in front of two separate committees on three hours of sleep after flying back to the U.S. from those trade negotiations in London. He said that as the trade negotiations are going on, he thinks ultimately, if things are going well, the Trump administration is willing to push the deadline for those negotiations past what President Trump has already said. So take a listen to how he expressed that and see if you pick up on the nuance here.
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Guy Adami
It is highly likely that those countries that are negotiating or trading blocs, as in the case of the euro, who are negotiating in good faith, we will roll the date forward to continue the good faith negotiations. If someone is not negotiating, then we will not.
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Eamonn Javers
So a couple of open questions there. One is, you know, what does the administration mean by in good faith? That's pretty subjective. And then what will they roll the deadlines forward to? Will there be some other deadline date certain in the future that we'll reset to in terms of our expectations around trade deals? Not really clear from what the Treasury Secretary had to. It is clear that if they're engaged in what they consider to be good faith negotiations, then they will push forward. He was also asked in a Senate committee hearing, a Senate Appropriations subcommittee hearing by Senator Van Hollen on this question of whether or not the administration is willing to lower its standards around chips and rare earths, that is to allow chips to be sold to the Chinese government in exchange for access to rare earths. And here's what he said about that.
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Guy Adami
We have been very judicious in that. So there is no quid pro quo.
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Tim Seymour
In terms of chips for rare earths.
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Eamonn Javers
So the Treasury Secretary there is saying there is no quid pro quo in terms of chips for rare earth, but not really being explicit that the administration is not considering the idea of lowering the standards for exports on super sophisticated chips. So maybe a little. But he's clearly signaling that there's no deal in place with the Chinese in order to lower the restrictions on selling ships to the Chinese government. Back over to you.
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Courtney Reagan
He has certainly been very busy, as you pointed out, that very tight schedule, very little sleep, and every word does seem to matter and the nuances in the wiggle room matter too. And Eamonn, congratulations to the newest graduate in your family as well. Thanks so much for being here with us. Bona. What do you make of what we've heard or known about what we know has been discussed in these trade deals with China? Does it, I don't know, give you any confidence that we've gotten a little further? We've passed that ball along. The markets didn't really move so much.
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Steve Grasso
I can tell you what I know. I think the knowns are that there are many unknowns. I think that's probably the most constructive way that I can, I can put it. I think this is a step forward in terms of market sentiment and reaction. As you, as you mentioned, it was quite a muted response, which leads me to believe that the markets had largely already prices in and anticipated a lot of this. The other thing slightly deviating from the U.S. china specifically, but I think it's all wrapped in is what this likely means for the Fed and those moves going forward. You know, if we've seen all the consternation about cutting more aggressively, I don't think the Fed can afford to put itself in a situation where they may have to raise rates. As Steve has mentioned, if the economy is going stronger, if employment remains, you know, a bit more stable, are we in and, and if we have this lag tariff effect, are we in a situation where we cut in an anticipatory way and then have to reverse course? And I think that is a situation that the Fed is trying to keep themselves out of. I think U. S China related. I think this helps perhaps blunt some of the effects of tariff upward pressure on inflation going forward. But I still don't think there's enough and there's been so much back and forth extensions kind of walking back of our position that I'm just not sure there's enough hard data to support a rate cut or raise right now until we get, you know, several more months of inflationary data.
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Courtney Reagan
Yeah, sure enough. And Tim, I mean it looks like the tariffs writ large on China are still staying in place. They may not be going up, but they're not going down. I mean they were still relatively high. From a bunch of the companies that reported said look we're going to do our best to mitigate through this, but these levels are still pretty high.
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Guy Adami
Well, we're four times the effective tariff rate of when we went into, well, the pre Liberation day dynamic. Certainly where we were last year. Even, even if we're at 17% now, we don't even know where we are. But I would just bring it back to the market where we've, I think we've danced around already for the first part of the show. Semiconductors are outperforming the market significantly. The, to me, the risk aggression trade is slowly catching fire again and it's kind of a crazy idea but I mean anybody who thought that I was done is done. Seriously, if you were the other way on that trade, it's been very painful. And that includes all the periphery trades. That also includes software companies which are starting to take off and the parts of the market that I we think will continue to do. Well, it doesn't mean that we're where we were in mid 2024. But again, I look at that Nasdaq, which is dancing very close to a new relative high against The S and P which didn't achieve, you know, the last time it did that was back in July of last year. Those are the dynamics, I think. You know, Vix sub 17 tells me semis are going higher. These headlines continue to tell me the market is going higher because the worst of tariff and not the economic impact, but the worst of the tariff dynamic for the market market is behind us.
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Courtney Reagan
Well, Wall Street's biggest bull predicting the s and P500 will jump 16% from today's close by the end of the year. Chris Harvey is the Wells Fargo securities head of equity strategy. He is with us here. So why, why are you so bullish then? You're looking for 16% upside from here when there is still so many known unknowns or unknown known.
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H
If you look at things right, there's a narrative and then there's a fundamentals. Credit spreads 85 basis. Basis points over. Not very recessionary. If we look at the IPO market, the M and A market we were worried about, that IPO market is hot. M and A markets beginning to come back. If we talk about the change in regulation, we haven't even seen the benefit in the change in regulation just yet. If we get some sort of trade progress and we're all talking about China, but when I look at what happened with India, some of the rhetoric coming out of the Indian US negotiation, that was actually pretty positive. Positive, right. That could be the template. And what did Wallace say not that long ago? Hey, if we only have 10% tariffs, we can start cutting rates. Now we start cutting rates, that's a whole new ball game. And if we do have resolution, not resolution, we won't have resolution. But if we do make tangible progress on trade and tariff, you can start looking through that bad news and you'll start looking to 2026 and that's pretty good.
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Courtney Reagan
How do you look past though, the way that investors and or consumers feel when we talk about the soft data?
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H
I discount the soft data heavily. Right. We're not. I will talk. I am trying to talk to anybody who will talk to me on jobs. Right. We're hearing a lot of noise about jobs, but I can't find the real pain. Right. We're talking to economists, we're talking to corporations, we're talking to analysts. You see pockets of it, but there's nothing systemic. And the soft data, it's just not there. We went through the presidential election cycle. Soft data didn't work.
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Guy Adami
Work.
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H
The predictive data did work. And that's where we're placing our Bets. That's where we're placing most of that focus and that is supporting the hard data.
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Courtney Reagan
My worry about the jobs though, is that we may not have seen it yet if companies are going through these various mitigation strategies to try to cut costs elsewhere. And that one big way to cut costs, unfortunately, is to cut payroll. And so maybe we just haven't seen that yet. I mean, is that factored into this?
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H
That's, that's fair.
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Courtney Reagan
Right.
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H
So the comment before was, does do tariffs work with lag? Possibly.
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Courtney Reagan
Right.
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H
And the other thing that we talk about is uncertainty. Right. And I'll throw out a comment that probably won't make sense at first. If you don't know, you know, right. If we get to the middle of summertime, we still don't know, then, you know, you have to make those hard choices. You know, you have to cut costs, you know that you have to reduce the labor force and everyone will do it together. And that is the big fear.
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Chris Harvey
Chris, when you look at rates, you talked a little bit about it before, but when you look at the CPI number, the biggest in CPI and PPI are shelter costs, right? So those went up, but gasoline went down and that dragged down the overall headline number. Where do you see that going? How does shelter costs come in? Because that's the only tailwind for this economy is if the mortgage rates come down, right?
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H
So more mortgage rates can actually come down. If you get volatility in the rate market down. The way you get volatility in the rate market down is the Fed starts giving you forward guidance, the Fed starts telling you what we're going to do, 3 months, 6 months, 12 months in advance, we may get that right. And then you can have rates stay where they are, that volatility starts to compress and mortgage rates come down. That would be a real plus. But also what I would add to that is I think we missed a big opportunity. The, the, the US Administration could have done something on tariffs, not, not tariffs on the deficit. They did not. That would have been a home run trade. That would have rally mortgages, that would have rallied Treasuries, mortgages, so on and so forth, made things much more affordable. That was a big missed opportunity.
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Bono
You were here at the end of March, you were bullish. That proved to be right. How do you wrap your head around though the current S and P valuation, which is high by any historical standard.
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H
So in my take were there's a great, you talked about it before. There's a great secular trade and we were, I lived through late 90s and we went back to late 90s and we tried to make the comparison and at the end of the day it's not a fair comparison. Back then you had WorldCom, Quest, Global Crossing level three, all super levered companies going to the credit markets, tapping those credit markets and leveraging up even more to put fiber in the ground. And the philosophy was build it and they will come. Today you have some of the best and the brightest, right, Spending on capex out of their own pocket. And what you have is something more analogous to intel where the infrastructure or the innovation is sitting right on top of the infrastructure and one is feeding the other. Jensen over at Nvidia, that phrase that he has, we are producing AI factories, we're producing AI plants, it's a good one and I believe with that or I believe in that. And so there's still that great cyclist.
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Guy Adami
I hate to cut you off, we have no time but 16% market jump, nobody's asked about when, I mean, in.
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H
Other words, that's the second half of.
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Guy Adami
The year we're going, we're going up 16% from here and two half 25.
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H
So if the Fed starts cutting rates, if we have more M and a activity, 23, if we start looking to 23, if we have some sort of progress or template for trade and tariff, where do we go up or down?
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Guy Adami
And sorry to open a new can of worms. I know we have to go to a break. Sorry about that Courtney. Thank you Chris.
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Courtney Reagan
Okay, Tim, thank you so much. Chris Harvey, thank you so much. Thank you so much for being here. Bonwen, I'm going to give you the last word before we do have to get to that break.
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Steve Grasso
Listen, I think Chris makes a very compelling argument in terms of how we can go higher the second half. I would, if I had more time I would ask him the flight path there and whether or not, you know, he expects more volatility. Volatility, because that's the way.
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Guy Adami
Do you think he's buzzing the light tower right now?
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Steve Grasso
Well, I'm not even sure I know what that means, so I'm not.
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Guy Adami
Ud.
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Steve Grasso
But anyways, is the move higher also going to be lockstep with more volatility and will that present trading opportunities? Because for the fast money cohort you're going to want to kind of pick your entry and extra points and if you're able to kind of trade around and add a little bit more juice to your portfolio. So I think, you know, perhaps, you know, those of us are a little bit more Bearish might feel compelled to dip their toes in.
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Courtney Reagan
We're going to have to have him back so we can finish up that conversation. Well, coming up, a quantum leap, the high tech stock surging as Nvidia CEO Jensen Long weighs in on the space.
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Chris Harvey
Why?
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Courtney Reagan
He says the technology is reaching an inflection point. But first, some after hours action to bring you shares of Oracle on the move after reporting results, the details from that quarter next. Don't go anywhere. Fast Money is back into.
- [22:19]
I
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- [22:49]
Guy Adami
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- [23:18]
Tim Seymour
With the price of just about everything going up, we thought we'd bring our prices down.
- [23:23]
Courtney Reagan
So to help us we brought in.
- [23:24]
Tim Seymour
A reverse auctioneer which is apparently a thing.
- [23:27]
Steve Grasso
Mint Mobile unlimited premium wireless 3030 better get 30. Better to get 202020 better get 20 20.
- [23:32]
Guy Adami
Everybody get 151515 15. Just 15 bucks a month.
- [23:35]
Courtney Reagan
Sold.
- [23:36]
Tim Seymour
Give it a try@mintmobile.com Switch upfront payment of $45 for three month plan equivalent to $15 per month required new customer.
- [23:42]
J
Offer for first three months only speed.
- [23:43]
Tim Seymour
Slower 35 gigabytes of networks busy taxes and fees extra.
- [23:46]
Courtney Reagan
See mint mobile.com welcome back to Fast Money. We've got an earnings alert on Oracle shares popping after the company reported EPS and revenues that came in above expectations. Currently trading near January highs of 7%. Christina Parts, the Netherlands has the details. Hi Christina, what can you tell us about Oracle?
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Guy Adami
Oracle?
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I
Well there's some also some rosy earnings commentary from its C suite. CEO Safra Katz saying she expects fiscal 2026 to be even better this year. The quote Dramatically higher revenue growth rates. Oracle chair and CTO Larry Elson Ellison also appearing optimistic, saying growth rates for Oracle cloud infrastructure revenue oci, which is really important. Also quote, skyrocketing along with demand. The biggest draw from the release is the company promising 100% growth for remaining performance obligations in fiscal 2026. Essentially, that means the backlog. So 100% growth for backlog. On the call, they're saying that that number is only going up from here. That's a quote. Oracle CEO also saying they will exceed. And this is just happening now, their revenue guidance, they're saying they're going to exceed previous revenue growth targets for fiscal 2027. They say now confirming that for fiscal revenue for this fiscal year, revenue will be $67 billion, slightly higher than estimates. Remember, Oracle just has this massive backlog and, and reaffirming that revenue guidance of 67 billion shows that they are turning that into revenues. And so that's why you're seeing the stock pop even higher to 7%. Guys.
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Courtney Reagan
Got it. Christina, you're just being on TV at the same time as you're listening to the call. Thank you very much.
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I
It's one year. Literally, it's one year in one year.
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Courtney Reagan
In the other. I could tell the updated guidance you were. Yeah, and I'm trying to read it.
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I
At the same time. People don't know we have to write what we're saying and. Yeah, multitasking.
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Courtney Reagan
All right. Awesome stuff, awesome stuff. Thank you for bringing that to us. Appreciate it. Tim, I kind of saw you scrolling on your phone over there looking at some Oracle charts.
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Guy Adami
Well, I'll tell you what. If again, if you were short Oracle or if you felt that day in January when we had a couple of guys, remember, they're standing on the boxes like that, the White House, a couple of guys had to get up to be as tall as Larry Ellison. And it never, never looks good. But. But it was, it was a day that seemed like, wow, we framed a top in Oracle because this is never going to. This could never be as good as this is being made out to be. And anyone who's thought, thought that the AI data center type of story around some of these, some of these software names too. I mean, it's just extraordinary. Now, is this stock cheap? No. And certainly on a trailing basis, it's wildly expensive. And that's something else. I was just. I mean, it's 41 times trailing. This is a company that says 26 is going to be better than 25. The caution for me is that they have been very bullish. Mostly the commentary around these earnings calls have been very bullish. But don't Count Oracle out. I mean if you've counted Oracle out, you've been put out of business five times in the last five years.
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Courtney Reagan
Steve, a nice little run up here in the last month here for Oracle.
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Chris Harvey
Yeah they are on valuations it's expensive but when you compare it to its peers, they do something that's much more efficient for their clients, for their customers. I think that's why the guide the outlook is so aggressively, so aggressive. If you think that 2026 and the CEO does think that 2026 is going to be better than 2025, you got to still buy the stock. They're going to grow into that valuation. I think they're great amongst the peers.
- [26:55]
Bono
Guy bumping up against the all time high that we saw late last year, early this year. Tim's right. I mean we have collectively like Oracle, but now it's sort of believe it or not and approve me stage in 28 times next year's numbers with really not the earnings growth you need to see for that valuation. The encouraging thing is you continue to see margin improvement. They're running the business better but but stocks got itself expensive. I think it fails at the prior all time high.
- [27:20]
Courtney Reagan
Well, there's a lot more fast money still to come. Here's a look at what's coming up next.
- [27:25]
Eamonn Javers
A Jensen fueled jump. Quantum computing stocks making a major leap.
- [27:29]
Guy Adami
As the Nvidia CEO weighs in the.
- [27:32]
Eamonn Javers
Inflection point he says the group is nearing.
- [27:34]
Guy Adami
Plus a June jolt.
- [27:36]
Eamonn Javers
Starbucks brewing up gains to start the month. Why investors are sipping on the surge.
- [27:40]
Guy Adami
And whether this counter caffeine climb can continue. You're watching Fast Money live from the.
- [27:45]
Eamonn Javers
NASDAQ market site in Times Square. We're back right after this.
- [27:59]
I
Do you ever think about switching insurance companies to see if you could save some cash? Progressive makes it easy. Just drop in some details about yourself and see if you're eligible to save money when you bundle your home and auto policies. The process only takes minutes and it could mean hundreds more in your pocket. Visit progressive.com after this trek to see if you could save Progressive Casualty Insurance company and affiliates. Potential savings will vary. Not available in all states.
- [28:29]
Guy Adami
Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn more@discover.com credit card based on the February 2024 Nelson Report.
- [28:59]
Courtney Reagan
Welcome back to Fast Money. Quantum computing stocks jumping after Nvidia CEO offered a more bullish outlook for the group. Speaking at the GTC Paris developer conference today, Jensen Huang said, quote, we are within reach of being able to use quantum computers in the coming years. He previously said the timeline was closer to 20 years. Quantum computing rising more than 25%. Rigidity up 11%. Steve I mean, it's all in the name. Like quantum computing, it feels like you got to own it. I mean, halfway teasing, but truly, all.
- [29:27]
Chris Harvey
These, if you look back one year performance, they were all up over a thousand percent.
- [29:32]
Courtney Reagan
Because I think it was initially this, the name sort of jazzed people up before they really learned more of the fundamentals, what they can do.
- [29:37]
Chris Harvey
And the timeline was supposedly off, as Jensen said originally a couple of months ago in January, he thought it was going to be a 15 to 20 year endeavor. Now you pull that forward and you make it 5 to 10, you could buy these stocks. I play it with D Wave, so there's a couple of other ones that you could play with as well. But D Wave is actually making some sales and some real progress in the space. IBM popped today because of their Quantum initiative initiatives. This is going to be a huge catalyst for the whole space.
- [30:09]
Steve Grasso
Yeah, I mean, I, I listen. Having Jensen's comments essentially lead the market higher is slightly concerning. I do think if you really start to look at these balance sheets are still burning cash. I don't question that this is the new wave, but in terms of deploying new capital T0 right now, I think it's a, it's kind of like a tough, tough argument to make. Leaning back to Steve's point, in January, he made the exact opposite comment and you saw the exact opposite reaction. So I have a hard time getting behind a company when it's some tertiary CEO coming out and making a sec. Not to mention he has every reason to be supporting these. They're going to be consumers and customers of his chip. So, you know, kind of taking all that into account, it's hard for me to trade these names on Jensen Huang's comments.
- [30:54]
Courtney Reagan
Jensen Huang, the new Elon Musk. We're hanging on every word he says and then we're trading higher.
- [30:58]
Bono
Know what the whole space is though? To me, Courtney, it's like that Luke.
- [31:00]
Guy Adami
Bryan it feels like, like, feels like country girl shake it for me, you.
- [31:04]
Courtney Reagan
Know, something like that.
- [31:05]
Guy Adami
So really that's what it feels like because it's just, it's it's out there.
- [31:10]
Courtney Reagan
So that makes you excited?
- [31:11]
Guy Adami
Just talking, exciting myself.
- [31:14]
Courtney Reagan
All right. Well, coming up, Starbucks in stealth mode. Shares kicking off June with a grande move higher, why investors are piling in and whether the caffeine climb can continue. Fast Money is back into.
- [31:29]
I
Missed a moment of fast.
- [31:30]
Guy Adami
Catch us anytime on the Go. Follow the Fast Money podcast. We're back right after this.
- [31:45]
Courtney Reagan
Welcome back to FAST money. Stocks closing lower as investors digested a preliminary US China trade deal maybe as well as better than expected. CPI report the Dow down just just one point. The S and P shedding a quarter of a percent of the nasdaq, falling half a percent. Shares of IBM hitting a fresh all time high and notching its ninth straight day of gains. Its longest winning streak since December 2023 stuck up nearly 9% during its run ensures the Voyager technology surging in its market debut. The space and defense tech company pricing above its expected range at $31 a share and opening at nearly $70 a share. The stock closing off its best levels but still up more than 80%. Meanwhile, Starbucks Brewing up a hot start to the summer, already up more than 13% in June and back in the green since CEO Brian Nicholl took over Nichols, saying today the coffee giant is considering selling a minority stake in its China business. Our Kate Rogers is back on the beat, has more on it. Kate, welcome back. Good to see you.
- [32:42]
J
Hi Corey, great to see you. So Starbucks CEO Brian Niccol telling the Financial Times there is, quote, a lot of interest in the company's China business, saying people see the value of the Starbucks brand. They see the coffee category is growing. I think they'd love to be partnering up with us in figuring out how we take this from 8,000 to 20,000 stores. That's according once again to the Financial Times. Now China is the coffee giants. Remember Second Home Market. It's looking to have about 9,000 locations there by 2025. It's seen many challenges in China though as of late due to a softer consumer environment and the expansion of lower cost competitors like luck and clients. Coffee same store sales were flat in China last quarter that they're also discounting in China. Drinks that are non coffee based as the consumer in China more focused on tea options. It's also talked about exploring strategic options for the China business, but there have been very few details about the plan beyond that. The company is also continuing on its back to Starbucks plan implemented by Brian Niccol who took over the chain last September and I talked to him last fall after his first Earnings report. And he told me that there's still a lot of growth growth for the Starbucks China business. But they're not at the point yet. This was back in the fall where they know who they would actually partner up with. And he said he was still kind of learning the Starbucks China business once again. That was back in the fall. We're looking at now. It looks like they could be starting this process to potentially sell that minority stake. But who will buy it? We don't know yet. Court back over to you.
- [34:03]
Courtney Reagan
Very interesting stuff. Kate, thank you so much. It's good to have you back. Tim, I want to lop this up to you. You're sort of our international guy. You know, you know a lot about that part of the world. What do you think? Who could be a good partner there?
- [34:13]
Guy Adami
And I think I could be our biggest Starbucks fan on the the desk. I'm not sure everybody rolls.
- [34:18]
Courtney Reagan
I mean I look well caffeine my.
- [34:20]
Guy Adami
Middle name and no. And know that I know. I love. I am disappointed by a few things as a consumer, including that we don't brew the coffee anymore. We have these machines that make each one one by one. Having said that, Brian Nicholl, what I worry about as an investor is I think he's tried to tell us everything's going great on this turnaround. Meanwhile, I think there is some sense of urgency that things need to turn around faster than they might be able to. Some of it is just improving the operational efficiencies of the stores and the experience. What you can't fix is that. And that will lead to some improvement in same store sales which have fallen for five consecutive quarters. And again fiscal 2Q which they announced, whatever that was a few weeks back wasn't very, very good. So I worry a little bit just about the consumer. I worry a little bit about their inability to pass along prices. No one was in a better position coming out of COVID Everyone wanted to have a cup of coffee and feel good again and go down to the coffee shop and hang out. Right now Starbucks needs to get through this period of lethargy because frankly the top line is not growing borrowing. And the bottom line looks like it might be more challenged. I stay an investor, but I don't. I don't allocate new money here yet.
- [35:23]
Courtney Reagan
Steve. You know, Brian Nicholl went to the Miami University. That's where I went to the same school. That's right. Oh. So I'm rooting just because like Ron Harper. We're fellow alum Ron Harper. When you Buy a turnback.
- [35:34]
Chris Harvey
You know, when you buy a turnaround story, you buy the CEO.
- [35:37]
Courtney Reagan
Right, Right.
- [35:38]
Chris Harvey
So this is going.
- [35:39]
Guy Adami
I'm still.
- [35:39]
Chris Harvey
I'm still willing to give him the benefit of the doubt, the Back to Starbucks initiative, the strategy. I like selling the minority state in China because you get someone who knows the country, they provide the capital. It does make me worry that he's out of growth opportunities here. But I think if he could lower the skus, which he's done, less frappalades or whatever, whatever you buy, guy drinks, whatever you buy there. And to bring that core culture, the key is to bring that core culture where people used to go to meet up.
- [36:10]
Courtney Reagan
The third place.
- [36:10]
Chris Harvey
The third place. And that's what it's lost. And I think people are just. It was during the pandemic, we sort of had that little migratory stage where people had no place to be. Now people are back at work and they're running in and out doing a lot more on digital. So as long as he can make that digital process more efficient with the workers that he has and less SKUs, I think he's going to be successful.
- [36:31]
Courtney Reagan
What do you think? Are we tapped out here until we see really more progress, something more transformational?
- [36:37]
Steve Grasso
No, because I really think the sentiment prior to him coming in was so negative and the stock had reacted so poorly that you can't do anything. I mean, aside from wait and see. Right. And so kind of a return to basics, lowering the skews, kind of incorporating a flow of traffic, cutting down on wait times, and then kind of partnering with someone in China that again, knows that demographic more intimately and really understand, you know, customer preference. You know, we can call it an admission of guilt. I call it humility. Like just. Just admit you're turning around the company, admit that you're willing to embrace a new voice, a new way of doing things and return back to like the core competencies here.
- [37:19]
Courtney Reagan
Simpler menus, handwritten messages. Right. Guy says, take care, guys, America guy. He did our run today. What do you mean?
- [37:28]
Bono
Valuation? I think, Tim, I think everybody would agree with that. Number one, we're right back to levels that we cascaded lower from in early April. So we should fail here. And little known fact, but the reason why you watch Fast Money and Tim knows this, Tina Louise went to Miami.
- [37:44]
Guy Adami
Of Ohio, also known as Ginger Rogers from Gilligan's Island.
- [37:48]
Bono
Not Ginger Rogers. I don't think her last name was Rogers. Ginger Rogers. Here she was realized that's Fred Astaire's dance part.
- [37:54]
Guy Adami
Ginger Rogers was Ginger Rogers, who had red hair.
- [37:57]
Courtney Reagan
Gingers.
- [37:57]
Guy Adami
Yeah, that's my bet. She was just ginger.
- [37:59]
Courtney Reagan
I guess she was just ginger. Which didn't need to be any more on Fast money. Well, coming up, Disruptor in the payment space. The CEO of Ramp joins us with more on how the financial operations platform is helping companies streamline payments, cut costs and free up their finance teams. That interview when Fast Money returns. Welcome back to Fast money. All week long we are talking to the companies leading the new era of AI on this year's CNBC Disruptor 50 list. Number six on the list is Ramp, a financial operations platform trying to help companies automate the spending process. CEO Eric Gliman is here on the set. Eric, thanks for being here with us here in person. Congratulations on your ranking on the CBC Disruptor list.
- [38:47]
Tim Seymour
Thanks so much for having me.
- [38:48]
Courtney Reagan
Can you walk us through? Because you've made the list before, what if, what would you say is the biggest change forward your company has made between the first time you land on the list, I think in 2020 for and then now.
- [38:58]
Tim Seymour
That's right. I think this is our third year on the list. We feel incredibly lucky to be on. And maybe for folks who don't know too much about Ramp, the way you can think about what we do is we're a finance operations platform. From a single place, you can issue cards, make payments of all kinds, automate expense reports, and even automate accounting. The way to think about what we do is we help companies reduce the amount they spend. We support about 40,000 businesses for from early stage companies to restaurants to Fortune 500 on average reduce their senses by about 5% per year. I think the big change, and I think a big part of why we're there is first the depth to which AI is deeply used in the platform. AI may not be smart enough or even close enough to be a cfo, but it certainly can do your expense report. It certainly can help you do your accounting much faster and more accurately. And also just the speed that the company has grown. We are in the upper nine figures of revenue. We are growing even faster this year at a larger scale than we did last year. And so those are some of the changes and things that people are looking out at.
- [40:00]
Courtney Reagan
When a company employs your technology, are they doing it alongside the humans that previously did those tasks that were very.
- [40:07]
Tim Seymour
Tedious, or is it in place of it's alongside? And so for most people, it's actually a very simple experience you're probably used to if you take a taxi cab for work, maybe you have a Corporate expense card or your personal and you use some software to go and submit your reimbursement. For many people it's the worst hour of their month. It's very tedious, it feels very low value and with ramp it's all integrated. So you tap your card, it then checks in real time before the expense is approved, does this in or out of policy. Then an AI based on past experiences will write the memo for you, it can text you for the receipt. And that whole experience takes less than 15 seconds. And so often it's really automating these very simple low value tasks. And so it's expense reports, it's doing bill payment runs, it's month end close or procurement cycles. So it sort of feels quietly integrated into experiences you already know.
- [41:00]
Bono
I'm sure for a while the growth was organic, but you guys made a decision to sort of get that in front of people, the super bowl ad. And since then we can find you all over the place. I mean that was a contrast conscious decision. Do you think that's paying dividends now?
- [41:12]
Tim Seymour
It is. I mean we feel incredibly lucky first to be growing faster but also serving so many more companies. I think a year ago we served approximately 20 something thousand companies, now it's over 40,000. But big picture, you know, we serve about one and a half percent of the corporate and small business card market. For us that means that 98% plus of businesses still are doing things the old way and still can benefit. And so we're excited, but we're going up against juggernaut companies that have existed since the 1800s and I think haven't evolved their products too much since then either.
- [41:44]
Courtney Reagan
What then is the competitive advantage that you offer over some players, whether they're pre existing or other startups that are trying to do similar to what you're doing as well?
- [41:51]
Tim Seymour
Yeah, it's really two things. First, it's really about measurable impact. I don't know why I think we're the only company still in our market that actually measures how much money we have actually saved our customers and how much much time we have actually saved them.
- [42:05]
Courtney Reagan
How much is it?
- [42:06]
Tim Seymour
It is over $2 billion since launching just shy of five years ago. As well as over 20 million hours of labor lifetimes of just doing expense reports, if you can imagine is no longer being done. And so that's one. And I think it's in contrast to many of our companies are working really hard to get you to spend more money, earn more points in multipliers. We think most business owners want to spend less. And I think the second is speed. We last year launched three major new product lines as well as 207 features. Over the last five months, our engineers have shipped 275 features. And I think when you contrast this to, you know, I'll put it this way, if I had to use the same computer my parents used when they first went to work, I would really struggle to do it. But I think I could, you know, swipe the same kind of credit card that they had to use or same bank account. And I think that many financial products have been stuck in time. Your car doesn't do so much more than it did for you in the 80s. And so I think that evolution, if it's not just cars, but cars that do your expenses, books that keep themselves money that will move to higher yield, I just think is much more fit.
- [43:12]
Courtney Reagan
For the times you are hired from my expense reports. Eric, thank you so much. Appreciate you being here. Congratulations on your placement on the list. You can catch even more coverage of CNBC disruptor 15 list tomorrow. Kicking off the CEO of gene therapy company Elevate Bio on Worldwide Exchange. That's tomorrow at 5:00am Eastern Time right here on CNBC. Well, coming up, international investing, a couple of key global markets outperforming the S&P 500 this year. We'll dig into the opportunities abroad. And Tim's mega. What is that? Mega trade.
- [43:40]
Guy Adami
Yeah. Make International great again.
- [43:41]
Courtney Reagan
I got it. Okay. More fast and too. Welcome back to Fast Money. A pair of international markets making our chart of the day. First, msci, E, W, F, Japan etf. How about that Covering hovering near brand new record highs. The fund is up 10% this year outpacing US markets. Same with Germany, Europe's biggest market already up more than 30% this year, about 13 times the S&P 500 hundreds return. Tim, you coined the mega trade make international great again. I'm sorry I just learned of this or perhaps had to be reminded of it. It's ok. Now we're takeaways of the.
- [44:23]
Guy Adami
We're all learning all the time, Courtney. And the idea also isn't that they can't coexist. I mean I've just been talking about semis. I think you're seeing a tech renaissance again in terms of the markets. But International has been outperforming the ewg. So that's msci, German dax, essentially etf, but gives you the currency exposure if you think the dollar is going to weaken some more.
- [44:41]
H
More.
- [44:42]
Guy Adami
But a couple names in there and I'm long all of these names in ideva which is my international etf. But if you're looking at SAP, this is essentially an AI software play. It's a, it's a basically a cloud play. It's Europe's kind of all in one cloud play. Siemens which we know a lot about but they are a major beneficiary of this. Rearm Europe, Rearm Germany, this is formally the GE of Germany but again it's a high tech in terms of digital automation. They're, they're one of the beneficiaries of US China because they are doing a ton over in China. China always were will probably do more RWE which is a utility but again a utility in renewables but also in the same way that that utility trades big here been really big there. EWJ is iShares Japan and again Japan is, is say what you want about what's going on with the yen but this is a market that's been outperforming now for a couple of years and it's outperformed the US by about 10% in currency terms I think the end will probably appreciate but again part of investing in Japan is corporate governance is better, better dividend payouts are better, free cash flows seem to be better and it is trading at a discount. So making international great again doesn't have to mean that this was just a trade. And again if you look at those two, if you look at Germany and Japan over the last 20 years they've still after this move underperformed between 50 and 70% and that means I think it's part of a mean reversion trade that makes it a longer term trade that I think you're early on.
- [45:59]
Courtney Reagan
Love to go to Japan sometime.
- [46:00]
Guy Adami
I hear it's very it is a made.
- [46:02]
Courtney Reagan
Coming up next, your final trades. It's time for the final trade. Let's go around the horn.
- [46:15]
Guy Adami
Tim country Courtney, so great having you here. RWE from Germany, I think you can buy this one.
- [46:21]
Steve Grasso
Vonnewen keeping along with the international theme.
- [46:23]
Chris Harvey
EFA Steve L3 Harris heavily dependent on government contracts. It's going to be a good year.
- [46:29]
Courtney Reagan
For them and Guy Diamond.
- [46:31]
Bono
We hope you have fun joining us. It's great having you here.
- [46:34]
Guy Adami
EW Zed in Tim's world and I hope you dance.
- [46:37]
Courtney Reagan
Thanks for watching Fast Money Mad Money starts right now. All opinions expressed by the Fast Money participants are solely their opinions and do.
- [46:47]
I
Not reflect the opinions of cnbc, NBC Universal, their parent company or affiliates and may have been previously disseminated by them. On television, radio, Internet or another media.
- [46:57]
Courtney Reagan
You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow.
- [47:03]
I
A particular strategy, but only as an.
- [47:05]
Courtney Reagan
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.
- [47:16]
I
Should not be relied upon as such. To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer do you ever think about switching insurance companies to see if you could save some cash? Progressive makes it easy. Just drop in some details about yourself and see if you're eligible to save money when you bundle your home and auto policies. The process only takes minutes and it could mean hundreds more in your pocket. Visit progressive.com after this track to see if you could save Progressive Casualty Insurance Company and affiliates. Potential savings will vary. Not available in all states.