CNBC's "Fast Money" Episode Summary – May 15, 2025

Host: Melissa Lee
Panelists: Tim Seymour, Courtney Garcia, Steve Grasso, Guy Adami, Leslie Picker, Michael Ha
Location: Studio B at the Nasdaq
Air Date: May 15, 2025

1. Market Overview

Timestamp: [01:07]

Melissa Lee opens the episode from Times Square, highlighting a mixed day in the markets:

• Dow Jones: Up by 270 points, marking a 4th consecutive day of gains.
• NASDAQ: Ends a six-day winning streak, declining by approximately 2.1%.
• CSB (a stock): Continues its fourth straight day of gains.
• UnitedHealth (UNH): Suffers a significant drop, closing down nearly 11%, contributing to the NASDAQ's decline.

Lee sets the stage for an in-depth discussion on UnitedHealth's troubling week.

2. UnitedHealth (UNH) – A No-Touch Stock?

Timestamp: [01:07 - 11:54]

Overview of the Decline

• Market Reaction: UNH's stock has plummeted close to 30% this week alone, nearing a 55% drop from its November 11th peak.
• Catalysts:
  • DOJ investigation reports by the Wall Street Journal alleging criminal Medicare fraud.
  • Leadership turmoil, including the murder of CEO Brian Thompson and recent CEO changes.
  • Disappointing Q1 earnings and revised guidance.

Panel Discussion:

Tim Seymour ([02:57]):

• Opportunity Amidst Decline: Sees potential in trading UNH from the long side, citing its previous strong performance and current valuation (~11 times earnings).
• Quote: "This is a stock I am inclined to trade from the long side." ([03:00])

Steve Grasso ([04:15]):

• Analyst Optimism: Notes that analysts like RBC, UBS, and Bernstein maintain positive price targets despite the downturn.
• Management Stance: UNH labels the DOJ report as "deeply irresponsible," indicating confidence in their Medicare Advantage business.
• Quote: "Because now it's about 11 times... this is, you guys, in a very interesting place." ([04:15])

Guy Adami ([05:26]):

• Skepticism on Rebound: Expresses doubt about a quick bounce, emphasizing UNH's significant exposure to Medicare Advantage.
• Quote: "It's only second to Humana right now." ([05:46])

Michael Ha (Baird Senior Research Analyst) ([07:29 - 11:54]):

• Cautious Outperformance: While maintaining an outperform rating, Ha warns of continued downside, projecting a potential 15% decline to $228 per share.
• Lack of Guidance: Highlights the absence of 2025 guidance as a major uncertainty.
• Quote: "For now it is a falling knife." ([07:43])

Conclusion: The panel remains divided, with some seeing trading opportunities amid low valuations, while others caution against ongoing risks and uncertain catalysts.

3. Apple Under Presidential Pressure

Timestamp: [15:15 - 19:14]

Issue:

Apple faces public criticism from President Trump over its plans to shift iPhone manufacturing to India, challenging its commitment to invest $500 billion in the US.

Panel Discussion:

Guy Adami ([16:22]):

• Production Costs: Highlights the increased costs Apple would incur by manufacturing in the US due to higher labor and regulatory expenses.
• Quote: "If you want to adhere to USA regulations, it's going to cost more."

Courtney Garcia ([17:13 - 18:35]):

• Impact on Valuation: Points out that Apple's delays and rising production costs could deter consumers from upgrading, potentially affecting its stock negatively.
• Quote: "Their story just hasn't really been there."

Tim Seymour ([19:14]):

• Valuation Concerns: Argues that Apple's stock decline is more about disappointing refresh cycles and inflated valuations rather than tariffs alone.
• Quote: "I think it's trading on people being really disappointed on the refresh cycle."

Conclusion: The panel agrees that while tariffs and manufacturing shifts contribute to Apple's challenges, underlying issues with product cycles and valuation are significant factors influencing its stock performance.

4. Berkshire Hathaway's Strategic Moves

Timestamp: [21:15 - 23:05]

Key Moves:

• Sales:
  • Entire $1 billion stake in Citi.
  • Reduced holdings in Bank of America by over 7%.
  • Paring back Capital One by 4%.
• Additions:
  • Doubled positions in Constellation Brands and Pool Corp.
  • Increased exposure to Domino’s.

Courtney Garcia ([21:21]):

• Insight: Berkshire Hathaway remains selective, maintaining its substantial stake in Apple while adjusting positions in other tech giants like Microsoft and Nvidia.

Tim Seymour ([22:03]):

• Berkshire's Strategy: Questions the rationale behind Buffett's divestment from major banks, noting Buffett's historical support for the banking sector.

Steve Grasso ([22:49]):

• Constellation Brands Investment: Highlights Buffett's doubling of this position, noting it's acquired shares at lows not seen since 2019.

Conclusion: Berkshire Hathaway is strategically adjusting its portfolio, reducing exposure to certain banks while increasing investments in consumer-facing companies and maintaining selective tech holdings.

5. Meta's AI Model Rollout Delay

Timestamp: [23:05 - 25:15]

Issue:

Meta (formerly Facebook) reportedly delays the rollout of its next-generation Llama AI model from next month to fall at the earliest, citing engineering challenges.

Panel Discussion:

Courtney Garcia ([23:31 - 24:46]):

• CapEx Concerns: Meta’s $72 billion investment in AI raises questions about the timeline for monetization, with delays potentially exacerbating cost concerns.

Guy Adami ([24:46]):

• Monetization Focus: Emphasizes that the critical factor is not the timeline but when Meta can monetize its AI investments.
• Quote: "It matters when they monetize, as Court said."

Tim Seymour ([24:43]):

• Market Dynamics: Suggests the delay reflects broader market overbuying conditions rather than unique issues at Meta.

Conclusion: The delay in Meta's AI rollout raises concerns about the company's ability to efficiently monetize its massive AI investments, potentially impacting its valuation and market perception.

6. Copper Supply and US Mining Initiatives

Timestamp: [25:15 - 32:38]

Issue:

With U.S. demand for copper expected to surge by over 40% in the next decade, concerns arise over the ability to meet supply needs, especially amid President Trump's push to reduce reliance on Chinese raw materials.

Panel Discussion:

Pippa Stevens (Guest Reporter) ([25:32 - 30:36]):

• Rio Tinto's Kennecott Copper Warehouse: Demonstrates the extensive processing and logistics involved in U.S. copper supply.
• Environmental Initiatives: Rio Tinto reduces its carbon footprint by adopting renewable diesel and solar power.
• Barriers: Highlights regulatory and permitting challenges hindering U.S. mining capacity expansion.

Steve Grasso ([30:33 - 32:00]):

• Investment Opportunities: Points to Rio Tinto's undervalued stock (~8-9 times forward earnings) as an attractive investment despite a four-year downtrend.
• Copper Demand: Emphasizes the critical role of copper in global industries, with China driving significant demand.

Guy Adami ([32:00]):

• Comparative Performance: Contrasts MP Materials' 37% YTD gain with Rio's 7% increase, noting Rio's potential for acquisitions and integration.

Tim Seymour ([32:00]):

• Portfolio Insights: Discloses long positions in international ETFs, BHP, and Rio Tinto, citing Rio's substantial ownership in major Chilean mines.

Conclusion: The panel underscores the strategic importance of domestic copper mining to meet rising demand and reduce dependency on China. Rio Tinto emerges as a key player with significant growth potential, despite regulatory hurdles.

7. Footlocker and Dick's Sporting Goods Merger

Timestamp: [40:25 - 42:34]

Issue:

Dick's Sporting Goods announces plans to acquire Foot Locker for $2.4 billion, leading to Foot Locker’s stock surging by over 85% while Dick's faces a significant downturn.

Panel Discussion:

Courtney Garcia ([41:06]):

• Investor Sentiment: Foot Locker investors react positively to the acquisition, though the premium paid by Dick's raises concerns.
• Quote: "It's a deal that’s really gotten hit with the tariff news."

Guy Adami ([41:31]):

• Potential White Knight: Suggests the possibility of another bidder impacting Dick's stock dynamics.

Steve Grasso ([42:22]):

• Market Reaction: Notes the high volume trading and potential for Dick's to rally if another bidder emerges.

Tim Seymour ([42:34]):

• Antitrust Concerns: Argues against fears of anti-monopoly actions, supporting the likelihood of the deal proceeding.

Conclusion: The merger between Dick's Sporting Goods and Foot Locker presents a complex scenario with Foot Locker enjoying significant gains, while Dick's contends with investor concerns over the high acquisition premium and potential antitrust issues.

8. Starbucks Expands in China

Timestamp: [42:34 - 43:47]

Issue:

Starbucks plans to expand its business in China, including a potential asset sale valued at $7 billion, amidst competition and consumer spending pullbacks.

Panel Discussion:

Courtney Garcia ([43:07]):

• Strategic Moves: Views the expansion as part of Starbucks' efforts to counteract declining consumer spending and competitive pressures in China.
• Quote: "Any way they can turn this around... is a big piece of that."

Guy Adami ([43:26]):

• Management Confidence: Commends Starbucks' management team while expressing concerns over the slow momentum in stock performance.
• Quote: "We're definitely starting to see some momentum at the very least."

Steve Grasso ([43:47]):

• Market Perception: Suggests that Starbucks' stock decline upon the announcement reflects investor skepticism despite strategic initiatives.

Conclusion: Starbucks' aggressive expansion in China aims to strengthen its market position amid economic and competitive challenges. While management remains confident, stock performance indicates cautious investor sentiment.

9. Final Trades and Closing Remarks

Timestamp: [44:37 - 45:19]

Tim Seymour:

• Copper Investments: Reiterates interest in copper stocks like Rio Tinto and BHP, highlighting valuation advantages.
• Quote: "Valuation is fascinating."

Courtney Garcia:

• Sector Insights: Suggests exploring stocks like FCX (Freeport-McMoRan) in the copper space.

Closing:

• Upcoming Highlights: Teases discussions on Walmart's pricing strategies and further analysis on Dick's Sporting Goods and Foot Locker.
• Fast Money Live Event: Announces a sold-out live event for June 5, with a waitlist available for tickets.

Notable Quotes:

• Tim Seymour:
  "This is a stock I am inclined to trade from the long side." ([03:00])

• Steve Grasso:
  "If you don't think UNH has more room to downside, I just don't think you're paying attention." ([07:29])

• Michael Ha:
  "For now it is a falling knife." ([07:43])

• Guy Adami:
  "It matters when they monetize." ([24:46])

Key Takeaways:

• UnitedHealth's Uncertainty: Significant stock decline amid DOJ investigations and leadership changes poses risks, though some analysts see long-term opportunities.

• Apple's Challenges: Tariffs and manufacturing shifts to India could pressure margins and consumer upgrades, affecting stock performance.

• Berkshire's Strategic Adjustments: Selective portfolio adjustments indicate a focus on consumer-facing companies and cautious tech investments.

• Meta's AI Delays: Postponement of AI model rollout raises concerns about monetization of substantial AI investments.

• Copper Supply Imperatives: Domestic mining and increased investment in companies like Rio Tinto are crucial to meet soaring demand and reduce reliance on China.

• Retail Mergers: The Foot Locker and Dick's Sporting Goods merger reflects strategic consolidation but presents mixed investor reactions based on premium valuations.

• Starbucks' Expansion in China: Aggressive growth plans aim to counter competitive and economic pressures, with cautious optimism from analysts.

Disclaimer: All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC, NBC Universal, their parent company, or affiliates. The information provided is based on the transcript of the May 15, 2025, episode of "Fast Money."