← CNBC's "Fast Money"
CNBC's "Fast Money"
Federal Judge Blocks Subpoena In Fed Reserve Probe… And Counting Down to Nvidia’s GTC 3/13/26
00:43:35
A fresh wave of semi catalysts lining up for next — from Nvidia’s GTC event to Micron earnings and an AWS–Cerebras tie-up. What Fast Money Friend Gene Munster is watching, and what to expect from Nvidia’s CEO Jensen Huang when he takes the stage. Plus Jefferies’ David Zervos joins us with a simple message for investors: “Don’t panic,” as traders weigh inflation risks, Meta’s reported AI delay, and Boeing’s push to fix wiring issues. Fast Money Disclaimer
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- [00:00]
Melissa Lee
Trading at Schwab is powered by Ameritrade, giving you even more specialized support than ever before. Like access to the trade desk. Our team of passionate traders ready to tackle anything from the most complex trading questions to a simple strategy. Gut check. Need assistance? No problem. Get 24. 7 professional answers and live help and access support by phone, email and in platform chat. That's how Schwab is here for you to help you trade brilliantly. Learn more@schwab.com trading not every sale happens
- [00:29]
Host/Moderator
at the register before AT&T business Wire. Checking out customers on our mobile POS systems took too long. Basically a staring contest where everyone loses.
- [00:39]
David Zervos
It's crazy what people say during an awkward silence.
- [00:42]
Host/Moderator
Now transactions are done before the silence takes hold. That means I can focus on the task at hand and make an extra sail or two. Sometimes I do miss the bonding time.
- [00:52]
Tim Seymour
Sometimes AT&T business Wireless connecting changes everything.
- [01:00]
Host/Moderator
Live from the NASDAQ markets in the heart of New York City's Times Square. This is fast money. Here's what's on tap tonight. We are getting ready for the kickoff of Nvidia's big GTC conference on Monday and the semi giant come to the rescue for the trade. And will CEO Jensen Huang deliver on hopes for the company? We will dig in. And speaking of AI Meta reportedly delaying the rollout of its latest large language model amid performance concerns, how did the tech giant fall so far behind the LLM race and can it get itself back on track? Plus a Boeing bounce to end the week. A year long boycott of Target comes to an end and Lulu logs its longest losing streak ever. Well, earnings next week turn things around. We'll head to the options pitch to find out. I'm Melissa Lee, come to you live from Studio B at the nasdaq. On the desk tonight, Tim Seymour, Bono and ice and Steve Grasso and Mike Koh. We'll get to all those stock stories in just a bit. We do start off with the latest development in President Trump's battle with Fed Chair Jerome Powell. Jeanine Pirro, the U.S. attorney General for D.C. saying the DOJ will appeal a federal judge's decision to to block the subpoena in criminal in the criminal probe of Powell. Steve Liesman joins us with all the details and the implications of course for putting Kevin Warsh in as Fed chair. Steve?
- [02:10]
Steve Liesman
Yeah, there's a couple components to this, Melissa. First I want to read to you the one part of the judge's decision which was very, very damning about Jeanine Pirro and the reason for Bringing this. I think we have a screen there that we can put up and show you what he said. Did prosecutors issue those subpoenas for a proper purpose? The court finds they did not. There's abundant evidence that the subpoena's dominant, if not sole, purpose is to harass and pressure Powell either to yield to the president or to resign. It goes on to further see this as a pattern of harassment or legal harassment. And this is a separate issue here. Joe Boswelis, to your question. Melissa just wrote a commentary saying any prospective appointment may not occur until, I'm sorry, let's just say 2027, if at all, based on what key decision makers in the political authority are signaling. I think that might be extreme. But I think your suggestion there, Melissa, that this could further delay. And the reason the hearings of Warshead, the reason is because there's two separate legal actions that it looks like Jeanine Pirro is taking. One is to send it back to the judge to reconsider, and the other is a potential appeal. So Senator Tillis later issued a statement saying unless this whole thing goes away, he would not move to advance Kevin Warsh's nomination to be Fed chair.
- [03:31]
Host/Moderator
I mean, it seems like the whole thing, you and I both listened to Jeanine Pirro at that press conference. It seems like the only way this thing is going to go away is if President Trump or somebody else taps her on the shoulder and says, jean, you're not going to pursue this anymore. So short of that, we could actually be looking at Powell in the chair for much longer, which makes next week's press conference a little bit more impactful and worth listening to because he might be the guy later on in the year who will decide if it's time to cut.
- [03:59]
Steve Liesman
I think that's an important point. We thought it was going to be the penultimate meeting where Powell was going to be the chair, and now it's the unknown ultimate meeting in terms of when he would be. He could stay on. And by the way, there is one comment that we cannot verify is accurate, but it is in the court document. And this is where the government is arguing against the Fed's request to quash the subpoena. And apparently there was some kind of hearing and it said the chair feels like this is the government's recounting, feels like he would not leave the board when his termist chair expires if he was still under investigation. You know, we've been trying to pursue that question as to whether or not Fed Chair Powell would stay on the board. Even after his Fed chair term were to end because, you know, he has a couple years left in his governor's term. So that's another issue that not only are we now trying to figure out who will be the Fed chair, but we really have no idea what the composition of at least the Federal Reserve Board will be as well, because we don't know if Powell will stay, will others on the Fed board stay? So there's a lot up in the air. But maybe what we should do real quickly, I don't know if we have this stuff available, Melissa, is look at where the market is priced.
- [05:11]
David Zervos
And it's very my mind, it's very interesting.
- [05:14]
Steve Liesman
We've been doing this for such a long time. Now, here's the deal. The market is pricing out rate cuts at least until December. And even in December, they're not quite so confident. I don't know how you read 63%, but that's up a little bit today based on the data we got this morning. But that's a probability of one cut and that's in December and 22% probability of two cuts by December. And this, as you know, we had at 1.3 cuts built in and certainly 2. But what's interesting about that, and I've said this a bunch of times, is that the market sees potentially Kevin Warsh coming in and not cutting right away, not cutting in the next meeting, not cutting potentially or more definitively till December because of what's happening obviously with oil prices.
- [05:58]
Host/Moderator
Yeah. Steve, thank you.
- [06:00]
Steve Liesman
Pleasure.
- [06:01]
Host/Moderator
Steve Liesman, thank you. So it is ironic that all of this to remove Powell when in the end he might actually end up staying much longer as Fed chair. Putting that aside, though, Tim, and how do you sort of think about this?
- [06:15]
Tim Seymour
Yeah, not ironic, but apropos that those pictures that we saw in the lead in some of that B roll were both Powell and Trump in hard hats because you know, everybody's there could be more battling going on here, but both sides are very dug in. And the district judge that issued this kind of, let's call it scathing, you know, he's definitely very opinionated in terms of what the intent was, is also an Obama appointee. So there's, there are the sides sides that are drawn up on both sides here. And it's pretty clear though that Fed Powell is not necessarily he could chair the fomc. We I was listening to your interview in the closing bell that was fascinating. Some of the politics here are not even politics. They're semantics on logistics. And this is coming at A time when inflation is feeding through. This is coming at a time when we have where the market has moved ahead of what the Fed will do. So next week is a week really. It's all about Fed meetings. It's the ECB, it's the BoJ, it's the bank of Canada. In a world that suddenly has changed almost overnight because again, CPI was, you know, it. If that's what you listen to, that was a great number.
- [07:23]
Bono
Yeah. I think if you go down the litany of everything that Tim just said, if that would have happened a month ago, I think it would be worth exponentially more important to the market. I think Iran has taken center stage. Oil has taken center stage.
- [07:37]
Host/Moderator
The.
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Bono
I don't want to say Powell is in the backseat. I don't think the market's paying the same amount of attention because there's so much noise around oil prices, cpi, PC, delayed PC, core PC, that you can interpret it whichever way that you want. Right now, if you're a dove or a hawk, you can see it two different ways.
- [07:59]
Host/Moderator
Right. But to that point, very point, that there are so many uncertainties in terms of how it all impact the inflation picture and the impact on the economy. Maybe it's. I don't want better for the markets in terms of gaining some comfort in terms of how the Fed is going to deal with this if the same guy is in charge, as opposed to switching over to Kevin Warsh sometime in the middle of the year, May 15th or so.
- [08:24]
Melissa Lee
Yeah, I think I agree with that on its service. I think my prime takeaway from this, the judge's ruling, was that I think it essentially bolsters Fed independence. For me, that's the primary concern. Whether or not there's someone at the helm that is essentially going to feel compelled or allow himself to, to be pushed to either cut or pause or raise rates on a whim. All of the uncertainty that Steve mentioned, oil, I agree, center stage. But all of that to me makes the mix of what we're going to do next that much more complicated and that much more important that we get it right and that it's based on factual data as opposed to impulse. With that said, you know, you kind of look at the rate picture, you look at gdp. I mean, Tim mentioned some of the CPI readings that GDP revision, I think is a bit concerning. That stacked up against what we've seen continued ticking up in unemployment, some of the jolts of numbers. I think you have a very muddled picture. I think if you go and look at three readings back from any like three or five rolling period, you're given a drastically different picture. And so for me, my primary takeaway is that the judges ruling today said that we're going to continue to have Fed independence, at least in the interim. You have confidence that that is going to be the case? Not that it was ever necessarily not going to be. But I think it's front and center and we can have faith that the Fed is going to take those things into consideration and be leaning towards the right decision rather than us essentially just having a poster child for what the administration wants.
- [09:49]
Bono
But plus, one thing before we go to my.
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Steve Liesman
Sorry.
- [09:52]
Bono
The other thing is what does the market look like and what does Iran look like and what does oil look like? It's in March right now. So this, things change in 10 minutes in this marketplace, they change in two minutes. So we're paid to act and trade off of the market that we have in front of us. But all of this could be sort of rear window or side window. Come back.
- [10:16]
Host/Moderator
Mike, what are your thoughts?
- [10:19]
Mike Koh
I think if you're interested in what's going to happen with rates rather than focusing on political posturing, which I think has a lot to do with basically what the DOJ is doing here. Warsh is a very strong candidate. I think Powell is a very strong Fed chairman. And I think if you just keep your eye on the two year, you're going to have a pretty good sense of where rates are going to go and probably just allow the rest of this to play out on its own. I don't think we should be focusing our time and attention on it. And the fact is that there's a good reason why we're not focusing as much time and attention on it because the events in the Middle east and what's going on with oil prices are very mean. We're talking about a half a percent to 1% of total global GDP is impacted by what's going on over there. I think that obviously has to be considered a bigger priority.
- [11:05]
Host/Moderator
Yeah, it doesn't matter. We haven't talked about Warsh or Powell or what would they do at all. We've only been talking about the 2 year yielding higher, so 10 year old moving higher.
- [11:14]
Tim Seymour
But, but the thing about today's ruling that is important for interest rates, if you really believe that Fed independence and the legitimacy of the institution is very good for interest rates, as in lower rates. Right. I mean we were starting, I don't know if the world was reacting back in April of last year to, to what or at different times to the perceived independence or maybe future lack thereof. But I think that's very important. I, I hear you Steve. On like yeah, we're kind of trading the market we have here. I will say whether it's looking at the oil futures curve where we have less backwardation, the future is pricing in higher oil prices by the day in fact is already shot through the Sunday night spike. If you look out six months or into 27, those rates, those changes are actually equal. We've actually gone higher than the spike of where we were again farther out pricing in longer term Pentagon moving more warships to the Middle east as we speak this is becoming more entrenched and that's because, and I think the views that we all have, I think strategists who are talking about 15 to 22% EPS growth in 26 are going to have to make adjustments. I think a lot of people are going have to make adjustments. And that's why I think the Fed is, is very important in that if we remove an easy Fed and we talked about this yesterday, if just the bias goes to neutral that, that, that, that's, that's a big change for the stock market which was expecting at least
- [12:37]
Bono
an easier Fed, that backwardation flattening there could be. So you know the administration has talked about selling today's futures. If you sell today's futures you have to hedge and buy the back end. So it flattens backwardation. So it hasn't done anything this week but last week you saw the price come down precipitously. If they're selling front month, they have to hedge their positions again, even the government treasury is never going to sell front month. We don't know if they're doing it, not doing it or if someone else is doing it for them or if other countries are doing it. But the bottom line is that's natural to see backwardation flattening because if you're selling front months, you think the price is too high, you have to hedge off your position and buy back months. And that normalizes the curve.
- [13:21]
Host/Moderator
So you're just, you're discounting it completely.
- [13:23]
Bono
I'm not discounting completely. What I'm saying is somebody at this price in oil, you got to believe that oil is going to stay up at this level for a quite significant amount of time to really buy into these prices. And when you see oil pop to that 120, those old highs that we had in 2022 and then fall aggressively, someone's telling you that they don't think it's going to be that long of an event.
- [13:47]
Host/Moderator
I don't know if we see it falling aggressively.
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Bono
I mean, last week when we traded overnight on a Sunday night, when we
- [13:52]
Tim Seymour
traded the 126, I just, you know, my view is, and I'm just telling you my view has changed markedly in 10 days. And you know, maybe I was quick to think that this wasn't as big of an engagement, but it's, it's in some sense policy wise. And we're going to have this conversation and I'll wait for Mr. Zervos to come in. And David's got some views on this and he's always pretty calm, cool and collected. So, you know, back in April of last year, we were wondering what pushed the White House, what, you know, what were those pressure points to actually get them to focus on the market. And I think at least in 10 days, there's a lot more on the table for market participants to look at me being one of them and just say I am changing some views.
- [14:35]
Host/Moderator
For more on the Fed and the markets, let's bring in CNBC contributor David Zervos, the chief market strategist at Jefferies. David, great to have you with us, particularly during this period of time, because in the past you've always been during after Liberation Day, you're comical, collected and said it would be time to buy. Do you feel the same way or are things sort of different? The unknown sort of greater? The fact that the Strait of Hormuz is actually closed and the new supreme Leader says not a liter of oil shall pass through the that straight. Are the challenges greater this time around for the markets?
- [15:06]
David Zervos
Well, I think, Melissa, for me it's a little bit harder for me because I feel better equipped on the trade side to discuss things than on the geopolitical side. I think tends to be that financial markets folks like myself, like yourselves, we're just not that great at geopolitics. And the sad part is the people who are good at geopolitics tend not to be that good at markets. So there's not a lot of help to really kind of calm the panic down. That said, what is calming to me is that the market itself is relatively calm. We're down 3% for the year on the S and P, which is hardly a blip. The two year note which you guys were talking about extensively earlier is really only up about 25 basis points. And so we've taken kind of one cut out of the system. And as we wait and watch, or at least the distribution has changed by about A cut, again, not that much in the grand scheme of things, with $100 oil after touching $120 oil and plenty of people out there scaring us into thinking that we could have $150 oil before all this is said and done, which is certainly in the realm of possibility. And we'd have to think about how that negative supply shock feeds through both to the economic growth outlook as well as the inflation expectations and inflation outlook. The good news is long term inflation expectations really do not look like they are budging through the TIPS market or survey data or any other or even the curve itself, the yield curve. So I'm kind of holding on to cautious optimism, but also recognizing that we in the markets just generally aren't as good at the geopolitical stuff as we are at the economic stuff.
- [16:45]
Host/Moderator
So you interpret the moves that we've seen so far in the major indices as being resilient as opposed to complacent? Well, because there's a candidate that we are being complacent. We're not really pricing in the full risk. We're not pricing in the flow through of the impact of higher input costs, not just energy, but helium and urea and, you know, you name it. Moving higher.
- [17:10]
David Zervos
Yeah, asphalt, all of it. You know, I think you could make that argument. I guess the good news for me is that, you know, back in April we were nursing 12% down moves in the S and P. We had a very, very sharp rise in 10 year yields. the same time, the dollar barely strengthened and then started to weaken. It was a really complicated time and much bigger moves in the broader macroeconomic aggregates or financial market aggregates that we look at. So you could take it either way. You could take it as the market's being complacent, that's one view. Or you could take it as it's a sign of resilience that people look at this and are sort of discounting what happens six to 12 months from now and saying, hey, I'm probably a little bit more worried about what this does to growth and employment and a little less worried about how it stops the Fed or causes inflation expectations or the anchoring of inflation expectations to, to come under pressure.
- [18:12]
Melissa Lee
David?
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Tim Seymour
Tim, so you're, you're sounding cool, you're looking cool tonight, by the way. You got a cool, cool outfit on. And I always watch around when my blood pressure is high because I think you, you bring, you bring that element. What raises your blood pressure, that. And as the market strategist, I guess I feel that strategists at some point could be starting to make adjustments to that EPS outlook based upon some of the headwinds we're seeing. Help us even understand even some of the mechanics under that. I don't need to hear, you know, where Jefferies is on this. I know you can't tell me some of those things, but help me understand what gets you on.
- [18:48]
Steve Liesman
Cool.
- [18:48]
Tim Seymour
And how far away are we?
- [18:51]
David Zervos
You know, look, I think any time we have one of these negative supply shocks like a change in oil prices, a marked significant, sustained change in oil prices, it's just generally bad news. Does that mean that it counters all of the good news out there? No. And so I'm still looking at the incredible stories that have driven the stock market up until this point over the last year or two or more coming out of COVID Mainly productivity and that's just productivity coming from our technology discussions and AI and everything else, but also from deregulation and the tax changes in the one big beautiful bill and the like. There's a lot of things that this oil shock would have to negate and then push back on for me to get really, really nervous. And here at 90 to $100 a barrel, I'm annoyed, but I'm not worried. If we sustain this and you guys made up a great point, which is these back month oil contracts which didn't participate in the Sunday night rally last week have actually done very well and are showing that we're going to be in a more sustained period. That causes me some concern. I don't like to see that. I think that is a drag on the global economy. It's a drag on, it's a drag on employment, it's a drag on growth. And I think that's going to be a problem for us. I don't see the worries on the inflation side maybe as much as some others do. Like a de anchoring of inflation expectations like we had in the 70s or even a little bit during the late 80s and early 90s during the Gulf War. Most of the big oil shocks that we've seen in the last 25 years and we've seen some big ones, bigger than this really did not get people nervous about a long term change in inflation expectations. That said, there were a lot of people that came on your show and other shows and said, oh my God, we're going back to the 70s, it's Arthur Burns, it's the Fed making mistakes. It's all going to end in tears. We're going to have massive stagflation I'm not a buyer. I don't think that's the story. You're supposed to push back on that story. But could we have a period where that inflation spike lasts a little while and it keeps the Fed on, on hold a little longer? Yeah, and that's going to hurt. And you're right, that's going to hurt. Eps.
- [21:09]
Host/Moderator
David, great to see you. Thank you.
- [21:12]
David Zervos
Always a pleasure.
- [21:13]
Host/Moderator
David Zervos. Mike, are you starting to get worried?
- [21:18]
Mike Koh
Well, I mean, I've been a little anxious. I think we probably all have ever since February 28th. It would be unreasonable not to be. And of course, what is going on in crude is particularly troubling. I mean, it's not that easy to fix that situation. Although the futures curve is going to reflect a couple things. Number one, it's going to end up looking through to a certain extent what's going on in the Middle East. It's always going to look through to improvements in productivity coming out of things like the Orinoco Basin, which we now might expect is going to actually take place. There's a lot of incremental production that could come online from that point portion of the world, but it's going to take us some time to get there. And kind of, to Steve's earlier point, just taking a look at the futures curve, you know, it's kind of interesting if you think about it this way, if those that manage the SPR are looking at this the way an oil trader would and said, okay, we've got 400 million plus barrels in the SPR and we're below where we should be, call it 6 or 700 million. If you start selling on the front, you can buy maybe 40% more in the back to refill it. So from a strategic point of view, it might be a decent course of action if that's the way they approach it, that they're going to say, we're in the long run, we're going to refill this thing and get back above where we are now. But we're going to try to stabilize oil prices in the short term.
- [22:33]
Host/Moderator
Coming up, Boeing taking flight as a planemaker looks to fix an issue that's delaying 737 Max delivery is a new timeline for production. Next. Plus, Metta plunging on reports it's delaying its latest flagship AI model. How other hyperscalers pounce on the opportunity. Don't go out anywhere. Fast Money's back right after this.
- [22:53]
Tim Seymour
This is Fast Money with Melissa Lee right here on cnbc.
- [23:01]
Melissa Lee
Trading at Schwab is Powered by Ameritrade, giving you even more specialized support than ever before. Like access to the trade desk. Our team of passionate traders ready to tackle anything from the most complex trading questions to a simple strategy. Gut check. Need assistance? No problem. Get 24. 7 professional answers and live help and access support by phone, email and in platform chat. That's how Schwab is here for you to help you trade brilliantly. Learn more@schwab.com trading oh, could this vintage
- [23:30]
David Zervos
store be any cuter?
- [23:32]
Host/Moderator
Right?
- [23:32]
Mike Koh
And the best part?
- [23:33]
Host/Moderator
They accept Discover. Accept Discover In a little place like this? I don't think so, Jennifer. Oh yeah, huh? Discover's accepted where I like to shop. Come on, baby. Get with the times. Right. So we shouldn't get the parachute pants. These are making a comeback, I think.
- [23:52]
David Zervos
Discover is accepted at 99% of places
- [23:54]
Tim Seymour
that take credit cards nationwide.
- [23:56]
David Zervos
Based on the February 2025 Nielsen report.
- [23:59]
Melissa Lee
This segment is brought to you by Ghelt. If you're a business owner wondering whether your CPA is just filing forms instead of helping you use taxes strategically, GHELT
- [24:08]
David Zervos
was built for you.
- [24:09]
Melissa Lee
Their expert CPAs and innovative AI tools help optimize entity structure, deductions and retirement contributions with proact proactive year round tax planning. Sirius XM listeners receive 10% off their first year of service when they sign up. Visit join gilt.com to schedule a discovery call. That's join glt.com join gelt.com
- [24:31]
Host/Moderator
welcome back to Fast Money. Boeing breaking a four day losing streak. Up two and a half percent after Bloomberg reported the aircraft maker is fixing faulty wiring in its 737 Max jets. The damage reported earlier this week could potentially impact March deliveries. The stock is still down over 9% since Monday. When that story crossed, you thought another issue. Boeing really?
- [24:54]
Tim Seymour
I did. I did think that and I think I feel like I flagged this one on Wednesday or Tuesday. And, but guess what? I actually am not that worried about this wiring issue. I'm not that worried about these delays. I think their, their approach. I'm not going to tell you that there couldn't be something more substantial than this. The biggest issue with Boeing is once you look at the chart of Airbus, look at the chart of Embraer, once you look at the chart of, of, of every airline in the world and, and again, even for a company that has 30% of their revenues on the defense side, I was just doing this work on Airbus because we own this in Ivo and it's been a disaster. I mean, and I mean, you know, over the last six weeks, including Iran, but some part of this before that. So talk about making a change. I'm not making a change in Boeing. I'm long this, I actually think this is an opportunity, but I don't know that this reverses right here. And my view on airlines is a lot more cautious even though I wouldn't be a forced seller here.
- [25:51]
Bono
Tim has a longer term view on Boeing. Mine was a trade. I bought it below 200, sold it in varying various prices from 240ish down. I thought last week the headline on the China order should have goosed it more to the upside. That's where I sold my remaining balance and I'm happy that I did.
- [26:10]
Melissa Lee
Yeah, I don't think this in isolation is really a big deal, particularly when you kind of compare it to some of the other issues with Boeing. But I'm with you in terms of I'm not sure I really see a compelling trading opportunity right now. You've, you're back down through the 200 day moving average. You've kind of lost the real inertia to the upside. I, to use Cardiff's term, I kind of think this is a pair of twos. I do think the news on the margin is structurally positive. However, I really don't see a compelling trading opportunity. It kind of seems like we're in a bit of no man's land here.
- [26:38]
Host/Moderator
Mike, where are you on this?
- [26:40]
Mike Koh
Yeah, I'm kind of with Bono in on this. Although I will make one point and that is that the more uncertainty you add just sort of globally, geopolitically to all stocks, but to this one specifically, on the basis of some of the news that we're seeing, one of the things that has started to happen is we've been seeing options premium creep up quite markedly so now three month fall around 40%. So for those who are thinking about saying okay, you know what, it's probably going to be that pair of twos that Bono and just referenced. You know, one of the things you could look to is selling some cash covered puts because you're going to get paid a lot more to do that.
- [27:11]
Tim Seymour
Now real quick, I think we might see a bunch of the carriers revise their estimates and I think that would be an opportunity to maybe take a bite. In other words, I believe in airlines here, but I think they can go lower and I think there's a bit of a washout that you still want to buy even down 25%.
- [27:27]
Host/Moderator
All right, there's a lot more fast Monday to come. Here's what's coming up next Nvidia highlights
- [27:33]
Tim Seymour
a massive week for chip stocks and the AI trade with all eyes on Monday's GTC conference kickoff. Can the biggest name in artificial intelligence shake things up? We'll dive in with Deepwater's Gene Munster next.
- [27:46]
Melissa Lee
Plus Meta Facing its biggest AI fears,
- [27:49]
Mike Koh
we'll pull back the curtain on the
- [27:51]
Melissa Lee
development nightmare, delaying the tech titan's latest
- [27:54]
Mike Koh
flagship model and how other names could pounce.
- [27:58]
Tim Seymour
You're watching Fast Money live from the NASDAQ market site in Times Square. We're back right after this.
- [28:09]
Melissa Lee
Trading at Schwab is powered by Ameritrade, giving you even more specialized support than ever before, like access to the trade desk. Our team of passionate traders ready to tackle anything from the most complex trading questions to a simple strategy gut check. Need assistance? No problem. Get 24. 7 professional answers and live help and access support by phone, email and in platform chat. That's how Schwab is here for you to help you trade brilliantly. Learn more@schwab.com Trading Sling is the live
- [28:38]
David Zervos
TV service that puts you in charge.
- [28:41]
Tim Seymour
Choose your plan Orange for sports and entertainment favorites, blue for news and reality
- [28:45]
Melissa Lee
or select for the essentials.
- [28:47]
Tim Seymour
Only pay for the stuff you actually watch and pause your subscription anytime because paying for TV or not watching, that's just rude. No long term contracts, no nonsense. Pick your plan, add what you want. Sling lets you do that. Visit sling.com to learn more.
- [29:04]
Steve Liesman
What do the steam engine, electricity and AI have in common?
- [29:07]
Host/Moderator
They don't just change how we work, they transform entire economies. Where the Internet Lives is an award winning podcast from Google and about the unseen world of data centers. This season we're going inside the AI revolution. From farmers using AI to analyze soil data to researchers discovering new medicines, a new era of AI innovation is here. Listen to where the Internet lives wherever you get your podcasts. Welcome back to Fast Money. Meta dropping almost 4% on reports that the tech giant is delaying the rollout of its new AI model and may license Google's Gemini in the interim. Julia Borson's got the details on this. Julia hey Melissa. Well, Mark Zuckerberg said back in January that Met his new AI model would ship in coming months. But now Metta doesn't yet have a launch date for its high stakes large language model in the works called Avocado, according to sources. Now this despite the company ramping up to as much as $135 billion in capex this year, MET is playing catch up as its AI division has undergone upheaval it including new leadership and scale. Alex Wang A strategy shift from building open source tools to consumer facing AI and hiring drama. Reports of resentment over new engineering hires paid hundreds of millions of dollars. Met is saying quote our next model will be good but more importantly show the rapid trajectory we're on and then we'll steadily push the frontier over the course of the year. Baird saying we believe that the success of metal Met his new generation of models will be more dependent on their ability to boost performance of meta AI in the family of apps rather than compete against General LLMs. So Melissa, we can be sure that Met his new model will be scrutinized as a sign of whether Met as AI investments are going to pay off. Julia thank you. Julia Boorstin it's worth noting that Matters Last LLM was released in 2024. So in the evolution of AI, a couple of years is a long, long time.
- [31:11]
Bono
Yeah, their LLM became an lol. This is keep it left right there. You chuckle. Thank you. So, so here's the first takeaway that I took from from that was Apple spent 12 billion on capex and is licensing Gemini. Metta spent 130 billion and is licensing Gemini. And this is where I thought where the long game that Apple's playing really conserves a hell of a of lot more money, becomes a lot more efficient, lets the winners and losers get sifted out throughout the marketplace. It's not about money and everyone thought you had to spend the most amount of money to be the most competitive. And Meta has disproved that.
- [31:50]
Melissa Lee
Okay, I don't know if they've disproved shows that you can spend a ton of money and still get it wrong and still not be the AI leader. That's my takeaway. But I never really valued matter based on the expectation that they were going to be the supreme leaders of AI. My logic was that they are very much an ads and engagement machine that has this AI kind of funnel or way of enhancing that user experience. Listen, I think this is a step back, but if I see nothing else from Zuckerberg with the whole metaverse situation, I've seen that they're willing to pivot when things go wrong. Now, I think that the outlandish capex that you've mentioned, along with the salaries that they're paying to develop this particular vertical. Yeah, it's concerning that they haven't been able to get this right. What I expect is within the next quarter or two, if this continues for them to, you know, either increase whatever partnership situation they're going to enter into or to probably pivot away and show that they're not going to continue to burn cash if there is no roi.
- [32:50]
Tim Seymour
I think the weakness today in matter is more an excuse to sell the cyclicality of the company. I think this stock, when we see economics, the meta sniffs out economic slowdown faster than any mega cap tech stock does. And I'm not telling you that the world's coming to the economy slowing down rapidly here. I'm telling you that there's some fear of cyclicality out there, whether it's ad, spend, consumer, all the things that are critical to their core business. You're going to see the stock sell off first and ask questions later. We've seen that multiple times and they're the first ones to go. So I don't love that chart. It looks like it's giving ground.
- [33:23]
Host/Moderator
Yeah. Coming up, all eyes on Nvidia as the juggernauts GTC conference gets set to kick off on Monday. Can this big event break the stock out of its funk? We'll dig in right after this.
- [33:36]
Mike Koh
Missed a moment of fast.
- [33:37]
Melissa Lee
Catch us anytime on the go.
- [33:39]
Tim Seymour
Follow the Fast Money podcast.
- [33:40]
Melissa Lee
We're back right after this.
- [33:50]
Host/Moderator
Welcome back to Fast Money. A big week for chips and the trade on deck. Semis managed to end the week almost 2% higher even as the broader market sold off on continued conflict in the Middle East. Nvidia's GPU tech conference GTC headlines the action with CEO Jensen Huang expected to take the stage on Monday. Micron results due out after the bell on Wednesday. That stock up nearly 50% already this year. And just today, Amazon's announcing a partnership with chip startup Cerebras to bring the firm's AI semiconductors to Amazon's cloud. Fast Money friend Jean Munster joins us now for more on all of this. Gene, always great to get your take on things. What do you think Jensen has up his sleeve for next week?
- [34:31]
Gene Munster
I think it's about reinforcing that. We're still so early in this trade that if you look at the inflection point, what's going on with Anthropic, their business? This is incredible. Melissa was a $9 billion run rate at the end of December. It was 14 in February and it's 19 today. So I think he's really going to hit that hard. Melissa and I would be reluctant to guess what the reaction to all that's going to be. But this is all about the inflection curve.
- [34:58]
Host/Moderator
We've heard so much about hyperscalers developing their own chips. Just this week, Metta announced that, you know, it has a chip that is designed for inferencing specifically as opposed to training models, and that it developed it in close partnership with Broadcom and not Nvidia. And then you have this report about Amazon and Cerebras. Is there any thought that maybe the mantle is being passed to somebody else or a group of others? Nvidia won't get every single dollar to be spent on chips in the future.
- [35:32]
Gene Munster
I think that that's part of this, is that there's this question ultimately and I want to kind of play it forward to this kind of discrepancy around going into GTC next week, all this positive context around this inflection point that I talked about, that big inflection point, really remarkable. What does that mean ultimately for the kind of the central question? You're getting to this central question with Nvidia. And this year the Street's looking for 70% revenue growth next year, 3, 30% in calendar 28. And yes, investors are looking out to 28. They're looking for 16%. So we go 70, 30, 16%. And the reason why you have that sharp decline is exactly what you're talking about is there's still this confusion in terms of how the silicon trade plays out, what happens with custom silicon and how does Nvidia ultimately play in that? And I think what we're going to hear on Monday is this is one of six times a year there's four earnings calls, two GTCs. One thing we're going to hear on Monday is Jensen be very emphatic that they're going to be playing a big role in these out years. And I suspect Melissa as an Nvidia shareholder, our firm owns Nvidia. I don't expect that that's necessarily going to be positive for the stock because I think it's largely known that things are going well and it's still a very hard sale for Jensen to convince investors that something as far out as 2027 and 2028 are going to be better than expected.
- [37:03]
Melissa Lee
Gene, bottom one here. Thanks for joining. Quick question. How how much emphasis do you expect Jensen to place on the Rubin platform, that Rubin family, the whole integrated stack there, and how scrutinized do you expect that to be?
- [37:20]
Gene Munster
So it is all about Ruben. He will certainly talk about it and he gave us a preview three weeks ago when they reported their quarterback about what he's going to say. And specifically his message is that Ruben, the profitability of Ruben for these companies like Metta, who is buying all these chips, that it has a fast return on investment. And that kind of what he underscored before. So he's going to come back to that same playbook. And I think that that is, it's good for Ruben. I think that the numbers will play out, that customers will ultimately see that ROI and continue to embrace and buy more Nvidia. Again, Momin, my biggest question is the storyline on next Monday is pretty well telegraphed here because we just got it three weeks ago in the report of the quarter. What's something incremental that he can say to really get investors more comfortable at those out years? I don't have a good answer.
- [38:14]
Host/Moderator
So next week, Gene, we've got Nvidia gtc and then we have Micron earnings on Wednesday after the bell. And so after these two events, is it just going to underscore the idea that memory wins still that the up 50% this year? That's not the end of it? We haven't seen it yet.
- [38:32]
Gene Munster
Yeah, my sense is, I mean these all play together. What's going on on the GPU side impacts obviously the memory side. And so I think the biggest takeaway here, this, this sounds redundant here, but the biggest takeaway is that we're still early, we're at an inflection point and just want to underscore what those numbers were for anthropic. And we're seeing that kind of across the board. There's lots of examples. Things really changed starting back in November when Opus 4 came out. And so as far as how this plays forward to the investors and their psychology around this is that my sense is that eventually the narrative is going to change. Right now we have investors skittish about two, three years out. Nvidia trades at 16 times, calendar 27 earnings. Microsoft trades at 21 times, Apple 26. Understand it's a hardware company, but at some point I think investors are going to just step back and read the big picture here, which we are undergoing an inflection point and they're going to be a beneficiary.
- [39:31]
Host/Moderator
Gene, good to see you. Thank you. Have a good weekend.
- [39:33]
Gene Munster
Thank you.
- [39:33]
Host/Moderator
Munster Deepwater. Michael, where do you stand on Nvidia and or memory names?
- [39:39]
Mike Koh
Yeah, I mean the memory trade is still getting going. I mean he was mentioning that Nvidia is trading at 16 times 27 numbers. Micron's trading at 9 times 27 numbers. So there's obviously some room. I mean we, we have broad exposure to this entire space and I think that it's the memory area in particular that was underappreciated frequently just thought of as a commodity or just simply cyclical. But you know, we have to remember that if we go back, it was, you know, 10 years ago or so when we thought about Nvidia. We didn't really think it was as important then obviously as it turned out to be. So I think Micron still has some room to the upside as far as it's come already.
- [40:15]
Host/Moderator
Quick, would you rather Tim, we haven't done that a long time. Video or Micron.
- [40:18]
Tim Seymour
Love a fresh look at an old game. Nvidia. Yeah, I mean I believe in both companies. I think we are on the side of a memory bubble that doesn't pop now. I like 21 times forward. I love Nvidia long term.
- [40:35]
Host/Moderator
You can play for super quick.
- [40:36]
Steve Liesman
Yeah.
- [40:37]
Bono
Micron used to be able to just chart dram prices and that just went in lockstep. I think it was a good buy below 200. I think it's overextended. I would be a seller of Micron. I'm not. I'm a hesitant buyer of Nvidia.
- [40:49]
Host/Moderator
Coming off Target higher at the end of the year long boycott looks close at hand. The details of what lies ahead for this name. That's next. Welcome back to Fast Money. Target jumping over a percent today but still ending the week down nearly 3%. Earlier this week, activists ended a year long boycott over the company's DEI rollback after holding private talks with Leadership. Still, Target hasn't reinstated its former policies and other activist groups say their boycotts will continue. Even with a 12% gain over the past year, Target is lagging behind our tribal Walmart which is up almost 50% in that time. We bring up these DEI protests because management has acknowledged in the past the drag it has been to earnings. They've done a lot of other things that have challenged earnings and sales, but this is one of the factors.
- [41:40]
Tim Seymour
It is and it's been real. But I think it really is where we are today and also in a world where maybe the consumer is changing a little bit. Sure. More inflation means you never want everyday value more than you have it right now at Wal Mart. You might want to even more tomorrow. But I just get back to some of the changes that have happened to Target. I do think the merchandise mix is interesting. I do think some of the investment in the stores is starting to show some signs. But the change in leadership just means that I think this is a story that's worth getting behind. Of course it is. The T In Timbo.
- [42:12]
Host/Moderator
Timbo, of course. How can one not know that?
- [42:15]
Tim Seymour
So I have to full disclosure, Mike,
- [42:18]
Host/Moderator
co, is it worth taking a flyer? I mean this is a turnaround story basically.
- [42:23]
Mike Koh
No, that's exactly what it is. And of course I don't know that we can really compare it to Walmart until they start sort of get onto the bandwagon of the key drivers that Walmart has seen. Walmart's the world's biggest grocer. It's 70% of their revenues. In Target's case, it's a small fraction of that. They don't have any of the fresh stuff as far as groceries concerned, just a lot of dry goods. But the good news is, and kind of I think this might be a core piece of Tim's thesis is that it's pretty cheap, right? And it seems like things have stabilized and that does give them a framework essentially to try to rebuild. And I think that's probably what they're going to do.
- [42:56]
Host/Moderator
Coming up, from tech to transports, we are digging into next week's biggest earnings. How the options market is betting these reports will play out. That is. Next, more fast Money into. Welcome back to Fast Money Earnings covering a wide swath of sectors next week, from retail to semis to transports. Lululemon, Macy's, Micron and FedEx, just some of the names on the calendar. The options market is lining up some big moves in these names. Mike of course. Got the action, Mike?
- [43:26]
Mike Koh
Yeah. So Lulu, that one's implying a move of about 10% higher or lower. FedEx, 6.7%. Micron, an implied move of about 9% and Macy's an implied move of nearly 12%. And as we look at all of those Lulu, which was historically one of the Holly Indexes names, you know where we saw the most activity there and where we've been seeing it for the last 10 days or so is on the put side. The most active ones today were the 160 and 155 puts that were most active. And as hard hit as these shares have been, anybody who's thinking about pressing shorts here, I think you need to be careful about how you go about doing that. And I think one way you could consider it would be by trading that 160, 155 put spread, which was actually slightly in the money would cost about two and a half dollars. So a one to one bet. Why do I say that? Because as hard hit as this stock has been, if we get any kind of a news that turns out to be positive, you could see a Pretty sharp rebound. But technically this thing looks like it's in real trouble. They've been getting a lot of pressure from the likes of Allo and Vuori and it hasn't rejoined the Holley index name yet, even though it's getting some help from American Express and the incentives that they're trying to get people to drive people in stores there.
- [44:34]
Host/Moderator
I'm just curious, Mike, does Holly know that she's an index named after her? I mean this has existed for like 17 years now.
- [44:40]
Tim Seymour
A little creepy.
- [44:41]
Mike Koh
He does.
- [44:42]
Host/Moderator
She does know. Oh, she know.
- [44:44]
Mike Koh
She does. She, she absolutely does. Because I actually ask. I mean, look, the reason we care about these things is when you look at consumer discretionary stocks, if you're like me, I don't do a lot of shopping. Other people in this household do. And if I want to know what's popular, I have to ask them. I haven't a clue.
- [44:58]
Host/Moderator
Yeah, yeah, no, I get it completely. What do you think?
- [45:01]
Tim Seymour
I mean, I wasn't going to say clear. Mike doesn't do a lot of shopping, but he said it. No, I would be cautious on Lulu. I'm not sure I'd press a short either. But there's more downside ahead for this company. I like FedEx next week. I actually think they could actually they could raise their guidance on the full year. I think outside of the macro, it's a great bottom up story.
- [45:24]
Bono
If you think that energy prices are going to remain elevated. FedEx even on a beat, you got to be a seller into that. And if you look at Lulu, by the way, just a little, little bow tie on this, we're back to Covid level prices or thereabouts, very close to it. That's tremendous.
- [45:40]
Melissa Lee
Yeah, I think micron of memory is where I'm focused.
- [45:44]
Host/Moderator
Up next, final trades, Final trade time. Michael Koh.
- [46:03]
Mike Koh
Yeah, think global and act local. There's a big difference between gas prices in Europe and the United States and that benefits local producers of fertilizer like CF Industries.
- [46:13]
Host/Moderator
Timbo.
- [46:14]
Tim Seymour
Yeah, I'm thinking global. I'm thinking global. Central banks are going to continue to buy gold. I understand a rising dollar has put a little bit of a crimp in that trade. You want to own the GDX final one.
- [46:24]
Melissa Lee
Listen, it's a scary chart but if you're looking to take a flyer, I think that hood looks interesting. It's really going to come down to trading volumes.
- [46:31]
Bono
Stephen I had my FCX for quite some time, been the scale seller and it's rolled over on a chart. So I am completely out of it now.
- [46:39]
Host/Moderator
Is that the bow tie of the show?
- [46:40]
Mike Koh
I put a bow tie.
- [46:41]
Bono
I put a bow tie on that trade.
- [46:42]
Host/Moderator
Thank you for watching Fast Money. Have a great weekend. See you back here on Monday on Closing Bell Overtime. Mad Money with Jim Cramer starts right now. All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC or
- [46:58]
David Zervos
its parent company or affiliates and may
- [47:00]
Host/Moderator
have been previously disseminated by them on television, radio, Internet or another medium.
- [47:03]
David Zervos
You should not treat any opinion expressed
- [47:05]
Host/Moderator
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 trading@schwab is powered
- [47:26]
Melissa Lee
by Ameritrade, giving you even more specialized support than ever before, like access to the trade desktop. Our team of passionate traders ready to tackle anything from the most complex trading questions to a simple strategy gut check. Need assistance? No problem. Get 24. 7 professional answers and live help and access support by phone, email and in platform chat. That's how Schwab is here for you to help you trade brilliantly. Learn more@schwab.com trading.