← CNBC's "Fast Money"
CNBC's "Fast Money"
Google On The Move After Antitrust Ruling… And A Major Market Forecast 9/2/25
00:43:38
Alphabet on the move as a judge rules on its antitrust case. The fate of Chrome, and the tech giants search data. Plus A major market prediction. Why Evercore ISI’s Julian Emanuel is feeling so bullish on stocks heading into the fall. Fast Money Disclaimer
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A rich life isn't a straight line to a destination on the horizon.
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Sometimes it takes an unexpected turn with.
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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 and now a next level moment from AT&T business. Say you've sent out a gigantic shipment of pillows and they need to be there in time for International Sleep day. You've got AT and T5G so you're fully confident, but the vendor isn't responding. And International Sleep Day is tomorrow. Luckily, ATT 5G lets you deal with any issues with ease. So the pillows will get delivered and everyone can sleep soundly, especially you. AT&T5G requires a compatible plan and device. Coverage not available everywhere. Learn more@att.com 5G Network.
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B
Live in the NASDAQ markets in the heart of New York City's Times Square. This is fast money. Here's what's on tap tonight. A major win for Alphabet shares surging after hours after a judge's ruling in its antitrust case. We'll talk the future of search and what it means for big tech straight ahead. And a September slump to kick off the first day of what has traditionally been a weak month for markets. A stage set by today's market action and why one big bull sees upside ahead. Plus a condiment cleaving. Oh boy. Why Warren Buffett isn't so happy about the breakup of Kraft Heinz Baba Bow as the Chinese tech giant sees a surge in revenue and losing its buzz by shares of Corona maker were dropping sharply today. All that and you're going to want to stick around for a very special announcement about an exciting event that is coming up. The big reveal is just moments away. I'm Melissa Lee, come to you live from studio BE at the nasdaq on the desk tonight, Tim Seymour, Karen Feinerman, Dan Nathan and Guy Dami. Great to see you all back on the desk.
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C
Great to see you all.
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B
We have been away but yes, all.
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D
That way you've been away. Well, I know we have big news, but welcome back.
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B
Thank you. It was great. It's great to see everybody together again to hear that, especially on a big news day. All right, let's start off here with that monster move higher in Alphabet after hours currently trading on what would be an all time high. The judge, the US Judge in the antitrust case against the company saying it will not have to spin off its Chrome browser or Android businesses. Let's get straight to Eamon Javors, who's got the latest Amen.
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D
Melissa this was a long awaited decision from federal judge Amit Mehta. And the reason was because the question was will Google be forced to spin off Chrome? The answer here today, no. So largely a victory for Google and Alphabet in this case. But there are some things that Google is going to be forced to do as part of the remedy phase of this case. Remember, Google was already found guilty of anti monopoly conduct and so this phase of the trial was all about what is the government going to do about that to in effect punish them and to end the harm from that anti competitive conduct in this case, Google is now going to be forced to share certain data with competitors. There's some language around here, in here about AI which I'm trying to pull out, which is obviously one of the big fights about the future. But Google will be allowed to keep Chrome and Android and Google will be allowed to continue to make some payments to some of its, to some of its peers in terms of using Google as the default on their search engines. As their search engines. So those payments, the judge says in this case can continue because it would be too disruptive to a company like Apple, for example, to stop that, given that Apple would likely be in a position of still having Google as its default and suddenly losing a massive revenue stream, you know, more than $20 billion a year in some years according to some of the documents that were filed in this case. So clearly there's some language in here that we need to understand better. As a 230 page ruling. We've had it for about a half an hour now, so we're poring through it, but some implications for Google in terms of changing its behavior in the future, but not the worst case scenario that Google had been looking at heading into this. Melissa?
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B
Yeah, far from amen. Thank you. Eamon Javers in Washington. For more, let's bring in CNBC contributor Jonathan Kanter. He's the former Assistant Attorney General for the Antitrust Division of the United States. He joins us on the fast line. He by the way, is part of the team that brought this case. Jonathan, great, great to have you on on a day like today.
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E
Thanks for having me. Nice to be with you.
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B
Are you surprised that this was that this, the most severe of the remedy remedies was taken off the table effectively?
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E
Well, it's hard to get surprised in this business. I think you wait anxiously and want to see what the court says. And it's a mixed bag. I think on some aspects, the most extreme remedies, as Eamon said, like a divestiture of Chrome, is now off the table, at least pending appeal. And that is without a doubt a victory for Google. There are other areas, like the inclusion of AI as part of the restriction. The inability of Google to make its AI the search default in places like Android, Chrome and Apple and others, which includes both search engine AI, is certainly a win for the government and also significantly, that Google has to disclose aspects of its search engine index and data. And the reason this is significant is because the idea behind the remedy is to allow Jenny, companies who have chat bots who also want to deliver search results to bootstrap search, gen AI search to chat bots to try to deliver a combined experience and take on Google. And so if you're thinking about the perplexities and their ilk, this is probably a good outcome for them.
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B
A lot has changed since this case was first brought, Jonathan. I'm wondering how that landscape has changed and whether or not a case like this could be brought again in the sense that now you know, Chrome is not where it's at. It's all about gen AI, as you mentioned, and how the case might have been different, differently pursued. And if a case like this could be brought in the age of AI.
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E
I guess I would disagree with the premise there. Browsers are going to be the theater for the next battle of AI. It's one of the reasons why a lot of the ad companies like AI and Perplexity and others are investing in developing browsers because they view that as important to displaying results. And it is, it is a modern version of browsers. But it's been extremely important and in the context of AI. So yes, also I think one of the things that we learned from the Microsoft case is that times of change and transition when we're seeing new technologies emerge are often when the remedies are most important. So if you go back to the Microsoft antitrust case, which is really what led to the birth of Google, Amazon, Facebook and others, there were, there was a lot of disappointment that the remedy didn't go full breakup. But ultimately the remedy in that case allowed companies like Google, browsers like Chrome and others to come to fruition. So we'll have to dig into this remedy. But there's a hope that this case, and more like it against big tech will create opportunities for smaller tech companies who are innovating to find pathways into the market to compete.
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F
Mr. Candidate, it's Karen Feiderman. Thanks for being on such short notice. So you said this is the remedy pending appeal. What do you see as the most likely reason, or what would you put forth as most likely argument to appeal? And how do you think that would be? How do you think that would play out?
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E
So we'll have to see. I mean, there is a high likelihood that Google itself will appeal. I think they're, they're dealing with a liability decision that found them to be a monopolist and a legal monopolist in search. There are numerous remedies in here that clearly will make it harder for Google relating to AI, relating to distribution of its products and services, and the inability to have exclusives. So the likelihood is high that Google will appeal. It is also possible that even if the DOJ is satisfied with some aspects of this remedy, it might argue that the court's opinion didn't go far enough in ordering things like divestiture or absolute ban on payments. And so it is conceivable the DOJ will cross appeal. So I think there are a few more rounds left before we know the final outcome of this case.
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B
This case is partially broadened, correct me if I'm wrong, to preserve the competitive landscape, to make sure that big tech doesn't monopolize innovation. And yet in this time when this case is being heard, we've, we've come up with a crop of brand new competitors out there. Perplexity, OpenAI. Just today, Anthropic got a $183 billion valuation. And I'm just wondering how you, how you view that, you know, in the context of the importance of this case and whether or not it was needed to preserve a competitive landscape that seemed to thrive despite the case going on.
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E
Well, I think the idea is that first of all, if you look at the data, while those companies are very promising, they haven't really made a dent in Google search business and certainly not in Google search advertising business. And so it is still by far the super dominant firm in both of those spaces. Second, they have promising technologies not unlike the way browsers and other companies did back in the day of Microsoft. And so the whole concept behind the remedy is to make sure that all this great innovation that we're seeing in the marketplace has the opportunity to succeed. Because otherwise, at a moment like this monopolist, in this case, Google would have the greatest incentive to tighten the screws and find ways to keep those competitors out of the market through anti competitive conduct. So the hope is that with the remedy like this, with the case having been brought, we will have the opportunity to see this inflection point when these new competitors reach their full competitive potential in a free market rather than one that's been closed off by the conduct of a dominant firm.
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G
Jonathan, Tim Seymour, again it's great to have you tonight. So thanks for being here because your perspective is certainly unique from the legal community and I guess forcing Google to share data, this to me seems also a, a big headline that might get lost and that this is a big win for Google. What do you think about that and what do you think about how that has implications for the other three or four giants who live off their data?
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E
I think it's quite significant. So Google during the remedies proceeding had argued that a divestiture, that the sharing of data was the equivalent of a divestiture. So I guess by Google's own definition they do have to divest something here, which is their data. I think from a strategic perspective, the reason this is important is it gives some of these AI companies who are have lambs with search like features the ability to bootstrap search data in order to make themselves more of a full throated and full stack competitor to Google. So the hope is that it will create more robust competition up and down for the entire search stack if LLMs can get access to Google search data, close some of the scale advantage that has made it difficult for them to replicate Google's web search capability and then offer, you know, a meaningful competitive alternative.
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B
Does this have any implications on some of the other cases against big tech? Antitrust cases against big tech?
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E
Yes and no. So I think this certainly will have be relevant in terms of precedent for some of the antitrust cases if the government or if the plaintiffs win. Remember, Google lost in a pretty big way on the underlying case both here and in a companion case brought in Virginia by the Department of Justice on its advertising technology. And we're still waiting for remedies there. So the question is really yes, this will matter in terms of helping give some guidance to courts as to where remedies could go, but is hardly definitive on liability. And if you read the decision, it maintains the opportunity for the court, if the remedy is not working, to crack it back open and tighten the screws. So for example, the judge in the decision said that while he's not banning Google from paying companies like Apple or others an amount of money to distribute their search, he's open to doing so if the remedy doesn't succeed. So we could certainly see changes going forward here as well. And so it's instructive, but it's not definitive as to the other cases.
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B
Jonathan, thank you. Appreciate your analysis. Jonathan Campbell, My pleasure.
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E
Thank you.
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B
All right, so the Stock is up 8.3% after hours here. All time high. It would be if we were in regular trade. Guy, what do you think?
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D
Can't do the counterfactual, but I will attempt. I mean, you can make an argument. Tim and Karen have said this, that if they had broken up Google, the stock would have probably gone higher. So maybe it's the certainty of some sort of outcome that's getting this relief rally. So you want to play stock market to 14, I think was a prior high, maybe back and fills back to that level. But it deserves at least a market multiple. Google you. So you throw $11 of market multiple. This is a stock to be trading between 240 and 250. Then if you want to give it a premium multiple, you can see where it goes. But I think this allows it to sort of get that valuation it deserves.
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C
You know, it's funny, I'm hard pressed to see like how much better it gets from here. You know, they have what, 90% of search queries. Okay, they already have that. It was never going to get better than that. They have 70% of like search ad revenue.
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B
Right.
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C
You can see how this company is deemed to be a monopoly. That was the ruling. Now we're at the remedy part. I think Jonathan kind of laid that out. And so when I think about this business and I think about how many platforms this company has over a billion users, I mean, think about they have like between 1 1/2 billion iOS users that they basically have a lock on that search, at least on those iPhone devices. They also have 3 billion on Android, which they own. So think about that. They have half the population of this planet already on devices that they control search search for. So when you look at the stock opening up like this or trading up where it is right now, you have to say to yourself, how is this going to meaningfully add to their earnings? Now you're going to say to me, Karen, well, it trades at 20 times, you know, next year expected earnings growth of let's say 7 or 8%. You know, I say to myself, I mean, I'm not like this is amazing for them. There was so many worst case scenarios that could have happened. But I think 8, 10% on the stock seems kind of odd to me.
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F
So there were two things really weighing on the stock one was this what would be the outcome? What are the remedies? And so appears to be a pretty good outcome for them. The other was has AI and all the changes that you talked about, has that made the search business less of a lock for Google? How much will they cede share? We don't know yet. The answer to that, the answer to the first part, I think you know, to get to 220, I don't know, 8, 7, wherever it is right now isn't a giant stretch as guy talked about. Certainly another, you know, point ish and a half of multiples. So I think there's probably still room there. It's interesting to me that does so what does this Apple payment part do now? Good for them, good for Apple. Apple's up a lot. What does that do to their discussions? With perplexity which I don't know if they've died or not. Is it, is it the push for.
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B
Them to acquire Anything would seem less relevant.
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F
Right. So that's sort of interesting. I don't at 228 if I owned none, I probably would buy some.
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B
Okay.
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F
I think, you know, could it trade down, Phil? Yes, it could but I think that this is significant.
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G
Well again Apple's trading 238 to 39 in the after hours after closing at 229. This is also being imputed upon Apple and their legacy business. But again, at least the ruling was very clear that these legacy payments to third party at least are allowed to continue. I just think it's fascinating if we went back over time over the last six months and you know, all of the headwinds against Google seemingly were all about their inability to win in the new age of AI. It was less about was anybody really talking about this case? I mean they were and they weren't. Now we're up 8% in the after hours because they're allowed to continue in the same business that we all were saying was not a great business and was going to lose out to AI. I think you've got your answer here and I think it's undervalued and I think it's going higher.
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B
All right. Meantime, former Fed Governor Lisa Cook filing new information this afternoon in her effort to overturn her firing by the Trump administration. Steve Liesman's got the details on this one. Steve.
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H
Hey, Melissa. Yeah. Fed Governor Lisa Cook in her filing in her case to overturn her firing by the president says explicitly, quote, she did not ever commit mortgage fraud, calls the president's move to unseed her, quote, the greatest threat to the Federal Reserve Board's political independence in its 111 year history. The 34 page brief filed late this afternoon argues that she can't be fired for conduct taken before she was in office, only for negligence and malfeasance in office. Any alleged mortgage inconsistencies were apparent in nomination documents she submitted as part of her Senate confirmation. She's entitled to a hearing before firing and a tweet is not noticed. And the correct remedy, if there is one needed, is impeachment, not firing by the President. The President said he fired Cook for cause because she claimed two homes in mortgage applications as her primary residences. But the brief by Cook argues explicitly the President fired her because he wants control of the Fed and lists multiple tweets by the President saying just that. President Trump's efforts to oust Governor Cook, quote, demonstrate a blatant push by the President and his allies to exert greater control over the independent central bank. It says letting the firing stand would give the President, quote, unfettered control over the Fed. The government now is required to file a response by Thursday. So no ruling likely before that at least may take a little bit more time, Melissa, but some tough words now from the Fed, Governor.
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B
All right, Steve, thank you, Steve Liesman. Steve was going through that and I just kept thinking there are kind of strange arguments to make to say if anything bad happened and it happened before my tenure, it doesn't count that if we allow this to happen, then it, you know, it impairs Fed independence, like all these other sort of reasons.
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F
I don't know if that argument is sort of estoppel in that, okay, you had the chance to look at this, you never chose to do anything about it.
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B
So you're.
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F
And then the stuff was out there.
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G
And the stuff was out there.
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F
Right. We're not cutting. Yeah, I understand. It sounds kind of weird because it sounds like, okay, maybe I did, maybe I didn't. But I wonder if that's what that, what's behind that argument. Because the rest about, you know, this is just to get control of the Fed. That sort of fairly obvious, right?
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B
Yes, yes.
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G
Yeah, I think both of those things are exactly right. I mean, I don't think there's any question what the intent here is of the White House. But I'd like to hear just clear, you know, I did nothing wrong and that's my defense. But the technicalities are important in the process we have in this country. So I, again, the two things out there are if she's Innocent. She's innocent. We know the White House wants control of the Fed, and that is obviously something for both the market and for a lot of other people in this country to think about. But it really is a dynamic where I think the process here is something that I think is important to respect, and that's clearly what she's leaning against.
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B
I know you. Goodbye, Steve. But we're going to bring him back in. Wow.
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F
Oh, you're allowed to find your show.
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B
To add to this conversation.
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D
Can you tell Steve this rarely happens.
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B
It really does, but we'll make this exception for Steve. Yeah, sure.
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H
So just real quick, I understand what you're saying. We all want to hear Lisa Cook lay out her reasons why this happened or say I did it or whatever. But what the argument being made here is what is the correct forum for that? She notes she's not been charged. She was never given any notice before her firing. So it's actually what her argument is, is a legal argument that the President can't fire her this way. The Supreme Court has held you have to give somebody notice, give them a hearing, and that without notice and without a hearing, that's what undermines the Fed. So I kind of get what you're saying in the court of public opinion, but this is real court. This is not the court of public opinion. I just want to throw that out there.
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D
Steve, when you hear us saying things like the administration will then subsequently have control of the Federal Reserve, it's not just us saying it. The administration has said that. Does that concern you in any. I mean, I can't believe we're even having that. We're putting those words out there, but that's what's being talked about.
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H
Yeah, I mean, that's where we're at. It's a whole new reality that we have to deal with. And I mean, the one hope you have, guy here is that, you know, there are people that will be in place and they don't necessarily, they're not necessarily going to always do the President's bidding. But. But this is about control of the Fed, and it's very explicit and every president's kind of wanted it. Some have done some things to try to get it, but this president's just out there saying, I want control of the Fed. And, you know, we'll see how markets react. Krishna Guha said today that just because it didn't happen quickly doesn't mean it won't end badly.
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B
Right, Steve? Well, I'm glad we brought you back, that's for sure.
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H
Thank You I'm going away now for good.
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B
Okay, see you next time. I also can't believe that we're having this conversation and that in reality the bond market is sort of behaving in light of this.
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C
You know it's funny we went back I think during the transition and we were talking about this. Think about how far we went back. Not about the Lisa Cook thing about Willie or won't he fire, you know, Fed Chair Powell. And you know this is going to be a really interesting week I think from Friday when we get the jobs data until September 17th when we get the Fed meeting just to see how much outside pressure is going to be put on these independent agencies. And so you think about the bls. This is going to be the first jobs report, the all important jobs report from August. What do they do? Are they going to re rig the numbers? Are they going to re revise them higher? You know and then if they do that, how much are these going to be trusted? And then what does that do to the Fed and we start getting these gangbuster jobs, you know, results because how great the economy is and the tariffs and trade wars are easy to win and all that sort of stuff. Well then the Fed doesn't need to cut interest rates.
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B
Right? So are we going to second guess everything? I guess is sort of the bottom line. What do we believe? How will the markets move on?
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G
What I hope not right now we're not right now we believe the Fed and the Fed governors are doing their job and I think they'll continue to do that job. Remember Jerome Powell was appointed by Trump and so at some point you have to believe that people fall in line and do their job. I believe in that process. I don't like, I don't like the central bank being pushed around by the White House. And I do think and again I go back as someone that's been investing in emerging markets his whole career, the whole thing that separates us from so many other countries in the world and Turkey is front case an example of what happens to your to the credibility of your bond market and your but what happens to your interest rate curve when you start pushing around your central bank.
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B
Coming up, Warren Buffett weighing in. Why the legendary investors disappointed in the Kraft Heinz split and whether a breakup can really fix its problems. Do not go anywhere fast money back into.
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A
For 140 years multicare has been in Washington prioritizing long term solutions, partnering with local communities and expanding access to care. Together we're building a healthier future. Learn more@mycare.org and now a next level moment from ATT Business. Say you've sent out a gigantic shipment of pillows and they need to be there in time for International Sleep day. You've got AT and T5G so you're fully confident, but the vendor isn't responding. And International Sleep Day is tomorrow. Luckily, AT&T 5G lets you deal with any issues with ease. So the pillows will get delivered and everyone can sleep soundly, especially you. AT&T 5G requires a compatible plan and device coverage not available everywhere. Learn more@att.com 5G Network.
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G
Will the job.
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I
Market bounce back from the recent weakness?
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G
Will the White House challenge the accuracy.
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A
Of the data numbers and analysis of.
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The critical August jobs report?
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Squawk Fox Friday, 8:30am Eastern streaming on CNBC.
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B
Welcome back to Fast Money. Shares of Kraft Heinz falling 7% today as a food conglomerate prepares to split into two separate companies, unwinding the blockbuster merger from 2015. The mastermind behind that deal, legendary investor Warren Buffett, who told CNBC he is disappointed in the decision and that although the merger did not turn out to be a brilliant idea, he doesn't think that taking the company apart will fix its problems. Berkshire Hathaway is Kraft Heinz's largest shareholder with a 27 and a half percent stakeholder in the company. And Karen, you're remarking, I agree with this completely. It is kind of unbelievable that they say to Buffett and Greg Abel, basically, we don't care what you think, we're going to go ahead with this.
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F
That is amazing to me. I mean, that's 27% holder. And it's not like this is an activist holder that you want to, you know, this is probably the single best kind of holder you could possibly have. And so it's interesting that they would sort of ignore what he wanted to do. I don't know why. And it's interesting also that they don't need a shareholder vote, so they're ignoring the other shareholders, which they can do by. Right. I guess the way they structure it. But I just find it very surprising.
- [26:07]
B
Yeah. But this is, of course, in an era where huge conglomerates specifically in these sort of food categories are looking at splitting up to unlock value. We saw that with kellogg. Yeah, right. PepsiCo Kellonova, fantastic name. Nobody could remember.
- [26:24]
F
Only Kindle was better.
- [26:25]
B
Right? Exactly. But Elliot taking a big stake in PepsiCo, looking to make some changes there. So, I mean, this is, you know.
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D
Out there, I think the fact that they're almost 30% of the company and they didn't give a guess. I mean, layman's terms, a heads up is interesting. I think the commentary about being disappointed is equally interesting. But now how do you trade the stock? Again, a lot of moving parts. But if you pull up a chart, we're back to levels we saw in 2019, 2020 on what was I think today, four or five times normal volume. So maybe if you're looking for an entry point, maybe this is the one you've been waiting for.
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G
It's interesting. I think that's right. I mean, I think the market did a good job of taking a $45 billion merger and turning it into a $33 billion company, which there are two companies that actually, you know, separately look like they have a better, a better glide path. So I can understand being frustrated with this move. But again, if you think about also, you know, the other side of this deal also is 3G capital, I think is one of the smartest, they certainly have been one of the smartest firm private equity firms in the business. And this was a big day back when it was announced and it was, it was going to augur other deals like it. Especially throughout the food and beverage space, we're seeing the opposite. I think it's probably time to buy these.
- [27:39]
F
One thing that was interesting from Becky's call with Warren Buffett, which was really interesting, was that he said they would not sell the stock in a manner that other shareholders wouldn't have the right to do the same. So but it didn't say that we would not share the stock, sell the stock in the open market, which they're free to do. That's a lot of stock to move. I don't know if that's most of the reason why the stock is down or just because people think, all right.
- [28:01]
B
Well, maybe it won't work right? Coming up, a big bump for Baba shares bucking the week's start to September. Where's the check tech China check trade going from here next. You're watching Fast MONEY live from the NASDAQ Markets side in Times Square. Back right after this.
- [28:29]
A
For 140 years, MultiCare has been in Washington prioritizing long term solutions, partnering with local communities and expanding access to care. Together, we're building a healthier future. Learn more@ multicare.org will the job market.
- [28:46]
G
Bounce back from the recent weakness? Will the White House challenge the accuracy.
- [28:50]
A
Of the data, numbers and analysis of the critical August jobs report? Squawk box Friday, 8:30am Eastern streaming on CNBC.
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B
Welcome back.
- [29:03]
E
What happened to You.
- [29:04]
B
This is the big reveal we mentioned at the top of the show. Me wearing a hat. No. On December 11th, we're going to host a very special Fast Money Live Trading the Holidays. It'll be right here at the NASDAQ market site. Fans will watch a live broadcast, ask the traders their investing questions and share a cup of holiday cheer with us all. So come join us here in the heart of the city, Times Square. To get tickets, scan the QR code on the screen or go to events, CNBC events.com/fast money. We're decking the charts, trimming the trades, wrapping them all up for the new year. What could be better on the holidays? New York City, the Rockefeller Christmas tree, Fast Money live Santa hats.
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G
I mean, we are going to be trading the holidays. There's no question. Guy, your hat looks particularly small.
- [29:46]
B
I don't have to, I don't have.
- [29:47]
D
To make up for any of my insecurities.
- [29:53]
E
Bad acronym this year, maybe.
- [29:54]
B
His head's big.
- [29:57]
D
It will be fun. I didn't have any bobby pins.
- [29:59]
B
We always get a great. We, we've gotten a great.
- [30:01]
D
That's unbelievable. We already have people signed up now. This is in December. What is this? September?
- [30:06]
G
Forget giving somebody a pair of socks when you can give them a fast, a trip to fast money and sit here and trade the holidays. I don't think there's a better way to do New York or trading.
- [30:15]
B
Yeah, it's a magical time all right. Coming up, a big bullish call for the markets. Just how high One Wall street analyst says the S and P is going and what's going to get it there when fast money returns. Welcome back to Fast money. Stocks kicking off September in the red. The dow dropping nearly 250 points. The S&P down 7.10of a percent and the tech heavy NASDAQ falling 8.10of a percent. McDonald's shrugging off today's drop. The fast food chain announcing its expected expanding its value offerings in a bid to reach price conscious diners. Alibaba receiving several Wall street upgrades today after reported accelerating sales in its cloud division. Analysts optimistic Baba can outpace Chinese rivals like Baidu and Tencent in the country's air race. And shares of ZSCALE are on the move after reporting this afternoon the company topping EPS and revenue expectations. Well, Evercore ISI out with two new market calls. A firm upping its year end target for the S&P 500 from 5600 to 6250. That is lower than today's close, but he's also expecting a big 2026 run, setting a price target for the end of next year of 77. 50. That implies a 21% gain from here. The firm's senior managing director, Julian Emanuel is behind this forecast. Julian, great to have you with us.
- [31:35]
I
Great to be with you.
- [31:36]
B
Why are you so bullish about 26? There seems like there's so many unknowns out there right now.
- [31:40]
I
There are a lot of unknowns, but there is one what we believe to be a known. Look, it is less than three years since ChatGPT was introduced to the world. And all the work that we've done over the course of that time shows that AI has every potential to be as significant, if not more, than the Internet revolution. It's already started to permeate across all of industry, across all of society, and when actually the strange thing is what got us thinking about being more aggressive was the turndown in March and April. Very much like what you had, you know, the tariff tantrum. No real disturbances, no dislocations. Very similar to the turndown you had in 1998 in the middle of the Internet revolution caused by long term capital. And the markets just continued to rip. And from our point of view, aside from how far we've come, in less than three years, you're going to have essentially a fed that's going to be more cooperative, even more than it was in the late 90s. In fact, they started hiking in the middle of 1999 to try and stop the bubble. We're not going to have that this time. And then the other thing that's very significant is if you look at that period in the late 1990s, essentially it was all tech all the time. The advanced declines peaked two years before the bubble. And we're turning down. We have a participatory democracy that today. Yeah, sounds nice. Absolutely. I mean, look at today. A bad day for the markets, but still you were green with energy, consumer staples and health care. And then after the close, we're back to our regularly scheduled AI type advancing.
- [33:27]
C
Julian, do you worry a little bit about a pull forward? You think about the capex. We've had hundreds of billions of dollars. There's some estimates that in 2030 there's going to be a trillion dollars alone that's being spe. So the other side of your call, you know, we can go back and look at 95 through 99 average returns, the S&P 25%. But then we lost 85% in the Nasdaq from its highs to its lows. I'm not saying that's ever going to happen again, but you're pulling forward. Just a lot of capex and just a lot of, you know, and a lot of the valuations actually show that.
- [33:55]
I
Right now it is, it is definitely a concern, no question about it. And part of our reluctance and part of our view that actually you're likely to have a pullback. Besides September being September, living up to its reputation on day one is this idea that valuations have become quite high. But when you think about what we've seen the last 25 years, going back to Y2K, you had a bubble, then it burst at 28 times, you're nowhere near that. Then you had successive other bubbles. And in our mind, when you think about the bubble that burst in 2020, which was the global interest rate bubble, which we've been in an interest rate bear market for the last five years, our view is that this could end in that kind of a bullion. But you know, from our point of view, at times like now we're still going to suggest hedging because you're going to have a lot of outperformance to spend in our view, if you're, you know, overweight.
- [34:53]
B
These names, the bull side, the bullish price target 9,000 is, that's, that's big. But in terms of you describing, you know, just the price target for next year, your base case scenario, it sounds like it's a, it's based on productivity gains. Is that, is that what I got or is it all, is it partly CapEx, you know, the spend on AI, equipment and services, etc. And then also the productivity gains.
- [35:20]
I
It's certainly the productivity gains. But you also have to think about the rest of the backdrop here. There hasn't been a bull market cycle that's ended without a really vigorous capital market surge. Okay. And we've started to see elements of that this summer. But really in fits and starts and you talk to anyone, the pipelines are full, the event driven traders are sort of licking their chops and frankly that is a recipe for valuations. Even with the favorable fundamental backdrop, and particularly if the market, as we believe will have an ability to shrug off gently higher, not surging, higher long term yields, that, that's all part of the recipe to get us to 77, 50.
- [36:08]
D
Given the aftermath of the last jobs report. How important is this one and what should the market be rooting for?
- [36:15]
B
Hard one.
- [36:16]
I
It is, it is a very difficult one. Well, we're slightly above consensus in terms of our View we think 115,000 on Friday. I would say in this environment, given the view that you're going to get a rate cut in September regardless, you'd rather have a stronger report.
- [36:40]
B
Julian, good to see you. Thank you. Julian Emanuel. Coming up, much more on Google's antitrust ruling, what it means for the company, for Apple and the future of search. The details, sales when Fast Money returns. Welcome back to Fast Money. Another check on Alphabet surging after a federal judge ruled Google will not have to part with its Chrome browser. For more, let's bring in Deepwater Asset Management managing partner Gene Munster. Jean, great to have you with us. Your take on this, Melissa.
- [37:17]
J
This is good news, of course, because the regulatory bark is much bigger than the bite. They're more lenient. That's positive. It's positive for Apple. Positive Google, but also positive for Meta. Surprised that Meta is not up more. I would just point out one angle related to why Google is up so much. This turning of the page on the regulatory allows investors to think more about the progress that they're making in terms of AI overviews, AI mode, these three panels, their search panel. Those are the three interfaces that people use. They're making more progress at getting those adopted. Had some remarkable speed of that over the last few months with AI mode. And so I think that that's, that's one piece to it. Another thing that's really jumped out to me is just putting this through the ringer. If you go below the surface, the impact to Apple and their ability to kind of have the upper hand I think think may be a little bit, that view may be a little bit misled. And just stick with me for a second. Is that if in fact that Apple has the opportunity to shop this search deal, that it's about 15% of their operating income. If they can shop this on a yearly basis, presumably that would be good for Apple because they can go and play off of each other. There's only one potential other customer and that of course is Microsoft with Bing. Beyond that, the list goes down. They can't spend billions of dollars. And Microsoft for the past 15 years has tried to find ways to improve their share. It's still at 4%. They've always had deep pockets. And so I think at the end of the day is this probably really nothing changes at the end. I think Apple will still get 20 billion a year from the Google search deal even though it's renegotiated every year and Google still has 90% plus search share.
- [39:01]
B
We're still awaiting though the Remedies in the ad tech case. And I'm wondering how much of an overhang that could still be on Google at this point. Alphabet.
- [39:11]
J
So that side of it is call it 9% of their business and so kind of think about that. It's a less profitable part of their business too. And so it's just not as, call it a 5% kind of an impact.
- [39:25]
C
Hey Jean Mel, as she often does, made a great point earlier. What does the data sharing mean for a company like Perplexing that's obviously squarely focused on that Google advertising Share.
- [39:38]
J
This. This is a big advantage. Perplexity is one of the big ones that could be advantage. It also could in a long term way benefit somebody like Apple as they try to think about ways that they can benefit from AI. One way is that they could come out with their own AI search product. That that's one of the reasons why myself and a lot of people feel that Apple should buy Perplexity. And so perplexity would be an obvious beneficiary I think Microsoft being to a lesser extent because they've got a fair amount of data, but I think that you know, from a perplexity standpoint it would be a positive.
- [40:14]
G
Gene, I was talking before that I just felt like if the stock's up 8% in the context of they don't have necessarily the search engine to compete in AI that everybody wants them to have. Is, is, is that too simplistic to think about this? Then it means that they weren't behind in the first place because this, you know, this ruling doesn't really shine a bright light on Google search product. It just says that the status quo can continue.
- [40:41]
J
Well, the way I think about it is there was like a near light year gap between Google's valuation and what the rest of the Mag 7 was at. It was, you know, rewinding a month and a half ago 19 times next year versus 27 times. And part of that gap was related to what we're seeing today. There's another larger part of the gap which is what you're talking about is what's going on in search. If we rewind three, four months ago I was talking about Google being in a very difficult place. And recently Deepwater, we've bought Google because as we look at the comments from their last quarterly call and then separately a week later, the comments from head of search as she's talked about some of the progress that they made. And so Tim, the answer is that Google's not out of the woods by any measure. But what they've shown with specific, the specific data point is that click through rates with AI overviews and AI mode are basically at the same level that search was at a couple years ago, which is really impressive. And so I think that that's still going to be the debate how they're going to navigate this. And I think over time investors are going to get progressively comfortable that they're going to figure this out because all indications are the things that they've been testing are working.
- [41:51]
B
Gene, thanks. Good to see you. Dean Munster Water Coming up, a sobering look at beer sales and why the changing trends of shares of Constellation brands dropping. That's next more fast Money into Welcome back to Fast Money. Constellation Brands plunging to a more than five year low after cutting full year guidance before the bell. The company behind brands like Corona Modelo, another spirit saying a challenging macro environment could lead to a 2 to 4% sales drop this year. It's also also seeing a decline in sales among Hispanic customers which make up about half of its total beer sales. The stock is tracking for its worst year since 2008.
- [42:35]
G
Tim 5 1/2 year lows. This had actually been a standout even relative to some of the other spirits companies, those that are more exposed to high end spirits as opposed to high end beer. And this was a high end beer story delivery. We've seen massive consolidation in the beer space and for a while there Constellation was in a great spot. They were actually taking market share from in a falling environment. But the, the demographic story here is clear. The alt beverage space especially amongst younger beverage alternative beverages and that's everything from ciders to you know, various forms but it's, it's hemp derived THC. It's THC BEVs. I mean these companies are looking for ways to get exposure and that's something that I think continues to be benefiting those all beverage. But definitely if you look at Diageo, Constellation, Brown, Forman, this has been a story that's been playing out just so much that I think this is now the bottom might be in on these.
- [43:25]
D
Trough valuations which I don't know if it matters if things are going to start to go the wrong way. But you haven't seen these. Tim can speak to the valuation in quite some time number one and he's right. I mean people just not drinking anymore. But can I just give you this little anecdotal thing please.
- [43:39]
B
I think you're gonna. I don't know why you asked.
- [43:42]
D
I had a strawberry infused cactus water.
- [43:45]
B
Earlier today how's that going for you?
- [43:47]
D
Not particularly well. I mean this show ends in five minutes.
- [43:50]
G
It's probably not a minute, not a minute too soon.
- [43:53]
D
If I may.
- [43:53]
G
Are men drinking those?
- [43:54]
B
Was it?
- [43:55]
D
Apparently Tim.
- [43:56]
G
Apparently real men who wear tiny hats. Just asking a question.
- [44:00]
B
This is like a soda. I mean it's.
- [44:02]
D
No, I don't know what it was but it was an odd tasting thing.
- [44:04]
B
I don't know why it was drank it anyway.
- [44:06]
D
I wanted to try it. I don't know why we're extracting the.
- [44:08]
G
Water out of pac.
- [44:09]
D
They have enough odd tasting.
- [44:12]
B
It's called prickly. Up next, final trades. Quick reminder. As we told you earlier in the show, Fast Money Live is coming back. A special trading the Holidays Live event is happening right here at the NASDAQ December 11th. Scan the QR code or head to cnbc.com fast money to get your ticket. Markets New York during the holidays. A front row seat to Fast Money Live. Can't think of anything that could be better.
- [44:42]
D
We want people to have a prosperous 2026. What better way to get on the track for prosperity than to join us on 12-11-100.
- [44:50]
B
Yep.
- [44:51]
G
Come to the NASDAQ for the holidays and bring guy a bigger hat than the one he had tonight, please.
- [44:56]
B
Final trade Tim, please.
- [44:57]
G
Oh, and Apple too. I think this is a big win today for Apple in addition to to that of Google.
- [45:02]
F
Karen Ulta sold off on earnings but the call they couldn't contain themselves. It was too good.
- [45:08]
C
Dan yeah, this Google, I wouldn't be buying it up here. I think it's great news for them but I don't think it's great news for the stock one way or another.
- [45:15]
B
Not a buyer.
- [45:16]
D
So happy our Sergeant Hawker's back to be Great to see you again tomorrow in the seat. Just a big things, a big show.
- [45:22]
H
Big toe.
- [45:23]
B
Yeah, like Hawker. Anyway. Hi Baba. Thanks for watching Fast Madam with Jim Cramer. Search right now.
- [45:33]
A
All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy and it should not be relied upon as such. To view the full Fast Money disclaimer please visit cnbc.com fastmoneydisclaimer. For 140 years, MultiCare has been in Washington prioritizing long term solutions, partnering with local communities and expanding access to care. Together, we're building a healthier future. Learn more at multicare. Org.