CNBC's "Fast Money" Podcast Summary

Episode: Google’s Pre-Earnings Win Streak… And Sarepta’s Dismal Outlook 7/21/25
Release Date: July 21, 2025
Host: Melissa Lee
Panelists: Tim Seymour, Karen Feiderman, Steve Grasso, Guy Adami, Meghan Horneman, Mitchell Kapoor

Introduction and Episode Overview
Melissa Lee opens the episode live from the NASDAQ market site in Times Square, New York City, outlining the key topics for the night. The primary focus centers on Alphabet's (Google) nine-day rally ahead of its pivotal earnings report and the concerning outlook for Sarepta Pharmaceuticals. Other significant market movers include Verizon, Cleveland Cliffs, Pinterest, and NXP Semiconductor.

Alphabet (Google) Pre-Earnings Rally

Nine-Day Winning Streak:
Melissa Lee introduces Alphabet’s impressive nine-day stock rally, the longest since 2019, with shares up approximately 9% during the recent surge. The discussion centers on Alphabet’s upcoming earnings report scheduled for Wednesday afternoon, alongside reports from Tesla and IBM.

Panel Insights:

• Karen Feiderman:
  [02:22] "The valuation is not stretched at about 19 times. There's a lot to like, including Waymo, YouTube, and the search and cloud businesses." She emphasizes Alphabet's solid valuation and diverse business segments but raises concerns about potential regulatory challenges from the Justice Department regarding monopolistic practices in search.

• Tim Seymour:
  [03:52] Addresses Google's valuation relative to the market, stating, "Google's probably 1.5 to 2 turns cheap on a forward basis." He highlights positive channel checks and underappreciated assets like YouTube and Waymo, indicating a bullish perspective despite high market valuations.

• Guy Adami:
  [04:43] Reiterates the stock’s undervaluation, especially concerning YouTube’s dominance. He humorously references technical chart patterns to suggest a potential breakout if Alphabet surpasses its prior all-time high.

• Steve Grasso:
  [05:29] Expresses concern over the search business, noting the rise of alternative search engines and younger generations favoring AI-driven platforms over traditional Google searches.

Key Takeaways:
While Alphabet shows strong performance and undervaluation relative to its forward earnings, uncertainties around its search business and regulatory scrutiny pose potential risks. The panel remains optimistic but acknowledges possible headwinds.

Market Indices and General Market Sentiment

Record Closures:
The S&P 500 closes above 6,300, and the NASDAQ briefly tops 21,000, signaling a bullish trend. Melissa Lee notes the market's resilience but highlights underlying concerns about sustainability.

Guest Opinion – Meghan Horneman:
CIO at Verdin's Capital Advisors joins to discuss market optimism amid record highs. She warns of potential volatility due to upcoming tariff deadlines and emphasizes the importance of strategic positioning and diversification.

Japan’s Election and Yen Strengthening

Political Shifts:
Melissa Lee touches on Japan's recent upper house election loss and the Prime Minister's commitment to remain in office. This political instability has led to a strengthening yen against the US dollar.

Tim Seymour’s Analysis:
[17:05] Discusses the Bank of Japan’s (BOJ) aggressive policies and the implications for global yields. He anticipates higher US yields if Japanese Government Bonds (JGBs) continue to rise, reflecting broader global financial uncertainties.

Impact on Investors:
The yen's strength and Japan's political climate introduce complexities for international investors, particularly concerning bond markets and currency valuations.

Rail Industry Mergers and Acquisitions

Potential Takeover Talks:
Reports indicate that BNSF Railroad, owned by Warren Buffett’s Berkshire Hathaway, is exploring a takeover of an East Coast rival with Goldman Sachs' assistance. Concurrently, Union Pacific (UNP) is eyeing Norfolk Southern for a possible merger to create the first transcontinental US railroad.

Market Reactions:

• Guy Adami: [19:26] Suggests that such consolidation could lead to sell-the-news scenarios, potentially driving short-term stock declines.
• Karen Feiderman: [20:25] Highlights the historical difficulty of securing railroad deals but notes a possible shift in the current administration’s pro-merger stance.

Implications:
Consolidation in the rail industry could reshape the sector, potentially leading to more efficient operations but also raising antitrust concerns.

NXP Semiconductor's Mixed Earnings

Earnings Report:
NXP Semiconductor beats earnings and guidance expectations with a 6% year-over-year sales drop. However, the stock falls over 3% in after-hours trading due to concerns over declining auto sector revenue, which constitutes 56% of its business.

Panel Discussion:

• Guy Adami: [26:13] Affirms the stock's reaction is understandable given the significant revenue loss from the auto sector.
• Tim Seymour: Expresses surprise at the negative reaction, questioning the market's expectation management.

Conclusion:
Despite strong earnings beats, structural weaknesses in the auto segment and ongoing tariff uncertainties weigh heavily on investor sentiment.

Verizon's Strong Performance

Earnings Boost:
Verizon shares rise over 6%, driven by nearly 300,000 net additions in broadband and robust yearly guidance. The company’s CEO credits enhanced free cash flow and strategic positioning amid a competitive telecommunications landscape.

Panel Insights:

• Steve Grasso: [28:03] Appreciates Verizon’s strategic moves, including increased free cash flow.
• Tim Seymour: Highlights Verizon's improved margins and debt repayment efforts, positioning it as a stable long-term holding.

Takeaway:
Verizon’s strong earnings and strategic financial management make it an attractive defensive play amid broader market volatility.

Pinterest Upgrade vs. Target Downgrade

Pinterest:
Morgan Stanley upgrades Pinterest to "Overweight" with an increased price target of $45, anticipating AI-driven growth and improved monetization strategies. The panel finds Pinterest undervalued compared to peers like Meta, citing strong user growth and innovative product launches.

Target:
Barclays downgrades Target to "Underweight" from "Equal Weight," citing ongoing strategy missteps and strong competition from Walmart and Dollar Tree. The price target remains at $91, implying a potential 10% downside.

Panel Discussion:

• Karen Feiderman: Prefers Walmart over Target due to better positioning in high-margin general merchandise.
• Tim Seymour: Notes Pinterest's unique market position and robust upgrades, contrasting with Target’s struggling strategy.

Conclusion:
Pinterest benefits from strategic upgrades and AI investments, positioning it for growth, whereas Target faces challenges that may hinder its performance without strategic realignment.

Sarepta Pharmaceuticals’ Dire Outlook

Gene Therapy Concerns:
Sarepta Pharmaceuticals shares plummet nearly 40% following a third gene therapy-related death. HC Wainwright analysts, led by Mitchell Kapoor, downgrade the stock to $0, predicting the removal of their Duchenne muscular dystrophy drug from the market.

Mitchell Kapoor’s Analysis:
[34:27] Explains that Sarepta’s gene therapy platform uses the same vector implicated in the deaths, leading to FDA's voluntary request to pull the drug. With declining revenue streams and insufficient cash reserves, the company faces imminent financial distress.

Panel Insights:

• Karen Feiderman: Questions the market's reaction and the practical steps Sarepta can take amidst financial peril.
• Steve Grasso: Emphasizes the inevitability of stock decline given the lack of revenue and safety concerns.

Takeaway:
Sarepta faces existential threats due to safety issues and financial instability, signaling a near-term collapse unless significant changes occur.

Steel Surge: Cleveland-Cliffs’ Rally

Earnings and Market Moves:
Cleveland-Cliffs shares surge over 12% following record steel shipments in Q2 and strong cost-cutting measures. The CEO credits the administration’s focus on domestic manufacturing and tariffs as key growth drivers.

Panel Discussion:

• Steve Grasso: Highlights the administration's role in revitalizing manufacturing, particularly in automotive sectors.
• Tim Seymour: Endorses investing in integrated miners like Cleveland-Cliffs, Rio Tinto, and BHP, citing record highs in metals like copper.

Conclusion:
Cleveland-Cliffs benefits from favorable policy shifts and robust demand in the steel industry, positioning it for continued growth amidst a recovering manufacturing sector.

Retail Sector: Dollar Tree vs. Target

Dollar Tree:
Barclays upgrades Dollar Tree to "Overweight," raising the price target to $120, driven by strategic price adjustments beyond the traditional dollar format. The shift caters to consumer trade-down trends amid tariffs.

Target:
Conversely, Barclays downgrades Target to "Underweight," citing ongoing strategy missteps and competitive pressures. The firm projects potential sales underperformance without significant strategic changes.

Panel Insights:

• Karen Feiderman: Prefers retail giants like Walmart over Target due to better strategic positioning.
• Tim Seymour: Praises Dollar Tree’s adaptation and resilience, contrasting with Target's struggles to regain momentum.

Takeaway:
Dollar Tree's strategic evolution garners positive analyst sentiment and stock performance, while Target’s lack of strategic change raises concerns about its future growth and competitive standing.

Legislation Impacting Private Equity Investments

House Legislative Update:
The House passed legislation expanding eligibility for investing in private equity securities. The bill allows not only accredited investors but also individuals who pass an SEC-administered investment knowledge test.

Panel Discussion:

• Tim Seymour: Highlights the groundbreaking nature of the legislation, noting it shifts focus from financial net worth to investment knowledge.
• Karen Feiderman: Observes the bipartisan support but remains uncertain about the long-term implications for the investment community.

Takeaway:
The legislation democratizes access to private equity investments, potentially broadening the investor base but introducing new regulatory frameworks focused on investor education and risk awareness.

SoftBank and OpenAI's Struggling AI Project

Stargate Project:
SoftBank and OpenAI face setbacks with their $500 billion AI project, Stargate, with plans scaled back to a smaller data center in Ohio. The partnership, initially buoyed by a $30 billion investment from SoftBank, struggles to meet ambitious goals.

Market Impact:
Shares of Oracle dip 2% in after-hours trading despite optimism around the Stargate project, reflecting investor skepticism about the project's viability.

Panel Insights:

• Guy Adami: Criticizes Oracle’s valuation, suggesting skepticism unless substantial progress is demonstrated.
• Tim Seymour: Connects Oracle’s struggles to broader insights on Google’s valuation, emphasizing the importance of sustainable growth.

Conclusion:
The Stargate project’s scaling back raises concerns about large-scale AI collaborations’ feasibility and impacts related stocks like Oracle, highlighting the volatility and uncertainty in the AI sector.

Final Remarks and Closing

Melissa Lee wraps up the episode by recapping major market movers and upcoming earnings reports. The panel emphasizes cautious optimism amidst ongoing market volatility, regulatory changes, and sector-specific challenges.

Key Quotes:

• Karen Feiderman on Alphabet’s valuation:
  [02:22] "The big concern is how they will address the Justice Department's issues regarding monopoly in search."

• Tim Seymour on Google’s valuation:
  [03:52] "Google's probably 1.5 to 2 turns cheap on a forward basis."

• Steve Grasso on Verizon’s performance:
  [28:03] "This one's great."

• Mitchell Kapoor on Sarepta's outlook:
  [34:27] "We expect the voluntary request would change into a demand in the near term."

Closing Disclaimer:
All opinions expressed by the Fast Money participants are solely their own and do not reflect CNBC's views. Investments involve risks, and listeners should conduct their own research or consult financial advisors before making investment decisions.

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