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CNBC's "Fast Money"
Highlights From Apple’s Worldwide Developers’ Conference… And A Warner Bros. Discovery Spinoff 6/9/25
00:43:42
Apple’s WWDC floated add-ons to new products debuting later this year, from long-awaited AI tools to a new design called Liquid Glass. But are the tech giant’s AI strides too late in the game to push the stock higher? Plus The latest in trade negotiations between the U.S. and China. And Warner Bros. Discovery’s spinoff. What the Lionsgate vice chair thinks about the media spinoff trend and the next move in the streaming wars. Fast Money Disclaimer
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- [00:00]
Melissa Lee
America's beverage companies are investing in America. We're American companies making American products with.
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Guy Adami
American workers in America's hometowns. We're local bottlers and manufacturers operating in all 50 states employing more than 275,000Americans in good paying jobs delivering for the.
- [00:20]
Melissa Lee
Nation because we believe in the promise of America and the people who make it great. Learn more@wedeliverforamerica.org paid for by the American Beverage Association.
- [00:32]
Dan Nathan
As America's leading business lender, bank of America is on your corner and in your corner. With $215 billion in business loans and over 3,700 business specialists across the nation. We help businesses thrive so communities prosper. What would you like the power to do? Learn more@bankofamerica.com LOCALBUSINESS bank of America Official bank of FIFA Club World Cup 2025 Copyright 2025 bank of America Corporation. All rights reserved. Live from the NASDAQ markets out in the heart of New York City's Times Square. This is fast money. Here's what's on tap tonight. Apple in focus. Investors unimpressed by the tech giants latest reveal. But is this a case of under promise over deliver? We'll debate what's next for the company and whether it can turn around what's been a pretty lackluster year. And Tesla troubles last week's feud between CEO Elon Musk and President Trump prompting downgrades from Wall Street. What's at stake for the company now it shift back into high gear. Plus Boeing shares take off and hit nearly 18 month highs. The Chartmaster says to sell Microsoft stealth rally to records and why shareholders aren't loving Warner Brothers breakup news. We'll get insights from longtime media insider Michael Burns. I'm Melissa Lee coming to you live from Studio B at the nasdaq. On the desk tonight, Carter Worth, Dan Nathan, Gaia Dami and Tim Seymour. We start off with another another big letdown for Apple. Shares of the iPhone maker falling as its weight Worldwide developers Conference kicked off this afternoon. CEO Tim Cook announcing in his keynote that developers can now integrate Apple intelligence into their apps. He also revealed an operating system redesign, real time AI translation and integration of ChatGPT with Apple's AI powered image generation app. While the stock closed off its lows of the day, it was still down over a percent. CNBC Steve Kovac is at Apple's campus in Cupertino to wrap this all up. Steve? STEVE.
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Steve Kovac
Yeah, Melissa. Not a lot of artificial intelligence in this event and that was because the bar was quite low after last year's announcements. Remember, it was this event, Melissa, a year ago where Apple showed off Apple intelligence. And then as the rollout went out through the rest of the year and beyond, did it really impress people? And then, of course, we got the big news with the Siri delay this spring, which really put pressure on Apple and especially today, there is just a lack of confidence in what they could show that would actually come to fruition. So they played it very safe. And like those features you rattled off there, nothing groundbreaking and nothing that we haven't heard from so many other competitors in the AI space. I will note though, the big one that you mentioned about developers and Apple giving developers access to their AI models on the phone, that's going to be a big step sell for Apple here. This event actually goes on all week and they have to convince those developers, hey, we have the best AI model that you can use, that can play with your apps, you're already developing on the iPhone, and here's what you can do with it that you can't do with OpenAI or so many other different LLMs out there. So that is the big takeaway from here is without some kind of big AI thing, what do we talk about next? And that means getting developers to stick on the platform. Because remember, Melissa, if they lose them, that puts the services business at risk and it puts their overall AI narrative at risk as well. So we're looking to see what the reception is like for that. But as you just showed off, outside of some minor AI features, this was like kind of a normal WWDC with a redesign. They call it Liquid Glass. And that is the new design scheme that's gonna be across all of Apple devices. It's gonna be a free upgrade. And yes, it looks great, it looks nice. It'll be a fresh new upgrade for your phone.
- [04:10]
Melissa Lee
But.
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Steve Kovac
But investors wanted to hear about AI, Melissa, and they didn't really get a lot today.
- [04:14]
Dan Nathan
All right, Steve, thank you. Steve Kovac.
- [04:18]
Tim Seymour
Thanks.
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Dan Nathan
The bar was very low going into this event. So how do you interpret a decline of 1.2%? Guy?
- [04:23]
Carter Worth
The bar was extraordinarily high last event. This time last year, we came out after the show, we were not impressed. Gene Munster was. And on the next couple of days, he was right to be. You're right to point out the bar was, I think, very low this time. But I don't even think they got up over that low bar. Now at $200, wherever it's trading, you know, what's the trade here? It feels as if the stock has been trending lower. It has not nearly the bounce that some of these other Mega Cap names did. And I don't think today did anything to help it.
- [04:52]
Melissa Lee
Yeah, I guess the focus is developers. Right? And so Steve just mentioned that. And so they don't even have the press really there anymore. They don't have all the fans there. There's nothing there. There's no there there. And I think that's probably the big problem here. When you think about the excitement that usually goes into these events. Show you the new iOS, they'll kind of surprise you with a couple of things. And that will drive an upgrade cycle in the fall when they finally release the phones with the new software. And, you know, they haven't grown iPhone units in the last couple of years because they haven't had a reason to have people come out and do it. And so at the end of the day, I think they should probably be done doing these really cringy videos. Like I watched the whole thing and they're just odd. They take place in this metaverse sort of situation. And, you know, it doesn't give you a lot of confidence that this is a company that's innov. And, you know, the comparison here is open air. They are shipping a lot of product. They are shipping, you know, innovative product. And you look around and you say to yourself, if they had an operating system, they're going to have a browser soon. You might replace the whole kit and caboodle with what they're doing, because they are Apple 20 years ago right now. So, you know, to me, I think it's disappointing. And the guy's point, the stock closed unchanged last year or down a little bit the day of WWDC and it rallied 10% in the next two days. So I got that wrong. I got the product right, but I.
- [06:11]
Dan Nathan
Got the price action this time.
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Melissa Lee
I don't know why it would, because the excitement there is that they announced that they were going to partner with OpenAI and that that would drive an upgrade cycle in the fall. That's what almost every analyst came out saying the next couple of days.
- [06:24]
Guy Adami
So, but I mean, I mean the chart, we can talk about that. But as they sit around there in the inner sanctum of Apple with all of their resources, all of their IQ and all of their manpower, what's their plan? I mean, are they. They must be aware that they're missing things. Yes. Do they have a plan? Are they trying to cope with these misses like AI and so forth, or are they just saying, oh, well, see what happens I don't know because to me it's just of course I don't know the difference between Apple's chart and Goodyear Tire. It's a bad chart. A bad chart is a bad chart. We know that of all the factors that ever been studied in markets, relative strength and momentum work more than anything else. This is poor relative strength. It is poor, poor momentum. Its relative performance to the sector peaked almost three years ago and it's not getting better. Good day for the market again. Apple down.
- [07:08]
Dan Nathan
If they do have a plan in the inner sanctum of Apple they have to do a better job at least messaging what this plan is. Tim Seymour mean you as a shareholder, how do you view this event in terms of it not bearing a catalyst? Maybe you didn't think that there would be a catalyst in the first place and you still believe that Apple is worth owning here despite the premium, despite a chart that looks as bad as Goodyear Tire according to the Chartmaster.
- [07:32]
Michael Burns
Wow. Wow. I think I would preach some patience but Carter's pointed out three years of patience I guess. And the stock also keeps failing at the 20. It's grinding lower. But I don't think there's been any penetration of AI apps. I think more engagement with developers. I think, I think you know some of the ecosystem around Apple and some of that low double digit growth on services which I think the company is going to continue to print at a high margin is, is part of why I'm less concerned than others doesn't mean I'm not also frustrated. And Carter asked the right question. I mean what, what's going on over there. But what we do know is that engaging more developers and having more opportunities for people to use AI apps on the iPhone and that's how they're going to engage for many people in AI. So to assume that suddenly there's going to be another mechanism to distribute AI to them I think is crazy. I'm not worried about Johnny. I've, you know, coming out with a brooch or a pin or something guy's going to wear. I mean I think it's something that it's actually that's a little bit of a head fake as to what Apple's problems really are.
- [08:39]
Carter Worth
I like a good brooch.
- [08:40]
Dan Nathan
You do. You've been known to sport a brooch.
- [08:42]
Carter Worth
Once he says that in a derogatory way. Meanwhile I mean I know why wrong with it?
- [08:46]
Dan Nathan
Nothing wrong but in terms of being the device is a great to distrib. I mean do we need a device to distribute AI if you can. I mean you are a user of these alternative chat sort of large language models.
- [08:59]
Melissa Lee
Yeah, it comes together with like Vision Pro and the vision that they have for spatial computing. Right. So there's a lot of things that will come together and going back to the developers and what the importance of services, you know, for Apple is like. The developers are going to stick around, they're going to be excited to do this. This is a great channel for them. There's a billion and a half iOS devices worldwide. Right. And so if you ever get a reason to upgrade these phones and you might have hardware. You know, I was talking to Gene Munster earlier today and Gene said it's not just the lack of a product that they have right now, it's also the overhang of the tariff trade situation too. So that is going to be a really interesting litmus test. If there is some sort of deal over the next few months, if the stock can rally off of that, if it can't, then you're going to know it's that investors feel like they are behind the eight ball. As far as innovation.
- [09:45]
Dan Nathan
Regarding how much of this do you think is tariffs versus just lack of a lack of innovation, you know.
- [09:51]
Carter Worth
No, I think the tariff thing is a bit. I think them being in the sort of the crosshairs of the US China relations is absolutely a big deal. I think that's a part of it. The way that Apple is bounced in a less than meaningful way as opposed to some of these other names. I mean, for example, look what Microsoft has done over this same period of time since April. It's pretty extraordinary compared to Apple. But again it comes down. Listen, I get the install base. I get that services now is north of 25% of overall revenue. I think they're rewarded for that. I also know that this is a company that has about 9% or so EPS growth and I'm probably being a little bit generous and you're Talking about maybe 5 and a half percent revenue growth with a company that's had flattening margins over the last few years. So a great company, inexpensive company.
- [10:34]
Dan Nathan
I wonder also Tim, and we've, we've talked about this before in terms of Apple in China. How much Apple's business is impaired, maybe not permanently but but for a while because it doesn't have AI, it doesn't have that partnership. And the tariff war, the trade war is impairing its ability, impeding its ability to develop, to sign a partnership with any Chinese company over there.
- [10:56]
Michael Burns
I think that's fair and I think we struggled with the China Apple story as opposed to the AI Apple story, appropriately. I'm not ready to, to call this an AI white flag. I think the China dynamics, I think China's best days, I mean Apple's best days in China may be behind it. But I think I said this on Friday and then I said but I think their best days, they are in front of us. And you said they better be because there are no days. But I, you know, China is, is, is complicated. It's certainly a loss for Apple and maybe that's why it shouldn't be trading at 35, 35 times. But I think the story we're focused on today is not the place that we should be punishing a stock that really hasn't rallied at all from it in the first place.
- [11:40]
Melissa Lee
You know, if Apple can't rally when they finally ship a product and they have a new piece of hardware and they're talking about that, then the story is pretty much done in my opinion, then it really becomes a consumer staple. The last 10 years they've had two hits. It's been AirPods and it's been watch. And those things are very iterative now too.
- [11:55]
Dan Nathan
Well, stocks ending the day near the flat line. But the S and P and NASDAQ both crawled back toward records. Both indices now 3% or less from all time highs. The down meantime shed just 1.2. Kick off the week. This is US and Chinese officials meet in London to talk trade. Megan Casella joins us now with the very latest developments. Meghan.
- [12:13]
Meghan Casella
Hey, Melissa.
- [12:13]
Carter Worth
Swab.
- [12:14]
Meghan Casella
Is six or seven hours of trade talks in London this afternoon between the US and China wrapping up just after 3pm Eastern with no news except that they are set to start meeting again tomorrow morning around 10am Eastern time. About 4am I'm sorry, about 4am Eastern time, 10am London time. So no news there. This came after Kevin Hassett told CNBC earlier today that he expected a short meeting with a strong handshake. Obviously not what happened, but we will have to see what comes tomorrow. And even still the White House putting out a strong face on this. The President saying he had gotten only good reports from the team in London. Take a listen.
- [12:51]
Guy Adami
I think we're doing very well. They're over there now. I'm only getting good reports. It's a little early but they'll be calling in soon. In fact, probably when I get back, I'll have my first call from them. We want to open up China and if we don't open up China, maybe We won't do anything, but we want to open up China. It'll be a great thing for China, great thing for the rest of the world.
- [13:13]
Meghan Casella
Now, the president went on to sort of sidestep a question about whether he had authorized his treasury secretary to ease up on export controls as part of these talks to get China in turn to, to allow for the flow of some rare earth minerals. That's really been the crux of these conversations this week. And Melissa, the president said only we'll see when he was asked about that after the Wall Street Journal reported on it earlier today. So no confirmation from the White House, but I was told by industry sources to pay close attention to the fact that Commerce Secretary Howard Lutnick is in London as part of these talks this time after he wasn't part of the Geneva talks. Letnick, of course, oversees the export control finance. So for that to be a part of the conversation, Lutnick does need to be in that room. So no handshake yet. No news yet. But we know they're meeting again tomorrow morning, Melissa, and we'll have to see what comes next.
- [14:01]
Dan Nathan
All right, Megan, thank you. Megan Casella at the White House. So ongoing here, but good progress in terms of the meeting continues tomorrow. So that's always a good thing with the S and P above 6000 at this point.
- [14:11]
Carter Worth
Agreed. And it was, I think it was Tuesday night into Wednesday of last week and when President Trump said, I like President Xi of China, always have, always will, then in all caps, caps. But he is very tough and extremely hard to make a deal with the 217 in the morning. And we talked about it on the next day. And what I thought, and I'm not saying I'm correct, but I thought it's a classic under promise over delivery, going to go out and say how difficult it is to make a deal and then a week or two later you come back with a deal. And the market will obviously love that, regardless of what the deal is. And it feels as though on the precipice of that. But at 6,000 is the S and P price that in.
- [14:43]
Dan Nathan
I don't think Kevin Hass is going to be talking about rare earths being shipped in volume and export controls being lightened unless something is in the works.
- [14:51]
Melissa Lee
Okay, let's be clear. Prior to April 2nd, China was exporting rare earth materials to us. Okay. We put 145% reciprocal tariffs on them. Okay. I don't know if they're reciprocal. They jammed them on there. They started putting export curbs on that. So if they start flowing again, well, there we were back at April 1st. There's no trade deal. Right. There's not opening up China right here. The bigger problem is that 90% of rare earth materials come from China. Those are things that we use in a whole host of really important stuff. And so they have to figure out who's got the leverage here in that regard. The Chinese have the leverage. And so there's going to be a situation, take a long time to figure out. I just think the administration people are going to come out, they say we got to win here and they're going to start exporting rare earth materials to us. Well, they were doing that on April 1st.
- [15:40]
Dan Nathan
Okay, well, let's just play this game still. This is where we are. Let's say they resume exporting rare earths, Tim, tomorrow they have some big handshake, it's a success, it's a wonderful deal, etc. Regardless of, you know, it's actually the same place where we were on April 1. What does the market do?
- [15:59]
Michael Burns
Well, the market, the market's grinding higher. Let's, let's, let's call it what it is. And the VIX is grinding lower and there's nothing, you know, you have to look past. Then the semiconductor index, the SMH, whatever you're looking at, it's up 21 and a half percent against the S&P from the lows of April 4, but also has decidedly outperformed in the last week during this period where, you know, I think we supposed to be tougher on China. I, I mean, I agree with Dan's assessment of that. Like this was already happening. What's the big deal? China should be very happy with how they have negotiated at this point. So I'd like to see us be significantly harder on China. But in the meantime, markets are going to grow, grind higher. Oh, and by the way, look at Alibaba or K Web are starting to catch wind again and again. I think that gets back to fundamentals in a couple of those names. Alibaba specifically.
- [16:50]
Guy Adami
Well, Tim makes a good point. I mean, if you were to look at the performance of the Hang Seng or the Shanghai composite, since the whole tariff brouhaha, obviously both of those are outperforming the S and P. But, but to your question, what does the market do in the event of some big handshake, I think it's as good a bet as any that it's, you know, sell the news.
- [17:11]
Dan Nathan
Coming up, Tesla's next turn with the EV maker trying to recover from June drop and gearing up for the Robotaxi rollout. But will the Musk Trump feud pump the brakes on a comeback that is next. Plus a Mickey D's downgrade. Why analysts aren't biting into the stock. And if there are recent chicken changes are enough to keep customers driving. Coming to the drive thru. Don't go anywhere. Fast Money's back in two.
- [17:37]
Melissa Lee
This is Fast Money with Melissa Lee.
- [17:40]
Michael Burns
Right here on CNBC.
- [17:47]
Dan Nathan
NetCredit is here to say yes because you're more than a credit score. Apply in minutes and get a decision as soon as the same day. Loans offered by NetCredit or lending partner banks and serviced by NetCredit applications to subject to review and approval. Learn more@netcredit.com partners NetCredit credit to the People A rich life isn't a straight line to a destination on the horizon. Sometimes it takes an unexpected turn with detours, new possibilities and even another passenger or three. And with 100 years of navigating ups and downs, you can count on Edward Jones to help guide you through it all. Because life is a winding path made rich by the people you walk it with. Let's find your rich together. Edward Jones, Member, SIPC.
- [18:35]
Michael Burns
How will you shape the future of energy with confidence? What does it mean to deliver affordable and reliable energy for all? From evolving supply and demand to pricing uncertainty? Ey understands the disruptions energy companies face and how to drive the outcomes that matter. So whether it's in the plants, at the pipeline or on the grid, eyes full spectrum of services help energy companies maximize operations to drive profitability and performance. Ey shape the future with confidence.
- [19:09]
Dan Nathan
Welcome back to Fast Money. Tesla shares shrugging off a pair of downgrades to kick off the week jumping four and a half percent. Analysts have been raising concerns over CEO Elon Musk's growing feud with President Trump. But our next guest says the war of words is far from the only obstacle facing this company. Former Ford CEO and CNBC contributor Mark Fields joins us here on set at the Nasdaq. Mark, welcome. It's great to see you in person.
- [19:30]
Mark Fields
Thank you.
- [19:31]
Dan Nathan
For a long time you've been a Tesla doubter, but now is the nail in the coffin in your view?
- [19:37]
Mark Fields
No, absolutely not. Listen, from from a short term perspective, they face a lot of challenges. They face declining sales. Part of that has to do with the fact that there's more competition now. Five years ago they didn't have a lot of competition. You see declining sales, you see declining margins. China is a big problem for them. It's a big market for them and there's a lot of domestic manufacturers there. So they have a number of issues. Plus on top of wrapped all around the issues with the musk being involved with the Trump administration. That being said, they have a lot of advantages, right? They're, they're, they have a cost position better than the rest of the industry. They have positive margins, which is better than the rest of the industry. And you know, they're launching the robotaxi business which if they get that right, with just what they're using, cameras, they can have a big cost advantage versus somebody like Waymo. And then there's robotics. So that's the way I would, I would characterize it.
- [20:37]
Dan Nathan
Right. For a long time we've talked about, you know, in the bear case for Tesla, growing competition and we are at the point now where that is nipping away at, at the, at the edges it. Can the big three. Can other automakers actually capitalize on Tesla's woes or is it so dispersed, this market share losses of Tesla amongst the competitors that it's not really a win for anybody else?
- [21:00]
Mark Fields
Well, it is a win when they're gaining share. I mean, if you look at Tesla's market share of the industry, three years ago they had 80, 85% of the market. Now they have below 50%. So that's a positive for the established automakers. The issue is going to be going forward is with tariffs that is going to worsen the margins for the established OEMs. And in particular, if they sell less, a less amount of EVs, they have to meet fuel economy requirements. And if they don't meet those, they have to buy emissions credits. And guess who they buy them from? They buy them from Tesla. So in effect they help subsidize the Tesla business. But net net, they're gaining. But they have to get back to, they have to get to profitability to have profitable growth.
- [21:45]
Carter Worth
40 years ago Ford was a 10 and a half dollar stock. It's a 10 and a half dollar stock today. Understanding it's had some ups and downs along the way. What's the road, what's the path forward for a Ford automaker in this environment? Because they're seemingly sort of mired in no man's land.
- [22:00]
Mark Fields
Well, you know, that's, that's, you know, Ford as well as the other established marker automakers are making a lot of investments in technology, in their vehicles, right. Almost to make their computer on wheels. The market has never given them any credit for that. When I ran Ford, we Talked about the investments we were making in, in Autonomous vehicles, in EVs, in compute power on the vehicle. But the market tends to view established automakers as metal benders Also. They have a reputation for destroying capital over the years. You can just see that with their over enthusiasm on EVs. They have a lot of stranded capital right now because customers didn't come as much as their product programs and capacity did. So I think the path forward for folks like Ford in particular, they have great product, they have high appeal product trucks, SUVs, making sure they double down on that, that provides a great profit stream, their parts and service business. And they can use that, as they're doing right now, to invest in EVs. They have a, from what I hear, they have a skunk works in California working on some innovative product. Their product appeal is really, really good. And I think that's the key for any autobay maker is having fresh product. And that's one of Tesla's issues right now. Their product is aging all right.
- [23:17]
Dan Nathan
There hasn't been a major refresh until just recently. In terms of granted, you are a Ford shareholder, I presume. Okay. Do you think Ford is the best auto stock?
- [23:30]
Mark Fields
Well, of course I do, but I.
- [23:33]
Dan Nathan
Asked you that because we've had Bill Simon of Walmart on and he has said that he prefers Target. So this is an open question. I mean, just because you own it doesn't mean that it is the best stock from here the next five years, next 10 years.
- [23:44]
Mark Fields
Yeah, there's, you know, there's lots of puts and takes. I mean, listen, if you're, if you, if you look at Ford and you look at the situation around tariffs, their advantage is we've always had the approach at Ford to have the majority of our production here in the US and so Ford has about 80% of their production from the domestic market here in the US GM, Chrysler, they're in the probably 40 to 45% range that they have to import into the US so when you look at that in and of itself, that's a big competitive advantage. But listen, you know, GM is making a lot of investments in EVs which if the market does take off, they have a full product lineup. You look at automakers like Hyundai, Kia, which have great design, also a good, full lineup of EVs that they're introducing in the marketplace. It's going to come down to execution, it's going to come down to cost position and product appeal from my standpoint.
- [24:40]
Dan Nathan
All right, Mark, great to see you. Thanks for coming by. Mark Fields. Tim, what's your take?
- [24:47]
Michael Burns
Well, I think if we get to a place where we really understand where tariffs sit and I still don't think we're at our final resting spot, but 70, $500 a vehicle on GM is not where I think we're going to be. I think that stocks, you know, it's in purgatory until we get out of it. And the question I think for auto investors more broadly, you know, independent of EV exposure and whatnot, is are we in the beginning or late cycle? And you know, you look, you had this, the SARS number, that most recent SARS number had some pull forward to it around tariffs. I don't really know where we are. I do know that GM left up to their own devices has never been more profitable. And the frustration I have was that the market doesn't reward that. And I think this is for some of the reasons that Mark just talked about.
- [25:27]
Guy Adami
Just briefly in terms of Ford and to guys point, obviously it has done nothing for three, four or five decades. It's essentially a bond, right? So you're talking about a security that has a 5.8% yield compared to 10 year treasuries and that yield is the average yield going back to 1980. So this is obviously not a growth company. It is a company that makes cars. But that's not why you own it. You own it for the yield. You will keep up with U.S. treasuries.
- [25:47]
Melissa Lee
You know, on Tesla, obviously, obviously I'm not going to talk about Ford or gm. I mean expectations for deliveries are still really high this year. And when you think about what Mark just said about, you know, these tax credits and who buys them and this is a very, very profitable business for Tesla, especially at a time where their auto gross margins have been cut in half over the last two or three years. And so you know, we're at a point where that Chinese competition, the tax credits, maybe there's weak demand for these things. The aging fleet, I mean the Elon and the brand degradation, I mean the list goes on and on. So if you're buying this stock right here, you better believe in humanoid robots. You better believe that Robotaxi happens sooner than you think. You better believe there's someone who wants to own those fleets. Even if the technology gets going and it's going to probably take longer than expected, there's little doubt that ultimately they will have a robo taxi business and it'll be good. But it might not look the same way that people like Cathie Wood think it's going to be some $5 trillion business in the next 10 or 15 years because that's the only way you can get to some of the estimates that some of these folks think that this stock is going to trade at.
- [26:48]
Dan Nathan
There is a lot more fast money to come. Here's what's coming up next.
- [26:52]
Michael Burns
Not loving it. Why Wall street isn't biting into McDonald's and why crunched consumers could lead to a Big Mac bummer for the name plus a major media split. Warner Brothers Discovery gets ready to break up what the new companies will look like and what it means for the broader media space. You're watching Fast MONEY live from the NASDAQ market site in Times Square. We're back right after this. If your small business is booming and ready to expand, you might say something.
- [27:27]
Guy Adami
Like it's happening.
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Mark Fields
Crushed it.
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Michael Burns
But if you need someone who can actually help protect your growing business, just say like a good neighbor, State Farm is there. And just like that, your State Farm agent can help you get the coverage you need for your new space for your small business insurance needs. Like a good neighbor, State Farm is there.
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Dan Nathan
Earn a business degree on your terms at Capella University. Our Flexpath format is available in select programs and lets you learn on your schedule. A different future is closer than you think with Capella University. Learn more at Capella. Edu. Welcome back to Fast Money. Call of the day on McDonald's Morgan Stanley downgrading the fast food chain to equal weight from overweight analysts saying the company is a top quality business but won't be insulated from structural pressures in the fast food industry. They point out that while the valuation was, quote, healthy, it could get derated if not everything goes to plan. Shares of McDonald's are about 6% off of their record highs right now. They do trade at a premium versus peers here. And one of the points is the pressure on the lower income household. They are not immune from what is going on in the economy. And so the notion that it's a defensive play may not be a merited one.
- [28:45]
Carter Worth
I think it's a fair downgrade. My if I'm nitpicking, which I like to do, I mean, they lowered their price target, I think from 329 to 325 4, which doesn't seem like a big, it's not a big deal, number one. Number two, yeah, valuation. I get it. The headwinds with the consumer. Absolutely. We've talked about it before. Their CFO talked about about a year or so ago the problem with the stock is. And Carter can speak to this, you know, we just can't, for whatever reason get through sort of that 325 level. But I will tell you, and I think Tim will agree, you do not run too far away from McDonald's here.
- [29:15]
Guy Adami
I mean, it's a nice downgrade in terms of timing. I was Morgan Stanley had this is by exactly a year ago and kept that buy until just now. The question is, their own action is what took the stock down. Right. It wasn't sort of a market thing to me. It's a pair of twos. I would neither be long nor short.
- [29:33]
Dan Nathan
Tim. There was just another downgrade, I think on Friday last week from Loop. And they cited the McCrispy chicken strips as being a real problem. Apparently they're smaller, they've got less breading, appearances, not as attractive. And of course, it is the cornerstone of the snack wrap because the snack wrap is basically a wrap with a strip inside. So I don't know, you know, how you feel about McDonald's. Carter says pair of choose. These analysts are skeptical. Premium valuation.
- [30:03]
Michael Burns
Well, I wouldn't go as far as saying it's, you know, if I look across fast food, there's a lot of oysters and not a whole lot of pearls. How about that one? No, I think, I think you have a case here where their segment. We've gone through this before. They came back with the value meal. This is a company that they are the Wal Mart of fast food. I mean, you don't ever count McDonald's out. And yes, there's cyclicality in their business. They dominate. They can push around the competition. When they go Value Meal, then Wendy's and Burger King are scared. So don't get too far away. As Guy said from McDonald's 24 times forwards, not awful.
- [30:40]
Melissa Lee
You know, I obviously eat a lot of salads. And so you guys are just crushing those corn powder cheese in this. Have you guys seen kava and sweetgreen? They've been cut in half over the last six months, which I think is really interesting. And I think that's kind of where I was going in a way. And so if you're thinking about what the trade down looks like, you know, Shake Shack has just had a big rally, which is also expensive. I mean, there's a lot of differing things going on. I think you have to remember also that some of these things are run better than others. You know what I mean? And I'm assuming that valuation is really what took hold of Kava and Sweetgreen. But those were almost like meme stocks last year.
- [31:14]
Carter Worth
Before we go to break, Mel and I know we have to go Tim throw a little counting crows at you and you just decided not Is it.
- [31:20]
Dan Nathan
The oyster pearl thing?
- [31:21]
Carter Worth
A lot of oysters but no pearls. Somewhere long December, but I didn't see that.
- [31:25]
Michael Burns
Great.
- [31:26]
Dan Nathan
Anyway, coming up, a short lived search for Warner Brothers Discovery shares are racing early gains. The media giant plans a split into two separate companies, how they are dividing up the assets and what it means for the broader media space. That's when he's back into welcome back to Fast Money. Stocks kicking off the week near the flat line as investors watch for any progress in the US China trade talks in London, the Dow down just one point, the S and P eking out a gain and the NASDAQ up 3.10of a percent, shares of Robinhood and APP11 lower today. The two names had been widely expected to be added to the S&P 500 as a part of the latest quarterly rebalancing announcement on Friday, but no news came on that front. Still, Robinhood nearly doubling in 2025, AppLovin up nearly 25% so far this year and Novo Nordisk drawing some activist attention. London based Parvis Asset Management reportedly building a stake in the Ozempic maker, hoping to influence its CEO search. And shares of biotech stock. Metsehra jumping more than 10% after positive early data for its obesity shot. It's a monthly shot, by the way, the company saying the drug helped patients lose up to 8% of their body weight in over five weeks in the early stage clinical trial and showed signs it could be administered once a month. Well, another big media spinoff in the workshares of Warner Bros. Discovery giving up early gains after announcing plans to separate into two public companies by next year. The streaming and studios business would include HBO Max and WBD's movie properties. The other would be a global networks company including cnn, TNT Sports and Discovery. The announcement coming on the day Lionsgate Entertainment marked its own spin off by ringing the NYSE opening bell. Lionsgate shares down 4% since it started trading as a standalone company on May 7. Stars now trade separately on the Nasdaq. It's more than doubled in the same period. For more on the state of media and the recent spinoffs, we're joined by Lionsgate Vice Chair Chair Michael Burns. Michael, welcome back to fast. Always great to see you in person.
- [33:20]
Tim Seymour
Thank you for having me.
- [33:22]
Dan Nathan
This is like the third spin off. I mean of course there's Comcast and Versant, which will happen when you did your spin off. I mean, did you think that this is going to sort of kick off a spate of these spin offs? And what about the industry is causing this?
- [33:36]
Tim Seymour
What do they say that imitation is the greatest form of flattery. This took a long time. It took to, to make happen. We thought this was in the best interest of our shareholders. And the one thing I want to correct you right, that the lion stock's down 4%. But that's without factoring the star shares that Lionsgate shareholders got and that stock has traded well. But I think that, yeah, this is the beginning of. I think it's a smart thing for the industry to do. We wanted to be a pure play content business on one side and stars over on as a separate public company. So we like the multiples for the pure play content business and we are back to our roots again.
- [34:16]
Dan Nathan
What, what happens with the linear side of the business in Europe? That's, that's the side that everybody wants to spin off and let go of.
- [34:25]
Tim Seymour
If they don't make a move digitally, I think that linear has got a big problem. But I think that they can convert to linear to apps and all of that. But they have to make that move. And frankly, I think they've taken a long time to make that move.
- [34:40]
Melissa Lee
Michael, on the studio front, John Wick the series is one of my favorite all time. I got to go back to Rocky, right guy to kind of really appreciate a series like that. Ballerina just came out the prior for John Wick's 1.1 billion cumulative growth. That's massive, right? So I'm assuming Ballerina is going to have some legs. I love, I loved it. I saw it last night. How important are these sort of franchise, you know, structures going forward? Forward, because it seems like that's a thing in the movie business right now.
- [35:07]
Tim Seymour
If you can have a built in audience and you can piggyback off of the other titles in that series, sure, that helps. Ballerina was a little bit of a challenge because it was a character that never showed up in any of the previous John Wicks. I think our marketing team did a really good job. It did $25 million opening weekend. I wish it did $35 million, but I think it will have legs. And the audience reaction, 93% positive. And then on top of that, you had, you know, great Rotten Tomatoes scores. So I feel like it's going to keep running and running and it'll be a great library title. No one gives us the credit for the library that we've built. $20 billion of content spent over the last 20 years. And when Ballerina was coming out, every single one of the John Wick titles uptick across every single platform.
- [35:53]
Carter Worth
Seems like Steve Mnuchin got the memo because their Liberty Capital, I think they're called called maybe I'm wrong, but they just basically doubled their stake in your company. And it seems as though they obviously see something that maybe other people have yet to see. Can you sort of speak to that?
- [36:07]
Tim Seymour
I think if you looked up smart money, it'd probably be a picture of Steve Mnuchin. So he understands our business. He's. We've had a lot of conversations with him over the years. He likes the model of what we have. He's been in the movie business before. He's got a big fund right now and we're happy to have him as a big shareholder.
- [36:26]
Dan Nathan
So we're going to have all these companies and they've broken our apart in two pieces. What does the industry look like five years from now, ten years from now? Who is combined, who is not combined? What do the pieces end up looking like?
- [36:40]
Tim Seymour
You know, this is when I shake my magic eight ball.
- [36:43]
Dan Nathan
I think eight balls better than most of our.
- [36:44]
Tim Seymour
So yeah, I think that you'll. I don't see you'll. I don't see them coming back together. I think once you separate pure content and like we did, they're. They're not going to come back together. It's. It's harder to pull them apart. I think David's about to find that out and I'm sure they thought this through and it's going to work out well. But what do I think it looks like? I think you're going to see consolidation in the linear networks. I think you'll see combinations of linear networks with some of the non commercial channels. It's all about saving money, economics, you know, economic benefit by doing that. And I think the pure play content businesses. Will there be consolidation down the road? Probably. There are only five great libraries in the world and we're one of them.
- [37:29]
Dan Nathan
Michael, hope you'll come back soon. You're welcome anytime.
- [37:33]
Tim Seymour
It's lovely to see you.
- [37:34]
Dan Nathan
Michael Burns, Lionsgate in the infancy of.
- [37:36]
Carter Worth
This show, Michael would come on, remember that was the whole Carl icon and Mike would come on like a gentleman all the time. And I'll tell you so I think Jeff Schwartz was on June 2 with the squawk Box crew talking about stars. Michael is one of the great operators out there. Now that you have a pure Play and I mentioned Steve Mnuchin because he totally gets it. I mean, Lionsgate here at these prices, I think is very interesting.
- [38:00]
Melissa Lee
I went to, I went to college with Jeff.
- [38:01]
Carter Worth
Sure you did.
- [38:02]
Melissa Lee
CEO of Stars. Good manager. Yeah. I think these are really tough and I think a lot of investors had their, like, hard time getting their arms around these sorts of things. And I think a great example of this Warner, you know, opened up 9, 10% or something like closed down in the day. And I think that, you know, as we have this changing landscape as it's moving below our feet, they're kind of tough to invest in right now. You almost want to look out a year and say, what is the, what is the landscape look like as far as all these different names? And you're going to have to bet on operators, you're going to have to bet on catalogs.
- [38:31]
Dan Nathan
Yeah. Tim, your thoughts?
- [38:34]
Michael Burns
I think private equity is doing the sum of the parts valuations and I think there's a lot of value out there. And I do think content has a premium multiple attached to it and the places that it's available. And again, I think there are, if you look at some of the legacy players and the different pieces, I think there's going to be more deals to come to state the obvious. And it gets you back to Netflix. And the question is, yes, we know this valuation is difficult, but this is a content machine on a glass global nature who by the way, is the only one that's always lived their life in a streaming capacity with all its efficiencies. So I'm not chasing Netflix here. Just nobody's close.
- [39:10]
Dan Nathan
Coming up, the technical take on a technology great with the Chartmaster season store from Microsoft as shares quietly hit another record. That is next. Plus, Boeing gaining altitude. The planemaker sticks a landing in China. What it means for the stock and whether the mainland drop offs will continue. Fast Money's back into. Welcome back to Fast Money. Microsoft shares hitting another record close to kick off the week. The 50 day moving average close to crossing above its 200 day for the first time since February. Traditionally a bullish signal, but the chartmaster says it is time to fade this. Carter, why?
- [39:48]
Guy Adami
Well, a couple reasons. Let's get right to the charts. We have three in total. The first, of course, as always, the hope is to have no lines, no drawings, no judgments and then we add them. There's the first. Now let's put some lines in. What do we know? This stock drops and it drops massively. Second chart some 26, 27% rallies. Of course it recovers all of that loss up 37, 38. Back to the scene of the crime. Third and final chart. We are just now slightly above that former high of July. Now people would say that's a breakout. There is a proper definition of breakout. If you go up one penny and fail, did you break out? How about 40 cents? You have to typically be above a prior high by about three and a half percent and stick your landing. So we have just eked out a slight. We're 1% above the high from July. And remember, Microsoft's relative performance, the S and P back to alpha peaked a year and a half ago. I don't like it.
- [40:47]
Dan Nathan
I would have heard that and thought, ok, so we'll wait a little longer to see if it's a breakout.
- [40:52]
Guy Adami
Well, that's the point. But on the first move or first approach to a former high, it's usually better to fade it or sell calls as it either backs and fills at the high, which is called contending with you back away or you back and fill. Very rarely would you just go right through.
- [41:08]
Dan Nathan
Right.
- [41:08]
Carter Worth
What you so see succinctly described Melissa Lee was what they call a golden cross in the business, which sounds amazing. What we saw in early April was a death cross, not only in individual stocks but in the broader index. And guess what happened? The market ratcheted higher. So sometimes as bad as it looks on the debt side, as great as it looks on the gold side, you fade.
- [41:31]
Guy Adami
Let's address that. The whole golden. Anything that sounds clever is almost always wrong. Okay, golden cross, death cross. What is this? Comic books? Listen, I have done back tests on that. It is one of the worst things you can do. By the time the death cross has happened, two guys point, it's already down 20, 30%. Guess what happened today. The Golden Cross. It's up 38%. You're behind the eight ball. Don't do it.
- [41:54]
Dan Nathan
Carter says that it sounds so stupid to even talk about golden cross. Okay.
- [41:58]
Melissa Lee
No, he tries to sound so clever all the time. Time. You know what I mean? Microsoft. Interesting. The fundamentals which you don't care about. You know, it's kind of the runaway winner here, at least from a cloud service. The way you kind of hear from folks like using, you know, the compute and the workloads they're doing in generative AI. And I think that's one of the reasons, despite the relative performance, why it's gotten back here. But it does seem like the sort of name because Azure has been such an important part of this. If they ever get some uptake on agents and copilots, that sort of thing. It's going to be a, it's going to be the first $4 trillion market cap company.
- [42:31]
Dan Nathan
All right, coming up, a bump for Boeing as a plane maker lands its first 737 Max in China. Are there more deliveries to come and what does it mean for the stock's recent run? That is next. And here's a sneak peek at the Kramer cam. Jim is chatting exclusively with the CEO of 100X. Catch the full interview. Top of the hour on Mad Money. More fast Money into. Welcome back to Fast Money. Shares of Boeing getting a bump today. The company delivering a 737 Max jet to China, the first since escalating tariff tensions sparked a pause in April. Boeing's been on a run over the last two months, up more than 35% now at its highest level in nearly 18 months. Paris Air shows also next week. Tim, you like Boeing here?
- [43:16]
Michael Burns
Yeah. I mean it's a golden cross, right? So you got to buy it. Just kidding. So I think this is a story of both improving fundamentals, improving true free cash flow. A story that the regulatory backdrop, I think the worst of it is through. I know there's a lot of investors that have PTSD on this one because there's certainly been a couple of moments in the last three years where it felt like that. But this is really a story of every major, I think ingredient in a Boeing. A sustainable Boeing rally is there and that includes also the street that has not upgraded this stock and is not predicting free cash flow positive for 25. I think it's a second half positive event.
- [43:58]
Dan Nathan
Carter has a chart.
- [43:59]
Melissa Lee
Look.
- [44:00]
Guy Adami
Well, this is all about time frames, right? So to your point, this is up some 50, 60% from its lows of just a few months ago. So if you are a fairly short term trader, I would sell calls or trim. The fact that it is up and you see that here on this chart, it is just starting to increase emerge from this formation. Now if you look at the arithmetic scale and that's what this is, we are above that downtrend line in effect since its peak. But you also, you can look at the logarithmic scale and we are not yet there either way, if you're a very long term investor, this is hopeful and encouraging. If you are a trader having gone from 130 to 220 trim or sell.
- [44:39]
Carter Worth
Calls, that downtrend line that Carter showed us has been in place since I believe March of 2019. So, so duration wise, it's a very important line. I think it's the be in Tim's bland. It's the be in Karen's carbs. I don't even know if Boeing is the B, but somehow it gets to.
- [44:55]
Dan Nathan
Be in your tube.
- [44:56]
Carter Worth
No, it is not to be in my tube. My tube has something else in it, but that's probably for another show. With that said, Carter's right to point out that we're right up against it. I think we do break out to the upside, but this is a logical place to take a pause.
- [45:09]
Dan Nathan
All right, up next, final Trade. Final trade time.
- [45:26]
Michael Burns
Tim Seymour, Novo Nordisk. I like the activist investor behind it. I like the story without the activist investor and I like the bounce farter.
- [45:36]
Guy Adami
Braxton Worth Beverage Co. Celsius a textbook bearish to bullish reversal buy.
- [45:42]
Melissa Lee
Dan Nathan yeah, Lionsgate has been trading long looks a little washed out near term ballerina give it some legs.
- [45:48]
Carter Worth
Did we have fun last Thursday? I don't know if we have a.
- [45:51]
Dan Nathan
Chance to discuss live is extraordinary.
- [45:53]
Carter Worth
Extraordinary is it? That's the right word to use and we thank everybody for joining us and we look forward to the next one. I look forward to Gilead making new allies time highs after this Goldman conference today.
- [46:04]
Dan Nathan
All right, thanks for watching fast. See you back here tomorrow at 5. 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, 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 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.
- [46:53]
Michael Burns
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Mark Fields
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Michael Burns
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