International Investing Vs. U.S… And NIH Funding Cuts Impact On Drug Development 3/17/25

Summary

CNBC's "Fast Money" Podcast Summary Episode: International Investing Vs. U.S… And NIH Funding Cuts Impact On Drug Development (Released March 17, 2025)

Introduction Hosted by Melissa Lee alongside a panel of top traders—Tim Seymour, Karen Feinerman, Dan Nathan, and Guy Adami—CNBC's "Fast Money" dives deep into the pressing financial topics of the day. In this episode, the discussion revolves around the contrasting performances of international markets versus the U.S., the potential ramifications of NIH funding cuts on drug development, and significant movements in sectors like AI, EVs, and streaming services.

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1. International Markets Outperforming U.S. Stocks Timestamp: 00:00 - 05:53

The episode kicks off with an analysis of the stark divergence between U.S. and international markets. While major U.S. indices like the Dow, S&P 500, and NASDAQ showed gains, emerging markets, represented by the EEM ETF, surged by over 8%, significantly outperforming the U.S. S&P 500, which saw a decline of 3.5% for the year.

Tim Seymour emphasizes the long-term nature of this trend:

“It’s probably not a two-week trade… the valuations offer you a really attractive upside.” (02:37)

Factors contributing to this outperformance include a weakening dollar, fiscal policies in Europe, deregulation, and potential positive developments like a Ukraine deal that could lower energy costs in Europe.

Dan Nathan adds a cautious perspective on whether the tech trade will maintain its momentum:

“It’s probably just little WG and dxj… but I feel like, God, this has been such a big move. Maybe a little pullback.” (04:24)

Karen Feinerman highlights the impact of a weaker dollar and ongoing fiscal strategies:

“They want lower rates and a weaker dollar… that’s something they all probably want because when you have a $37 trillion debt problem, you want that currency to be weaker.” (05:53)

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2. Nvidia’s AI Conference and Market Sentiment Timestamp: 05:53 - 07:00

The panel shifts focus to Nvidia's upcoming AI conference (GTC keynote), discussing investor expectations surrounding new AI technologies like the Blackwell GPU and Rubin chip. Guy Adami suggests a cautious approach:

“If there’s nothing new for them to talk about… the US might test recent lows and present buying opportunities.” (05:08)

Melissa Lee prompts further discussion on China's AI advancements, specifically referencing Baidu and Alibaba as potential game-changers in the tech sector.

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3. NIH Funding Cuts and Their Impact on Drug Development Timestamp: 32:31 - 39:06

A significant portion of the episode is dedicated to the implications of potential NIH funding cuts on drug development. Jon Flavin, CEO of Portal Innovations, underscores the critical role of NIH funding in fostering innovation:

“For every $1 that the NIH has put into the research platform and initiative, $3 are seen in economic impact.” (37:50)

Flavin warns that reduced funding could hinder advancements in crucial areas like cancer, Alzheimer's, and HIV research, leading to a potential brain drain as innovation migrates to more supportive environments globally.

Rebecca Patterson further elaborates on the broader economic and strategic consequences:

“If you can’t sell that vision [of sustaining innovation], then you're going to cause a lot of disruption in this space.” (12:47)

The discussion highlights the delicate balance between necessary budget cuts and the need to maintain a robust pipeline for medical breakthroughs.

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4. Sector Spotlights: EVs, Streaming, and FinTech Timestamp: 26:39 - 32:31

Electric Vehicles (EVs): China's BYD unveils a groundbreaking charging system capable of powering cars in just five minutes, promising a 292-mile range. This innovation poses a direct challenge to American rival Tesla, whose stock has been under pressure due to leadership controversies and market performance.

Guy Adami criticizes Tesla's leadership:

“The CEO... behavior is downright despicable.” (28:51)

Streaming Services: Netflix receives an upgrade from analysts at Moffatt Nathanson, who raise the price target by nearly 16%, citing successful monetization strategies and the triumph in the streaming wars.

Dan Nathan praises Netflix's strategic moves:

“There’s more monetization than meets the eye.” (39:48)

Buy Now Pay Later (BNPL): Affirm's stock experiences volatility following Klarna's takeover of a key partnership with Walmart. The discussion centers on the strategic implications for the BNPL sector, with Dan Nathan expressing cautious optimism:

“I like Affirm… but why do you want to own [Affirm] going into a period where the consumer is clearly weakening?” (25:03)

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5. Intel, Reddit, and Lululemon Market Movements Timestamp: 40:29 - 45:00

Intel: Shares surge nearly 7% following a regulatory filing indicating incoming CEO Lipu Tan's $25 million stock acquisition and potential strategic shifts in chip manufacturing and AI.

Reddit: The social media platform's stock experiences a rollercoaster day, dropping by up to 6.5% after a sell rating from Redburn, then partially recovering following an expanded partnership with Google.

Lululemon: Despite bullish notes highlighting positive brand momentum on platforms like TikTok, Lululemon's shares remain volatile, down nearly 11% in March. Tim Seymour supports the bullish outlook:

“If I could put an eye in my tube, I would… but valuation is a little expensive.” (43:59)

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6. Upcoming Events and Closing Remarks Timestamp: 45:00 - 45:51

The episode concludes with a preview of future segments, including Jim Cramer's live chat with Nvidia's CEO Jensen Huang and discussions on the impact of NIH funding cuts on drug development.

Tim Seymour encapsulates the day's themes:

“What’s going on in Europe is really fiscal… but this is an epoch.” (16:59)

Karen Feinerman and Melissa Lee encourage listeners to engage with upcoming live events and stay informed about market dynamics.

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Conclusion This episode of "Fast Money" offers a comprehensive overview of the current financial landscape, highlighting the robust performance of international markets relative to the U.S., the critical importance of NIH funding in sustaining medical innovation, and notable movements across key sectors like EVs, streaming, and FinTech. The panel provides insightful analysis, supported by notable quotes and expert opinions, making it a valuable resource for investors seeking to navigate the complexities of today's markets.

Transcript

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[Tim Seymour]

Well, you know there's, there's no question for me, I'd rather be abroad. Not only because I'm the ambassador but I also run an international ETF ID which was the I imply SEP last year. I just think that there's a lot of different reasons why this trade isn't just a two week trade and I think that's the debate for people. It's been, it's actually not a two week trade. It's probably if you look at the outperformance, Dax outperformed the S and P by 25% since Thanksgiving. But I'm going to coin Dan likes is is what is it the faithful eight. Faithful eight. So I'm going with, I'm going with Miga which is make international great again. And it's with some irony that the rest of the world has really been rallying since this administration took office. And I think it's a, it's a combination of the dollar is going to get weaker. I think there might even be like a mini Plaza Accord. Take your, your history book out for people if you don't know what that reference is. But the fiscal dynamic out of Europe is important. I think Deep Seq was a very important event for the world. I think it's certainly beneficial to China, but I think it's beneficial to Europe. I think if you get a Ukraine deal, leave the politics aside of that. I think energy costs in Europe go way down. I think the dynamics for deregulation in Europe are very important. But you started all this with a 15 year relative underperformance. That is something that doesn't change overnight. And you can make an argument that you're starting to see this trade work bits and parts of the last couple of years. So the valuations offer you a really attractive upside. Even here at a discount to the US you have better dividend yields and I think you have fiscal policy as a tailwind.

[Melissa Lee]

Is this trade though really working? Because US tech has been under pressure and in Europe for instance. Right. It's underweighted tech relative to the United States. It's really been benefiting from the presence of industrials and banks. The things that had been going in the rally even here in the United States.

[Dan Nathan]

So are you saying that the tech money leaving just one of the place it's going?

[Melissa Lee]

If the tech trade is back on, maybe money doesn't. Yeah.

[Dan Nathan]

Come back. I mean I've had on various international for a while and the only one of really any significant size is China. The rest is just little WG and dxj which is actually yen adjusted but so I'm feeling a little underweighted. Rest of the world, but I feel like most people are. Yes, right. That's how we got here. Sort of got all the money flowing into a market that it doesn't have the market cap to absorb it. It's just going to go up. So. But I feel like, God, this has been such a big move. Maybe we do see a little pullback and I'll have to jump in anyway.

[Guy Adami]

What do you. Plaza Court. That's.

[Tim Seymour]

Come on.

[Karen Feinerman]

No, but I hearken back to Las Vegas like eight or nine, 10 years.

[Melissa Lee]

Ago when we went to Las Vegas.

[Karen Feinerman]

We went out and we were just sort of hanging out collectively and somebody approached us and said is there an emerging market specialist amongst us? Staring straight at Tim Seymour. It's one of the highlights of the.

[Tim Seymour]

I didn't pay anybody for that. That was legit. I mean, you know there are people that want to know.

[Karen Feinerman]

Of course they do.

[Melissa Lee]

Especially now.

[Tim Seymour]

Never know with that.

[Karen Feinerman]

All that said. Yeah, I agree with Tim. I mean I think you definitely want to stay there. We talked about EWZ at the end of January and look at how well that's performed. That's the Brazil E.T.F. by the way, and a weaker dollar is going to win there and quite frankly that's about to break through about a 15 year downtrend that we've been in and FXI say what you want but now you're talking three year highs and I think that's got a lot of room left as well.

[Guy Adami]

I'm going to trade the globe here a little bit. We're just getting it in here. You know, I think a good pairs trade at this moment on a short term basis would be shorting international along the US I mean my base case is kind of that all of this chaos that we've absorbed over the last couple of months and is doing a number on the markets because the markets are anticipating the potential for a slowdown here. If we were in a full scale trade war. I suspect that doesn't happen. I suspect as we get into mid April we get back to that kind of base case scenario. That certainly happens if the market continues to go down because it worries a bit more of a slowing economy based on the policy. So to me, I think the US is probably more interesting at this point and I think we'll probably test those recent lows, the 5,500 level from Friday at some point and you may have a really good opportunity to kind of average into this trade as it relates to the U.S. the one thing I'll say is in China there are some opportunities if you look at like a Baidu, okay. They get the predominant amount of their sales from search related advertising. Okay. But we know what this model looks like. It looks a lot like Google. Google, they have a video site, they have a cloud business that's growing fast.

[Melissa Lee]

They have Ernie.

[Guy Adami]

Yeah, they do.

[Melissa Lee]

I. Oh yeah.

[Guy Adami]

And so I just, I think a name like this, maybe they can pull up a five year of this. It looks a lot like Alibaba before it just took off. So to me, I think like you're going to find interesting opportunities, especially with all that stimulus. But I wouldn't hold your breath for this stimulus to kind of give the Chinese economy a huge bump because it hasn't over the last few years.

[Dan Nathan]

But this is the stocks of it. I'm sorry.

[Tim Seymour]

Famous Ernie's for 100.

[Karen Feinerman]

Well, Bernie, Bernie and Ernie show at University of Tennessee that of course, Ernie Grunfeld and Ernie.

[Tim Seymour]

Ernie on Three's company. I mean, I don't know. Father knows best.

[Karen Feinerman]

Father. Well, that's five.

[Melissa Lee]

Oh six. Hi, 506. We have a lot of wood to chop here. Let's chop. In terms of what China announced though, because we had been talking about this huge press conference, right. There was a huge run up on Friday in terms of the expectations for the stimulus, the mandate to raise incomes, especially for farmers. It seems like a much more a bigger effort to directly stimulate the consumer than efforts passed, which is sort of. It went through the financial system in order to trickle down to the consumer.

[Tim Seymour]

But you have to, you have to give them credit for trying something different. And there's no question that your traditional infrastructure buildout is not going to work here. You know what, I would get back to where I do think that, I mean, Dan's referencing this with Baidu. If you look at their tech sector and you look at the transformation that you've had, I mean policy towards their own companies, towards their national champion companies, and then you listen to the companies themselves. I mean when you listen to Baba. This is the bnt, right? Yes. Congrats. It's about time.

[Dan Nathan]

It's also the A in carved look.

[Tim Seymour]

And it was the B and zebra. The B and zebra, correct.

[Melissa Lee]

That's here.

[Tim Seymour]

And the BN bicep was last year. So Dan and I were early in the trade, which means we were wrong. But when you listen to even what Baba tells you is they're going to spend 10 times more on capex towards AI and cloud in the next three years than they have over the last decade, decade and a half. So the spend is there certainly in other parts of the economy. And it gets you back to where, if you believe China is looking to be competitive on a global stage in technology, I think some of these companies are going to be allowed to do what they want to do. That's why, I mean again, the move in Alibaba, which is relentless and again, I think this is something that also you can, you can see where global players who don't have to be in China and again, this is something where my etf, we didn't have to own this for, for a while and we've owned it now two or three months. But I don't think it's time to sell Baba. I think the valuation is an argument. You stay there.

[Karen Feinerman]

I agree with that. In the crux of a lot of emerging market and Tim will speak, this is a weaker US dollar which by the way, I think will continue. You know, here the administration want for lower rates. Well, if they get lower rates and they get a weaker dollar as well, which by the way is something quietly they all probably want because when you have a $37 trillion debt problem, you want that currency to be weaker. And I think that's what you're going to be seeing more of. I think that's why these emerging markets trades are going to work out as well as they have been and will continue to.

[Melissa Lee]

All right, for more on what is next for international markets, let's bring in Rebecca Patterson, former chief strategist at Bridgewater. Rebecca, great to see you.

[Rebecca Patterson]

Great to see all of you.

[Melissa Lee]

Happy St. Patrick's happy St. Patrick's nice green there. You got on in terms of allocating, you know, the next dollar, would it be to us or would it be abroad?

[Rebecca Patterson]

If I'm looking at a one week or two week trade, probably abroad. But I, I'm a little surprised you all haven't spent more of this first six minutes on the April 2 tariffs that are coming that are going to be bigger than what we've seen to date and are going to be aimed at the rest of the world. That doesn't mean that we can't see a Decoupling continue for some time, but it is going to be a pretty big headwind. I take your point. So earlier, China's tilt in this latest stimulus towards the consumer is a pretty big deal. It's not big in size, but it's big philosophically. President Xi to actually say, okay, we're going to help the consumer. The other thing they said they're going to help is technology and the stock market. And we know historically China has used state related bodies to intervene and support their own market. So even if they get hit with tariffs, do they do enough there to provide an offset? And maybe this is a low volatility but a stablish place to be while we go through this policy uncertainty? Maybe I am nervous about the rest of the world being able to decouple on a sustained basis. I think what we've seen so far, primarily profit taking on the US repatriation, foreigners taking their toys home, their capital went home and that's what weakened the dollar and lifted those markets. I think that's been the biggest factor driving this trade that's finite. Once they rebalance, it's done unless we continue to get new positive catalysts.

[Melissa Lee]

So in your view, it is uncertain as to whether or not Germany's stimulus plan will outweigh the negative impacts on from tariffs, for instance, or China stimulus will outweigh the negative impacts.

[Rebecca Patterson]

The German stimulus I think is actually a much bigger deal than what we're seeing in China. China, relatively speaking, what they're doing is a structural break from history by loosening the fiscal constraints, allowing the government to spend significantly more money, especially in defense and infrastructure. And what we know from history is when governments do this targeted fiscal stimulus, it doesn't get priced in all at once because the capital keeps rolling out over a period of years. So I do think there is a sust sustainable trade in European infrastructure and defense. It won't go in a straight line, but it probably has some legs to it. I mean years, not quarters or weeks. China I'm a little less certain about because they have so many structural headwinds, demographics just being one of them. And the tariffs are just going to make sustaining this latest bounce hard. We can spend a whole hour on the Plaza Accord and the possible new version of that. I don't know if the viewers today want to spend a whole hour with us on it, but that's a whole nother can of worms.

[Dan Nathan]

Rebecca, it's Karen. Let me go back to Germany because this is such a massive shift, right? So you talk about for the next week or two. But I mean, it's a much, much bigger shift than that. Can you isolate where you would think about Germany versus some of the rest of the European markets?

[Rebecca Patterson]

Yeah. So, you know, if come April 2nd or around that date, we get this new wave of tariffs that's obviously going to include Europe. President Trump has made that very clear. And you get a pullback in some of these markets in Europe that might be an opportunity average into a long position in terms of where I'd go in Europe, look over the next 612 months. Personally, I'd rather be a little bit more on the defensive side. So looking across Europe, markets like Switzerland and the UK tend to have lower betas. They tend to be a little less defense, a little less volatile, a little more defensive. And they also offer the valuations and lack of ownership that the rest of Europe does. Germany itself, though, I would be looking for any dips in some of those big infrastructure companies, things like Orion Mattel, which I know has already rallied a lot. But just as an example, those sorts of companies that will benefit from this spending in the years to come, I think. I think it will have legs just like the Chips and science act, just like the highway act in the 1950s in the US and defense in the 1980s. These things ran for years.

[Karen Feinerman]

We talked about a weaker dollar. What is your sort of take on the dollar going forward? Because the drop we've seen has been pretty precipitous in a very short period of time.

[Rebecca Patterson]

Yes, precipitous. That's a good one. I'm happy that I was able to actually pronounce that right after you. So, you know, again, I think the dollar falling is less about what's happening in the US and more about the capital flow leaving the US for the rest of the world, including Europe and China. And if that rebalancing continues, the dollar weakness can continue. Foreigners had put a lot of money into the US over the last few years, so there is money to keep leaving. But if they think that the US could still do okay and they still want that tech exposure, they might want to not want to take a lot more out. The other thing I'd worry about, and we have the FOMC meeting this week. Yes, this week already. Goodness. And if the Fed starts saying they're a little more nervous about inflation expectations rising and they decide that they don't want to have two rate cuts priced in for the rest of this year, that's a signal. And if inflation keeps Fed funds on pause longer than the market's expecting that's going to provide a measure of support for the dollar. I think the dollar is more of a range bound situation in the next few months than straight down from here, frankly.

[Melissa Lee]

We started the segment off Rebecca asking the ultimate question, the ultimate would you rather, and that is US or Europe? It really sounds like if you had your druthers, you would say none of the above because it sounds like you really want to be extremely defensive, at least in the near term with fixed income and gold, correct?

[Rebecca Patterson]

That's correct. I mean, look, later this year we are going to get a tax package through in the US it is going to be incrementally stimulative, Al, not to the same degree as what we saw in 2017, early 2018. We're going to have much bigger tariffs. That's going to be a drag. Immigration, I think, is going to be a drag on growth. So I think for the US Market, we're starting from a great point, right? We had strong growth at the end of last year, strong consumer balance sheets, but I think we're going to be seeing moderation in growth. And so it's equities might have a positive return this year, but it's going to be single digit, not double digit. You can have some exposure overseas to be diversified. But then I also, even at these levels, I still would be looking to have a small position in gold, small position in fixed income, and probably looking to degree it's appropriate at actively managed hedge funds to give you some more of that diversification because I think we're going to be in for a wild ride this year. There's a lot of big policy initiatives underway and frankly, some of them, if they go through, are unprecedented.

[Melissa Lee]

Rebecca, always great to see you. Thank you.

[Rebecca Patterson]

Thanks.

[Melissa Lee]

Rebecca Patterson. All right, so what do you take away from the conversation, by the way?

[Tim Seymour]

We've been wordsmithing very well tonight, so as we often do, so I just want to add one that I think tops them all. I mean, what's going on in Germany? It's more than extraordinary. It's epical. Okay.

[Melissa Lee]

Epical. Is that a real word? It's not just epic.

[Tim Seymour]

E, C, H O. Yes. No, it's not O, C H. Wondering.

[Melissa Lee]

I was asking, just asking.

[Tim Seymour]

Epoch. E, P, O, C, H. Epoch.

[Melissa Lee]

Yeah. Okay.

[Tim Seymour]

Oh, she's just correct.

[Karen Feinerman]

Well, that's from your Catholic school. Teachings on Sundays.

[Melissa Lee]

I don't know if that's the way you pronounce it. Anyway, proceed, please.

[Tim Seymour]

So what's going on in Europe is really fiscal and I think that's Part of it. But. But then if you look at what's outperformed this year even over here, you could look at an xlv. So in other words health care. But look at, look at a Novartis, look at the Sanofi. And then as you get into the industrials, it's not just Siemens. I mean you have Infeon and then you have some technology companies that are really exposed to this like SAP. So you know, I just think that there are companies on their own merit that valuation make a lot of sense here. It doesn't mean that yeah, it's been a huge run and I think we don't know what's going to happen April 2nd.

[Melissa Lee]

Meantime, Nvidia closing well off its lows of the session but still ending the day in the red. The worst performer in the SMH semiconductor ETF today. The company holds its AIGTC conference this week with a keynote from CEO Jensen Huang tomorrow investors awaiting updates on its Blackwell GPU and its next gen Rubin chip shares still down 22% from record highs hit in January. Over the last week three analysts have lowered their price targets on the stock. So our expectations prices. Sell the news, Dan.

[Guy Adami]

If it is sell the news then watch out for the entire generative trade because again we all thought good quarters, good guy acronym. Yeah, the Gen 8. Yeah, exactly. And I played that game right. You know, I mean listen, it sold off after the results. The stock was already down, right. There was a lot of negative sentiment. A lot of their customers had already sold off over the prior couple of weeks. So I just don't know if there's anything new for them to talk about as it, you know, as far as the product roadmap exists right now. So I'd be most worried if the stock, let's say say rallies because it's been down a lot and then fails because that is just meaning that there's no appetite for this story right now or what is the incremental buyer looking for?

[Dan Nathan]

So we were talking about this the other day. I'm more interested in what are they seeing right now, not what is a little bit down the road. What are they seeing right now? Has the story changed? You know, we come back to this. Is there going to be a lot more compute needed for inference and is deep seek actually potentially a place us right.

[Karen Feinerman]

Capex story what is, you know, again Capex is not written in stone. If companies decide, you know what the environment is not so we don't view it as favorable. There's too much ambiguity out there. They'll pull back on Capex. Nvidia loses to that I think that and the fact that they promise in the back half of this year to a reacceleration of margins. Let's see if they address that as well.

[Melissa Lee]

It is amazing that after hearing all of the major hyperscalers come out and raise their cap OPEX guidance that there is still disbelief around those numbers right that, that there's still investors minds an asterisk nest next to any number given by a matter a Google whoever and.

[Tim Seymour]

Remember those numbers and that guidance was well after deep seek it was not they had a chance to recant or try to hedge their words or something. So I think it's important, I think everyone's saying the same thing though that this, this is an important point for the market. It's a, it's a period where the breakdown in semis has been, you know, know, very, very clear and it goes all the way back to last summer and it is traded the best of all of them as it should. It's not expensive. But this is an important.

[Guy Adami]

So to the asterisk that you just mentioned, I mean they just gave us the guidance. They're not going to change anything, right? So if anything like if they were to come out and be a bit more bullish about that capex guidance or like upgrade their guidance for the quarter or something, no one would believe it because they had the opportunity on February 26th to do that and nothing's really changed. The other thing I'd say about the asterisk is that you know these stocks that got killed in 2020, that it was down 70% at the lows in October 2022 that stock did not start rallying until they started cutting costs and still they started firing people. They have rationalized their costs as it relates to hiring. The only thing that they'd be able to cut if the stocks were down a lot over the next few months or a year or something would be their capex. And that's how these companies do that. I mean we're not, we've talked about this for years and years, you know, I mean like when you're spending too much on Capex but your revenues slow a little bit, then there's something that has to be reacclimated. And again, you know, like we saw why all stocks sold off after their earnings. Microsoft, Metta, Amazon and Google because their revenue had decelerated and they hadn't laid off that CapEx guidance. If anything they raised it.

[Melissa Lee]

By the way, our own Jim Cramer is speaking with Nvidia CEO Jensen Huang live from the GTC conference on Wednesday. That's at 10:15 Eastern Time on Squat on the street, with even more on Mad Money coming up, a retail replacement Wal Mart shaking things up in the Buy now space. News that had shares of a firm sinking today and what it could mean for what will be the newest stock in the space. The details next. Plus, it's not just FinTech EV leaders facing increased competition as well how one Chinese automaker is electrifying the space in just five minutes. We'll explain when Fast Money returns.

[Guy Adami]

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[Guy Adami]

Tomorrow. Corning's CEO ahead of the company's investor day. His message to Wall Street. Plus DraftKings CEO on the big money behind college basketball. Stay ahead of the market squawk box tomorrow, 6am Eastern. CNBC.

[Melissa Lee]

Welcome back to Fast Money. Buy now, pay later. Stock affirm falling nearly 16% at its lows after CNBC reported rival Klarna would take over a key partnership with Wal Mart. The stock recovered some of the losses, but still end of the day down more than 4%. Klarna, which on Friday filed plans to go public, will provide loans to Wal Mart customers in stores and online through the retailers one pay in the coming weeks. I know Karen had been interested in a firm leading up to this.

[Dan Nathan]

So it was down a lot on this. But as you know, you read the 8K affirm said, you know, it was 5% of GMV, it was only 2% adjusted operating income. So that's not so big. And apparently we don't know this because Klarna doesn't need to update their S1 right now that there was a lot of equity incentive so that Walmart would get equity in Klarna and that would probably be, you know, valuable. So how much was it really worth to a firm if they had to go along at price it the way it was priced at Klarna? Not enough. I find this really interesting. It's come back a long, long way. It had that huge run two Huge quarters. I'm going to let the dust settle a little bit. I like. I like a firm.

[Guy Adami]

Yeah. I just say this. You got to figure out what else is going on here. So this is a huge boon for Klarna before they go public. We saw this with Reddit. Remember, they did this deal with Google and that really made sure that the numbers were going to work out of the gate. So, you know, were they competing on price? What did they have to give up? This is Klarna. At the end of the day, though, for a firm, this is a big knock. You know, I like, we've seen this again with Amazon. It was like, you know, we thought that, well, why wouldn't they buy them? Well, why buy the cow when you get the milk for free? So, you know, this is a space that you think is perfect for a Walmart customer. Right. Especially on some of the bigger items. So again, I find it interesting more for Klarna than I do. The last thing I'll say is last year, one of the first stories that we heard about use cases for generative AI, Klarna said they fired 700 customer service workers. Maybe they have some edge in the way they're integrating this technology.

[Dan Nathan]

But to your point about the ipo, though. Sorry, I mean, I mean, you want to really. This is a pr. I don't know that it's a stunt, per se, but you would take on this business. A very nice thing to announce as you hit the road.

[Guy Adami]

That's what I meant. Yes.

[Tim Seymour]

Why. Why do you want to. I mean, leave all the stunts in the. Why do you even want to be in this space right now at a time when the consumer stepping down and the valuation makes no sense? I mean, this company maybe becomes profitable in 2025. It's a great company and all we hear about is how nimble they are in the credit space. But they've never gone through what we could be seeing, and maybe we don't. I mean, credit spreads haven't really. Credit spreads have basically indicated that the equity markets once again are wrong. Or at least that's what credit markets usually tell equity markets, but you can't tell me. And retail sales today was a step down in spending. I just like, why do I want to own 5 times sales going into a period where the consumer is clearly weakening and we don't even know what's going on? Coaching point.

[Melissa Lee]

Yeah.

[Dan Nathan]

I think we could see buy now, pay later become even bigger as the consumer. They signed this deal with 6th street to. For 6th street to do to do funding. That was really important deal. So I think also they've had these two quarters where they turn the corner. I think it's, it's interesting.

[Karen Feinerman]

Stocks down 50% in a little over a month. Number one, Tim's right in everything he said. But if you're looking for a bounce, this is a level traded four times normal volume today. Traded back down to those November levels. I actually think it traded okay today.

[Melissa Lee]

There's a lot more fast money to come. Here's what's coming up next.

[Guy Adami]

Charged up and ready to go in just five minutes. How one Chinese EV maker is electrifying the space and the pressure it could put on the competition. Plus, pharma in focus amid potential cuts to NIH funding, what it would mean for drug development in the US for years to come. Ahead, you're watching Fast Money live from the NASDAQ market site in Times Square.

[Tim Seymour]

We're back right after this.

[Guy Adami]

Tomorrow, Corning's CEO ahead of the company's investor day, his message to Wall Street. Plus, DraftKings CEO on the big money behind college basketball. Stay ahead of the market. Squawkbox tomorrow, 6am Eastern, CNBC quick programming.

[Melissa Lee]

Note, the next Fast Money Live event is coming up on June 5th in this turbulent and unsettled market. Come join us us for this unique in person experience right here at the NASDAQ market site. It's a chance to connect with the fast money traders, ask questions, get their perspective on how to navigate your investments in these topsy turvy times. You'll watch the show here at the nasdaq, be part of an in depth Q and A session with the traders and then share what's on your mind over cocktails. You'll also walk out with a six month subscription to CNBC Pro for new users and a special commemorative gift. So register for the next Fast Money live, scan the QR code on our screen or go to cnbc events.com fast money. It was fun.

[Karen Feinerman]

It was a lot was more than fun. It was like it was an event that was one of those things like you will remember that 10, 15 years from now we had a blast and we drank tequila and we laughed a lot.

[Tim Seymour]

But I mean we were, we were building our, you know, our top five stocks and also our top five rock and roll bands. I mean it was, we were getting to the stuff that matters now. It was a chance to really talk to people personally, learn a little bit more about how they're investing, what they're doing in the markets. And you know, obviously it's probably never been more important to have that conversation.

[Melissa Lee]

Yep. I'm sure you guys out there have a lot of questions, so come to June 5th. Ask them. Meantime, some electrifying news in the EV space. China's BYD unveiling a new charging system that it says can power up cars in just five minutes. The company's chairman and founder saying the system is capable of providing 470km or 292 miles of range in its tests on its new sedan. BYD also saying it will build a charging network across China and begin selling cars at the new tech network next month. Shares of American rival Tesla meantime down to start the week. Elon Musk's company coming off an eight week losing streak, its longest on record, also got its price target slashed over at Mizuho earlier today. You pointed this one out. I mean this seems like, I mean just another knock in China.

[Guy Adami]

Yeah, I mean the headlines today were bad. I mean show me which has obviously been a formal competitor to Apple over there on the smartphone. I mean they supposedly have a really hot car that's going to come after the Tesla. Yeah, they're going to Europe. So I think that's huge. I think the Trump administration on the first day they kind of cut funding for it from the IRA for the state, the electrifying station build out here in the US And I just like listen, I can't say this enough. You know the CEO who's not there last week he tweeted out something on his other company that Stalin, Mao and Hitler did not murder millions of people. He retweeted that. Okay. He said, I mean like this is not talked about enough people. I'm just telling you that this is one of like the most influential companies in the planet or was. And he's behaving like this on his other platform. And you guys could say, well this a show about stocks. This stock is being adversely affected by his behavior and his behavior is downright despicable.

[Melissa Lee]

I mean a lot of what he's doing these days are, you know, it is alienating either current customers or future customers. And so it is our business to talk about that impact.

[Karen Feinerman]

Yeah, I mean but you look at the stock and I think that's what we're trying to do here to 20 ish is where this whole thing started in October before the election. We've almost round tripped it. So if you're looking for a level to buy this stock for a trade trade, I think this is about as good as it gets. And there will be analysts that raise their price target on the back of the sell off. We saw Adam Jonas do it a couple of weeks ago. I think he has a $600 price target. So there going to be some short term catalyst. Doesn't mean it's fixed by any stretch but could easily see the stock go back to 275 to 80 and nothing has changed.

[Tim Seymour]

And there's a little more focus on the chair of the board to Robin Denham and the 682 million in comp that she's had since 2014. But that is not I'd rather talk about BYD. I'm actually long BYD and ID but though and this is a company that really is first of all they're looking at building their third plant across across Europe. They talked about Germany. They're trying to and tariffs have everything to do with it. And again their ability to access the European markets and we know that actually growth has been slower in China. I mean they're a global company. They're looking to see where they can grow. I like this one.

[Melissa Lee]

Coming up, drug development in the crosshairs of the Trump administration's cost cutting campaign. How NIH research funding cuts could impact everyone from big pharma to seed stage startups when Fast Money returns back into welcome back to Fast Money. Stocks building on Friday's rebound rally. The Dow up more than 350 points. The s and P up more than half a percent. The Nasdaq gaining about 310 of a percent. The indices each putting in their first back to back gains in a month. Gold meantime, higher again today, hitting another record high. That's that's its 12th record of the year. The precious metal is up nearly 14% in 2025. Energy also in the green crude at its highest level in about two weeks. The Energy ETF leading the S&P 500 today. And shares of Alphabet taking a leg lower. Late in the session after the Wall Street Journal said it was back in talks to buy cyber startup whiz for $30 billion. Previous deal talks stalled last year. That's a company that you're familiar with.

[Guy Adami]

Yeah. It's interesting that you're seeing this. Last year they said no, they wanted to go public this year. You know they get a really good bump. We've been talking about this in the private market, some of these AI companies the way that they've been skipping billions at a time in valuations in a very short period of time. But this is the sort of acquisition that really helps Google possibly take a bunch of share from some of their bigger incumbents in the space that would be Microsoft and be awb. So again, I also think it speaks a little bit to the fact that, you know, we haven't seen a lot of deals announced so far and might this be one that they're willing to kind of test the waters with because Google has never made a deal. I think in 2012 we were talking about Motorola Mobility was the last big one and who the hell knows what happened to that one inside of Google.

[Melissa Lee]

All right, well, meantime, the NIH canceling funding for an ongoing 30 year study tracking patients with diabetes and pre diabetes. It is the latest research project on the chopping block is funding and personnel cuts grip the nation's health agencies. A 2023 paper in JAMA Health Forum finding that the NIH gave funding to 354 of the 356 drugs approved by the FDA from 2010 to 2019. So what do these cuts mean for the future of drug development? Portal Innovations founder and CEO Jon Flavin joins us for more. John, great to have you back.

[Jon Flavin]

Thanks. Hi Melissa, how are you?

[Melissa Lee]

Good. This really does seem quite dire. I know that in the halls of many labs, research facilities across the country, scientists are worried that they're going to get their funding pulled and that all of the work that they put in for years will just be down the drain. Can you tell us how you think this will play out?

[Jon Flavin]

Yeah, I mean the model, you know, historically from when Vannevar Bush came on the scene in World War II to kind of really put the National Institutes of Health as a strategic priority. And that led to the Bayh Dole act, you know, which allowed universities to spin technologies into companies. It's really been the lifeblood for creating great companies that bring new drugs and new devices to patients emissions. So, you know, this uncertainty is causing a freeze. And when that freeze takes place, you know, innovation is risked to going to other places. Innovation flows to money. And we want innovation to be in the United States. It's been the primary place for Biopharma innovation, creating $90 billion in exports over year over year. So it is the place to be and where the talent wants to be to create new innovations. And this kind of uncertainty really mixes things up and causes downstream effects for innovation for patients.

[Melissa Lee]

I'm wondering if you're thinking of certain kinds of disease that will really suffer because of these cuts. The nih, for instance, is the world's largest funder of cancer research. There's also 495 active clinical trials in Alzheimer's and related dementia funded by the nih. Nih. These are just two areas that could really feel some impact.

[Jon Flavin]

Yeah, and I mean, if you look from 1991 to date, cancer death rates have come down 33%. No doubt a big impact coming from NIH and all those innovators that move the needle for cancer patients in the present day. Look, hiv, you know, NIH was a primary source of innovation to drive a solution for that deadly disease, Human Genome Project, leading to big discoveries, disease in cancer, Alzheimer's and more to come because of the investment that was made in that project. And then the present day. Mrs. As we know, you know, a very important tool for vaccines and the approach that can be used for deadly diseases like Covid and others that may come downstream. So major effects across every disease category. And who's picking up the slack? I think you're going to see, you know, private industry move in. I mean, we certainly are interested, you know, in picking up the slack as it relates to early stage innovation from a venture capital perspective. But philanthropy states, you look at the state of Texas, they have the separate fund, $6 billion fund that invests directly into cancer startups and other innovation. So where will the money come from? Who will step into the breach?

[Tim Seymour]

John is Tim. Thanks. Maybe China, maybe other parts of the world for sure will be stepping in. But I guess just get to the other side of this. I mean, is there any part of this that you think is justified? I mean, there's like there's cuts going on everywhere and there's fat everywhere. So I don't think there's anybody sitting on this desk. And my guess is much of our audience at home wants to stop innovative technologies going on in, in medicine and in biotech. But drop it in the context of where we are seeing cuts. I mean, is any part of this justified?

[Jon Flavin]

Well, like any type, type of endeavor, efficiency should always be reviewed. And you know, maximizing efficiency and effectiveness is always something that should be done on behalf of the American taxpayer. That said, you know, we've seen tremendous innovations over the past century that have benefited from NIH funding. And so it's difficult to say that these moves, particularly the confusion like where are we going with this? What's the big vision? Tell us the how this will make and maintain America as the place to be if you want to innovate and help patients downstream. If you can't sell that vision, then you're going to cause a lot of disruption in this space because people, investors, innovators, don't really know where to position themselves to be able to continue to carry the ball forward. So it's not a great situation. Certainly universities can improve their translation rates, rates, and certainly pushing more of that out to the private sector may indeed have a benefit to taxpayers as we try to be more efficient in taking these great scientific breakthroughs. I mean, look at crispr. You know, this technology spun out, you know, Nobel Laureate Jennifer Doudna. These types of technologies are at risk if we're not able to backfill that breach.

[Dan Nathan]

John, it's Karen Feinerman. Thanks for being on. We had just put up a stat a little bit ago. $1.44 billion was the average NIH spend for first in class drugs.

[Guy Adami]

Drugs.

[Dan Nathan]

What was the overall spend for what those drugs would be? I'm trying to understand the NIH's role versus all the other, whether it's private or pharmaceutical or any other place that it gets funded.

[Jon Flavin]

Well, I mean, billions of dollars are going in. You know, even just if you just take one drug, it requires, you know, upwards of 800 million, you know, sometimes lower, sometimes higher. And it's an 8 to 10 year journey to go from the professor's lab all the way to the patient through the FDA approval process, process. So it's a long, expensive and very risky process. If you look at, you know, what NIH has done, particularly on the small business innovation research grant side of things, I mean, that's been the life's blood. It's kind of America's seed fund, if you will. They spend about $1 billion a year in SBIR small business innovation research funding from NIH that has really spun, you know, thousands of startups over the past several decades that have then gone on to raise private capital. For every $1 that the NIH has put into the research platform and initiative, $3 are seen in economic impact. So take that to scale and it's massive.

[Melissa Lee]

John, thanks so much for joining us on this very important topic. We appreciate it.

[Jon Flavin]

My pleasure, Melissa.

[Melissa Lee]

John Flavin of Portal Innovations. Coming up, analysts binging on Netflix shares getting a boost as one firm sees more than 15% upside in the name. Why? They say there is more monetization that meets the eye. The details and fast money returns. Welcome back to Fast Money, a call of the day on Netflix. Moffatt Nathanson upgrading the streamer to a buy from neutral, raising the price target to eleven hundred dollars. That's almost 16% higher from today's close. Analysts saying Netflix was, quote, has, quote, won the streaming war and that improved monetization will boost Profits in the years to come. What do you think of this call guy?

[Karen Feinerman]

I'm sure they're saying, you know, wish we did this a week or so ago. It doesn't matter. The timing is still pretty good and I think they're right. If you pull up a long term chart, you'll see we've seen sell offs of this magnitude before in Netflix over the years and each time, three or four weeks later, the stock is ratcheting higher again. They win. Yeah. Valuation may be a little expensive given what they trade at historically, but it's Netflix world and I think then it gets to their price target.

[Melissa Lee]

They say the ad tier will drive margins without any ceiling in sight. That's pretty, it's a pretty bold call. Yeah.

[Dan Nathan]

They're saying they can't build enough inventory for ad. That's a great problem to have. Right. And then along with, you know, however many price increases there will be down the road, that just all falls to the bottom line. I'm surprised.

[Rebecca Patterson]

They're great.

[Dan Nathan]

Moffitt Nathanson. I'm surprised they, they were needed.

[Tim Seymour]

Yeah, yeah, it's look, it's hard to argue with the call. It, it was easy to see where Netflix was taking a significant pullback when other high tech stocks that are part of passive investing in some of those indices. But it gets back to evaluation where you know, we know they've won the streaming wars. We know they're cash flow accretive. We know that actually their content spends actually starting to go up in a good way. We also know that there's levers they haven't even pulled in terms of live events, not necessarily sports, but things that look like sports. And how about games streaming? But I do think that if we start to see the consumer pull back, I don't think anybody's recession proof and I think Netflix would have exposure.

[Melissa Lee]

Coming up, some fast movers catching our attention Today's session. The headlines behind the moves in Intel, Reddit and Lululemon next. And do not miss a special Mad Money out west from Nvidia's GTC conference. Jim is chatting with the CEOs of Intuit, Snowflake Arm Dell and Cisco. Plus a one on one with Nvidia CEO Jensen Fong on Wednesday. That's all on Mad Money right here on cnbc. Meantime, more fast money into. Welcome back to Fast Money. Some fast movers catching our eyes today. First up, intel jumping nearly 7%. A regulatory filing on Friday showing incoming CEO Lipu Tan well by $25 million in stock. Reuters also reporting the Tan is considering significant changes. Changes to Intel's chip manufacturing and AI strategies. Intel shares now up nearly 25% since Thursday. Its best three day run since October of 1987. Do you remember October of 1987?

[Karen Feinerman]

Now look at this is a non doctored photo, but this is me in October.

[Dan Nathan]

Are you laughing at, Are you arrested? What happened?

[Melissa Lee]

I know it looks like a mug shot.

[Karen Feinerman]

That's a Drexel.

[Tim Seymour]

Did you steal Mark Bavaro's wallet?

[Karen Feinerman]

I didn't steal anything. Tim, look, it's the same. I can make that same face right now. Watch. It's fantastic, isn't it?

[Tim Seymour]

Can we do a side by side?

[Karen Feinerman]

I think you can probably, yeah.

[Melissa Lee]

We should split them up. Split them up?

[Karen Feinerman]

They can, yeah.

[Tim Seymour]

You look like Mark Bavara.

[Karen Feinerman]

See the way my eyes get dark? Like my mood.

[Melissa Lee]

Somebody from Georgetown, I think.

[Karen Feinerman]

I think intel could trade 34. That's the high in July of last year. We've said that for a while and I've said if I could put an eye in my tube I would, but as I said, that would make it tweeb and that's not a word.

[Melissa Lee]

Could be I tube could be like iPhone. Wild day for Reddit, meantime. Stock falling as much as six and a half percent early in the day after analysts at Redburn initiated the stock with a sell rating at a $75 price target. But they spiked higher midday on news. Google had expanded its partnership with the social media platform rising as much as 11% only to end the day down 2%. Reddit shares are up nearly 270% since their IPO about a year ago. I think this is the most time we've, most times we've mentioned Reddit in one show in a long time.

[Guy Adami]

Yeah, I mean, listen, this thing has been a rocket ship. I never thought it would perform this way. When you think of some of the comps in the public markets, they just haven't been doing particularly well. So, you know, good on them to kind of get the strategy that they did get going. I think the Google deal that they did. Right. Pure margin, you know what I mean? So it was a great deal on their part. I just, you know, I have no sense how they're growing users or advertisers, but to me it seems a little fairly valued.

[Melissa Lee]

All right, Lululemon shares meantime surging more than 5% today. Truist out with a bullish note noting positive brand momentum on Tik Tok and saying the company can benefit from warmer weather. Still, shares are down almost 11% so far. In March. Anybody trading Lulu here?

[Tim Seymour]

Tim well, I like the call. I think the call was back a year ago that the competitive landscape was really rough and that there was going to be some impact to margin that they were going into to a drawdown period with peak margins. I think some of those dynamics have worked through a bit in the stock price. I don't think it's terribly cheap, but I think you can nibble it up.

[Melissa Lee]

Next, final trades, final trade time.

[Tim Seymour]

Tim it's almost really close, but I remembered I picked GDX because I think it's starting to break out and Happy St. Patty's Day, Dad.

[Dan Nathan]

Oh, that's nice. TJX, the stock I actually think is on sale. It's had a rough month. I like it.

[Guy Adami]

Yeah, I do. The news is getting better.

[Karen Feinerman]

You buy it on pullbacks in that same genre.

[Melissa Lee]

There's no D genre genre.

[Karen Feinerman]

Target.

[Guy Adami]

Mel Sorry.

[Melissa Lee]

Thank you for watching Fast Money. Be back here tomorrow five more fast Madam I Jim Craig we're 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 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 tomorrow Corning's CEO.

[Guy Adami]

Ahead of the company's investor day, his Message to Wall street plus Draft DraftKings CEO on the big money behind college basketball Stay ahead of the market. Squawkbox tomorrow, 6:00am Eastern, CNBC.