← CNBC's "Fast Money"
CNBC's "Fast Money"
Jensen Joins The Party… And Next Move In Rates As Warsh Gets Confirmed 5/13/26
00:43:32
Nvidia CEO Jensen Huang adds to a stacked invite list of company chiefs joining President Trump on his trip to China. What to expect out of his discussions with Xi Jinping, and how the meeting could impact the company’s being represented. Plus Cisco and Stubhub report results, Ford drives higher after some Wall Street love, and cashing in your chips; why the chartmaster is selling out of semis with the group at all-time highs. Fast Money Disclaimer
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- [00:00]
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- [00:28]
Tim Seymour
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- [00:57]
Melissa Lee
Live from the NASDAQ Marketsite in the heart of New York City's Times Square, this is fast money. Here's what's on tap tonight. The golden ticket. Shares of Nvidia jumping to new records as CEO Jensen Huang books a last minute trip to join Donald Trump in China. What's on the agenda in Beijing and just how much is at stake at the meetings this week and the next Fed chair confirmed. But with inflation still running hot and rates at nearly one year highs, is Kevin Warsh inheriting a more complicated economy than he expected? We'll debate that. Plus Nike swooshes to 12 year lows while shareholders are struggling, are shrugging off Excels, improved guidance. And Ford revs up shares seeing their best day in over six years. What for the stock it overdrive. How much further can it run? I'm Melissa Lee, come to you live from CDO B at the Nasdaq. On the desk tonight, Tim Seymour, Karen Feinerman, Steve Grasso and Guy Adami. And we start off with that 11th hour invite that sent shares of Nvidia to new record highs. This time yesterday the chip giant CEO was not on the list of execs accompanying President Trump on his trip to China. But late last night, Jensen Huang boarded Air Force One in Alaska, joining Trump and more than a dozen other CEOs heading to Beijing. The news helped Nvidia stock to more than gain more than 2%. Sixth straight day in the green. Shares are up 15% during that run. The move power in the Nasdaq to new highs as well. The tech heavy index up 1.2% today, twice the gains of the S&P 500. So does Huang's trip to China suggest Nvidia is back in the driver's seat for the Mega Cap tech trade. Does this say something about semiconductors in the AI trade, Tim?
- [02:28]
Tim Seymour
Well, it certainly says the influence that he has even within the power brokers, not only in technology but in the White House. And I think Jensen Huang has been a very important, call it an advocate for even this administration in terms of the US's role in technology USA. So I think we still are not going to have an outcome where we understand export dynamics totally for Nvidia because I'm not sure anybody totally does. And one of the things that we've also learned over the last few days, especially from some of the Chinese hyperscalers, is that the efficiency of some of the local chip dynamics and what you're seeing Deepseek was not a mirage. It doesn't necessarily mean it was the end of the hyperscaler investments that we saw. Think it's important Jensen one's there. I mean there's no question about it.
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Karen Finerman
Yeah, I, I just think it never should have been where it was two weeks ago. Right. You had such a melt up in everything. They were at the center and everything around it was a melt up and evaluation. So wildly different.
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Melissa Lee
Right.
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Karen Finerman
Except for obviously we know that the scale up of the memory and that that PE is a little bit different but it shouldn't have been there when everything else is going on as much as it is. So I think it's still not expensive here. I don't love going into, I think it's the 20th is earnings. So I don't love a giant run up into earnings because expectations get too high and there's nothing they can say. And it'll be a gigantic quarter, no doubt but it should be here.
- [03:57]
Guy Adami
What chip? I'm struggling trying to find the tailwind for Nvidia. So the chip that they're allowed to sell is the H20 or the H200. One of those. I think it's. So it was a $17 billion number to Nvidia when it was allowed to be sold into, into China or I should say China was a $17 billion account for Nvidia. Now you have the 15% government surcharge on Nvidia. So if you even get that full 17 or 18 billion, you're only looking at 13 or 14 billion in revenue.
- [04:34]
Tim Seymour
I don't think you're going to get
- [04:35]
Guy Adami
the full one because it's an older outdated chip. I don't think China is just going to rewind and say we're going to give you the same order. So I think it's a negative for Nvidia. Because if we're buying it ahead of this meeting, I think it should be sold. I think this is a buy the rumor, sell the fact I don't think they're going to get the contract and I don't think it matters as much as it used to months ago, a year ago, or whatever the case might be. There's a reason why Nvidia stock has underperformed the rest of the group, but I think it continues to do so.
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Steve Grasso
Who's in the. What's that building? The Parthenon.
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Melissa Lee
Oh, the Pantheon Parthenon with the greats.
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Shahzad Kazi
Right.
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Steve Grasso
Louis Yamada.
- [05:15]
Melissa Lee
She's up now.
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Steve Grasso
Just so to be clear, I've been a non believer. Tim and Karen have been all over this and rightly so. But you know, you go back and look and if you didn't. If I didn't know it was Nvidia and said, you know, this stock has been basically basing since last August, it's been trading sideways and now we're breaking out. So her famous quotation amongst many is the longer the base, the higher in outer space. And now we're appearing to go into outer space in earnings. The setup isn't good, but quite frankly you could say that the last three or four times they've reported the setup probably hasn't been all that good as well. And they've delivered. My concern continues to be around competition and the potential for margins to decrease and start to decelerate. That's the other side of the story. But it appears as though we're not
- [05:54]
Melissa Lee
close to that other side on this China trip. By the way, the CEO of Micron is also in attendance. So that's sort of an interesting addition here in today's trade. I thought it was really interesting in general that we did see chips in particular output outperformed tech, tech which outperformed the markets more broadly. And it looked like a defensive trade. Like in a world in which inflation is going to hurt the consumer, in a world where inflation is going to push up prices across the board. That's the trade you want to be in, the one that's been off the
- [06:20]
Tim Seymour
charts and it's been the one that there's also definitely rotation within mega cap tech. I mean, how are we explaining the Apple move and how are we explaining. Well, we're going to talk all about Cisco in a second. But I do think that tech looks defensive in a high inflation environment, especially as tech companies have the ability to really to. They have levers they can pull. We're going to hear About AI job losses. Again, I think it remains an interesting tape because in fact we're seeing rates around the world go to all time highs, not all time highs, at least 15 to 20 year highs in the case of Europe and Japan. That's fascinating for today.
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Steve Grasso
Yeah, that is this, you know, that's the other story of the market, you know, where obviously markets doesn't seem to care about where rates are and maybe it shouldn't care. And I think the optimist will say rates are here, guy, because there's growth in the United States economy. I think that's a small part.
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Tim Seymour
Person yourself there was that.
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Steve Grasso
Did I do that?
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Melissa Lee
Now he says that some would say
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Tim Seymour
some other person talking to you.
- [07:14]
Steve Grasso
Yeah, but it wasn't a total third person. But I appreciate that. No, but I try to slide it in there without you noticing. Obviously I was not able to do that. A high rate environment at some point matters because it's not just growth, it's an inflation problem, which obviously we saw in the last couple prints.
- [07:30]
Melissa Lee
Let's get more on that. First, high stakes between President and President Trump and China's Xi Jinping to talk everything from tech to trade to Taiwan and the Iran war. Eamon Javers is live in Beijing with the very latest. Eamon.
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Eamon Javers
Yeah, Melissa. It is daybreak here in Beijing and President Trump is going to begin his day in about four or five hours. He arrived last night here, Beijing time, went straight to his hotel. And we're gonna expect to pick up the schedule this morning with the official greeting from Xi Jinping onto a bilateral meeting. They'll end up the day today with a state banquet. And that's where I think you're gonna see all those CEO that you guys have just been talking about out and about here in Beijing, all trying to work side deals of their own for their own companies. And there's so many flashpoints here of diplomatic difficulty throughout this day where you could really see some challenges. We've made a list for you here. But start with the idea of Chinese weapons sales to Iran. That's something the US is gonna wanna press them on. The Strait of Hormuz blockade, obviously deeply concerning to the Chinese government because of the amount of oil they get out of the Strait of Hormuz, the US relationship with Taiwan. We could see the Chinese push President Trump to try to disavow Taiwanese independence and say the US actively opposes that. And then of course, AI is the big wild card here. We don't know exactly how AI is gonna shake out in these negotiations. This week. Is there a deal potential on the table there? It seems like maybe the answer is no. Expectations across the board are relatively low for this summit, Melissa. But certainly we'll see some soybeans purchased.
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Steve Grasso
We'll.
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Eamon Javers
We'll probably see some Boeings purchased, probably see some beef purchased. And maybe that enough is enough to call it a win. If they can kick this trade truce down another six months or a year down the pike, that might be enough to make global markets happy, guys.
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Melissa Lee
It seems, Eamon, that it would be unlikely. And yet China will, I'm sure, press the US to actually say they oppose or they disavow Taiwan independence. And I feel like that issue is tied up in the AI trade at this point. Since Taiwan semi is so important to the AI trade here in the United States. Is it seen that China has any leverage on this front because of that?
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Eamon Javers
Well, China has a lot of leverage. And, you know, one of the big pieces of leverage is obviously Iran. The President wants a solution there. The Chinese, you know, the Iranian government is in many ways a proxy for the Chinese government, and they have a lot of leverage with the Iranians. So they can offer something there. And then in terms of trade, they might be able to offer some things that the President really likes on trade. So is the president willing to consider Taiwan and its status a poker chip in a grander negotiation, so to speak? You know, he has said he's going to hear out Xi Jinping. He expects that Xi Jinping is going to bring up the issue of Taiwan, what he's going to do with it. That's why we watch these summits, to find out.
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Melissa Lee
Yep. Eamon, thank you. Eamon Jabbers live for us in Beijing. For more on all of this, China Beige Book chief operating officer Shahzad Kazi joins us here on set. Shahzad, great to have you with us. I'm going to pick up right where we left off with Eamon. In terms of Taiwan. I'm just wondering how you think about it. If Taiwan, if, if for some reason the China, the US flips in terms of saying we're, you know, we don't oppose, we disavow Taiwan independence, what does that do to Taiwan semi if it's more under Chinese control? I would think that it would actually sort of foul up the AI trade here because of national security concerns.
- [11:08]
Shahzad Kazi
Yeah, I think that would be pretty much disastrous for lots of American companies, including, of course, starting with Nvidia, because of how dependent we are on tsmc. And I think one of the things the Staff wants to make sure is that the President doesn't say anything even resembling what he just described here. And we keep him on, you know, on, on, on note where he's supposed to be.
- [11:28]
Karen Finerman
Yeah, no, just along those lines. I was wondering that. I mean, that seems just sort of nuclear is the wrong word, but so draconian that the market reaction. We know the President doesn't like a market reaction that's very violent to the downside. What else. What else do we have in our bag of, I don't know, you know, tit for tat kind of. They give us the soybeans, a beef, all of that.
- [11:52]
Shahzad Kazi
Yeah. Look, the way this was structured is we have to remember the President asked for this summit in many ways, rather than this being sort of the invitation from the Chinese side, the way the US Side has tried to structure this very hard is we want to hear the Chinese make a bunch of big announcements, whether they be on soybeans, whether they be on Boeing jet engines and so on and so forth. And this is not so much supposedly about going in there and asking China for greater market access or doing the traditional things like, you know, we're not happy with your IP theft issues and we don't want these joint, you know, joint ventures anymore and so forth. So it's supposed to be a bit of a departure from the traditional delegations and trips that we've seen.
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Tim Seymour
Shazad, it seems to me, Obviously the tech CEOs are there because they are some of the biggest companies in the world, but it does almost feel back to Taiwan, semi, that being a disaster for Nvidia, as you say. I almost get the sense that the Chinese, excuse me, that the American CEOs, tech CEOs, they want to see some kind of a truce. I mean, I get the sense that this is good business for America, and I get the sense that this is a president that's always been about business. So I understand the national security issues, and I know we're kind of really forget everything else. It really is about supremacy of the digital age. But right now, the commercial interests favor more rather than less cooperation.
- [13:10]
Shahzad Kazi
So I think it depends on which sectors we're talking about. But your larger point is absolutely correct. Pretty much everybody around the table right now wants to see the truce extended, whereas there's no grand bargain to be had at this delegation or really, quite frankly, any other Xi Trump meeting at this point. US China relations are just not there at this point. And I suspect they're only moving further away from that. Watching this relationship not blow up has become priority number one. So everybody wants to make sure things stay calm and we can just keep extending that truce, as we say, that
- [13:39]
Steve Grasso
was struck in Busan through a lens of the market. What's the best outcome out of this meeting? They walk out hand in hand, shaking hands, unilateral. How does it work out for the market?
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Shahzad Kazi
Well, look, the announcements on purchase agreements, which of course would have to correspond with certain tariffs coming down on the Chinese side, perhaps some kind of positive messaging on Iran would go a long way. I don't think Xi is going to commit too much on this. I think those things would be incredibly positive for the markets.
- [14:05]
Guy Adami
So when you look at it, the. The tip of the iceberg for me or the iceberg is where Melissa started with Taiwan. In your opinion, you follow this closer than anyone. In your opinion, is that a conversation that's going to take place or not at this meeting? Is that going. Is China going to force that issue in the next year, two years, in your opinion? Never.
- [14:25]
Shahzad Kazi
Look, I think some of the projections around how quickly China would move on Taiwan are, are probably way, way too aggressive. I'm going to say there's a very good chance that they don't have to make military move at all. Right. I mean, if they can strike some kind of a deal with Taiwan, which essentially gets you some kind of de facto reunification of sorts, that could very well be an option on the table for the Chinese. So I'm not betting my money on them moving in in 2027.
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Melissa Lee
Is that likely in your view? And would that have to inherent in that is. Is the US saying effectively, okay, we don't back Taiwan independence anymore, we're going to quietly walk away from that.
- [15:05]
Shahzad Kazi
You know, it's hard to judge how just incredibly how likely that is. Some of it comes down to how much the Taiwanese want to fight themselves. Right. We're seeing some changes there taking place. And then what the political atmosphere in Taiwan itself also is how does the public feel about it? They are after all, a democracy, unlike China. But that will play a role in that.
- [15:23]
Melissa Lee
And not to sort of beat this point to death, but if that happens, if there's some sort of reunification that happens, I would think that our ability or U.S. company's ability to manufacture at Taiwan semi would be much more limited at that point.
- [15:37]
Shahzad Kazi
It would have to be, which is why TSMC shouldn't be just seen as this place where we can just do business freely without worrying about it. This all comes down to US Supply chain security and we need to Treat TSMC as this very serious choke point against us that it is.
- [15:52]
Melissa Lee
All right Shahzad, thanks for coming by. Great to get your analysis as always. So you liked TSMC for a long time. Do you start rethinking this whole dynamic?
- [16:02]
Tim Seymour
Look, we've had this risk out there. You can make an argument TSMC would be a lot higher without this. I mean it's the largest position in my etf, it's the largest position in emerging markets, it's the largest, you know, it's the largest chip manufacturer in the world. So I think we all have to be cognizant of that. I, I think the things also just back to the markets we, we should not forget about is there's an element, I think there's a little bit of an inflection in the Chinese economy. I think in the second half of the year you're going to be surprised at the upside. Chinese stocks have massively underperformed. KWEB is massively underperformed. You've seen a nice breakthrough today. You've had great earnings out of JD and Baba. I mean I think, you know they're the cheape in the tech world right now and I think they're interesting to Tim's point.
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Steve Grasso
You know, if you listen to people like me over the last couple of years that have been concerned about Taiwan, you've missed a lot on the upside in all these trades. And that risk is out there, it's been out there, it will continue to be out there but at this point it's a bit of a tail risk. So you have to say, you know, if they're a 15, 20% chance, 25% chance, I think that's rational and reasonable. But you want to sort of exit these trades on the back of that potential to happen.
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Karen Finerman
So the whole thing about what would happen if they were to invade Taiwan does make me think they have so much more leverage from not maybe that we'll leave it as is and we'll just continue to bargain using the same chip that we don't ever need to play to get what we want. And it's somewhat successful.
- [17:24]
Guy Adami
Yeah, I don't think I've ever heard a non aggressive takeover or reunification. Have you heard that? I haven't heard. He's the first person that I've heard from concept 70% of Taiwanese would oppose it. But I think if you get it down to a trading element between Eamon and Shahzad, Boeing, Archer and Tyson, those are the names that are most likely to come up in that order with Deals that come away that can rally stocks.
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Melissa Lee
Now, back in January, the chartmaster called the software trade vulnerable and semis compelling. But now he thinks the tide may be turning. Carter Braxton Wirth of Worth Charting joins us now with what he's seeing in this trade. Carter?
- [18:06]
Carter Braxton Wirth
Yeah, not so much interested in software here, but I certainly think that the semis are full. I mean, very hard to know when something has run its course when it's extended parabolic. But let's look at some charts. I myself want nothing to do with it at this point. This is the SOX index going back to.07. Let's annotate this a bit and put in some lines and arrows and other things. We're at the top of a channel that's been in effect since the 07 peak. The low there is 09. So one way to draw the lines. Let's do it again. Another iteration, put in quadrants again at the upper band here. Right now we can do another one for fun. These are all the same charts. I mean, do you buy or sell something that's this steep? Now, many would say, hey, look, it's not as steep as it was in 2000, which is true. We're 54% above the 150 day moving average. In March of 2000 we were 95. That would say there's more to go if it's going to match that run. But what we do know is that it's a very popular trade. It has come a long way and there is a fever, there is a fevered pitch about the whole thing. To my eye, by my work, one is right to back away.
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Melissa Lee
All right, Carter, thank you. Carter. Braxton Wirth of Worth Charting again. Carter said he wants nothing to do with this trade. Do you, Steven?
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Evan Brown
Wow.
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Guy Adami
Usually you're.
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Tim Seymour
Stephen, for the final trade, you're in trouble.
- [19:37]
Guy Adami
I do believe you should back off the trade. I think it's exhausted and I think that money that was coming out of software stocks had to go someplace. And when you started to see the data center build, it was a logical place to rush right back into the semis. I think that's long winded. Nvidia has underperformed for a good reason. They've been the leader. I would look for plays that have not been exhausted.
- [19:58]
Melissa Lee
There is earnings momentum in this group and also it may be defensive in this environment. Isn't that what we were talking about? I mean, right? I mean, tech is seen as defensive
- [20:08]
Steve Grasso
in a higher interest rate environment. As Tim has said, tech can be
- [20:10]
Melissa Lee
viewed as defensive, technicals are fundamental.
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Steve Grasso
Look, I'm not going to play the semi game because I've been bad at it for a long time, but I'll play the software game. And I do think there's an inflection that happened a couple weeks ago now. They've been sort of dicey over the last couple days, but I do think there's a chance that IGV outperforms over the next couple couple weeks.
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Tim Seymour
35% outperformance to the S and P in what has been a heroic run for the market by semiconductors since the low of March 30th. So I can't argue with what's been said here. I would say dance by the door after you get out of this dance because you want to dance your way
- [20:46]
Melissa Lee
back into this by the door. The dance you want to so you like.
- [20:51]
Tim Seymour
I was always dancing by the door
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Melissa Lee
and I couldn't quite leave. But you want to sort of hang out, but you want to be ready to go.
- [20:56]
Tim Seymour
You want to. You should be ready to possibly, you know, take some profits here. But you better not get too far away from the dance because it's a good time.
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Melissa Lee
Okay, I like that. It's a confusing metaphor to me, but
- [21:07]
Tim Seymour
it was always confusing.
- [21:08]
Melissa Lee
Coming up, shares of Cisco on the move after the OG tech giant posted results. The numbers and the details from the report next plus Nike stock hitting 12 year lows today. What the company needs to do to lace back up and whether there's any chance of a swoosh in store. Don't go anywhere fast when he's back
- [21:24]
Evan Brown
into
- [21:27]
Tim Seymour
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- [21:51]
Karen Finerman
Again.
- [21:52]
Tim Seymour
Now that was bloody riveting.
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Guy Adami
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- [21:56]
Melissa Lee
It feels good to Geico it's smart
- [21:58]
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Tim Seymour
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- [22:42]
Melissa Lee
Welcome back to Fast Money Earnings Alert. I'm Cisco, the cloud networking stock soaring after hours. It is up 18% right now on an AI driven beat. And raised shares had already hit a record during the regular session. Our Christina Parts Nebulous has been listening in on the call. She joins us here on set. Christina, what's the latest?
- [22:58]
Christina Parts Nebulous
There's a lot at first, Cisco's posting the biggest post earnings rally in over a decade. The last time the stock actually jumped double digits was after its May 2013, really a sharp reversal from last quarter when you actually saw it fall 12% on margin concerns because of memory costs. Two things driving this move that they're talking about on the call. First, AI demand. Cisco raised its full year order expectation to 9 billion, up from 5 billion. This, this is a near doubling of the outlook. And then second, the guide Cisco is calling for Q4 top line growth of 14.5%. The earnings strength appears to be driven by genuine demand rather than price hikes, which they did do since gross margins were roughly in line, meaning the upside is coming from volume, not necessarily fully pricing. Although they did admit that some demand was pulled forward in Q3, not necessarily seeing it in Q4. A CFO saying that hardware margins are also growing much faster than software. So that is helping the whole mix. The company also, they announced it talked about it in the last hour, cutting fewer than 4,000 jobs this quarter, less than 5% of the workforce, taking a $1 billion pre tax charge to do it. Cisco as we know, has become a latecomer to the AI infrastructure trade. But tonight's numbers really suggest it's catching up fast. And as one analyst put it on the call just now, welcome back to 1999.
- [24:13]
Melissa Lee
It is. I mean we've seen so many of these 1999 stocks come back this year.
- [24:17]
Steve Grasso
Go back to 1999. Cisco's much higher than it was 26 or 27 years ago. So yeah, welcome back. But good for Cisco. And again I'll give Tim kudos on the call today. He said you're going to see a big core out of Cisco. You're going to see it higher. This is one name I think we've talked about and said valuation is not all that concerning. And even with that move, I don't think it's that bad right here either.
- [24:37]
Melissa Lee
Yeah, well how should we understand data center as part, do they break it out by segment in that way or is it lumped in data center revenue like when it's driven by data center?
- [24:49]
Christina Parts Nebulous
I understand. Yeah, but they were just, it's more hardware versus software mix and they did focus on the Silicon One, which is their networking chip. I do want to just add one thing that came up as I was walking up to set, they mentioned this $6 billion fiscal 2027 AI revenue floor. They haven't provided a full year. So already the fact that he's giving that number, you know, 90 days out before Q4 ends is probably adding to the uptick in the stock. And then the other thing too is that they signed another hyperscaler within the first couple weeks. So that's possibly adding to the after hours jump too.
- [25:22]
Melissa Lee
Yeah, yeah, I love it.
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Tim Seymour
I think it's going a lot higher. In fact, I would be buying a move. I know this seems crazy, but what they announced in terms of going from 5.9 to 9 billion on that hyperscaler revenue networking up 23%. The valuation's not crazy. And again, remember there was a time we wanted to believe this was a software and security story and that was a big part of the high margin story. Get back to business and get back to the core business. I think the fact that also Chuck Robinson's basically talked about urgency and laser focus. And by the way, like now, let's be clear, these were AI job losses. There's no question about it. We tried to dissect all these job losses from many companies over the last month. This was all about we're going to save our money, we're going to decide how we're going to invest. So the message is they're aggressively moving now at a time they expect to be a leader.
- [26:11]
Melissa Lee
Christina. Thank you, Christina Parsonnevolis. Cisco up 18% right now. Coming up, Nike tripped up shares stumbling to their lowest level more than a decade. The major swoosh they need to get to get back on track. You're watching Fast Money live for the NASDAQ Markets site in Times Square. Back right after this.
- [26:34]
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- [27:00]
Melissa Lee
This episode is brought to you by
- [27:01]
Guy Adami
Schwab Market Update an original podcast from Charles Schwab.
- [27:05]
Melissa Lee
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Steve Grasso
packed daily market Preview delivered in 10
- [27:11]
Melissa Lee
minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trade. Download the latest episode and subscribe@schwab.com Market Update podcast or find Schwab Market Update wherever you get your podcasts. What made you confident that you could do something that hadn't been done before?
- [27:33]
Christina Parts Nebulous
I have no fear of failure.
- [27:35]
Julia Boorstin
Trailblazing women, changing the game One of
- [27:38]
Melissa Lee
my favorite pieces of advice Think about
- [27:40]
Christina Parts Nebulous
what your boss's boss needs.
- [27:42]
Melissa Lee
Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just got to think big to accomplish big things.
- [27:51]
Julia Boorstin
Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts.
- [28:01]
Melissa Lee
Welcome back to Fast Money Stocks closing mix after another hotter than expected inflation report. The Dow with a small loss falling 67 points, snapping a three day winning streak. But the S and P and Nasdaq both closing at records, the S and P gaining more than a half a percent, the tech heavy Nasdaq up more than a percent, both indices on pace for a seventh positive week in a row. Shares of Nike though in the red today, the stock trading at its lowest level since 2014, down more than 33% so far this year. It's been nearly cut in half since CEO Elliot Hill took over in 2024. Home Depot also getting hit, falling another 3% today, now down more than 11% over the past month. It is trading at levels last seen in late 2023. Some more after hours action. Shares of StubHub jumping after topping revenue estimates, reiterating its full year outlook. Shares are still down more than 60% since public in September. What do you want to trade? Karen?
- [28:52]
Karen Finerman
Nike. I don't own Nike. I, you know, sold it for a loss. I was sort of looking for things to harvest for a loss that provided me an excellent one. Only a little bit higher than here, 44 or so.
- [29:03]
Tim Seymour
Congratulations.
- [29:04]
Karen Finerman
Thank you. I waited the 31 days. I'm free to jump back in and yet don't seem inclined to do so because I don't get any sense that they've really fully righted the ship. It's not super cheap at all. So I'm just hanging out not long. Nike.
- [29:19]
Guy Adami
I don't know other than being a trading vehicle how the stock comes back. I think that it's structurally challenged in China. People have moved away from brands. Brands have taken market share and here you have a bunch of non public companies that are actually taking market share as well. So the competition is too steep. They need new blood to guide them out of this. They don't have either one.
- [29:40]
Melissa Lee
All right, coming up, Kevin Warsh confirmed as an expat chair, but he is inheriting a high inflation environment. What that could mean for his policy and how the markets will take it all. And in fast money's back in tune. Welcome back to Fast Money. The Senate confirming Kevin Warsh today as the next Federal reserve chair. The 54 to 45 vote, the narrowest margin since confirmation started being required in 1977. The vote comes hours after the latest inflation print showed producer prices surging in April, jumping 6% from a year ago, the biggest increase since 2022. In comments this morning, Boston Fed President Susan Collins suggest rate hikes, hikes could become necessary to contain inflation. For more on all of this, let's bring in Evan Brown, the lead global multi asset portfolio manager at ubs. Evan, great to have you with us.
- [30:32]
Evan Brown
Great to be here.
- [30:33]
Melissa Lee
Does it really complicate the picture for, for Kevin Warsh? I mean it seems like he would leave things unchanged.
- [30:39]
Evan Brown
Yeah, I don't think he's going to be doing much for the first several months. I mean he was coming in hoping that inflation would be coming down and he'd be able to, to cut rates a few times. But as we can see from those comments from, from Susan Collins, he's going to have an FOMC that you know, is not going to be eager to do that. Just given how inflation is rippling through the economy right now, at what point
- [31:00]
Melissa Lee
do you get concerned about the inflation that is in this, in the system right now and whether or not it gets out of control?
- [31:06]
Evan Brown
Yeah, I mean right now I think you, you worry about it becoming self sustaining if the labor market really starts tightening again. So one thing we haven't seen yet, we have seen the labor market stabilize. We haven't seen the unemploy rate go down and wages shoot higher yet. If that happens, then it's very likely that the Fed will be tightening rates.
- [31:27]
Karen Finerman
So when you look at the oil move, how much of that do you think is causing inflation? Has it had enough time to fully sort of embed itself there? And if it were to go down, do you think we'd get to a lowering rates position?
- [31:41]
Evan Brown
Yeah, I think it takes time for oil to pass through to the rest of the economy. I mean, you're certainly starting to see it in airfares and trade services, things like that, that. But then it, it kind of makes it way its way more and more through into core inflation as it, as it goes. What's concerning is that the Strait of Hormuz is still closed. Right. And, and so as long as that's the case, it's higher for longer oil and then it's, it's higher for longer everything else.
- [32:08]
Tim Seymour
Evan, you, you've cited in your notes, the move in copper. I mean it's, it's a 15% move in copper in the last 10 days. It's all time highs. It's not, you know, and, and you're making a point that from an asset allocation perspective that people are probably still. Your thoughts on that and how underweight.
- [32:24]
Evan Brown
Yeah, look, I think when you, when you most people own the s and P500, they get very little exposure to underlying commodities, you know, 3% exposure to energy, very little to, to metals and mining. And you know, our view is that in this regime where inflation is a, is a risk that the, the average investor, you know, who owns a stock bond portfolio could, it's helpful to diversify by owning some more of that of that energy and owning some more of that metals and mining.
- [32:53]
Steve Grasso
I also read your notes and we have an emerging market specialist in Tim. But Brazil is something you continue to like here.
- [32:59]
Evan Brown
Yeah, still, still like Brazil had a rough day today. A little bit of political volatility. But I think in general what we've seen is, you know, pretty good monetary policy, commodities as we were talking about doing well. And Brazil is a very diversified commodity exporter. So we like those interest rates, we like the dead and we like the, the equity.
- [33:20]
Guy Adami
So Evan, when you look at the rates environment, I'm not sure what raising rates would do with the supply shock. But the real problem is you have to unlock the housing market. With Kevin Warsh, there's really nothing that he can do because he wants to bring down the Fed's balance sheet. So those operation twists are sort of not, not going to happen. They're archaic with this type of a Fed governor, Fed chairman. Is there anything that he can do to unlock the housing market that I'm not thinking of?
- [33:51]
Evan Brown
I don't think so. I mean, to your point, he does want to bring the balance sheet down. I think he will be very careful with that and in coordination with the Treasury. So I don't think that that's going to lead to a big spike in yields. But in terms of bringing yields further out the curve down, it's Going to come down to the economic data. You know, if he's, if he's pushing for cutting rates then which is really his main policy lever and the market is saying, hey, you're losing credibility on inflation, then the long end yields are just going to rise anyway and higher term premium in the market. So I think his hands are tied until we get a resolution in the
- [34:28]
Melissa Lee
Middle east and on the tech rally that we've seen. I mean, I think it's an interesting case. You make, you want to ride this momentum but you're saying this has really been a catch up trade on stronger earnings because tech really didn't do anything for months. And so we're just seeing it sort of catch up with the, of the rest.
- [34:43]
Evan Brown
Rest, that's right. I mean, don't get me wrong, it's been an absolute surge in tech and probably overbought on some measures. But you do have to zoom out a little bit and say that hey, tech really didn't do anything from October to March. And given how strong the earnings have been, this is really a catch up to those earnings which have been really phenomenal.
- [35:08]
Melissa Lee
Evan, it's always good to see you. Thank you for coming in.
- [35:10]
Evan Brown
Thanks me for having, having me.
- [35:11]
Steve Grasso
Evan Brown, big Peter Frampton fan.
- [35:13]
Melissa Lee
As you know, I mean one of the biggest.
- [35:15]
Steve Grasso
If we were allowed to play music that would be, you know, we'd have his walking because he does show us the way.
- [35:20]
Tim Seymour
That's why I said it.
- [35:22]
Steve Grasso
He does show us the way. And I will continue to say, as Tim has pointed out, copper is showing us the way. It's not just crude oil. I mean there are things happening now that are very inflationary that obviously a rate cut is not going to help, which is why a rate hike at some point is probably not out of the question.
- [35:36]
Tim Seymour
And you know, do we feel like, do you feel like we do? I absolutely feel like he does on commodities. I just think I look at copper miners. We talked about integrated miners. It's not just gold and silver, it's the entire space. We know what's been going on with, with, with Caterpillar and even John Deere. So look at your commodities holdings.
- [35:56]
Melissa Lee
Coming up, the CEO of AI data firm EXL Service joins us fresh off the company's investor day here at the nasdaq. What the company had to say about guidance and what he sees in store for tech, AI and software. That's when he's back into. As America celebrates its 250th anniversary, CNBC spotlights the business leaders who forged American industry and an extraordinary legacy of philanthropy.
- [36:26]
M
I am Elizabeth Alexander and I am president of the Mellon Foundation. We were founded in 1969 by Paul Mellon and his son, sister Ailza Mellon, and they are the two children of Andrew W. Mellon, who is the namesake of the foundation. Mellon was an American industrialist who really distinguished himself in business and did have particular interest in art. The Mellon foundation is the nation's largest funder in arts, culture, humanities, especially in higher education, but also public humanities, libraries and archives. What we have done is evolve our mission to include social justice. We want to widen the aperture to be more inclusive and to reflect more powerfully the diversity of the United States. Arts and culture and ideas are an absolute essential aspect. That kind of extraordinariness we want to bring to as many people as possible. If I had to choose one word that gave us at 250 a sense of American progress, because I am a poet, I cannot choose one simple word. So I'm going to choose a hyphenate and mine is going to be work in progress. This is a place where aspiration is real and we can keep striving to make it better and more fair for all of us.
- [38:09]
Melissa Lee
Welcome back to FAST money. We've got a news alert on AI chipmaker Cerebras IPO pricing Christina Parks and that has got the details. Christina?
- [38:16]
Christina Parts Nebulous
Well the company has priced at A$185 a share according to a person familiar with the deal. Deal well above the already raised range of 150 to 160 we've been talking about all day. According to our calculations that means the proceeds from this would be at 5.55 billion bucks higher than the 4.8. And the fully diluted valuation would be around $56 billion including, including the Green Shoe CEO Andrew Feldman stake again according to our calculations be worth about 1.9 billion. And notably OpenAI's co founder Greg Brockman, whose personal investment in Cerebras came to light during the Musk trial last little week, holds a stake now worth about $14.4 million. The press release is expected any minute.
- [39:03]
Melissa Lee
Melissa and again, Christina, they, they specialize in the inferencing chip, right?
- [39:08]
Christina Parts Nebulous
It's the inferencing chip, but they also provide the system with it and then they also do cloud services, which is roughly about 30% of the business. So they want everyone to know that they're not just a chip company.
- [39:17]
Melissa Lee
Right Christina Thanks Christina. Parts nebulous. We knew that this was going to be oversubscribed. We Knew it was going to be big and it's the perfect environment to go public for a show company.
- [39:27]
Karen Finerman
Well, it's interesting, as I was walking to the studio today, there was a truck that was unloading a giant cerebrous crate. And I'm like, well, I wonder what actually is in there that they'd bring it here. And it's turned out it's just money, probably. It seems what they're doing here, I mean, in some ways it's reminiscent to me of coreweave. Right? Not the. I mean the original hype was gigantic. And then by the time it actually came to market, there was tremendous, tremendous demand for it. And then it sold off quickly, but now it's significantly higher than it ever was. I wouldn't be surprised to see the same thing. Here we are in a white hot market for what they do.
- [40:07]
Melissa Lee
What's interesting is it has the same sort of issue, if you want to call it an issue, in terms of customer concentration. Core, we also had customer concentration. That was a huge knock against it until it diversified its customer base. And that really helped the stock sort of move past that period.
- [40:21]
Steve Grasso
You know what, they get penalized for it and then subsequently get rewarded if you show diversification. And you're going to see the ebbs and flows here as well. Core weave was a horrible story six months ago. All of a sudden it's back in everybody's favor.
- [40:32]
Guy Adami
I'm going to buy this one. And if you look at it, there's only one. They're the only direct inference player on the market right now. And Nvidia bought Grok, not the Musk Rock, the other one, for 25 billion, right? 20 or 25 billion. So that leaves. Because they wanted to corner the market and inference as well. Nvidia holds 90% market share in training, but only holds about 60% market share in inference. So if there's going to be a way to kind of weasel in, in this marketplace, I think you're going to see a lot of tailwinds with this, Nick.
- [41:05]
Melissa Lee
Except that Vera Rubin will be capable of inference. The same functions as an inference chip, and that's Nvidia.
- [41:13]
Tim Seymour
Well, so I think it doesn't even matter when they do. I mean, I know that sounds absurd, but again, look at, look at where retail is going to be positioned on this stuff. And I think, you know, this is all ahead of Anthropic and Space X. And look out.
- [41:27]
Melissa Lee
All right, coming up, Excel service down after its investor day right here at the nasdaq. The CEO of The data firm will join us here on set to break down the company's latest numbers next. More Fast MONEY into.
- [41:42]
Discover Credit Card Advertiser
Foreign.
- [41:49]
Melissa Lee
Welcome back to FAST money. Shares of EXL Service down today as the company hosted its Investor day here at the Nasdaq. The move comes despite the AI data and solutions company raising guidance for the year, seeing revenue and EPS growing low double digits. EXL shares are down about 36% this year, under pressure with the broader software space for more EXL service. Chairman and CEO Rohit Kapoor joins us here on set. Rohit, great to see you.
- [42:11]
Rohit Kapoor
Thank you for having me.
- [42:12]
Melissa Lee
So it's interesting because you are actually saying today also that AI is dramatically increasing your total addressable market and yet you're trading lower on the year because you're being swept up in software. So walk us through why you shouldn't be swept up in that part of the business and you should get the benefit of the AI boom.
- [42:30]
Rohit Kapoor
Well, to me, it just seems like we are a great house in a bad neighborhood and that's the problem with us. So it doesn't matter how good our house is, it's the neighborhood that matters and we get dragged down by it. You know, it's not very often that you report earnings. We did that two weeks back. We blew past our revenue guidance, our earnings guidance, raised the guidance for the year. We had our investor day today. We have nine analysts that cover us. Eight of them have a buy on us and one has a hold on us. And yet the stock trades down. So it's something which is which we stopped focusing on. And we just want to kind of, you know, work on our fundamentals and just, you know, serve our clients well,
- [43:11]
Steve Grasso
tell them the story is important. And, you know, OpenAI and Anthropic, they're getting into engineering services, which I would think is good for you. It's a bit of a tailwind for you. That's not a story that's being told right now.
- [43:22]
Rohit Kapoor
So that's a tremendous validation of why you need experts to help enterprises adopt AI in their best business. And I think OpenAI, you know, coming up with OpenAI Development Company is a key validation of that. Now keep in mind one thing, that unless and until you deploy AI effectively in the enterprise, you're not going to be able to sell more licenses and more tokens on OpenAI. So I think it's in their best interest to kind of promote this and make sure that it's done correctly by clients. And for us, it's huge because it allows us to be able to work with our enterprise clients and help them in this journey of the adoption of AI in the enterprise.
- [44:05]
Melissa Lee
In terms of your end market customers, your segments like healthcare, insurance, et cetera, are you seeing any hesitation in recent weeks given the uncertain macro environment in terms of signing new deals or whatnot? I mean, are they hesitating on the spending at all or. No.
- [44:22]
Rohit Kapoor
Actually, since the beginning of the year, the big change that has happened is everybody has moved from proof of concepts and pipelines and they want to go into production. So we are seeing every one of our clients really say let's adopt AI and put it into production. So that's been terrific. Given some of the macro uncertainties that have happened over the last few months, we haven't really seen anything much that's changed. 82% of our business comes from the US so the US customer base for us is very resilient. They want to take advantage of of this and I think they just need some expert help and I think EXL is a great firm that allows them to be able to benefit from this trend.
- [45:05]
Melissa Lee
Which sectors are providing you the most growth for US?
- [45:08]
Rohit Kapoor
Insurance has been really strong. If you take a look at insurance, it's got legacy architecture in terms of their platforms so they can adopt AI much more quickly and better and jumpstart their process. Healthcare is a big area where there is a growing adoption of a AI and keep in mind all of these are regulated industries. So these are complex changes that need to be undertaken. But we understand these domains really well, we understand the context, we've got great mastery over data and the application of AI is something which we can fine tune and make it work for our clients.
- [45:45]
Melissa Lee
Good house in a bad neighborhood. That's a good way of putting it. Rohit, great to see you. Thank you so much. Services up next, final trades. Time for the final trade.
- [46:00]
Tim Seymour
Timbo, I'm long But I mean Cisco 20% higher than it was yesterday. These numbers say the rating can go at least 20% higher on the market.
- [46:09]
Melissa Lee
Karen?
- [46:09]
Karen Finerman
Yes, Amazon one and change percent higher than it was yesterday. I actually believe this could go higher as well. Amazon.
- [46:16]
Melissa Lee
Stephen on point.
- [46:17]
Evan Brown
Boeing.
- [46:18]
Guy Adami
I'm looking for a break above $250 guy.
- [46:21]
Steve Grasso
Big debut by JR Ewing last night at Shea. Well done Southern Copper. Tim.
- [46:26]
Melissa Lee
Thank you for watching Fast Money. Mad Money Jim Cramer starts right now.
- [46:32]
Julia Boorstin
All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC or its 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 hey Fidelity, how
- [47:06]
Evan Brown
can I remember to invest every month?
- [47:08]
Melissa Lee
With the Fidelity app, you can choose
- [47:10]
Christina Parts Nebulous
a schedule and set up recurring investments
- [47:13]
Melissa Lee
in stocks and ETFs. Oh, that sounds easier than I thought. You got this? Yeah, I did do. Now where did I put my keys? You will find them where you left them.
- [47:27]
Guy Adami
Investing involves risk, including risk of loss. Fidelity Brokerage Services, LLC Member nyse, SIPC.