← CNBC's "Fast Money"
CNBC's "Fast Money"
Markets Drop As Uncertainty Rises… And Oracle Reports Results 6/10/26
00:43:54
Stocks selling off as investors digest the latest developments out of the Middle East, and the highest inflation read in over three years. SMBC Americas’ Chief Economist Joe Lavorgna lays out his take on the CPI report, and what’s in store for Kevin Warsh at his first Fed meeting next week. Plus, all the details from Oracle’s latest earnings report, Musk’s unique strategy for his SpaceX IPO, and how the NBA finals and World Cup combo are kicking off a sports betting golden age. Fast Money Disclaimer
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Commercial Narrator
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Venture Global Representative
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- [01:03]
Willis Lee
Live from the NASDAQ markets, I'm in the heart of New York City's Times Square. This is fast money. Here's what's on tap tonight, a market in doubt, stocks getting hit as oil inflation. The latest developments out of the Middle east weigh on investors how surging uncertainty could impact the markets and what it will mean for Kevin Warsh's first Fed meeting as chair. And Oracle on the move, the software giant reporting results in the last hour. We are digging into the numbers, bringing you the latest headlines from the conference call which is kicking off right now. Plus the betting boom as the NBA Finals and World cup converge a pot premiere for Trulieve and the mid cap Mediterranean food stock. The Chartmaster is buying for lunch the technical take on where Kava is heading next. I'm Willis Lee, come to you live from Studio B at the nasdaq. On the desk tonight, Tim Seymour, Dan, Nathan Gaidami and Rebecca Patterson, former chief strategist at Bridgewater Associates. Welcome Rebecca. And we start off with a market sell off that sent the S and P to its lowest level since May 5th. The index falling over one and a half percent off more than erasing gains for the week. The Dow and the NASDAQ following suit with the tech heavy index weighing weighed down by a 3 plus percent drop in the semi stocks. The move sparking sparked in part by heightened tensions in the Middle East. Oil prices spiking 2% after President Trump said Iran will quote pay the price for being slow to negotiate a cease fire deal. Oil prices are up 35% since the start of the war, helping stoke inflation concerns. This Morning's read on consumer prices in May showed the highest number in over three years. That report comes just one week ahead of the next Fed decision, the first one with Kevin Warsh at the helm of the central bank. So with all this uncertainty weighing on investors, what can we expect from the markets as we head deeper into the summer? Guy, what do you rate that ever?
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Rebecca Patterson
Becky here, number one. Number two, Tim, every day is a great day.
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Willis Lee
That is true.
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Rebecca Patterson
I would, I said it's a great
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Willis Lee
day as opposed to other days. But anyway, proceed.
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Rebecca Patterson
You know, I appreciate, you know, Tim is right. I was going to. Now I'm going to say you're right again because Tim has been, he's been overwhelmingly bullish for a while. Last week he was quick to point out that some of the behavior we saw, some of the reversal, some of the technical things were concerning. And we also talked about these engulfing patterns, potential for an outside month in the S and P which we haven't seen in many, many years and 70200 is sort of your line in the sand. But the concern to me, yeah, elevated tensions in Middle East. I get it, I think it's more than that. And CPI I think was headed in this direction anyway and inflation is, has been a problem, continues to be but the biggest problem I think continues to be in the form of the bond market. And I'm one of the few people, I think or maybe now more people realize that that rates are going higher and maybe not for the right reasons.
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Willis Lee
Mel, do you agree?
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Mel
Rebecca yeah, I'm with you. I worry about the bond market. I mean we're seeing the world rearm so governments are spending more money to do that. That's continuing to get upgraded so to speak. At the same time no one wants to cut domestic spending to pay for the rearmament. We want guns and butterfly and so but budget deficits are getting bigger. We have to issue more supply and at the same time we've got this deluge of corporate supply including from all these lovely tech companies. So there's a lot of bonds out there and who's going to buy them all if we have higher for longer rates that makes these capital intensive industries struggle a little more.
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Tim Seymour
Yeah, I mean the CPI number this, this morning was kind of in line. So you know, you think it's a relief but I mean it's not a good number. Like the in line was not a good number. And, and the last three months on an annualized basis are 8.2% CPI. So as we're all saying here the dynamic even for tech stocks, the sensitivity really to the Iran headlines but for high tech, the highest growth part of the market to really oil prices or cpi certainly PIE is probably never been higher especially when you think, at least in recent memory when often we are buyers of tech and in an inflationary environment because it's more insulated because they weren't debt laden. And yet as Rebecca points out, I mean this, this has been the story of the last month and a half and it's, it's part of the story. I think it's a dynamic also. It's fascinating to me that not just rotation and what it then does, but that you're seeing the indices themselves actually move more than individual stocks. And that really happens when you have, you know, 10 stocks make up 40% of the index and they happen to be the stocks that we were just talking about that have the most sensitivity. So there was this whole period where the market was kind of gnashing around and ugly below the surface. Excuse me. And now we're actually seeing the indices do it. It's great if you're hedging with Qs and spies, but it's not great for other things.
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Dan Nathan
Yeah, just say for the markets, I mean there's pockets of risk that have not been appreciated. People have just been kind of really casual about watching stocks like GM, Ford, Caterpillar go up because they're now AI stories. Right. All of them are down 5% today. Ford's given back a lot of that rally and I think we were kind of scratching our heads. Okay, so you're not good at EVs, but you're going to re or some of that, you know, manufacturing capability or some of that energy, you know, battery sort of stuff for a think about the lead times for that.
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Rebecca Patterson
Right.
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Dan Nathan
And this goes back to investors if you want to give them a multiple based on what might happen in the future. I mean this is a company that couldn't build, build EVs, you know what I mean, and sell them. So you think they're going to be able to kind of do this and kind of do it in line with all the expectations about a data center build. And the other thing I would just add, you know, we're so focused on semis. The stocks doubled in two months. I mean just think about that people. This is an index of, you know, 50 stocks. It doubled two months. Well, you know what else almost doubled? Software almost doubled. And that was really just kind of a, you know, a whim, you know, why folks were taking a shot on there. So I think there's an air pocket in software that has the potential to go back and test those prior lows and semis in storage and memory if there's some of the heat that comes off of them. We've already seen in the hyperscaler. So I think the Nasdaq in particular could be in for a difficult summer.
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Willis Lee
We got breaking news here. We're going to get to on Iran. Megan Cassell's got the details. Megan
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Megan Casella
Melissa, Defense Secretary Pete Hegseth just confirming to reporters a few moments ago that the US Will be moving forward tonight with further attacks against Iran. He was confirming what the president hinted at earlier today, that in response for that downing of the US Apache helicopter, we saw one round of US Strikes last night, some retaliation from Iran as well. And now we're going to see, he says, another round tonight. Here's some of what Hegseth told reporters.
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Tim Seymour
CENTCOM Central Command will be busy tonight because President Trump said we will be hitting Iran hard and we will be because Iran has a chance to make a good deal, a great deal to codify what they said they've been willing to do and they haven't been willing to do it.
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Megan Casella
Now, Melissa, throughout those remarks, Hegseth did seem to keep saying that a deal is still on the table. He says strikes will happen tonight. They will be hard. They might have to happen again tomorrow night. Those will be hard as well. But throughout, he says the deal remains on the table. Some of this, though, he seemed to suggest was not only in response to the downing of the helicopter, but also because Iran has not agreed to make that deal yet. I will also flag, Melissa, that just in the last few minutes or so, Iranian state media is reporting, citing military sources, that Iran is yet again prepared to respond. Iran's Tasnim news agency saying that if the Americans take any aggressive action, they will once again face heavy responses. So we're primed now to see more tit for tat in these strikes later tonight.
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Willis Lee
Melissa, and still not clear as to whether or not this is a breach of the ceasefire, correct?
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Megan Casella
That's correct. And he was asked about that and Hegseth clearly didn't want to get into it directly, leaving that up to the president himself. But the president today not asked directly about it. They're continuing, though, to say that the talks remain ongoing. That suggests that the cease fire, perhaps in name only, still holds.
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Willis Lee
All right, Megan, thank you. Keep us posted. Megan Casella, we are seeing in the electronic session oil trade higher on the back of these Headlines. Brent right now is at 94 and change a barrel. It is up by about 1.7 sense. We'll see what happens here. CWTI in terms of the uncertainty it inserts into the markets, but also into the inflation picture because obviously the longer the conflict goes on, the more persistent the inflationary pressures will be.
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Mel
Yeah. I mean, in the month of May, we've already seen retail gasoline prices come down almost 10%, and that will feed through to CPI next month. But we are seeing producer prices from around the world higher. That's going to be higher here, too. And oil is bouncing back up now. So I don't know if we have a very long reprieve in this case.
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Willis Lee
Yeah.
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Rebecca Patterson
For the market historically, in times like these, I don't know if that means anymore flight to quality in the form of the bond market. I think those norms have been sort of thrown out the window. I'm in Rebecca's camp. I mean, this is bond bearish to me, which again means yields go higher and we'll see what the market does. And, you know, I'm not speaking for Tim. I'll say this again, though. Energy stocks, regardless of the underlying commodity price, are still a place you want to be, especially if you see rotation from some of these semi names.
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Willis Lee
All right, for more on all this, let's bring in Joe Lavornia, the chief economist at SMBC Americas. He most recently served as Treasury Secretary Scott Besson's economic counselor. Joe, it's always good to see you.
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Joe Lavornia
Thank you. I get to sit near Tim. I guess it's a special treat.
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Willis Lee
Look, some guests refuse to come in for that same reason.
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Joe Lavornia
There's no accounting for taste.
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Willis Lee
Right. What did you make of the CPI data today? And if you can piece it together with the headline that we have, which seem to indicate that the conflict will go on and perhaps we're at a stage where it's going to intensify.
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Joe Lavornia
Again, the view I've had is that it would go on for quite some time after I left the administration. Because there's no easy off ramp.
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Willis Lee
Yeah.
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Joe Lavornia
Because the things that Iran wants effectively give them a strategic victory, which understandably many people don't want them to have. So this is going to drag on with supply chain pressures that will look very similar to Covid on a much smaller scale where you've got fertilizer costs are up 30 to 40%. You've got other commodities that come through that region. Nitrogen material, that makes plastics. It's all plastics. That was the graduate. But anyway, so you look at The New York Fed has a global pressure supply index that's up sharply. The price is paid in the various isms, the nfib. I mean, it's a supply shock, but also when energy eventually comes back online. So even clear to me that it's going to come back on as quickly as people think. It's not like you turn a well off like a light switch. So that to me makes the economy more inflation prone. So today's numbers are okay. But look, we've moved further away from the Fed's inflation target from before he went into Iran. As I said before, the Fed needs to raise rates because you look, historically we have never gotten inflation back one point or more without the Fed raising rates. Just hope they can do it without a recession.
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Kim Rivers
Right.
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Willis Lee
Piece this together with the fact that Kevin Warsh first meeting next week and there are a lot of uncertainties as to whether or not we will see a dot plot. What sort of forward guidance will be given at this point. What are you, what would you anticipate here?
- [11:47]
Joe Lavornia
The Fed is Kevin's, I think, going to be a very consequential Fed chair. But the way the institution works and I think the way he'll approach it is it'll be, it'll be somewhat systematic and perhaps slow in the sense that I don't expect him to come in. We're going to change things immediately, overnight. But I do think over the course of time we'll look back and say these are some substantial changes, whatever it might be, whether it's giving more information around the dots, putting the dots out, say after the press conference, having meetings where people don't know exactly what the statement is going to look like going in because now they hand out various versions of the statement so you basically know what you're going to write before they actually meet. So he could change in a very substantive way. Just not going to happen next week in any big way. It's possible. I think they'll figure out a way to not have a tightening bias when in reality they should because the inflation numbers are not good. They may get better at some point, but they're not good at the moment. And the economy looks pretty healthy. I mean, job growth is reaccelerating. So you look back in December, Yes, a bunch of dissents for hikes. That's before we went into Iran and that was when the labor market was still iffy.
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Dan Nathan
Joe, as someone who just left the administration, like, help me understand this. It looks like they're deliberately the White House trying to cause A recession. If you go back and think of April 2025, I mean they roll out this trade war, right? There was no easy off ramp. That's a turn that you use. It's kind of hard to suggest that we won that trade war because a lot of the inflation that was embedded in that is still here. And then we think about the war, the war of choice. You know, you just said also there's no easy off ramp here and we're going to have persistent inflation. And when you think of the two of them combined, like how do you get out of this spiral? You know, because to me it just seems like it's going to slow growth. Right. We have high inflation and isn't that the sort of thing that's to going tough for risk assets but is likely to kind of weigh on economic growth?
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Joe Lavornia
The economic growth numbers have been pretty good. Maybe 3% growth in the second quarter, maybe 2 and a half, 3 for the year. I'd been more bullish we not going into Iran. And I would have said it's a disinflationary boom with growth up near 3. I would not conflate though the tariffs with the war in Iran because the tariffs had a very minimal effect on inflation. It's a one off price level adjustment. And the Fed looked properly look through it. They look through those tariffs last year and cut rates three times. It's much harder now when you've got oil prices which is a self induced supply shock and then you run the risk of, of increasing inflation expectations. And the reason the Fed needs to raise rates in my view is that the longer they keep rates flat, those real rates become more negative. Monetary policy eases and there's no negative effect from the equity market or credit spreads at this point. Financial conditions are super, super stimulative. The economy will be healthy. How do you get out of it? Well, I mean I've got my own views, I'd rather not share them publicly on what you would do. But in a perfect world, in a perfect world this is deflect. I'm deflecting now.
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Willis Lee
You're not a member of the administration
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Joe Lavornia
but here's what look, you're sitting next to me prices. If oil prices go back, if they're going the direction they were prior to the war, we could get disinflation because we were going to be sub 60. We were at four and a half year low in retail gas prices. Rebecca was talking about retail gas. That's hugely positive for the consumer. It would push away this notion of the K shaped economy. The problem is is this war in many ways for me from a forecasting perspective change things and change things monumentally. The tariffs I can live with. I like the tariffs. Tariffs make sense. We needed an industrial policy but on the, on the war that's and how that happened that's maybe a different issue.
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Willis Lee
Joe, it's always good to see you. Thank you, thank you for coming in sitting next to Tim despite what other people say.
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Tim Seymour
Man, Timbo, I just got smarter. So what's, what's interesting first of all Joe, Joe is very consistent with where he was on tariffs even when he was either on the eve of the administration or in the administration and the overly accommodative Fed policy dynamic. And I think what he's talking about, I say we have negative real rates. I think we have a case where there's no question today CPI tells us we have negative real rates. And weaving in what Rebecca said about what what essentially governments but are doing around deficit spending is something that when they're all doing seems to be probably a little more comfortable. And so I think the part of everything we're talking about that we haven't really hit on is that higher rates are going to hit equities hard. We just don't know when and we don't know what that breaking point is. And frankly guys that have said that the 10 year has done nothing for three for three years are largely right. But I would say outside of war noise we've actually had an uptrend in the 10 year bond yield since October of 25 and I don't know, I don't see it stopping.
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Mel
No. And I have to think that the long term yield will settle somewhere in this range. Right. We'll have cyclical ups and downs but we're going to be closer to a four or five handle than a two or three handle. I think going forward that hurts mortgages, that hurts the consumer. But going back to the CPI report today, one thing we haven't talked about yet is real earnings and real wages have gone down now for the last two months in a row. And Greg, it's did a great piece in the Journal a couple of weeks ago looking at both wages as a share or sorry share of gdp. That's wages and the share of profits. Right. And profits as a part of GDP if I can get these words out correctly. Hello. Are at the highest level they've been at since they started collecting the data in 47. Wages are going the other way.
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Willis Lee
Wow.
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Mel
They're down to the lowest level for about 50, 60 years. So you're seeing this divide and it makes sense for the kids. If you have high corporate profits, that helps the share price, which helps the people who own the stocks. If you just have wages, you're left behind. But this is going to be an issue if inflation stays sticky. These people get further and further and further behind. It becomes a social issue, it becomes a political issue and eventually it becomes a broad consumer issue which hurts the stock market.
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Willis Lee
Let's get to an earnings alert on Oracle, which be top and bottom line estimates. Shares though are lower. If the company said it's looking to raise $40 billion through debt and equity financing in fiscal 2027. The conference call kicked off at the top of the hour. Sima Modi is here with the very latest. Seema and Melissa.
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Sima Modi
I thought it was notable that Oracle's new Chief Financial officer Hilary Maxon actually started the call. It Wasn't the CO CEOs or Chairman Larry Ellison. And yes, the big talking point is that Plan to raise $40 billion in debt and equity and fiscal year 2027 it follows the company's previous plan in 2026 to raise about $50 billion in debt and equity and just to break
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Megan Casella
down that 40 billion.
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Sima Modi
For 2027 it's about 25 billion in debt and 15 billion in equity. And it also follows that mega announcement we got from Google just last week to raise about 80 billion. Listen, I think what the company so far on the call is really trying to hit on is the demand story. It's accelerating, especially when you look at remaining performance obligations. That's the clearest sign yet of demand picking up now up 363% year over year to 638 billion. That surpassed every estimate on Wall Street. And I think what the street is now waiting for is more details on what they're doing to diversify their customer pipeline. They haven't got into that just yet. What we did find out last week where David Faber's interview with the co CEO of Oracle as well as OpenAI CEO Sam Altman is that concerns about that relationship has been put to bed. Given that you saw Altman at Oracle's $16 billion data center in Michigan, the expectation is that is continuing to ramp. But now we want more details on how much revenue is coming in from Nvidia Metta as well as Elon Musk's xi, which Oracle also counts as a customer. I will point out one of the other discussion points has been on, you know, how long does it take to convert RPO into revenue. They did provide a stat about 12% will be recognized in the next 12 months. That's really the first time they've provided 12% in 12%. But that number is expected to ramp up in the coming quarters again as we get these details. I think that's just an important one. It's one that a lot of analysts have been noodling on.
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Willis Lee
Huh. That's interesting. It doesn't seem like a lot. It does seem slow. 12% over 12 months and it'll ramp.
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Rebecca Patterson
It should ramp up. Great job. I see. Minimum. I was just on your cbo. You call it the CBO over time.
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Willis Lee
Yeah.
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Rebecca Patterson
And we sort of pontificate. Dan alluded to it. If you look at Oracle, I don't think a lot of people realize it almost went up from the April lows, 100%. As you know, as recently as a week and a half or so was trading in the mid-250s ish. And now the pull off makes sense. Now this is to me, you're betting on one thing. As I said earlier, Larry Ellison is pushing all his chips in the middle of the table. He's levering this thing and he's saying he's making a bet that Oracle is going to be sort of the epicenter of this whole air craze and he might wind up being right, but the market now is not rewarding people for that. The environment we find ourselves in is very penalizing pricing.
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Willis Lee
And the software business, by the way, was not good in this quarter according to.
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Dan Nathan
Yeah, nothing's good in this thing. And you would talk about the conversion rate RPO's. This is a company that if the stock were to go back to where it's trading two months ago, literally the market cap is going to be nearly equal to that of the debt that they have after they're done raising this. And so when you think about all the rumors about delays and SEMA just, you know, had a lot of commentary about Sam Alton, what they're doing or whatever. They have stopped down the development of some data centers that exists for, you know, open air. And that is part of the rpo. And so you think about what's going on here. There's nothing good going on here. And Oracle is so far behind some of the big hyperscalers. And you think about that negative free cash flow that they have. Okay, so all the major hyperscalers have funded hundreds of billions of dollars of data center build based on their cash flow. Now they are raising equity and debt. So if Oracle has never been in the position to use cash flow to do it and they have deeply negative cash flow. So in what planet do you think this is going to work out for Oracle? I mean like seriously, this is going to be the epicenter of whatever blow up happens from this data center build. So have a ball, you know, but I mean like, you know, I'm just saying. Okay, all right, well I mean the
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Tim Seymour
planet Capex, they, they, they missed it. I mean they came in at 55.7, they're supposed to be just around 50 and we got those numbers on what they have to do the capital markets. So you don't think that there's not going to be a dollar for dollar proportionate relationship between every dollar spent on Capex and every dollar going into the capital markets. So you know, the infrastructure business was up 93%. That's great. But it's still only a $5 billion top line.
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Willis Lee
The stock is after our session lows right now down more than 7%. Coming up, an Elon Musk styled IPO. How Space X's market debut is breaking the norm and whether the unconventional process will be a boon or a barrier for the stock on Friday. Plus game four of the NBA finals and a World cup to boot. How the two massive sports events are setting up to make history in the betting world and the stocks that could see the biggest bump from it all don't go anywhere. Fast money's back in two.
- [22:25]
Venture Global Representative
At Venture Global we think about what can be done, not what's usually done through innovation. Venture Global is not only building some of the the largest energy facilities in the world right here in the United States, but delivering American energy at a fraction of the cost in a fraction of the time. So while others are busy talking, we're busy building. That's Venture Global. That's unstoppable energy.
- [22:55]
Joe Lavornia
I want to grow the game of soccer and give every kid the chance to play.
- [22:59]
Dan Nathan
What would you like the power to do?
- [23:01]
Willis Lee
Bank of America champion street soccer advocate
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Kyle Martino and is proud to be
- [23:05]
Willis Lee
the Official bank of U.S. soccer and FIFA World Cup 2026. Bank of America NA member FDIC the
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- [23:42]
Willis Lee
Welcome back to Fast Money. We are counting down to Friday's open, when all eyes will be on Space X's market debut. Shares expected to start trading here at the nasdaq, and retail investors getting an unprecedented chance to participate in what could be a historic offering. But the massive size isn't the only thing different about this deal. CNBC's Leslie Picker's got more on this. Leslie.
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Kim Rivers
Hey, Mel.
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Leslie Picker
Space X's books have officially closed a day early to give ample time to sort through allocations before Friday's debut. And as you mentioned, Elon Musk is doing the Space X IPO his own way. IPO conventions such as price ranges and minimal retail allocations and quiet periods have been thrown out the window. Both CEO Elon Musk and CFO Bret Johnson have done interviews posted on X during the roadshow. Some applaud Musk's simplification of the process and removal of the usual friction and gamesmanship that can be involved in IPOs. Others criticize it as risky and untested, especially since the $75 billion debut would be the largest of all time. Remember, Mark Zuckerberg famously showed up to the Facebook IPO Roadshow in 2012 wearing a casual hoodie, and he faced major Wall street backlash over it, rankling some investors who saw it as immature and disrespectful. Institutional investors have learned a lot about and embraced tech culture in the ensuing 14 years. They've come a long way, but IPOs can present this unique battleground where nonconformity can be either rewarded or punished.
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Mel
Mel.
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Willis Lee
All right, Leslie, thank you. Leslie Picker. Another way he's rewriting the rules is being included almost immediately in the NASDAQ 100, which will be interesting for those who own the QS. Right? I mean, you'll immediately get exposure, almost immediately get exposure to Space X, but
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Tim Seymour
you won't get full market cap weighted exposure. So let's just clarify for people at home what this means. Yes, there are now rules because it will be a top 40 market cap that allows them to change the rules and get them in effectively within 15 days. But it's, it's based upon free float and then it's a function of free float and there's a three times multiplier. And so this is not going to be a massive weighting in the queues.
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Mel
It's just not, I think originally it's supposed to be something like 0.5%, which is bigger than the average weight, but it's still not going to dominate the index. And I think the bigger issue, I see these headlines, they make me nuts. Everyone is going to own this, every retail investor. It gets dumped on them. It's not true. The s and P500 is the benchmark people own and it's like $20 trillion. The NASDAQ is $1.4 trillion. Ish. Right. That was the end of 2024. So it's a little off, but it's close, 14 times bigger. So if this were in The S&P 500, I'd say, yeah, the world now owns Space X, but this is not what's happening. So I. Yeah, I'm with you. Like it's a big deal. There's going to be billions of flows going in. But let's not over exaggerate it.
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Tim Seymour
I mean, you know, we hear about the foreign pension funds, Danish pension fund people that say that the governance is big factor. And let's be clear, I mean, you know, opacity and that balance sheet is, is what you're taking. Yeah, I said opacity.
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Rebecca Patterson
Wow.
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Tim Seymour
You're a Georgetown guy. And it's a case where, you know, we've seen one, one pocket fund, the other pocket this and that. And by the way, that is how Elon's done it. There's no hiding behind this. This is exact. And by the way, 50% of people that buy Space X, and I at least mean on the retail side, I won't speak for the institutions. That's why they're buying.
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Willis Lee
Right?
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Tim Seymour
Because they trust in that and they trust in the ability to let him run his structure. By the way, holding companies usually trade at a discount to the sum of the parts. And that's what we got here. We got at least three primary parts. So
- [27:19]
Rebecca Patterson
135 is the price. You set the price as we talked about last night, obviously that's where it's going to open or not. So as we price that, where it opens is going to be fascinating. But more than that, how quickly, quickly it trades down to that 135 level and how quickly the green shoe is sort of initiated, whatever the phrase is, that's what you're watching here. And by the way, I'll just throw this out there because why not? We're on a TV show.
- [27:44]
Willis Lee
I know where you're going.
- [27:45]
Rebecca Patterson
Given current market conditions, it's not out of the realm of possibility that if what's happened today continues in tomorrow, you could get, you know, what market conditions dictate that we delay, which would be catastrophic I'm not saying it's going to
- [27:58]
Willis Lee
be terrible for the market.
- [27:59]
Rebecca Patterson
I think there's a chance happens.
- [28:01]
Dan Nathan
I think there's some good news for retail investors who are going to get access to this. And again, 30% of that is going to be allocated. You know, oftentimes they don't get a lot and then they end up getting really excited and paying the opening price or afterwards and paying the big pop. So, you know, I can't endorse anybody going out there and paying a pop. We saw Saraburus, it, you know, had a huge pop and it, you know, really traded 100% higher or more, you know, for about a few days and then it looks literally has come all the way back and it's probably trading where it should be. But a lot of folks bought the aftermarket and now immediately they're down 30, 40%. So, you know, the idea of going out and buying it on the, on the pop doesn't make any sense. But if you get it 135, you might as well hang out.
- [28:42]
Willis Lee
Coming up, more details on Oracle's after hours move and all the details from its conference call. But first, game four of the NBA Finals tips off in less than three hours. Yes, and the World cup is on deck two. How the two events are creating one of the biggest events in history. You're watching Fast Money live from the NASDAQ market site in Times Square. Back right after this.
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Willis Lee
to Fast Money ratings for Monday night's Game 3 of the NBA Finals. Just in an average 23.8 million people tuned in to watch the New York Knicks take on the San Antonio Spurs. That's a 159% jump from last year and the most watched Game 3 since 1998. Tip off for Game 4 is just a few hours away and excitement is spilling out way past the seats at MSG watch parties and bars. Sports betting stocks have been surging. Take a look at the Roundhill Sports Betting ETF, up 3% today. It's up nearly 10% in the last two months. DraftKings Flutter, Penn Entertainment and Rush street also seeing some outsized gains today. So Knicks plus World cup. This could be a huge bump for these.
- [31:45]
Tim Seymour
Yeah, well, I mean WXOU radio bar 5800 is my bar and there will be a watch party. I think it's a dynamic where we see the power of sports. It's why, you know, when you start talking about even about Netflix getting involved in live events and sporting events. But back to online sports betting. I mean, they have these moments. They've also had these moments where they've been very worried about prediction markets. So here it is. Sweet spot of everything you want in the online sports betting world and World Cup. Let's call it what it is. As much as I'm a Knick fan, I mean it's the World Cup. I mean soccer and football as they call it in the rest of the world is a lot more important and a lot more of a betting sport than basketball. So I think it's I just don't love the margin profile. You know I was long draftkings for a long time time. It was never cheap but it was a growth story and now I'm not
- [32:33]
Rebecca Patterson
sure I see that with everything you just said quickly you would think a company like Nike who makes sneakers or
- [32:39]
Willis Lee
trainers and merchant various other apparel but
- [32:42]
Rebecca Patterson
doing extraordinarily well yet here we are finding it at a 13 year low. Fascinating how they've lost their way. By the way, I am rooting for seven games just about to move.
- [32:52]
Tim Seymour
I know you were so the NBA is too by the way. Some would argue.
- [32:55]
Rebecca Patterson
I know. I'm not arguing that Tim.
- [32:56]
Willis Lee
I know you guys are excited. Tim has his Knicks tie on. We got to move on. Coming up, we are keeping an eye on Oracle shares after hours listening in on the company's conference call. What we are hearing and what the tech analyst Gil Laurier makes of the quarter with fast money returns. Welcome back to Fast Money. Stocks tumbling for a second day and closing at the lows of the session. The dow falling nearly 1,000 points, its worst day since October. The S and P dropping more than one and a half percent. The NASDAQ down nearly 2%. REIT ETFs hitting multi year highs today. Vanguard Real Estate hitting highest levels since November of 2024. State street vs Trust and Alps Active REITs all hitting their best level since April of 2022. Intraday Gold Meantime, continuing season, continuing its decline.
- [33:47]
Dan Nathan
The water we have done gold is continuing to climb.
- [33:50]
Willis Lee
You dropping another 3 1/2% today. The precious metal down more than 21% percent since the war began and settling at its lowest level since November. Casey's General Store surging more than 20% for its third best day ever after topping earnings and revenue estimates this morning. Casey's now up nearly 66% this year. And Super Micro dropping nearly 28%. The company announcing $7 billion in equity related financing deals to help cover the cost of hardware components purchases. Another check on Oracle. It's really been moving around in the after hour session. It is now down by just about five plus percent. Thirty minutes into the call. Shares are coming off as we mentioned at the after hours lows which are down about 7%. For more let's bring in Davidson head of Technology research Gil Laurier. Gil, great to have you with us. What you hear on the conference call so far that catches your attention? Why do you think the stock is down?
- [34:42]
Gil Laurier
The kind of quarter we called mixed, right? Revenue didn't accelerate from last quarter. It needs to accelerate for them to meet 2027 guidance. The beat was Small. The guidance is only slightly above expectations. That's on and then they announced their fundraise. What sounds like a new fundraiser really isn't. That's, that's on the negative side of the ledger. On the positive side of the ledger they did reaffirm that $90 billion revenue guidance which implies high 20s revenue growth and they grew their remaining performance obligations nicely. Interesting to note, Oracle's remaining performance obligation is now bigger than Microsoft, Amazon's and Google's. They have more a backlog to deliver than any of the three large hyperscalers. So that's on the good side of the ledger. A lot of the back and forth now is about the capital raise. They said they're going to need 40 billion in the fiscal year, but they stayed consistent to their previous statement that there's no more debt raise in this calendar year.
- [35:51]
Dan Nathan
Right.
- [35:51]
Gil Laurier
Their fiscal year just ended in May, so there's no debt raise until next calendar year. They have not issued all of their at the market offering. Remember they announced a $20 billion at the market equity offering. They've only issued 5 billion of that. They still have 15 billion left. So they're actually planning to raise less capital next year than they did last year in spite of the fact they have more capex next year than last year. So they're being more capital efficient by taking more prepayments and more customers that own their own GPUs. So that's what we would call a mixed quarter.
- [36:28]
Rebecca Patterson
All right. So Gill, is it hyperbolic to say that Larry Ellison is basically betting the fate of the company just pushing all the chips in the middle table that Oracle is going to somehow be maybe not the epicenter of this entire thing, but pretty damn close to it.
- [36:41]
Gil Laurier
Absolutely. He's been making an increasingly large bet on the Oracle cloud business and OCI is going to go from being a quarter revenue in the year that just ended to being 2/3 or more of the revenue within three or four years? That will be the business in a couple of years and that's why the intent or the guided to 30% CAGR over the next three or four years. So that's really based on that big bet that they can be one of the leading providers of AI Compute. Again, they used to be a distant fourth. Oracle Cloud used to be a distant fourth to Microsoft, Amazon and Google in AI Compute. They like to be neck and neck with those guys.
- [37:22]
Willis Lee
So there's going to be a dramatic change in the margin profile of this company. I would imagine. Gilmore OCI is much right slimmer margins and software business and then also that financing costs are only going to get higher. I would think.
- [37:36]
Gil Laurier
Yeah, the margins are substantially lower. I would say the margins and the rest of this are probably 50% 5 0. And in this business right now I would think of them as maybe 151 5. The good news is that for the last few quarters they've been able to offset that mix shift with cost cuts. They can do that forever. But as long as they do that and they can have accelerated growth with stable margins, that's a good return on investment. So that can work out. And then on the cost of capital again, they're now going very bookings they added this quarter are either prepaying customers or customers that are bringing their own GPUs. So that's a less capital intensive business. Now that's likely also less profitable business. But at least it alleviates the pressure on capital and that's why they can raise less capital next year than they did last year in spite of they're going to have more capex this year than they did last year.
- [38:34]
Willis Lee
Gil, thanks. You got to leave it there, Gil. Lauria Oracle shares down less than 5%. Right now breaking news here in Iran. Let's get back to Megan Casella, Meghan,
- [38:43]
Megan Casella
Melissa, those strikes that we spoke about at the top of the hour have now begun. The US Military confirming they are now firing missiles against Iran. Here's the post the US Central Command posting on social media saying US CENTCOM forces began launching additional self defense strikes today at 5:15pm Eastern against multiple targets in Iran at the Commander in Chief's direction. The strikes are in response to Iran's unwarranted and continued aggression. I will note again using the term self defense. They're trying to suggest this could be a targeted measure but as I said before as well, Iranian sources are reporting Iranian state media is reporting that they will be targeting new U.S. interests. They say that was if the U.S. took action. Now the U.S. has. Now we wait to see how Iran responds.
- [39:24]
Willis Lee
Melissa all right, Megan, thank you. Megan Casella. Coming up, blazing a trail. Cannabis company truly becoming the first US Company to list at the nyse. CEO Kim Rivers will join us next to discuss the marijuana milestone and how physicians economists company going forward. Fast Money's back into. Welcome back to Fast Money. Trulieve Cannabis making its NYSE debut today under the ticker trlv. The move making it the first US Cannabis company to trade on a major US Exchange shares ending the historical historic day just in the red for what the listing means for the company and the marijuana industry. Let's bring in CEO Kim Rivers. Kim, great to see you again.
- [40:05]
Kim Rivers
Great to see you as well.
- [40:06]
Willis Lee
What does this US Listing enable you to do at this point?
- [40:10]
Kim Rivers
Well, first of all, it is a historic day for not only truly, but for US Cannabis. It allows us to have increased liquidity, increased shareholder participation, not only, of course, with our retail investors, but also with institutions. So we are just thrilled to be here today.
- [40:26]
Tim Seymour
Tim, congratulations. I'm almost as happy about this as is you, and it's been a long haul. Now, let's talk about what this means to the margin profile of your business. So for folks at home that are not following this industry effectively, you have put the medical business, which has effectively been federalized, and it's, it's a higher margin business. And I think an issue for a lot of investors that now can buy Truliev on the New York Stock Exchange for the first time, a US Cannabis company. The question for many is what is the margin profile of the company? What is the multiple we should be paying for cannabis companies? This is what I do every day. Full disclosure truly is the largest position in my cannabis etf. But I want to hear you talk a little bit about really why this is not only a game changer in terms of access for investors, but what this might mean truly to the valuation of the industry.
- [41:16]
Kim Rivers
Yeah, absolutely. So, I mean, we have been financially disciplined since day one. As you know, Tim, we have the best margins in the industry. So we're boasting approximately 60% gross margin, and we will take that forward. Our medical business, as you said, has incredibly strong margins. We're focused in Florida, Pennsylvania, Georgia and West Virginia with expansion coming in Texas, which is going to be a huge opportunity for us in the near term. So, yeah, I mean, it's a great company to, to invest in and I'm proud to. To lead it. And again, just a lot of growth ahead.
- [41:48]
Willis Lee
Kim, you've been called the industry's Trump whisperer. And so I'm wondering at this point, you know, what that means for you, for your company in particular, as an advantage over other companies in the industry. And what is the next sort of thing that you're looking to accomplish while the administration's here.
- [42:05]
Kim Rivers
Sure. So what we have Today in the TRLV, TRLV listing is 100% DEA registration, registered assets that are again, ring fenced and separated from our adult use assets. That's very important because when we talk about access to capital, when we talk about institutions being able to participate, when we talk about banking. We really do have that pathway because of what the administration moved forward as it relates to rescheduling immediately medical cannabis for state licensed businesses. But they didn't stop there. We also have a hearing process that's been kicked off for the broader cannabis plant that will end in July with additional rescheduling news probably coming sometime this year. So it really is going to be the summer of cannabis in the US along with again those growth initiatives that we talked about. So we're so excited to be positioned where we are as again the US Cannabis company that's listed on the nyse.
- [42:57]
Willis Lee
Kim, great to speak with you. Thank you.
- [42:59]
Kim Rivers
Thanks.
- [43:00]
Willis Lee
Kim Rivers of Trulieve well, again it's
- [43:04]
Tim Seymour
really important, important that this I don't think cannabis, I'm not sure cannabis will ever be federally legal in this country but it does mean that medical cannabis is effectively and what it means and Tim references there will be I think five or six cannabis companies listed on either the New York or the nasdaq. All of that means is you've now given the ability for big institutions, first of all the exchanges, but banks, the lower cost of capital is also a game changer. So I think it's an exciting time. Everybody's been here but before but this is real follow through and this is far and away one of the biggest days we've seen.
- [43:38]
Mel
I worry a little bit about the rescheduling for the next step, the hearing that's about to start and the legal action that seems likely to follow. How much do you worry about that?
- [43:47]
Tim Seymour
Look, I think the adult or the wreck markets so in states that have legalized that, it's a lot harder to get that through. I don't expect June 29th is going to be also a rubber stamp. In fact, I think it's going to take some time. But the, the reality is that the DOJ has put the DEA on this and I think the right people are pushing for change. But this is a little more complicated.
- [44:11]
Willis Lee
Coming up, Carter's Kava call what the chartmaster sees in store for the Mediterranean food chain after its recent rebound. More fast Money into. Welcome back to Fast Money. Fast casual restaurant chain Kava jumping 7% today after UBS upgraded the stock, citing a compelling growth story for the name. Shares are up more than 14% over the past week. But where are they headed now? Let's get the technical take from the chartmaster, Carter Braxton or Carter.
- [44:40]
Carter Braxton
Sure. Let's get right to it. I got four charts as always, same time frame and we Just look at them different ways. First of four iterations. What you'll see, of course, is a stock that's had a real boom and bust since it. Interesting. We're exactly two years. It was June 15, 2023. It came out at 22 a share. First print was 42, a high flyer. And if you look at the next chart, you'll see that surge, of course, the stock rallying. Basically a huge bull phase, going from essentially 42 to 172 and then a bear phase in 2025, losing basically three quarters of its value, going all the way back down to 44. And then one more iteration, three of four. You'll see, of course, we're in a new. A new bull phase year to date. And finally, and this is the important part, last chart. It's a textbook bearish to bullish reversal buy. Over the past six weeks, the stock is down 30% and it's touched its 150 day moving average to the penny. And it bounced there beautifully. We like it long here. Play for about 110.
- [45:48]
Willis Lee
All right, Carter. Thank you, Carter. Braxton Wirth on Cava.
- [45:52]
Rebecca Patterson
Guy, ubs. Now, I'm not nitpicking here. They upgrade the stock to buy from neutral. That's significant, right? They raised their price target from 85 to 90. That seems a bit tepid to me. So, yes, bullish to bearish. A bearish to bullish. No question about it. Huge valuation, though, you have to deal with here.
- [46:10]
Mel
I just keep thinking about this Iran war, the fertilizer, the crops, the input, inflation. A company like that, how much room do they have to raise prices when that comes? Because it's coming.
- [46:20]
Willis Lee
Yeah, those bulls are expensive. I mean, you would. I don't know, I feel like you would know that.
- [46:24]
Mel
2025, I don't know, but they're up there.
- [46:28]
Tim Seymour
I'm sure they're expensive. I think the margin profiles is. Is something to be concerned about. In fact, it's across the whole space. And some of the price action here is a little similar to what we're seeing with CMG or Chipotle too. Again, massive growth, massive move lower. And now chart looks interesting. Carter's talked about that one, too.
- [46:45]
Willis Lee
Up next, final trades, Final trade time. Timbo.
- [47:01]
Tim Seymour
Pops, I know you're watching.
- [47:03]
Joe Lavornia
Feel better.
- [47:04]
Tim Seymour
Truly think it's actually going higher? I'm long it's my etf, so full disclosure.
- [47:09]
Willis Lee
Rebecca Patrick Patterson, IGF I.
- [47:12]
Mel
The one global infrastructure. The war is going to cause it and it's an inflation hedge. And good luck, Pops.
- [47:17]
Megan Casella
Great to have you.
- [47:18]
Willis Lee
Rebecca dan yeah, yeah, Mr. Seymour, get
- [47:21]
Dan Nathan
better there SMH is the third day in a row.
- [47:23]
Rebecca Patterson
Just sell Pops Bob room for the Knicks for Mr. Seymour without question. I mean, he's watching GPCR. That's like the R in Karen's Whatever.
- [47:34]
Willis Lee
Thanks for watching. Fast Mad Money starts right now.
- [47:37]
Fast Money Disclaimer Narrator
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 if you're a
- [48:10]
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