Meta And Microsoft Earnings Roll In, GDP Drops, And Tariff Impact On Retail 04/30/25

Summary

Summary of CNBC's "Fast Money" Episode Episode: Meta And Microsoft Earnings Roll In, GDP Drops, And Tariff Impact On Retail
Release Date: April 30, 2025
Host: Melissa Lee
Guests: Steve Grasso, Karen Feinerman, Dan Nathan, Guy Adami, Julia Borson, Pippa Stevens, Gene Munster

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1. Introduction

Hosted by Melissa Lee, CNBC's "Fast Money" episode aired live from Studio B at the NASDAQ Marketsite in Times Square, New York City. The episode focused on a high-stakes earnings season with major companies like Microsoft, Meta, Qualcomm, and Robinhood releasing their quarterly results. Additionally, the discussion delved into the unexpected drop in GDP, inflation concerns, and the impact of tariffs on retail pricing.

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2. Earnings Reports

a. Microsoft

Highlights:

• Earnings Beat: Microsoft surpassed expectations with earnings per share (EPS) of $3.46, beating estimates by $0.24.
• Revenue Growth: Reported revenues of $70.07 billion, marking a 13% increase from the previous year.
• Azure Performance: Azure cloud services stood out, growing by 33% year-over-year, exceeding the anticipated 30%. Notably, 16 percentage points of this growth were attributed to artificial intelligence (AI), up from 13% in the prior quarter.

Notable Quotes:

• Steve Grasso [02:04]: "Azure, of course, that big bright spot is sending shares up 6% growing 33% year over year."
• Dan Nathan [03:23]: "It's a nice little move off that recent low we saw a couple of weeks ago."

Analysis: The panel discussed Microsoft's strong performance, especially in its Azure division. However, concerns were raised about future guidance amid economic uncertainties. The possibility of Microsoft collaborating with customers to reduce cloud computing costs could impact Azure's growth rate. Additionally, Microsoft's capital expenditures (CapEx) were under scrutiny, especially in the context of Meta increasing its CapEx for AI investments.

b. Meta (formerly Facebook)

Highlights:

• EPS and Margins: Meta reported an EPS that surpassed expectations and achieved a 41% margin, exceeding the street estimate of 37%.
• AI Investments: Increased fiscal 2025 CapEx to between $64 billion and $72 billion to support AI initiatives.
• Ad Performance: A 10% increase in ad prices year-over-year contributed significantly to the higher margins.

Notable Quotes:

• Mark Zuckerberg [24:03]: "AI is transforming everything we do."
• Gene Munster [24:55]: "These AI tools are having a huge impact in terms of how customers are using them."

Analysis: Meta's robust margins and increased investment in AI were highlights. The focus remains on how AI is driving user engagement and revenue growth. However, potential regulatory challenges in Europe and the impact of tariffs on infrastructure costs were points of concern. The panelists expressed optimism about Meta's strategic direction despite these challenges.

c. Qualcomm

Highlights:

• Earnings Performance: Qualcomm beat both top and bottom-line estimates but issued conservative revenue guidance.
• Revenue Streams: The chip division performed well, while the licensing business showed signs of weakness.
• Trade Uncertainties: CFO highlighted uncertainty around global trade impacts, particularly tariffs.

Notable Quotes:

• Pippa Stevens [20:00]: "Their diversified global supply chain sets them up well."
• Steve Grasso [21:05]: "Qualcomm always falls into that bucket of trying to get investors' attention."

Analysis: Despite a solid earnings beat, Qualcomm's stock declined due to lukewarm guidance and ongoing trade uncertainties. The company's reliance on major clients like Apple and Samsung raises concerns about future revenue stability. However, analysts on the panel viewed Qualcomm as a potentially undervalued stock with strong fundamentals.

d. Robinhood

Highlights:

• User Growth: Robinhood reported 25.8 million users, including 3.2 million paying Gold subscribers.
• Revenue Surge: Transaction-based revenue reached $583 million, with significant contributions from crypto and options trading.
• Earnings Beat: EPS more than doubled year-over-year, accompanied by a 50% increase in revenue.

Notable Quotes:

• Kate Rooney [21:05]: "Record net deposits driven by strong trading volume, especially in crypto and options."
• Steve Grasso [30:15]: "Robinhood should be up higher given their performance."

Analysis: Robinhood showcased impressive growth in user base and revenue, particularly in the crypto and options segments. The decision to increase share buybacks to $1.5 billion indicates confidence in their financial stability and growth prospects. Panelists believe Robinhood is well-positioned to capture more market share despite a recent sell-off.

e. Starbucks

Highlights:

• Earnings Miss: Starbucks reported weaker than expected earnings with a decline in same-store sales.
• Turnaround Plans: CEO Brian Niccol emphasized ongoing efforts to streamline operations and invest in technology.

Notable Quotes:

• Steve Grasso [38:40]: "I'll give him the benefit of the doubt and a time when people... I would be a buyer of Brian right now."
• Dan Nathan [39:06]: "Margin pressures are there, competition is there. The quarter was not particularly good."

Analysis: Starbucks faced a challenging quarter with declining sales. However, CEO Niccol's commitment to turnaround strategies, including investment in labor and technology, provides a path forward. Panelists remain cautiously optimistic about Starbucks' future performance despite the current setbacks.

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3. Economic Indicators

a. GDP and Inflation

Highlights:

• Unexpected GDP Contraction: The US economy contracted by 0.4% in the first quarter, contrary to economists' expectations of 0.4% growth.
• Inflation Concerns: The price index accelerated to 3.6%, raising fears of stagflation.
• Impact on Markets: Crude oil prices fell below $60 per barrel, and treasury yields spiked as investors worry about higher inflation delaying Federal Reserve rate cuts.

Notable Quotes:

• Dan Nathan [13:13]: "The inflation component should startle people a little bit."
• Steve Grasso [14:06]: "Energy will come down, and I think housing if there's... they're adding 411,000 barrels per day."

Analysis: The unexpected GDP decline coupled with rising inflation presents a complex economic landscape. Panelists discussed the potential implications for Federal Reserve policies, including the possibility of further rate cuts and their effects on mortgage rates and the housing market. The fear of stagflation—simultaneous stagnation and inflation—adds uncertainty to market sentiments.

b. Federal Reserve Policies

Highlights:

• Rate Cuts: Speculation around multiple rate cuts by the Federal Reserve to stimulate the economy.
• Mortgage Rates: Concerns that rate cuts could influence mortgage rates and the broader housing market.
• Policy Uncertainty: Ongoing discussions about how the Fed will balance tackling inflation with supporting job growth.

Notable Quotes:

• Karen Feinerman [16:10]: "I don't think anyone knows what should be done if you have a weakening jobs market."
• Steve Grasso [17:13]: "Stop the roll off of $35 billion of MBS mortgage-backed securities off the Fed's balance sheet."

Analysis: The Federal Reserve faces a delicate balancing act in its monetary policies. Panelists debated the potential actions the Fed might take in response to the economic indicators, including halting the runoff of mortgage-backed securities to stabilize mortgage rates. The uncertainty surrounding job numbers and their impact on Fed decisions remains a focal point.

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4. Impact of Tariffs on Retail

Highlights:

• Price Increases: Retailers across various sectors, from mass-market to luxury, have begun passing tariffs onto consumers. Notable examples include a 5% increase on Louis Vuitton tote bags and price hikes on leggings at Target.
• Inventory Management: Retailers are pulling forward inventory orders to meet holiday demands before further tariff implementations.
• Future Implications: Uncertainty remains on whether retailers will revert prices if tariffs are rolled back or adjusted.

Notable Quotes:

• Kate Rooney [32:05]: "Luxury taking some price increases. The Neverfull Louis Vuitton tote bag up around 5%."
• Dan Nathan [34:16]: "Fragile environment because the fourth quarter was so different than the first quarter."

Analysis: The imposition of tariffs has forced retailers to adjust pricing strategies, leading to increased costs for consumers on a variety of goods. Panelists discussed the short-term and potential long-term effects of these price adjustments, including consumer behavior shifts and inventory planning challenges leading up to the holiday season.

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5. Stock Market Movements

Highlights:

• Overall Rally: Despite a nearly 3% early loss, the NASDAQ recovered and the Dow and S&P ended the day in the green, continuing a seven-day winning streak.
• After-Hours Trading: Significant after-hours movements were observed, with stocks like Microsoft and Robinhood experiencing notable gains or declines post-market.
• Sector Performance: Technology giants constituted approximately 40% of the market's overall composition, influencing major market movements.

Notable Quotes:

• Steve Grasso [43:31]: "The market has done enough to alleviate the fears within the marketplace right now."
• Dan Nathan [44:21]: "Margin pressures are there, competition is there."

Analysis: The stock market exhibited resilience despite mixed economic data. Technology stocks, buoyed by strong earnings reports, played a significant role in sustaining the market's upward trajectory. However, uncertainties around inflation, Federal Reserve policies, and global trade tensions continue to pose risks to sustained growth.

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6. Future Outlook

Highlights:

• AI Investments: Continued emphasis on AI across major tech companies, with investments aimed at enhancing user engagement and operational efficiencies.
• Regulatory Environment: Ongoing scrutiny from regulators, especially concerning data privacy and AI implementations, could impact future growth.
• Consumer Behavior: Shifts in consumer spending patterns due to economic uncertainties and price adjustments may influence retail strategies.

Notable Quotes:

• Gene Munster [24:55]: "These AI tools are having a huge impact in terms of how customers are using them."
• Karen Feinerman [34:00]: "It's going to be interesting to see what happens and where the rate of change is."

Analysis: Looking ahead, the integration of AI technology remains a pivotal factor for growth and competitiveness among leading companies. Regulatory challenges and evolving consumer behaviors necessitate adaptive strategies from businesses. The panelists remained cautiously optimistic, highlighting the importance of innovation and strategic investments to navigate the uncertain economic landscape.

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7. Notable Quotes with Timestamps

• On Microsoft’s Azure Growth:

  • Steve Grasso [02:04]: "Azure, of course, that big bright spot is sending shares up 6% growing 33% year over year."

• On Meta’s AI Transformation:

  • Mark Zuckerberg [24:03]: "AI is transforming everything we do."

• On Economic Uncertainty and Inflation:

  • Dan Nathan [13:13]: "The inflation component should startle people a little bit."
  • Steve Grasso [14:06]: "Energy will come down, and I think housing if there's..."

• On Tariffs Impacting Retail:

  • Kate Rooney [32:05]: "Luxury taking some price increases. The Neverfull Louis Vuitton tote bag up around 5%."

• On Federal Reserve Policies:

  • Karen Feinerman [16:10]: "I don't think anyone knows what should be done if you have a weakening jobs market."

• On Stock Market Resilience:

  • Steve Grasso [43:31]: "The market has done enough to alleviate the fears within the marketplace right now."

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8. Conclusion

The episode of "Fast Money" provided a comprehensive overview of the current financial landscape, highlighting strong earnings from tech giants amidst economic headwinds such as GDP contraction, rising inflation, and the impact of tariffs on retail pricing. The discussions underscored the critical role of AI in driving growth for leading companies while navigating regulatory and market uncertainties. Panelists emphasized the importance of strategic investments and adaptive measures to sustain growth in a volatile environment.

For listeners seeking detailed insights into the stock performances of Microsoft, Meta, Qualcomm, Robinhood, and Starbucks, as well as analyses of broader economic indicators and retail challenges, this episode offers valuable perspectives to inform investment decisions.

Transcript

[Melissa Lee]

What does it mean to live a rich life? It means brave first leaps, tearful goodbyes.

[Steve Grasso]

And everything in between.

[Melissa Lee]

With over 100 years experience navigating the ups and downs of the market and of life, your Edward Jones financial advisor.

[Kate Rooney]

Will be there to help you move ahead with confidence.

[Steve Grasso]

Because with all you've done to find.

[Kate Rooney]

Your rich, we'll do all we can.

[Melissa Lee]

To help you keep enjoying it. Edward Jones Member, SIPC As America's leading business lender, bank of America is on your corner and in your corner. With $215 billion in business loans and over 3,700 business specialists across the nation, we help businesses thrive so communities prosper. What would you like the power to do? Learn [e-mail] LOCALBUSINESS bank of America Official bank of FIFA Club World Cup 2025 Copyright 2025 bank of America Corporation. All rights reserved. Live from the NASDAQ marketsite in the heart of New York City's Times Square, this is fast money. Here's what's on tap tonight, a massive night of earnings. Microsoft, Meta, Qualcomm and Robinhood. Just some of the names reporting the last hour. We'll go inside. The numbers give you the latest headlines from the calls. Plus tracking prices. A new report detailing how retailers from mass market to haute couture are tariffs. Just how much should you expect price tags to increase? And decaffeinated shares of Starbucks hitting their lowest level since Brian Nicholl was announced as CEO. Can the turnaround specialist perk things back up or are there more jitters ahead? I'm Melissa Lee coming to you live from Studio B at the nasdaq. On the desk tonight, Steve Grasso, Karen Feiderman, Dan Nathan and Guy Adami. And we start off with a super sized slate of earnings tonight. Metta and Microsoft higher after their prints while Qualcomm and Robinhood are both moving lower on their results. Full team coverage on the reports. Kate Rooney on Robinhood, Pippa Stevens on Qualcomm, Julia Borson, tracking matter. But we start off with Steve Kobach on Microsoft. The call kicking off in less than 30 minutes time. Steve.

[Steve Grasso]

Hey, Melissa. Yeah, ahead of that call, we got some solid beats here with Microsoft's report with Azure growth being the real standout. First of all, you got EPS beating by $0.24, $3.46 a share and revenue a beat as well. $70.07 billion up 13% from the year ago quarter. And then there's Azure, of course, that big bright spot in that's sending shares up 6% growing 33% year over year, beating expectations of 30% growth. And within that Azure growth number, 16 percentage points of that growth came from artificial intelligence. That's up from the 13% a quarter ago. We just see that continue to climb and take up a bigger chunk overall of the total Azure growth. So that is the old news. The new news coming up on the call at 5:30. Here's what you should be watching for. First of all, guidance on Azure cloud growth. Given all this economic uncertainty we're talking about, we might see Microsoft work with customers like they did back in 2022 to save Cloud computing costs. That of course hurts the growth rate of Azure. And then there's CapEx. We just heard Metta is raising its CapEx for the year and we know Microsoft has been pulling back in recent months. So we'll be paying attention to CFO Amy Hood's guidance on what CapEx will look like in the fiscal year, which beyond the fiscal year rather that ends in June. Melissa.

[Melissa Lee]

All right, Steve, thanks. Keep us posted. That call again, 28 minutes time will get underway. Looks good right now. Things could change dramatically in a half an hour when that call starts, when we get that guidance guy, what do.

[Dan Nathan]

You make of the often does but I mean I think people collective sigh relief as your growth half of the growth is good for them. This gets this level now for 19420 gets us back to where we sort of fell off the cliff on back on February 20th or so. But back of the envelope you do all the math. And yes, it's a nice little move off that recent low we saw a couple of weeks ago. Now you saw the company just regardless of what they say, trading close to 29 times next year's numbers, which is cheaper than it's been but expensive historically.

[Karen Feinerman]

You know, it's interesting when Google reported on Thursday afternoon, there were things that you could pick out a little bit but you know, the stock was trading higher 5% in the aftermarket. I think a lot of that had to do probably with low expectations here. I think you could say the same thing for Microsoft. I think that everyone's focused on that Azure growth. Again, let's see what the guidance is. I'd also mention that, you know, a lot of the story leading up to the core weave, you know, ipo, I want to say last month or so was that Microsoft was canceling some data center leases. I wonder if they were moving some workloads, you know what I mean? Or they basically had more capacity on azure for that 50% of their business that is AI. So that could be really interesting. I guess the most important thing on the Q and A is like what sort of uptake are they getting for their like agents for Copilot and the like that they're putting out there? Because that's a really important part of it as you think about this story broadening out. So again I don't think there's anything to kind of knock right now.

[Steve Grasso]

I think it's, it's right where Dan left off. There's nothing to knock right now. This sort of gives a soothing sense to the overall market that it's not as bad as we thought. Whether the spend is still there. Matt, we're going to hear about ad spend. The price target on Microsoft, the consensus price target is I think $495. So we've got about 20% more to the upside there. If they continue to spend. The market's okay market is 40% made up of the large cap tech names. So I'm most interested. We heard that they were cutting back on data centers. Data centers where it was 88% of Nvidia's revenue last year. Are they doing it for real and how much impact is going to be on Nvidia? Most important thing could you see in video stock move down as I've been thinking Nvidia has been been blessed with the overall rally in the market. It's dipped off that ninety dollar basically support level. But there is a thesis where in video could make less money and the others make more money. And I don't think anyone's priced that in the market's still okay. But Nvidia suffers, gets pulled out.

[Melissa Lee]

You're reading through and the other read through will be probably coming on the conference call. Any sort of commentary on enterprise, you know. Right. I mean what's good?

[Guy Adami]

Well, are you talking about. Well Dynamics365 which is their ERP which competes with the Salesforce and Oracle. That's. That was a nice beat. And if you look Salesforce is up nicely in the aftermarket. So you know we talked about with Alphabet, was it better than feared? This was dramatically. I thought better than feared.

[Melissa Lee]

Yeah.

[Guy Adami]

Yeah. And so you know that Azure growth, we talked about that. That was significantly better than feared, I think.

[Melissa Lee]

Yeah. I mean that was what bombed the stock in the last earnings report. I mean the bulk bulls would have said going into this report to the Microsoft report that it was very much de risked in terms of the story because of that decline from the, from that quarter in terms of Azure the bar was much lower in terms of expectations.

[Dan Nathan]

Bar was much lower. Exactly right. And if you go longer term, I mean, it's still important, I think, to point out that, you know, this is a good quarter back to where I pointed out we were in February. But this was a stock that topped out in July of last year on a broader market until the last month or so. That's done extraordinarily well. So I think finally valuation just sort of caught up. And despite the quarter, despite the growth, I mean, anything north of 25 times for Microsoft is historically pretty expensive. Now you could say, you know, they've shifted their business. They deserve a premium multiple, maybe, but it is expensive.

[Steve Grasso]

And back when it did top out In July of 2024, it was a $468 stock when it topped out with consensus, as I said, up to 500, now, 495. So people are just throwing that out the window and thinking they're better times ahead, which is unique from everything that we've seen in the last two months.

[Melissa Lee]

All right, so the stock is up almost 6% in the after hours session again, the conference call gets underway. 24 minutes time. Meantime, let's get to Matt A shares are surging after the company pushed the top of the bottom line beat. The conference call kicked off at the top of the hour. Julie Borson's got the details. Hey, Julia. That's right. Mark Zuckerberg kicking off the call just moments ago saying that the company is well positioned to navigate macroeconomic uncertainty and that the major theme for Metta is how AI is transforming everything they do. That's why he says they're increasing their investments in AI to pursue five major opportunities. Improved ads, more engaging experiences, business messaging, Meta, AI and AI devices. Now, to fund that, Met is increasing its fiscal 2025 CAPEX to a range of 64 billion to 72 billion, up from a prior outlook of 60 to 65 billion. Saying, quote, this updated outlook reflects additional data center investments to support our artificial intelligence efforts as well as an increase in the expected cost of infrastructure hardware. Now, in term of Meta's core terms of Metas core business, 41% margins far exceeded the 37% street account estimate. And that was driven in part by a 10% increase in ad prices from a year ago. The call is ongoing. We're going to be listening closely for any indication from Zuckerberg about economic uncertainty impacting ads and particularly what they're expecting out of China. Back over to you, Melissa. All right, Julia, thank you. Julia Boorstin. Karen A lot to like here.

[Guy Adami]

A lot to like. Yeah. I mean, they beat on so many metrics. That operating income, that was a really big beat Feed. Julia touched on the 10% growth in ads. If you want to nitpick at something, it would be the 5% AD growth where the street was expecting a little bit higher than that. The CapEx actually for this quarter was a little bit down versus consensus, but we know, we think it will be up. You know, I'm always afraid to get too excited because they have that call starting just a few minutes ago. Sometimes they drop a bomb that we're not really expecting. But there was really a lot to like here. And I think that the stock had sold off so much since the last quarter that the risk reward is pretty compelling going in. I'm actually surprised it's not a little bit higher.

[Melissa Lee]

Does the raise in the CapEx midpoint range, Guy. Sorry. That's fine.

[Karen Feinerman]

I'll take it.

[Melissa Lee]

Give you some, you know, ability to let go of that AI spending is going to be down.

[Karen Feinerman]

Not yet. This is going to surprise you. I have a cynical take about this silver linings guy. Yeah. No, Yesterday, Trump saying a hostile and political act to Amazon. All of these companies that we're talking about are in the sights of regulators. Regulators. We've been hearing about Google and the potential for remedies and the like. And so when I think about this and I think about commentary, I don't think for a second this is lost on these CEOs, all these CEOs who rushed down to Mar a Lago and gave money personally and from their companies to the inauguration. So again, you get a shot across the bow like that yesterday and you see a company like Amazon turn about face like that, it's going to raised antennas of Zuckerberg and of Satya and some of these other folks.

[Dan Nathan]

Volatility in this name is unbelievable. This was north of $700. I think it was a $480 stock a couple of weeks ago. You see where it's trading now? I'm with Karen on this. I mean, this quarter, theoretically, given the move that it's had up and down, I think it should be higher than this now. We'll see. You know, maybe it's just early people get their footing, but this, this quarter suggests it should be doing better than it's doing.

[Steve Grasso]

Same theme. They're working on a proprietary AI training chip that they're doing it with Taiwan semi. They're not doing with Nvidia. Last year they made up 13% of Nvidia's revenue. So if there's any pullback, whether it's incremental or exponential, it's going to affect Nvidia. That's two companies out of the four that make up all of their revenue.

[Guy Adami]

One thing that's a little disappointing in my portfolio, the Google response here. Right. You know it's up not quite what it percent and a little not very much.

[Melissa Lee]

What do you think that is? I mean is it the overhang of all the regulatory, the trial.

[Guy Adami]

Yes, I guess you would think think you know with this Microsoft Azure numbers be better but I do think that is such an albatross of we don't know how to value it.

[Melissa Lee]

Right.

[Dan Nathan]

The existential risk See Google should be trading so much better given the, given the quarter we just saw, given what's going on over the last 10, 15 minutes or so, given the broader market's getting on its horse a little bit and it's not and you wonder why that is and maybe that existential risk that again to bring up. Ben Reitze brought up a month and a half or so ago. That's what's weighing on the market right now.

[Melissa Lee]

Meanwhile, President Trump speaking at an Investing America event in video Jensen Fong, SoftBank's Masayoshi Sun, IBM's Arvind Krishna, GE Aerospace is Larry Culp all in attendance. We will monitor it. We'll bring you all the headlines of course but let's meantime check in the markets today. Stocks staging a late day rally that sent the Dow and the S and P into the green at the close. The two indices both now riding seven day winning streaks. The NASDAQ slightly lower but well off the nearly 3% loss it saw early in the day. The initial sell off coming after new GDP data show the US Economy unexpectedly contracted in the first quarter. Economists were expecting 0.4% growth and a price index within that report found inflation accelerated to 3.6% raising concerns of stagflation. Crude oil dropping on fear slower growth could lead to drop in demand. WTI settling below 60 bucks a barrel, its lowest in over four years. And treasury yields initially spiked as investors fear higher prices would delay rate cuts from the Fed. So how worried are you now? How much more worried perhaps are you now?

[Dan Nathan]

Well it's the inflation component. I mean the slowdown, I mean it's going to get messy over the next couple of quarters in terms of the pull forward than is there going to be demand on the back end and all those things. So I expect that. But the inflation component I think should Startle people a little bit and quite frankly I'm surprised yields and go a lot higher on the back of that. So should you be worried? Yeah. If the job number comes in horribly which it could given all the jolts data we've seen recently then that you just said it. I mean there's your stagflation environment. Mel.

[Guy Adami]

Well we talked about on the midday call about if stack if we have a jobs number that isn't good then I think that would give the Fed reason to go reason to go and make maybe that's enough of a put under the market. I don't know. We talked about the Trump put is there the Fed put which has been absent. So this is, you know, when we play that game it's not would you rather it's if you told me what.

[Melissa Lee]

It was, what would you know?

[Guy Adami]

I wouldn't know. I wouldn't know on a bad jobs number.

[Steve Grasso]

Yeah but you know, when you look at this, the core PC has come down, it's moving in the right direction and income has, is been decelerating. So I don't think that we're, we're worried about that just yet. I am worried about jobs and I think that dual mandate, the jobs has to take precedent. I think you're going to see inflation come down and OPEC plus is adding 411,000 barrels per day in May and probably extending that until September. That's a ton of supply on the market. They're trying to keep their market share from the US suppliers.

[Melissa Lee]

When you talk about you think inflation is coming down, you're specifically talking about energy prices, not anything else. Not goods, not services. I mean services are a problem.

[Steve Grasso]

I think energy will come down and I think housing if there's. They're factoring in four cuts now. So four cuts from basically people thought maybe two or maybe one or maybe none. Now to Karen's point, maybe you have the Powell put back in. If there's going to be four cuts and they maybe start in July. I think we're still. I think the market is always pricing ahead. Not seeing what they see now.

[Karen Feinerman]

Yeah. I think what's different this time. I love that saying. Right. Is it pretty good? Is that I just don't think anyone knows what should be done if you have a weakening jobs market, if you have an economy that is, you know, it's just kind of hanging in there. I don't think that, you know, Microsoft and Google and Metta are really reflective of the economy. Right. Like for all intents and purposes. So if you get a weak jobs number and then you have increased pressure over the weekend on Powell. That came back pretty quickly, right? Over the last few weeks or so or last few days. Excuse me. I think the playbook for a weakening economy and a weakening jobs market doesn't really work right now, you know, and Guy made this point, I want to say a few months ago when the Fed was worried about jobs and they were worried about maybe a stagnant economy. They're less worried about inflation. They cut in September 50 basis points and then they cut 25 and then 10 year went up and it really didn't accelerate growth. What do we talk about? The lag, the long and variable lags of monetary. I just don't know what a cut would do right now given the uncertainty about trade. Given the uncertainty, not just with China.

[Melissa Lee]

Psychological though, right? I mean, is it action like the market reaction is immediate? Because can I tell you something?

[Karen Feinerman]

I remember the second day of 2001, okay. And I know that you got to go all the way back here and the Fed had a surprise rate cut. And there was this initial reaction where everyone panicked to buy things to cover shorts and buy things. It did not take long for whatever that initial jolt was. We're making new lows in many ways. You know, it could signify some sort of panic.

[Melissa Lee]

Right.

[Karen Feinerman]

And if you're doing the thing because you were going up, I think what.

[Steve Grasso]

He has to do. I understand, I understand your point and I agree with your point. I think what he has to do is he's got to stop the roll off of 35 billion of MBS mortgage backed securities off the Fed's balance sheet. That puts upward pressure on mortgage rates. That's the first thing that he should do is stop that runoff and see what happens to mortgage rates. Housing is a tremendous part a third of inflation.

[Melissa Lee]

Hmm. I don't know. I mean, I think there's so much involved in, in the housing side of the equation that it's very difficult to say what the Fed will do will then make people who have a 3% mortgage move out of their home.

[Steve Grasso]

And you know who doesn't know how to do it?

[Melissa Lee]

The Fed doesn't know it.

[Steve Grasso]

And no one, no one knows how to do it.

[Melissa Lee]

But I mean, like that, like people have 2% mortgages at this point.

[Steve Grasso]

But we know, we know. Yeah, it's 60% of people are locked into a mortgage. You own a mortgage, you don't own a home. And it's the existing home sales that are locked up right now. MBS Rolling off is bonafide putting upward pressure on mortgages.

[Guy Adami]

But if we see the labor market start to weaken, I think people will be less confident going out by house. They've been waiting for supply to come on.

[Melissa Lee]

Maybe it does matter if the Fed cuts and what happens then?

[Steve Grasso]

Housing prices come down. Yeah. What happens then?

[Melissa Lee]

Inflation prices if you're out of a job? I don't think happened that way.

[Steve Grasso]

We're at historic low unemployment. We're talking about what's palatable for the fed right now. 6% unemployment is not palatable. But still historically 6% unemployment is pretty low.

[Melissa Lee]

I get what you're saying. When people feel it, even if it's from a historically not being callous.

[Steve Grasso]

I got it.

[Guy Adami]

One of the things about this potential labor recession, if there is one, is that it is more white collar jobs jobs. Right. And that because of various reasons they sort of, you know, the blue collar jobs are still there or maybe even increasing potentially. But the white collar jobs that, you know, percentage of those people that are buying a house, if they get concerned, then I think yeah, well, you're right. Prices will go down.

[Melissa Lee]

Nobody to buy though. Coming up, we'll keep an eye on all of the after hours movers. Microsoft's conference call kicking off in about 10 minutes. We'll bring you all the headlines plus the details out of Qualcomm and Robinhood. Next, in a deep dive into retail, the sector adjusting to Trump's tariff policies. Just how high are prices going on? Clothes, toys, handbags and more don't go anywhere. Fast money's back into.

[Karen Feinerman]

This is Fast Money with Melissa Lee right here on cnbc. Comcast business helps retailers become seamlessly restocking frictionless paying favorite shopping destinations. It's how nationwide restaurants become touchscreen ordering quick serving eateries and how hospitals become the patient scanning data managing healthcare facilities.

[Melissa Lee]

That we all depend on.

[Karen Feinerman]

With leading networking and connectivity, advanced cybersecurity and expert partnership, Comcast business is powering the engine of modern business. Powering possibilities. Restrictions apply.

[Melissa Lee]

A pivotal jobs report with the Fed.

[Karen Feinerman]

Decision right around the corner. Are tariffs and policy uncertainty taking a.

[Melissa Lee]

Toll on the job market.

[Karen Feinerman]

Employment numbers and analysis Squawk Box Friday 8:30 Eastern and streaming on CNBC.

[Gene Munster]

Plus.

[Melissa Lee]

Welcome back to Fast Money. Qualcomm sharply lower despite posting a top and bottom line beat the chip maker issuing light revenue guidance. The call is underway. Our Pippa Stevens has been listening and she joins us now at the very latest. Hey Pippa. Hey Melissa. So Qualcomm is under pressure after their guidance didn't blow the street away. Just in line on the top line decline if you take the midpoint of the range. Now on the call just now, the CFO pointing to uncertainty around the impact of the global trade landscape, saying their guidance is based on their current assessment of the financial impact of tariffs as they stand today, but did say that ultimately they don't see any material direct impact at this point, saying their diversified global supply chain sets them up well. The CEO also laying out some of Qualcomm's latest technical achievements and updates from partners like Microsoft, whose products are using Qualcomm's Snapdragon platform. Now, on that guidance front, the chip business is performing well, although the licensing business is facing some weakness, with Qualcomm guiding that Division's revenues between 1.15 to 1.35 billion, while Wall street was looking for 1.31 billion. Alyssa? Pippa. Thanks. Pippa Stevens. Didn't seem too bad, guy.

[Dan Nathan]

No, it's not. And this is, by the way. I mean, pull up a chart of the stock. It has not. Listen, it's bounced recently like a lot of these things, but it's not traded well now for the last few months. And you just sort of do back of the envelope math and say, okay, what am I missing here? Yeah, it was not too bad. Valuation is, in a word, compelling. I just don't really get, I don't know what the street is looking for. Maybe it's just as, it's just as easy as dollars flowing into one and flowing out of another. But Qualcomm to me looks pretty cool.

[Karen Feinerman]

Here, you know, headline that stuck out to me. And again, this is a company that has activists all over it. They were giving a lot of, you know, you know, money back to shareholders, that sort of thing. They said they're going to use 100% of their free cash flow for, you know, buybacks and the like here. So I thought that was interesting. But on the flip side of that, Apple is a 22% customer, Samsung's a 19% customer, and Huawei is 12% customer. So, you know, we know those are the handset makers. We know that they sell in a lot to them. We know that Apple is trying to kind of boot them out doing some of their own custom stuff. So, you know, to me it just seems like one of those ones to guys point it's cheap, it's, it's, you know, the numbers weren't that bad. If investors don't care, then they don't care. They just think it's a value trap. And you know, hardware is harder than, let's say software right now. So it'll be interesting to see what Apple has to say tomorrow night.

[Steve Grasso]

Qualcomm always falls into that bucket of trying to get investors attention. Did I see that right? Revenue was up 17% versus expectations of 3.1%. And then the return on invested capital is 52.8%. That blows away the average in the semiconductor space. I agree with the guy. But if they do, if a tree falls in the forest, to Dan's point, no one's around to hear making noise, then no one cares about the stock. But I would be a buyer of Qualcomm off of this.

[Melissa Lee]

Even if nobody sees it. I'm in the woods.

[Steve Grasso]

I got an axe. I got an axe. I chopped my own wood.

[Melissa Lee]

Coming up, more earnings action on deck. The big numbers from Robinhood. And look at the headlines out of Meta's and Microsoft's conference calls. Plus tariffs hitting the big retailers. What it means for your wallet and the stocks. You're watching Fast Money live, the NASDAQ markets at Intelligence Times Square. Back right after this.

[Steve Grasso]

A pivotal jobs.

[Karen Feinerman]

Report with the Fed decision right around the corner. Are tariffs and policy uncertainty taking a.

[Melissa Lee]

Toll on the job market?

[Karen Feinerman]

Employment numbers and analysis squawk box Friday, 8:30 Eastern and streaming on CNBC. Calling all fast Money fans. Join us for our next live event Thursday, June 5.

[Guy Adami]

This show encouraged me to get into trading and I think I've become a.

[Melissa Lee]

Much smart trader from them.

[Karen Feinerman]

Watch the show, stay for an exclusive Q and A, meet the traders and leave with a special gift.

[Gene Munster]

This was an incredible experience.

[Steve Grasso]

I loved being here and meeting these guys and it was just the experience was awesome.

[Gene Munster]

Never miss a show ever.

[Karen Feinerman]

So to find out how to navigate this wild market environment, get your tickets now. Just scan the QR code or go to cnbc event.com backslash fast money.

[Melissa Lee]

Welcome back to Fast Money. We are getting comments from Metal CEO Mark Zuckerberg on the company conference called Deepwater Managing Partner Dean Munster has been listening and he joins us now.

[Gene Munster]

Gene Melissa, Zuckerberg is on cloud nine and the reason is that he raised guidance by 3%. But these AI tools are having a huge impact in terms of how customers are using them. Increasing engagement by 7 to 30%. And so, so he's on cloud nine. They're going to be continuing to invest, invest aggressively in AI. And I think that point about the engagement increasing around AI is really important because as we look around and ask the question, how is AI? What's the return on investment on AI. Meta is actually showing tangible examples of that increasing revenue. They lowered their total expenses for the year by 1%. And so this company is in a unique area where it's actually having this benefit from AI. And so that's coming through loud and clear from Zuckerberg on the call.

[Melissa Lee]

Karen's got a question.

[Guy Adami]

Yeah, hi Jean, thanks for being on. Do you think they talk about a little bit increase in capex and do you think that's, is that part of why the stock's up? Do you think that's money well spent?

[Gene Munster]

Definitely money well spent. It comes from this point of strength that they're at right now is that they can go more aggressively. He outlined five key areas, areas of their growth plan and all of Those have an AI component to it. And so this CapEx piece is kind of confirming to investors how do you get there on these five growth areas you invest more into capex. I would say this just to zero in on that CapEx number is that this is really good. What happened with Meta tonight. I expect the stock to continue to gain strength tomorrow, but the Data point around CapEx, I think it's probably going to be considered as we look at Microsoft and earnings and Qualcomm tonight, I think that, that that data point is probably going to be the one that rises to the top amongst tech investors because of course not all data points are created equal and that one is pretty strong. Raising it by 9%.

[Karen Feinerman]

Hey Jean, Dan here, thanks for being on. You've had a great call on this one here. I know you're a little perplexed by the sell off that you had since they reported last quarter. Talk to us about Lama a little bit. Right. So you just explained a little bit how they're using these tools and we know that they've been serving ads better over the last few quarters and monetizing it better. But you know, a lot of the reviews of Llama don't really stack up to what's going on at OpenAI or even Gemini for that matter. And so it's open source. How are you thinking about it? How are the opportunities outside of their own ecosystem?

[Gene Munster]

So outside the ecosystem it's a little more muted in terms of the opportunities with Llama within it. They can use it for business messaging and for creating content. Actually was using Med AI, which is powered by Llama for today and I asked it it what are the best models and surprisingly it put itself. It said it didn't want to rank them, but it said I'm really good at having conversations with people and being an AI companion. And the point of that is that it's pretty clear is that if you rank these that it doesn't have still the substance to stand up to some of these other closed models. But in the context of how Zuckerberg wants to use it, it's going to do what it needs to do, which is create content, improve ad engagement and be an AI companion for people as they kind of get more and more spun into this vortex. One other quick one just on that, like how it impacts is that their usage the number of daily users up 6% a year is up 5% last quarter. This is at a noxiously high number. It's going after 3.4 billion people, almost impossible to accelerate growth. That's an example of using an AI tool, using meta AI to increase engagement. So those are the ways that they can monetize it, even though it's not the best model.

[Melissa Lee]

All right, Gene, thanks. We'll check back in with you shortly. Meantime, want to get to Shares of Robinhood turning sharply higher in just the last few minutes after posting a top and bottom line beat. The retail trading platform also beating on a number of key user metrics. The call is underway. Kate Rooney has been listening in. Hey Kate. Hey, Melissa. It could be the April numbers that we got moving shares higher, but it was a beat in the quarter across the board for Robinhood. Record net deposits driven by strong trading volume, especially in crypto and options. Earnings per share more than doubled in the quarter from a year ago. Revenue was up about 50% and then revenue per user was stronger than expected as well. Robinhood now has 25.8 million users, 3.2 paying gold subscribers. That's been a growth area, beating consensus there. Transaction based revenue 583 million. That was a beat. Crypto made up almost half of that year to options revenue roughly the other half. Futures a part of that had a strong quarter. Equities a much smaller portion of that in comparison, about 56 million of that total number. Robinhood also upping its share buyback to 1.5 billion, a record in net deposits, 18 billion in the quarter as Robinhood looks to try to take market share from other brokers. OPEX was a slight miss as the company upped marketing as a way to attract some of those new deposits. We did, as I mentioned, just get that update for April on those numbers. Robinhood executives saying it they're seeing 6.5 billion in deposits for the month. Equities trading. They say at A four year high still. And they say they've seen continued engagement throughout the month of April. This is what analysts were looking for, driven by a greater share of active traders who tend to stay more resilient through the volatility. They called it broad based in terms of strength and retail engagement. They say positive signs and engagement. And the CEO just saying that focus on active traders is now paying off. It's making them more resilient now. All right, Kate, thank you.

[Dan Nathan]

Kate Rooney Guy should be higher. I mean the gold subscribers, it's not an insignificant, insignificant number. 3.2 million people. That's up 90% year over year revenue. As Kate said, it's up 50% year over year. EPS is up 114% year over year. They're operating really well now the naysayer will say a lot of this is crypto. That's fine. I mean crypto doesn't seem to be going away anytime soon. I mean they're operating really well. I think the stock should be higher than it is now.

[Karen Feinerman]

Now, yeah, I'll broaden out a little bit. So options crypto. I saw an article in the Journal today talking about spacs coming back. This feels like 2021. I'll just say this, I mean that and then equity is not so interested.

[Guy Adami]

So supply chain issues pull forward. That's very 21.

[Karen Feinerman]

Yeah, I just think of the stuff, the speculative stuff that was working in 21.

[Steve Grasso]

Robin, Robinhood to guys. To guys point should be up higher.

[Karen Feinerman]

It's not, it's. Yeah, I'm not speaking about Robin Hood in particular. The takeaway working there, there.

[Steve Grasso]

So I, so I think to the point of guys say it should be up higher. It's up 200% on a one year basis. So I think people look at that. We were sitting around this desk and it was trading at around $10 and it was supposed to be the best levered play against bitcoin. And you see that the last bump in the stock is A with the market, B, with crypto trading. Crypto trading is up 100% this year. So as Guy said, it's not going away, it's only getting bigger. They're gold investments. They're sucking IR investment money in retirement from other funds. I think it's still good but I think you want to wait for a better pullback in this.

[Melissa Lee]

All right, coming up, how Trump's tariff plans could impact your wallet. The price hikes, the top analysts flagging in the retail space and the totes and toys seeing a major surge in prices more on that when Fast Money returns.

[Karen Feinerman]

Missed a moment of fast. Catch us anytime on the Go Follow the Fast Money podcast.

[Gene Munster]

We're back right after this.

[Melissa Lee]

Welcome back to Fast money. Stocks rallying off their lows of the day to wrap up April trading. The Dow and S and P closing in positive territory but both notching their third negative month in a row. The Nasdaq just barely negative today but seeing its first positive month in three. And some more after hours action. MGM topping earnings estimates but missing revenue expectations. And ebay beating EPS and revenue estimates but giving light earnings guidance dividends. Well, a new report suggests some retailers are already starting to push price increases due to tariffs onto consumers. Dana Telsey is behind the findings. She's the Telse Advisory Group CEO and chief Research officer. Welcome to you, Dana. Thank you for having me on set. What are some of the most shocking increases that you've seen?

[Kate Rooney]

So what we've been doing is two weeks ago we started pricing 80 items across the board in all different areas of consumer whether it's apparel or home furnishing. And you have to have a start somewhere. So we'll look at it week after week. It will come out every Tuesday. Luxury taking some price increases. The neverfull Louis Vuitton tote bag up around 5%. You obviously have Easter that just came in here. So there's some fluctuations up and down. And you've also seen for example, some of the leggings at Target go up a bit in price too. So that's some of the changes that are happening. I think we're going to see more. You heard what happened with Stanley Works on the conference call where they talked about price increase now and there's another price increase coming next quarter. It's early days what this could mean. But the pull forward of inventory levels is happening at the retailers.

[Melissa Lee]

Obviously the trade talks are going on right now and so we don't really know what will happen if things will be carved out, if things will be pulled back, etc. How do you foresee it in terms of, you know, if a retailer raises price on something, chances are it's not going to pull back the price if they get relief. Or is it, I don't know, maybe it's different environment.

[Kate Rooney]

They do the first round of tariffs you've seen, whether it's footwear manufacturers, whether it was housewares, people raise prices some as much as 10% on a pair of shoes that maybe were $100. They pulled it back after all the hubbub basically diminished. So you could see that but it will be very interesting to see what happens and where the rate of change is. What you're hearing is about an innovative new products, whether it's with embellishment in apparel or whatever, they'll take a higher price increase. They want to make sure as hard as possible that on the essential goods that people know the stickiness of the price that they stay where they are. But it remains to be seen and the word I'm using for what the environment feels like now, it feels fragile. It just feels fragile because like we were saying earlier, the fourth quarter was so different than the first quarter. First calendar quarter ended March 30th and every week of April feels different than the last week.

[Dan Nathan]

So Dana, that's fragile. With an unemployment rate as Steve said earlier, still not at historic lows but but reasonable job numbers this week, delinquency rates have been on the rise. You said fragile. Can Walmart and tjx, two names specifically, can they continue to win in this environment?

[Kate Rooney]

I think they can continue to win. You know why? Because they have the higher income consumer who will trade down. They have the benefit particularly of TJ of being the umbrella of prices. Someone else is always higher than them. They price lower and they're going to get good brands out there. People talk about, oh, is there going to be inventory available? There's always inventory available for off pricers through all different times of change, you've seen the inventory there.

[Steve Grasso]

So when you look at your favorites and you look as Guy said, so you have your TJ Maxx, you have your Burlington and then if you go North American, which I've heard you say, you go Bath and Body Works, that's a good name for you. And then you go with your Costco and then Sam's Club, which is Walmart.

[Kate Rooney]

Exactly.

[Steve Grasso]

On that side. How do you feel? So you agree with all those. Those are your top picks.

[Melissa Lee]

Basically.

[Steve Grasso]

How do you feel about Tapestry and Capri? Because plenty of people have gotten burned. Yep, I've tried to play it. I've made money, lost money, made money. Where are you now?

[Kate Rooney]

So I'm still a Tapestry fan. Couple reasons why Coach is gaining market share. Their product is new and differentiated. You have don't have the pricing power yet at Michael Kors like you had in the past. You got rid of Versace and you had to. And we've seen companies overall in the portfolio approach in the US you look at Stuart Weitzman also for Tapestry, they're selling the companies for less than they bought the companies at. But certainly the ability for Tapestry. It's holding their price points. It has more newness. It's actually taking some of the stores that Michael Kors is closing where they don't have a Coach store and putting a Coach door in what needs to be seen. Kate Spade, can they deliver an uptick there on Capri? You got to be able to fix Michael Kors. Can you get to a base level of Michael Kors to show design and product that people want to pay a better price for? You walk in Macy's. Macy's will have sales on Michael Kors goods. They won't have some sales on the Coach goods.

[Guy Adami]

So, Dan, if you were a retailer now and trying to think about the back half of the year, what would you be doing? How do you plan for this?

[Kate Rooney]

You can plan. I was on the phone this morning with a whole bunch of retailers yesterday, also manufacturers. Everything I'm hearing is the fact that there's uncertainty how much you can order and do you need to order because you need to order by June 4 for the holiday season. So the uncertainty that's out there now, I think I would plan definitely a little bit, lean on some of my innovative, innovative products. I'd stock up on my essentials because I know I can sell them beyond the holiday season. But first time outs, back to school because that's the lead indicator for holiday. Most retailers can be stocked through July, the beginning of back to school. All hands off after that in terms of how they're going to bring in goods. Because the one thing is it can't be made in the US for many of our apparel companies. I was speaking with someone who has a factory in Turkey. Their family has a factory in Ethiopia and they say it's not hard to manufacture things in the United States. It's impossible because the labor costs will add to the actual cost of the garment.

[Melissa Lee]

June 4th is a deadline to order goods for Christmas.

[Steve Grasso]

You're done with your Christmas shopping by.

[Melissa Lee]

June 4, knowing the tariffs are coming. I bought it all early June.

[Kate Rooney]

Orders have to be in.

[Melissa Lee]

Wow.

[Kate Rooney]

It's soon.

[Melissa Lee]

Yeah, it's right around the corner. Dana, thank you, Dana, thank you for having me. Advisory group Guy. We can start the countdown clock to June 4th.

[Dan Nathan]

It's the holiday season.

[Melissa Lee]

Mel. Oh, ho ho.

[Dan Nathan]

First of all, it's great having Dana here, here in person. Number one, she is on the top of the mountain in terms of retail. Number two, Steve said, I said, Dana said. The winners continue to be the winners. It's TJX World, Wal Mart's World. You want to Throw Costco in the mix as well. And Dana won't say this because she's respectful, but if Tapestry would just be coach, the Stock would probably 40% higher than it currently is.

[Melissa Lee]

All right, coming up, investors not loving what came out of Starbucks last night. While the CEO is telling investors to look past the disappointing details and towards the future, more on that Money returns. Welcome back to FAST Money. Shares of Starbucks down about 7% and posting their lowest close since announcing Brian Niccol as its new CEO last August. Easy down five and a half percent. The latest move coming after coffee chain posted weaker than expected earnings. Another drop in same store sales but nickel hyping that companies turnaround plans. Here's what he had to say this morning on Squawk on the Street.

[Steve Grasso]

I'll be transparent and you know, I'll.

[Melissa Lee]

Tell you right now the results weren't great.

[Steve Grasso]

But I love the progress that we're making on the turnaround. If you like the idea of what's possible and you believe in the future.

[Karen Feinerman]

Of what we're going to create and generate.

[Steve Grasso]

I've got a lot of optimism and you know, I'm pretty excited to be where I am right now and I'm really excited about what's about to come.

[Melissa Lee]

We knew it wasn't going to be a quick turnaround. So I don't know what we were expecting here.

[Steve Grasso]

But yeah, this is, you know, I've always believe you buy as I've said in the past, you buy CEOs, you don't, you don't buy stocks. It starts with the top down. CEO has that 50,000 foot up. He's investing in labor, he's investing in tech. He's simplifying the menu, which all of us can agree it needs simplification. I'm going to give him the benefit of the doubt. And I would be a buyer of Brian right now, which is Starbucks. I would give him the benefit of the doubt. I think he can do a turnaround. He's got to do the investment phase first. Awful time to do the investment phase when everyone's worried about increased costs. But I think I'm going to give.

[Melissa Lee]

Him the benefit of the doubt and a time when people, I mean, if we're talking about unemployment going up, if you're not, don't have a job, you're not buying coffee probably at, you know, five bucks a clip, I don't know.

[Guy Adami]

I mean, well, also he was making a bet on China. It's not, not, I mean, it's growing, but it's not a gigantic part that that is weighed down. I always think the worst thing that happened was that it went from 76 to 96 the day that he was announced.

[Melissa Lee]

Yeah.

[Guy Adami]

And he's been fighting that ever since. He's probably like that. He's thinking about the long term and not trying to do anything for this quarter.

[Dan Nathan]

Well, that's it. You know, glad Karen mentioned that because we didn't think it'd be a quick fix but the market certainly did because it went up basically 50% over the course of a couple of months. It trade up to $117 hours on the back of I'm not quite sure what now we've round tripped the entire thing but it's not a quick fix. Margin pressures are there, competition is there. The quarter was not particularly good if you want to take one thing away from today, traded about four times normal volume and we traded down the lows we saw back in August when he was announced.

[Melissa Lee]

Coming up, another check on the after hours movers. Microsoft's conference call is underway. Fast Money Francine Munster has been listening in and will bring us what he is hearing. That's next. And here's a sneak peek at the Kramer Cam. Jim is chatting exclusively with the CEO of Yum Brands. Catch a full interview. Top of the hour on Mad Money. More fast money to welcome back to Fast Money. Another check on tonight's key earnings. We are about 20 minutes into Microsoft's conference call so let's go back to Deepwater Managing partner Gene Munster for the very latest there. Jean, what's new?

[Gene Munster]

I'm Melissa. From Microsoft's perspective, Amy Hood, the CFO is just starting to talk right now so we're probably a few minutes away from that all important guide. As far as the Microsoft call, Satya talked about the importance of scaling laws holding. That's a big AI topic that's also kind of confirming related to the importance of building AI infrastructure that's good for Nvidia. On the flip side, a couple of data points from Meta's call is that Susan Lee, CFO mentioned mentioned that part of that expansion in capex earlier I was seeing how important of a data point that was. Part of that expansion in capex spend was related to higher costs that they're anticipating related to tariffs. She said that some of it is related to expanding the amount and the size of the AI brain that they're building and so that kind of watered that down a little bit. And one last point is that they also mentioned that some of the ongoings with Europe and some of of what's going on on the policies and regulation there could start to have an impact in the back half of the year. Investors largely shrugged that off, but you see the stock kind of dipping a little bit in the last 20 minutes. Meta has, and I think it's kind of a combination of those two. Overall, still very positive. Very positive quarter.

[Melissa Lee]

All right, Gene. Thanks. Gene Munster, what do you think about that asterisk to that CapEx increase?

[Guy Adami]

Yeah, that's not quite as, you know, because those dollars aren't ones that will be have a return on those dollars, they're just higher.

[Melissa Lee]

Right.

[Guy Adami]

So that is, yeah, it's, it's worth a couple of points.

[Dan Nathan]

So there is a pretty solid quarter. I mean, and they and Wal Mart, they being Facebook, two companies that have really figured out the thing. I mean, they're getting a return on their investment without question, which is why you can justify the spend. So I still think it's too cheap here.

[Karen Feinerman]

We talked last night about this AI diffusion rule that's going to come in place on May 15th. I think this is going to be something that we'll probably hear more about on the Q2 call falls, you know, when we get there. So, you know, again, what does that mean? That could be a hit on demand as it relates to outside the US and other things outside the US which they just mentioned about policy and the like.

[Melissa Lee]

Yeah, the queues in the after hours, by the way, are higher by about 8, 10 of a percent. But these reports overall, I mean, the pastiche is a good one when it comes to.

[Guy Adami]

Interesting use of pastiche. Yeah, yeah.

[Melissa Lee]

I think it's an underutilized word.

[Gene Munster]

Sure.

[Steve Grasso]

Especially on this show. The market has done enough to alleviate the fears within the marketplace right now. So we've had six days up or seven days up and the market has is gained 8% in the last seven days or so. So I think that if you're looking for this rally to continue. I am. I think that it's done enough, as the Qs are suggesting right now, to keep that momentum going forward.

[Karen Feinerman]

Would you rather Pastiche or Mosaic?

[Melissa Lee]

I'm like, I like Pastiche. It sounds nicer. But Mosaic's good too. Both are solid. Up next, final trades. Time for the final trade. Stephen.

[Steve Grasso]

Starbucks giving Brian a shot. And North American comp sales were down, but they're trending higher as well as transactions.

[Melissa Lee]

Chairwoman?

[Guy Adami]

Yes. So after this big earnings report, see know I look at matter and I think, all right, if I owned none, would I buy it right here? Yes, I would.

[Melissa Lee]

So Meta Dan I'm just thinking about.

[Karen Feinerman]

The mosaic in the health care space a little bit here. I think the XLV is pretty interesting here.

[Guy Adami]

It's a pastiche of different.

[Steve Grasso]

Pfizer and stuff like that.

[Dan Nathan]

Perhaps quickly where are you? Where are you two ladies going?

[Melissa Lee]

Karen Feinerman being an honor tonight for the Harvard Business, as well she should.

[Guy Adami]

Which I did not attend. Okay, the irony Hi Baba.

[Melissa Lee]

Thank you for watching Fast Money. Mad Money starts right now. All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet or in other media. 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 A pivotal jobs.

[Karen Feinerman]

Report with the Fed decision right around the corner, are tariffs and policy uncertainty taking a toll on the job market? Employment numbers and analysis Squawkbox Friday, 8:30 Eastern and streaming on CNBC.