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

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.

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.

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.

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.

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.

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.

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."

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.