← CNBC's "Fast Money"
CNBC's "Fast Money"
More Market Concerns… And Two Big Earnings Reports On Deck 8/5/25
00:45:31
More economic data spooking the markets, as the ISM Services Index falls in July. What it means after last week’s jobs report. What one top market strategist sees in store for stocks, and where he sees the most opportunity. Plus Disney and McDonald’s earnings reports on deck. What to expect from the results, and what it will tell us about the strength of the consumer. Fast Money Disclaimer
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- [00:00]
Mike Santoli
Hey, Fidelity, what's it cost to invest with the Fidelity app? Start with as little as $1 with no account fees or trade commissions on U.S. stocks and ETFs.
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Karen Feinerman
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Mike Santoli
That's music to my ears. I can only talk.
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Guy Adami
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Karen Feinerman
Sell order assessment fee not included.
- [00:24]
Guy Adami
Some account types and securities excluded. Details@fidelity.com commissions Fidelity Brokerage Services, LLC Member.
- [00:28]
Karen Feinerman
NYSE, SIPC.
- [00:31]
Dan Nathan
CNBC make it's online course.
- [00:33]
Mike Santoli
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- [00:40]
Melissa Lee
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- [00:41]
Mike Santoli
Building your personal brand. Register now@cnbcmakeit.com Personal Brand Live from the NASDAQ market site in the heart of New York's Times Square, this is FAST money. Here's what's on tap tonight. Fresh signs of a slowdown. New data showing the services sector is flatlining and raising the specter of stagflation. Inflation. What will it mean for stocks during a traditionally troublesome period? And a consumer check. Disney and McDonald's both reporting before the bell tomorrow. What will they say about demand and the strength of spending and healthy gains for Pfizer after its results? A coin flip for shares of Coinbase now down more than 30% in about two weeks. And the CEO of space company Voyager Technologies joins after his first earnings report as a public company. What he has to say about the numbers and defense deals with the government. I'm Mike Santoli and more. Melissa Lee Tonight coming to you live from Studio B at the nasdaq. On the desk tonight, Tim Seymour, Karen Feinerman, Dan Nathan and Guy Adami.
- [01:44]
Karen Feinerman
Great to have you, Mike.
- [01:45]
Tim Seymour
Well, Michael, this a rare tree.
- [01:47]
Mike Santoli
Rare tree says pause for applause.
- [01:49]
Dan Nathan
Okay, we can do that.
- [01:52]
Tim Seymour
We don't absolutely do that, but we.
- [01:54]
Mike Santoli
Do want to start with a deeper look into the data that seemed to get under the market skin just a bit today. The ISM Services index unexpectedly falling in July, but the price is paid component, a measure of inflation, rose to the highest level in more than two and a half years, while employment contracted for a second straight month. That, of course, after Friday's weak jobs report. Broader markets, they were all down today with the NASDAQ leading the losses. Utilities, tech and communication services, they were the biggest drags on the S&P 500. Modest moves, but our markets profit properly, pricing in risks to the economy at this point Guy, you know, look, the market showed a little sensitivity to this, right? You got a little bit of a whoosh down after the numbers. Banks actually took it on the chin. Mostly came back though. So how do you put it in context?
- [02:42]
Tim Seymour
The stagflation part I think is really important. I think it was about 13 or so months ago, maybe 14 almost to the day when Jerome Powell when asked about stagflation he said trying to be clever. I see neither the stag nor the inflation and quite frankly we have both now. And the final component to that is the jobs market which we saw last week is starting to deteriorate. So that's sort of the, that's the chemistry, that's the mix for stagflation. The problem with that is in my opinion there's no real easy answer to get out of that. And I think the bond market is trying to figure out what's more dire right now. Is it inflation which is clearly still a problem or is it the slowdown today in terms of yields? It's picking a slowdown. But what I would submit neither one I don't think are bullish for the market.
- [03:26]
Mike Santoli
So what do you make of the market's ability to shrug it off today?
- [03:29]
Tim Seymour
That means, I mean that's why the four of us here, because I say.
- [03:33]
Mike Santoli
Something then you look, I understand that interrogate your point.
- [03:37]
Karen Feinerman
I do think that two out of three last trading days we've had data that is very concerning. I think Monday's rebound was a combination of, you know, we kind of, we a little bit of razzle dazzle over here. We forgot, oh it's fire the BLS head, let's do this and we kind of forget look that payroll number, unless we think those numbers are outright fugazi. We still have a labor market that suddenly went from being okay to 35,000 on an annualized, excuse me, on an average three months. That along with the services part of the, of the story. We know what the US economy is. It's a services economy. We printed sub 50 on or almost sub 50 on that non manufacturing PMI. And as we said there's a sticky stubborn part of the inflation side of this. So I just think we're at a place. Through earnings season we've had pretty much everyone you needed to hear from with the exception of Nvidia who's a couple of weeks away. We've had a chance to be bottom up. Bottom up has been very good and I don't know that top down is terrible but it comes after what has just been a heroic move in the equity market. So today's move is nothing. A 1% move in the semiconductors, who have outperformed the S and P by 25% since that April low. You know, as Dan says, how do people.
- [04:46]
Dan Nathan
One thing is, I'll say it's kind of grinding a little bit over the last week or so. Right? We had that new high. We had a lot of new highs over the last couple of months. They seem kind of incremental, like just kind of moving. And then if you take stock of what happened, like in earnings season, I mean, I'm really hard pressed to see more than like a dozen stocks in the S&P 100 that really outperformed meaningfully to the upside. I don't mean the beats and the raises, that sort of thing, at least the stock market reaction to those. And you know, David Rosenberg, guy just calls him what, Rosie. Rosie. He had a stat this morning and I thought was really interesting. Insiders at only 151s and P500 companies in July bought back their own stock, lowest level since 2018. 2018 was kind of a tough year. It was. We started a trade war. At least the administration did. Right. And we had growth scares. And when we had all that combined, then we had a 20% sell off in the stock market in Q4. And so when I think about what's going on right now, the markets you just asked us, Michael, they're not really appreciating a whole heck of a lot. But Rosie also added the one caveat that retail bought the dip, and retail continues to buy the dip, and retail bought the dip back in April and they didn't sell. There's a lot of data that suggests that. So it seems to be a bit of a bifurcation at least what insiders at S&P 500 companies are thinking about their own stocks. And this goes back to. When did Jamie Dimon say this? A few quarters ago. He was asked about whether they're buying back their stock or not or something to that extent. He's like, I'm not. I think it's expensive. That's where they. Well, the stock here is only that much more expensive, you know, six months on.
- [06:09]
Mike Santoli
Yeah, I mean, well, I mean, JP Morgan's at like 2.4 times book value, like more expensive than it's been for. But maybe not every company feels exactly that way. You know, Karen, you can almost watch the market do the kind of trade off, you know, over the course of the day, which is Yep. We do have a little more pronounced slowdown evidence here based on the jobs number and maybe ism today. And then we're raising the odds of a September rate cut and maybe that's going to be in time to cushion the blow or kind of carry us through this period.
- [06:35]
Christina Parts Nevels
I think it's exactly right. Why this is a pretty muted response ultimately at the end of the day to what could, you know, is sort of double barreled, not terrible, but not great data. And so I think the Fed put is very much in play now. I think the odds have gone up what to, I don't know, 70% or so of not just a, that would be a September, but also the odds going up of two other potential raises. So that's what the market sort of wants to hear. I think that will drive the next leg up. We're getting some more clarity on tariffs. Earnings season is sort of over except for retail. I am interested in how retailers and consumer, how the consumer is holding up. But I think it's that Fed put there.
- [07:13]
Karen Feinerman
You know, we had this conversation yesterday, Mike, and part of this was what's more detrimental to the equity market? Is it inflation or is it a growth scare? And I think in the big picture, I don't think, I don't want to put words in your mouth because I think you were talking a little bit, you're more concerned about the inflation keeping the Fed back. And so the Fed dynamic that Fed put is pretty exciting for markets here. But equity markets overall are not priced for, for any type of slow growth environment, let's be clear, I mean, and certainly not recession. So if we continue to see a run of, of of data points and, and again we've said the hard data has been fine. The surveys and the sentiment data, the soft data has been terrible. Look what the market's done. Hard data hasn't turned well, we've gotten some hard data and so I just think that after the kind of move we've had here, while retail has been offsides, you know, the institutional community is probably breathing a sigh of relief because I think there's a lot of folks that really aren't at their benchmarks at this point.
- [08:06]
Mike Santoli
Yeah, they maybe want it to come in a little and retail kind of stepped in front.
- [08:09]
Dan Nathan
But you know, it's interesting what you said, what we're priced for. You know, FactSet is out today saying that they're expecting 10% earnings growth year over year over the next few quarters or something like that. That's a big bump, right?
- [08:18]
Mike Santoli
If you think 10% this quarter. Well, we're going to land.
- [08:22]
Dan Nathan
That's right. Okay. And it came down, expectations came down from 9.4% at Q1 to about 4.5 and now they're back up at 10%. So they're actually pushing that along for the next few quarters. So if you think about where the S and P is priced at 22 times, that's above. I think 20 times is a five year average, 18 and a half is the 10 year average. I mean we're not priced for hard data consistently coming in like this. And I'll tell you like if you go back a year ago and we know that the, you know, they were worried, the Fed, that is, they were worried about the labor market. Right. And we just had the SAHM rule kicked off, right. Remember that thing? And then some came out and said not a rule, it's nothing, you know, but think about, we went from three and a half percent unemployment to 4.2 or something like that. We've basically been at 4.1 for the last few months or so. We're not seeing the unemployment rate tick up that, that meaningfully. I guess if you start to see that with data like we've just had last Friday, then you start worrying about a stagflationary environment because the unemployment picture is the last thing.
- [09:16]
Mike Santoli
I mean the tricky part in terms of figuring out the market is priced for, for the macro is like 60% of the equity market cap of the S and P is like tell me what trends are. Yeah, yeah. And so what does it matter?
- [09:30]
Tim Seymour
I think it does matter.
- [09:31]
Mike Santoli
Yeah.
- [09:31]
Tim Seymour
I mean it's an 8, 9, 10 stocks are probably now 45, 50% of.
- [09:36]
Mike Santoli
The 10 stocks are 40% of the.
- [09:39]
Tim Seymour
I mean, and that's, you know, that is historic in terms of just the magnitude. I'll say this, and you talk about it on the different shows you're on all the time. Some of the, some of the technical moves we saw last night, I think last night, last week were concerning obviously yesterday sort of, I think maybe covered over a little bit, but it didn't change what we saw last week. And again, there's zero valuation cushion in terms of the market right now. People have been rewarded on sell offs and this complacency has made itself into the market. But you know, very quietly, the Vix is hanging around 18 again. And in my opinion, you know, you're setting up for another reacceleration to the upside in that I hear it.
- [10:15]
Mike Santoli
I also kind of get the sense that almost everybody is at least telling themselves they're prepared for that. Right. They're telling themselves August and September are a week you got to expect us to come in. We went straight up from April to July 31st. And so I just wonder how that plays into it. If everybody wants and expects the 5%, either you get more or you don't get it.
- [10:35]
Karen Feinerman
Go ahead, Karen.
- [10:36]
Christina Parts Nevels
Well, I was going to say I'm not going to trade around in front of that and think, all right, historically bad month and next month as well. I'm not going to do that because it's so difficult to get back in. It's also really inefficient tax wise. So, you know, when the VIX was down at 15, that seemed like a decent time to buy some protection here. It's sort of no man's land though. What we're talking about, the market is not as if it's a bottle. We know there's these few, few huge companies. That growth there was tremendous. Well over the 10%. Right. I mean you look at Metta up 20, revenue up 20. Palantir today, that was insane. But I think there's a whole bunch of stocks and probably all the IW match of the IWM that is actually reasonably priced.
- [11:17]
Mike Santoli
Yeah.
- [11:18]
Karen Feinerman
Well, I'll just say that if it was all about AI, and I agree with that and if you want to see the market go higher, that's what you need. And I didn't hear anything during this earnings season that told me that those trends are not very much intact. And you know, back to Palantir, we had this chat. I mean, sovereign AI is a big deal. There's infrastructure spent around the world and governments are much further behind the private sector. Why won't that continue to support some parts of that trade? And I'll just, I mean, you can't tell me banks, we just talked about JP Morgan's valuation. Banks have participated. Certain industrials have outperformed the S and P all year. So you can't tell me this has been five stocks. And we know there's a couple members of the Magic Seven that aren't doing so well. But I think yes, September and August could be weak. They're expected to be weak. That might even be that wall of worry.
- [12:07]
Mike Santoli
Just want to point out for Palantir, of course, stock up almost 8% today. Over $22 billion worth of stock traded in Palantir today. Basically the same as Nvidia. It's one tenth the market cap.
- [12:18]
Dan Nathan
It's 3 times 1 tenth the market cap at $400 billion is 100 times. No, I know you're. I'm making a difference is 100 times sales.
- [12:27]
Mike Santoli
Of course.
- [12:27]
Karen Feinerman
Think about that.
- [12:28]
Dan Nathan
Okay, so. So people are like eye popping year over year growth. I mean, the company is clearly inflecting, but it's coming off a very low base. And all of that growth this year expected to be 52% year over year revenue growth. I'm looking, it decelerates pretty meaningfully. And we're talking about a company that's supposed to go from 4 billion in revenue this year. They just passed a billion for a quarter in sales for the first time ever to 5 billion next year. Okay, 10 billion expected in sales. I want to go out three years or something like that. So for this stock to grow into that valuation, you take every sovereign on the planet. Okay. And you're not like, you know what I mean? Like, that's my only point.
- [13:02]
Mike Santoli
This is like I get a stock. My point is more, My point is more the look at the fever in terms of how active this stock is. It trade 3 times more $volum today than Microsoft and Microsoft's 10 times the market cap. That's my point.
- [13:14]
Karen Feinerman
Well, it's right up there. It's right up there, though, with these cartoonish moves we've had in IPOs. And it, and it speaks to the froth and the liquidity and, and by the way, Palantir, my guess is if you divided this along demographic lines or certainly along along age lines, chronological lines, if you're 35 and under, you own the stock. If you're 35 and over, you might not. So I guess everyone on this desk is.
- [13:38]
Mike Santoli
It's owned by people who were told all along that crypto is worthless. And they are sitting there watching crypto get to trillions of dollars, in my view. All right. Meanwhile, bank of America CEO Brian Moynihan says he doesn't does not expect a recession despite today's disappointing ISM data. Take a listen to what he said.
- [13:55]
Tim Seymour
Our economists believe there'll be no recession. They believe the economy in the US will go about 11 2% this year. They believe that the Fed will not cut rates because inflation will take longer to get down.
- [14:04]
Mike Santoli
That the Fed will not cut rates.
- [14:05]
Tim Seymour
During 25, they'll cut 26. And they've been for a long time. And they believe that. And even with the tariffs came in, they said all that caused economic. Less economic growth this year than they otherwise scheduled, but still no recession.
- [14:18]
Mike Santoli
Our next guest disagrees, saying two rate cuts are still Coming this year, let's bring in one point, BFG Wealth Partners Chief Investment Officer Peter Brookvar. Peter, pick, pick your spot. In terms of where you would take issue with that view, it's interesting, both bank of America and Morgan Stanley saying no cuts this year and you know, I guess because they figure growth is going to hang in there and the Fed's going to want to wait to see inflation come down. How do you see it?
- [14:42]
Peter Brookvar
Well, I agree with Brian that economic growth this year is only going to be one, one and a half percent, if that. That's what we saw in the first half of 2025. The second half of the year I think is now in question. And if July's jobs data is any precursor to further weakening, then there's more risk to the downside to one to one and a half percent then upside. The Fed, to me, they are locked in for the cut in September after they saw the jobs report. And if they don't like looking at the BLS report anymore, all they have to do is look at the ADP report or the employment component of the ISM manufacturing and non manufacturing reports and they all still confirm each other. They have every reason, I believe, to cut, but I think we have to. We have to. What I want to emphasize though is a cut in September, maybe one in December. This is still more rate tweaking. The days of going back to zero are over. So yeah, maybe we'll get a few more cuts, but is that going to be the saving grace to an economy that's still dealing with other challenges like tariffs, for example, but maybe offset by some tax incentives on the capital spending side. But I think net, net the Fed is locked in for cuts. It's only going to be a few and but we have to understand why they're doing it. They're doing it because there's been a deterioration in the labor market. And I think you hit it earlier, Mike, when you talked about the stock market sort of weighing the benefits to the markets with those cuts, but on the other hand trying to figure out, okay, well they're cutting for economic reasons and what does that mean for corporate profits in the back half of the year?
- [16:17]
Mike Santoli
I wonder about the ISM Services number today and also just the takeaway from it because, you know, not to undermine its message, but we went through a couple of years when ISM manufacturing was telling you based on historical patterns, we should be going into a recession. It didn't happen even though the Fed was tightening. It didn't happen for whatever other reasons, whether it was pandemic stimulus still flowing through. So I'm wondering what your read through on the ISM services number was today. Obviously a little pressure higher on prices and a little bit lower on new orders and employment.
- [16:48]
Peter Brookvar
Well the way that I break down the US economy because I think it's important to do so in order to understand the true drivers. I mean I spend and anything related to it is a major driver of economic growth. If you're not part of that ecosystem you are seeing more challenging economic conditions. Government spending a very powerful driver of growth. Upper income spending is as well, particularly in travel and leisure. But manufacturing has been in a recession for more than two years now. The housing markets essentially in a recession. The lower to middle income consumer is are basically in their own personal recessions. Global trade is rather muted and capital spending ex that AI spend is actually been flatlining. So it is a very mixed and uneven economy in this debate. Recession? No recession. Well, parts of the economy are in a recession, parts of the economy are growing and in the aggregate we're basically seeing just one to one to one and a half percent type GDP growth which back in the day was knocking on the door of a recession. 1% growth should not feel good. Maybe some want to call it resilience, maybe some want to say well it's not a recession but it's pretty punk growth in totality.
- [17:58]
Tim Seymour
Peter Services are basically the consumer and you know, Brian Moynihan and Jamie Dimon, let's list them in different planets because they have a much different view on where things are maybe because of the way the banks are structured. But with that said, delinquency rates Now I think 90 days plus or 13% of all credit cards which is the highest we've seen in the last 14 years. And there's a laundry list of delinquency rates that are going higher. That to me does not speak to a strong consumer. Thoughts on that?
- [18:27]
Peter Brookvar
I agree. When I hear a company like Canaveral, which full disclosure we own, not happily, but we do. When they talk about their snacks business being hurt by consumers pulling back on discretionary spending where a $2 $3 bag of pretzels is, is it considered a discretionary item or a slim gym that they sell? To me that tells me that there is a portion of the population that is very stretched and I think it's, it's being reflected in those delinquency numbers. Luckily the economy has that upper income spender where the top 10% earners are spending half the money but below that lens we are much more challenged which also ties in the stock market itself being as elevated as it is is also helping that upper income spender.
- [19:17]
Mike Santoli
Peter, appreciate you weighing in see how, how it goes from here. Karen, are you hearing that sort of a line from your companies in terms of real stress on the, on the consumer or is there a way that we're kind of going to be able to muddle through here?
- [19:29]
Christina Parts Nevels
Depends on the ones like United Rentals. No. Yeah but I'm interested. That's why the retailers we haven't heard from yet. We'll see how the Walmart consumer is doing I kind of think. Okay, yeah because also we have that Wal Mart trade down effect from the wealthier consumer there.
- [19:44]
Karen Feinerman
Yeah, well and Wal Mart trades like it in other words and we had this chat yesterday, I mean it's back to, it's back to near all time highs and Wal Mart is as well prepared for this back to school to take market share to, to be essentially inflicting price upon everybody else. I just quickly also you know it's interesting we had some trade data today. Whether it's a small thing, it's certainly a headline maker but the dollar is a very interesting, you know called an asset class at this point. It's certainly very important to how a number of other asset classes will trade. Dollar seems to be finding a little bit of support here and I think it's also been a very crowded trade to be short the dollar. That may be something that's changing.
- [20:21]
Mike Santoli
Well Fed a little bit support but then backed off on the jobs number and you know it's hard to know I mean if it's, if it's, what.
- [20:27]
Karen Feinerman
If the Fed is really now again if the Fed's now going to cut three times this year and central bank differentials are going to favor very much. The Fed being the weakest one in the room. Dollar will go lower but I don't know if that's the case.
- [20:39]
Mike Santoli
Yeah, none of us does at this point. All right, we have an earnings alert on amd. Shares of the chip maker dropping after hours. The company beating revenue estimates but falling just short on eps. Our Christina Parts Nevilles joins us here now with more on the quarter. Christina.
- [20:55]
Melissa Lee
So you saw the share price actually climb a little bit higher just when the earnings came out and that's because their guidance hit 8.7 billion higher than the whisper gross margins were relatively in line at 54% for Q3. But what's standing out on the earnings call is really Lisa Su, the CEO trying to position the company as a transformation towards an AI infrastructure firm. And I say that because there's three main quotes right now that just stood out to me. And she's only been speaking for the past 20 minutes. The first one is she calls out Nvidia point blank saying the Mi355 matches or exceeds Blackwell. So the B200 chip. So these are just AI GPUs in critical training and inference workloads and delivers comparable performance at a significantly lower cost. So she's calling out Nvidia specifically. She's also speaking to the Mi 400 series, which is the next generation, saying that it is launching in 2026 and there's significant interest from larger, larger or multiple profile customers. And then lastly on China, she did say that she believes the chips for China should resume and this we know as long as these licenses are granted. So it's a wait and see kind of approach for Nvidia as well as amd. The problem is the stock is, I guess the expectations were very high going into the print stock, up 45% year to date, outperforming all the chip sector as a whole. So that could be, you know, just not enough for a lot of these investors.
- [22:16]
Mike Santoli
It has had an amazing run. But it is interesting that, you know, the reason to believe, I think from people who, you know, have been owning AMD is if it just, if the dial just turns a little bit, a little bit of the revenue that's basically been earmarked for Nvidia next year, you know, spills toward amd. The size differentials mean that it's a great, it's a great win for AMD, right? It's like 1/7 the revenue AMD next year versus Nvidia. So the idea is the pie is that big, they only need a little taste, right?
- [22:44]
Melissa Lee
So it's great for them. And yet why, why is that reaction happening in the markets right now? Especially if the CEO is speaking to the progress made with their next generation core CP GPUs I should say, and their CPUs doing quite well as well, I guess.
- [22:57]
Karen Feinerman
I feel like this was a fantastic response for a Stock that's up 110% off the April lows.
- [23:02]
Mike Santoli
So as you point or whatever it.
- [23:03]
Karen Feinerman
Is year to 45%. And I think that guide was fantastic and I am excited by my 355 and 400 and the ability to take just a little bit of market share. I thought the market is responding to the uncertainty around China. I mean that to me, wade through.
- [23:18]
Melissa Lee
All of the Comments? Didn't we know that?
- [23:20]
Karen Feinerman
We did, but, but in the last month we've had a rally back on the sense that China was back open for business. I mean the White House and the opening up and then we, you know, Nvidia calls back the six and a half billion dollar write down because suddenly, you know, chips in China are at least in a place where we feel we understand the strategic dynamics of what's going to be allowed and not allowed. I just feel like AMD had a big rally on that alone. Nvidia certainly did. So in terms of the comments after market. Yeah, I agree. I mean China's, who knows. But that's not a reason to be selling the stock. And after the move, as someone that's long the stock, maybe that's what it sounds like. I thought it was a great outcome today. Yes.
- [23:57]
Tim Seymour
I was just looking. I mean $800 million charge, so basically inventory charge. So if you back that back in, that's how you get to the 54% gross margins. Because on the surface it looked like a huge miss. Operating margins weren't great, but the data center was good and that just shows you how poor intel is vis a vis some of these other companies. I think to Tim's point, given the run that it had, the fact that it's unchanged right now, ish. Is actually pretty encouraging.
- [24:22]
Melissa Lee
Yeah, I was just saying it's 43% for this upcoming quarter. If you back out the 800 million charge, 54% for the guide. And Nvidia did say that we would only start to see it in Q3 for China shipments. So still trickling.
- [24:35]
Karen Feinerman
Yeah.
- [24:36]
Mike Santoli
Christina, thanks. All right. Awesome. Don't miss AMD CEO Lisa Su in a first on CNBC interview. That's tomorrow at 9am Eastern time. All right. Another earnings alert on Snap. The stock tumbling after the tech company missed profit estimates for the second quarter. CNBC's media correspondent Julia Boorstin has all the details. Julia.
- [24:57]
Melissa Lee
Hey.
- [24:57]
Karen Feinerman
Well, while Snap's daily active users were.
- [24:59]
Melissa Lee
Stronger than expected and its revenue for the quarter pretty much in line, global.
- [25:03]
Karen Feinerman
Average revenue per user was actually three.
- [25:05]
Melissa Lee
Pennies short of estimates.
- [25:06]
Karen Feinerman
CEO Evan Spiegel saying that the company's top line growth was impacted by a.
- [25:10]
Melissa Lee
Number of factors including an issue related to its ad platform, the timing of.
- [25:14]
Karen Feinerman
Ramadan and the effects of de minimis.
- [25:16]
Melissa Lee
Changes another issue that analysts are already pointing to.
- [25:21]
Karen Feinerman
Daily active users in the US The US is of course the most valuable market in the North North America. US Most valuable market for advertising.
- [25:28]
Melissa Lee
That user base in North America actually.
- [25:30]
Karen Feinerman
Declined by 1 million. Now Snap's third quarter revenue and earnings guidance is ahead of estimates. The company flagging a key growth area, saying its subscription Snapchat plus approached 16 million subscribers and has an annualized run rate of nearly $700 million.
- [25:47]
Melissa Lee
Back to you.
- [25:49]
Mike Santoli
All right, Julia, thank you. Dan, you're going to talk about when.
- [25:52]
Dan Nathan
You'Re blaming Ramadan for, for your lack of upside there. I mean this is one we go over quarter after quarter and it's really interesting when you think about just so how some of these social platforms have iterated, how some of them have grown users have some of them grown their average revenue per user and this thing is just stuck in the mud. And the other thing I'll say is this company went public in 2017. I don't think they've ever turned a profit on a GAAP basis. So they're still losing a lot of money. They are not positioned. They did create this my AI but when they're talking about the de minimis rule hurting them, that's their e commerce strategy to sell low priced crap to teenagers and stuff like that. I mean to me this company's got a problem. The biggest problem might be Evan Spiegel because super voting rights that he owns is not allowing any sort of activist or any sort of M and A or anything like that. There's got to be some value left in this platform. But while he's there, it's not going to be actually ever realized. And when you go and look at some of the stuff that they're doing around glasses and stuff like that, you know Metta license, Ray Bans and they sold 2 million of them, you know what I mean, in a year or something like that. And they're cool. Wait until you see what they're coming out with. This is, you know, the they're not cool, people will not wear them or buy them. I mean I feel bad for these guys.
- [27:02]
Mike Santoli
Yeah. I mean it's a $15 billion market cap. It's really pretty trivial relative to the industry.
- [27:06]
Christina Parts Nevels
True, it is. I mean I've said this for years. Why own Snap when you can own Meta, Right. And just to the glasses as an example, I think we have a chart of maybe Snap since inception. Since as an IPO rather versus Metta maybe we don't. It's a dramatic difference. Let me just.
- [27:22]
Mike Santoli
I think what you rather probably wouldn't be able to see the Snap line on the bottom of the chart.
- [27:27]
Christina Parts Nevels
It did have a brief, you know, pandemic frenzy.
- [27:30]
Mike Santoli
Yeah, for sure. And yeah, it's never really kind of proven that it's actually kind of much of a business. Well, they're in the future.
- [27:38]
Karen Feinerman
They're in the wrong place in the, and it's the, it's the business school cliche, but they're in the wrong place in the funnel in terms of the advertising model. So I don't see where the business is going to break out of this. And if you're an options guy and we have them on our show and Dan's an options guy, but I mean, the, the volatility around their releases is extraordinary. A 15% move, by the way, is like a snoozer. I mean, they're usually 25 to 30% move.
- [28:03]
Mike Santoli
And don't discount the possibility that if they start hunting heavily shorted stocks again and decide to stampede into this, it'll just fly right. 10% of the float is short at last report. All right, there is a lot more fast to come. Here is what's coming up next. Coinbase getting crunched. And one of our traders noticed some under the radar action in the name, what it could say about the stocks next move. Plus, in this packed week of earnings, we're setting the table for two reports.
- [28:32]
Dan Nathan
That could give big reads on the.
- [28:34]
Mike Santoli
Consumer, how our traders are prepping for results from McDonald's and Disney. You're watching Fast Money live from the NASDAQ market site in Times Square. We're back right after this CNBC make it's online course how to build a standout personal brand. Three industry experts will show you how to create and grow your brand step by step.
- [28:58]
Melissa Lee
There's no time like now to start.
- [29:00]
Mike Santoli
Building your personal brand. Register now at CNBC. Make it.com/Personal Brand. Welcome back to Fast Money. Coinbase down more than 6% today after the crypto exchange announced a private offering of convertible notes worth up to $2.3 billion. Stock has now dropped 21% since reporting earnings last Thursday and is 33% from the record hit just over two weeks ago. Karen, reflecting this news as a driver here.
- [29:26]
Christina Parts Nevels
Yeah, well, just the convert, you know, so they announced this convert 2.3 billion. That's not that much actually, Coinbase. And so people are buying the convert, shorting the stock. So that's probably maybe, I don't know, close to $1 billion of what was shorted today. They had those good earnings, but expectations were so high. And then also if you look at what's happening to crypto space, including bitcoin, which is down probably 10% last I don't know, 10 days or so. All of that makes for, you know, downdrafting coin. Still expensive, though. They've done an extraordinary job with their business. But don't own it.
- [29:57]
Tim Seymour
It.
- [29:57]
Mike Santoli
I don't own it on paper. You know, the bankers will tell you, well, the zero coupon converts, perfect, right? Because all you're doing is like, you're actually collecting money. You're getting paid for the volatility of your stock. Right. But I don't know what was the conversion? It was up like 25 or 55, I think.
- [30:12]
Dan Nathan
Yeah, all day long. You'll take that.
- [30:13]
Christina Parts Nevels
Well, then they also did say they would buy calls. They would buy calls to cover the really quickly.
- [30:18]
Dan Nathan
You know, it's funny, like bitcoin's moved down just a little bit. It doesn't really feel like it's kind of had like a sharp move, like. And so the, especially the way like the NASDAQ moved on Friday. But when you think about this company, I think more than 80% of their revenues still come from retail from consumers. And now you think about one of the stories of the last year has been all the different ways that anybody can buy bitcoin, you know, so like to me, and they still have fat margins, I think, on those transactions. Big spreads. I don't know, man. This one seems tough right here.
- [30:43]
Mike Santoli
I've kind of thought that if it's so lucrative for them to be in the middle there, it's almost shows you it's an immature market. Right, for crypto. Still, if people are. This is in the vague.
- [30:53]
Karen Feinerman
I'm long and this is one that I can, I can stomach this volatility. And you don't go from150 to4,420 without a bit of a retracement. And it's still in an uptrend, if you want to look at the chart, in my view. Well, I think basis is very important for infrastructure in terms of blockchain. And I think they're finding ways to make more revenue more top line.
- [31:11]
Tim Seymour
And the range of Tim just said from that April low to the recent high, I mean, today's move is a 50% retracement of that entire move. I would have loved to have seen a trade more volume today. It basically was in line. But you know, you're waiting for. If you believe in the underlying story, valuation notwithstanding, this is the level you've been waiting for.
- [31:28]
Mike Santoli
All right, coming up, Disney and McDonald's on deck. What those reports could tell us about the strength of the consumer. That's from Fast Money returns CNBC make it's online course how to build a standout Personal brand. Three industry experts will show you how to create and grow your brand step by step.
- [31:51]
Melissa Lee
There's no time like now to start.
- [31:53]
Mike Santoli
Building your personal brand. Register now at CNBC make it.com/personal brand. Welcome back to Fast Money. Stocks pulling back as traders digested more economic data and new tariff threats from President Trump. The Dow falling 62 points on the day. The S and P was down about half a percent. The tech heavy NASDAQ losing more than 6, 10 of a percent. And some more after hours action. Shares of revision is lower after missing EPS estimates. Amgen beating on the top and bottom line expectations and super micro sinking after missing on both the top and bottom lines as well. Also giving weak guidance. So Amgen not much of a move. The others pretty meaty. To the downside meantime, Disney down nearly a percent today ahead of its third quarter results. Tomorrow morning, investors keyed into its theme parks business streaming, subscriber growth, of course and details on the launch of ESPN streaming product. Disney shares are up 30% in the last three months, but down eight of the last nine days. So what is the setup here?
- [32:55]
Christina Parts Nevels
Well, can I give it over to Tim? Yeah, Tim's our Disney guy here.
- [32:59]
Karen Feinerman
Well, I certainly wear the ears sometimes. Yeah.
- [33:02]
Mike Santoli
This is a Mickey Mouse.
- [33:04]
Karen Feinerman
I like the setup. Yes. Well, that's why I said it. But, but I think the growth in DTC is, is sustainable and I think the profitability is the big part of this. The ad revenue is something that will be interesting to hear. I do think the optionality around ESPN streaming and where we are post kind of Hulu and the bundle that we're getting with Disney plus ESPN and Hulu is fascinating and at least is a case where I think they continue to grow on that level. I think parks will be less bad and I do think that the experiences and the cruise lines and Karen and I, I did go on a Disney cruise without leaving shore here in Manhattan a couple of months ago with Melissa. And I think, I think that business is a bright spot. It's not necessarily a needle mover but I think the cyclical parts of their business I think are okay and the valuation is fine. That the, the chart on this one is the one that's interesting and I think it's held some key levels.
- [33:55]
Mike Santoli
Yeah. Be interesting to track. You know, they at some point said that they thought they could get back to peak operating cash flow numbers which are I think from 2018. So that's you know, we'll see how.
- [34:05]
Karen Feinerman
In that long range forecast they gave us that five year, overly detailed, you know, interesting.
- [34:11]
Mike Santoli
All right, McDonald's also out with results before the bell tomorrow. The fast food chain falling more than a percent today. It is now down more than 5% in the last three months. Investors watching us, same store sales after the company last quarter saw its worst drop since 2020. A lot of mixed action in the restaurants.
- [34:30]
Tim Seymour
Actually look at McDonald's over the last four years. The volatility has been pretty unbelievable if you think about, I mean this is usually slow and steady, but the moves to the downside have been dramatic, in a word. And we're in the midst of one now. But I don't think you get too far away from McDonald's here. It's sort of 295 off the all time high valuation, maybe a little bit stretched, but not nearly as expensive as it's been historically. And I think you look at some of these other restaurants whose valuations make no sense, Chipotle being one of them. At least you can wrap your head around McDonald's. So I sort of like it here.
- [35:01]
Mike Santoli
What's the, what's the, what's the catalyst? The whole snack wrap thing or do we, we know, we did a taste.
- [35:06]
Dan Nathan
Test on the snack wraps, didn't we? Mel brought it in.
- [35:09]
Mike Santoli
Yeah. Yeah.
- [35:10]
Karen Feinerman
Guy, you're a big fan of the, the Crocs Happy Meal, right?
- [35:13]
Mike Santoli
I think that was something you tried. I don't know.
- [35:15]
Tim Seymour
What is it? No, tell me what that is.
- [35:17]
Karen Feinerman
It's, they were giving out some kind of, you know, Crocs.
- [35:20]
Tim Seymour
Crocs in collaboration with Crocs.
- [35:25]
Karen Feinerman
But, but the bottom line for McDonald's is that they have the ability, whether it's through Happy Meals or promotional deals, to beat the, you know what out of the competition. And they've done that every time where times have gotten tough. So I don't think you bet against the golden arches here. I do think the, the, the margin story is one that comes from digital and AI and some of the enhancements in their business. Margins are getting better.
- [35:47]
Mike Santoli
All right, coming up, shares of Voyager Technologies dropping after earnings last night. Update the numbers from the quarter and what CEO Dillon Taylor has to say about the results. Company's first since going public in June. He's going to join us next. Don't go anywhere. Fast Money is back in tune. Welcome back to Fast Money. Shares of Voyager technologies tumbling almost 15% today. The Defense and space company last night giving its first earnings report since its June IPO. Voyager reporting a wider loss in the second quarter than a year ago. Revenue did rise 25%. Shares of Voyager rocketed 82% on its first day of trade. But they've given back a lot of those gains. The stock now up just 10% from its offer price. Now for more on the earnings and the outlook, let's bring in Voyager Technologies Chairman and CEO Dylan Taylor. Dylan is also a commercial astronaut who was on a blue origin new shepherd mission. And Dylan, it's great to have you on. So I guess just talk through the quarter what the street might have been seeing here and break apart your guidance for us.
- [36:56]
Guy Adami
Yeah, well actually we thought it was a great quarter notwithstanding what the stock did today. We did beat on revenue, as you pointed out. We also raised full year guidance and our EPS and adjusted EBITDA was actually in line with analysts estimates. I think there were a couple of AI headlines. AI generated headlines that showed a miss on adjusted epi, adjusted EBITDA and eps and that was not correct. So who knows if that moved the stock at all or not. But you know, the core business is growing very rapidly and we're augmenting that with accretive M and A. So we feel very, very good about the business actually.
- [37:34]
Mike Santoli
What on the defense side, what are the sort of key priorities and I guess sort of the signpost for your kind of achievement?
- [37:44]
Guy Adami
Yeah, so on the defense side, we are part of Golden Dome, which I think has been in the news quite a bit. And specifically the big program we're on is called Next Generation Interceptor. And that's really the premier missile defense shield for the United States to protect us from hypersonic missiles from adversaries like China and Russianuclear tipped hypersonic missiles. So it's a no fail mission. No kidding. No fail mission. And our technology is really integral in that program working. It just recently passed a key technical milestone called Critical Design Review. And so that really opens up the aperture for our technology to be on other programs as well.
- [38:24]
Tim Seymour
Great revenue growth. The margin pressure comes from integration, it looks like, and sort of scale up costs which theoretically should go away over the next couple quarters. So if you think about it through that lens, how do you see the acceleration in margins going forward?
- [38:40]
Guy Adami
Yeah, no, great question and great insight. So we're highly acquisitive. We've made eight acquisitions since our founding and as I mentioned, that high organic growth rate will be supplemented with accretive M and A. So we anticipate a lot of operating leverage in the business. Also, our product mix is changing. Part of the revenue drop off in one of our segments called Space Solutions was we were actually giving up up a low margin contract that we didn't want to keep, frankly. So anticipate M and A and other organic growth initiatives moving into higher margin product mix. So we'll benefit from additional operating leverage as the revenue scales, but we'll also benefit from better pricing and better margins overall.
- [39:18]
Mike Santoli
And what are you looking to target in further M and A at this point? I mean, I assume the kind of space related startup, you know, private market, the market arena is pretty busy right now, but what areas look the most ripe?
- [39:33]
Guy Adami
It is pretty busy, but we offer something unique. Who are the other buyers out there? It might be a private equity firm. For a lot of these founder tech led companies, that's not an interesting opportunity set for them. They don't want to sell to a financial sponsor necessarily in a larger strategic, let's say an aerospace prime. That's not necessarily a win for them either to be a badged employee at a large 100,000 employee company. We actually provide a, a really good opportunity for them to be part of a bigger platform, a bigger mission, but yet still be entrepreneurial, flexible, adaptable. The area that we really like is signals intelligence. So in addition to that propulsion technology I talked about on Golden Dome, we also do a lot of signals intelligence and this is really mining data and providing actionable results for intelligence analysts. And this is a very, very bullish market, high growth and so I would anticipate we'll make additional M and A in that. And of course it's a. It's an obligatory buzzword I have to throw out there, which is AI. But this really is enabled by AI because you're processing a ton of signal data and what you're trying to do is create actionable answers that you can transmit to the client. So AI actually figures very prominently.
- [40:49]
Mike Santoli
All right, Dylan, I appreciate you telling.
- [40:51]
Tim Seymour
Us all about it.
- [40:51]
Mike Santoli
IT. Thank you very much.
- [40:53]
Guy Adami
Great, thank you.
- [40:54]
Mike Santoli
What do we think guys?
- [40:55]
Karen Feinerman
I think these numbers were solid. I think some of the uncertainty on the backlog going down was something that worries the market. But you know, it's hard to. It's hard valuation wise. There is, I mean look, it's a sales story. Sales, the guide was better than expected. The quarterly sales were better than guide. The cash burn was more or less in line. It's a fascinating space that people want to own. So you can't be looking at valuation here.
- [41:18]
Mike Santoli
Going to get another one, right? Firefly IPO coming up. I just wonder if it's kind of like people surfing from one new one to the next new one to some.
- [41:28]
Tim Seymour
Degree and no debt on their balance sheet. The IPO brought In, I think 700, $650 million or so backlog. As Tim said, JP Morgan is a great note. They just initiated, I think, overweight with a $50 price target. It's volatile, but there's a story behind this without question. Question.
- [41:44]
Mike Santoli
All right. We will follow it. Coming up, Pfizer in focus, the long struggling pharma giant giving strong guidance this morning. Can the gains keep coming? We're going to debate that. And here's a sneak peek at the Kramer camp. Jim's chatting exclusively with the chairman and CEO of energy company Kotera on the back of earnings. Catch that full interview at the top of the hour on Mad money. More fast.
- [42:06]
Karen Feinerman
And.
- [42:14]
Mike Santoli
Welcome back to FAST money. Shares of Pfizer jumping after the pharma giant topped EPS and revenue estimates this morning. Company also hiking its 2025 profit outlook, citing cost cuts and a strong performance this year. The move comes ahead of results from Novo Nordisk tomorrow and Eli Lilly on Thursday. Novo last week warned sales growth would be much less, less than expected this year. And the stock reacted to that. Drugmakers also in focus as the US Plans to impose tariffs on the industry that could reach up to 250%. So, I mean, Pfizer wakes up, Tim, obviously priced for not a lot of growth. And they got a little bit of a glimmer.
- [42:53]
Karen Feinerman
They did. It wasn't a lot of growth. It was a better, it was a better outlook. It was a raised guide. And it was something that I think the lower opex is encouraging at a time when you don't know the reason why. Normally, lower opex is nothing to be excited about for a company that you're looking for Catalyst. But, but I think this story has been de risked from an EPS perspective. I think if you're, if you know, you're locking in between 250 and three and a quarter until anything really happens for them either in the oncology space. We Talked about the 3s bio, you know, lung cancer partnership, that global distribution deal. You know, there's, there are some things to sit in this stock. And at this point, I think the chart tells you it's put in a.
- [43:33]
Mike Santoli
Base 8 times earnings or so for Pfizer and Merck and all that and.
- [43:37]
Christina Parts Nevels
Just under 7% yield.
- [43:39]
Mike Santoli
Yeah.
- [43:39]
Christina Parts Nevels
Yeah.
- [43:40]
Mike Santoli
But see, almost is that, is that.
- [43:42]
Christina Parts Nevels
Good or bad, right? Yes. Should they be spending that much money?
- [43:45]
Mike Santoli
Yeah, it's, well, they have the money. I mean that's right. Like probably like a 12% free cash flow yield at this point or something.
- [43:52]
Tim Seymour
Revenue number B. Revenue number is very good. Valuation has always been there. It's just there's been no growth. But if they're in the middle midst of basically somehow readjusting their company and cost cutting measures, I mean this four year downtrend might finally be broken.
- [44:06]
Mike Santoli
It feels like the market only ever wants to pay up for the next big, you know, product. Right. It's not like we're going to buy the portfolio in the Legacy.
- [44:14]
Dan Nathan
Well and that's what went on, I mean the last year and a half or like actually Prior and Novo and Lilly and that was the next big product and now it's still the next big product but the stocks don't care.
- [44:23]
Mike Santoli
Pfizer. Well, yes, they kind of took credit up front.
- [44:26]
Dan Nathan
Well, it's not too different than Pfizer with the COVID you know what I mean? Like and now it's been left for dead.
- [44:31]
Karen Feinerman
Yeah, it's interesting. And they were getting punished on, on Covid essentially coming to an end for four, two years. I do think the point is what are you doing in health care right now? It's a very difficult place to invest and I think in Pfizer's case a lot of the risks are out there.
- [44:48]
Mike Santoli
Yeah, it's difficult place to invest. It feels like, it feels value trappy I guess in a lot of it. But it is also like a record low percentage of the S and P. So it's one of those like you know, do you buy, you know you can.
- [44:59]
Karen Feinerman
How can 30% cheap to its, its 5 and 10 year PE.
- [45:05]
Mike Santoli
All right, up next, going to get the final trades. Time now for the final trade. Go around the horn. Tim, get it started. Mike, great having you today and boy.
- [45:28]
Karen Feinerman
Big smile on your face despite what's going on in the Bronx these days. Pfizer Visor also some great stuff.
- [45:34]
Christina Parts Nevels
Also thanks to Mike Synovus and Go Liberty.
- [45:38]
Mike Santoli
Dan.
- [45:39]
Dan Nathan
Go Liberty. Palantir last time was this far away from its 200 day moving average and the RSI was the stock spent the next month and a half going down 40%.
- [45:47]
Tim Seymour
Guy, I think you're the hardest working individual at CNBC. We're fortunate to have you. But Tim's making fun of us in.
- [45:53]
Mike Santoli
Terms of they're not going to lose in the Bronx.
- [45:58]
Karen Feinerman
Valero.
- [45:59]
Mike Santoli
Valero, excellent. Thanks a lot guys. Been great. Appreciate you guys watching. Fast Money Mad Money with Jim Cramer starts now. All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet, or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer CNBC make it's Online Course how to Build a Standout Personal Brand Three industry experts will show you how to create and grow your brand step by step.
- [46:56]
Melissa Lee
There's no time like now to start.
- [46:58]
Mike Santoli
Building your personal brand. Register now@cnbcmakeit.com Personal Brand.