← CNBC's "Fast Money"
CNBC's "Fast Money"
Nike Reports Results… And Commerce Chief Charges Tesla Up 3/20/25
00:42:55
Nike reporting results, as the sneaker maker looks for a swoosh in shares. The numbers from their latest quarter, and how the Fast Money traders are lacing up in the name. And Stock picks coming out of D.C., as Commerce Secretary Lutnick tells inventors to ‘buy Tesla’. How the EV maker has become a political talking point, and where it’s heading next as shares sit more than 50% off record highs. Fast Money Disclaimer
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- [00:00]
Melissa Lee
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Sarah Eisen
Our state has changed a lot in.
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Melissa Lee
The last 140 years. We know because Multicare has been here guided by a single purpose, making our communities healthier.
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Sarah Eisen
That comes from making courageous decisions, partnering.
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Melissa Lee
With local communities to grow programs and services and expanding healthcare access to those who need it most. Together, we're building a healthier future. Learn more@mycare.org 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. An earnings bonanza today. Nike swooshing higher, but FedEx doesn't deliver the numbers and trades behind those stock moves and more. Plus Tesla fallout from protests and vandalism at the showrooms to a big endorsement from the sitting commerce secretary, the EV maker front and center for the Trump administration. Will the stock continue to suffer with Elon not holding the wheel? And a Celtic slam dunk? Boston's basketball team making a deal for what would be a record valuation. The number, the buyer and what it could mean for the storied franchise. I'm Melissa Lee. Come to you live from Studio B at the nasdaq. On the desk tonight, Tim Seymour, Karen Fireman, Steve Grasso and Guy Adami. And we start off with a big night, very big night of earnings. Nike, FedEx, Lennar Micron all out with their latest numbers in the past hour. We've got full team coverage on those numbers. Frank Holland standing by on FedEx. Diana Olich is all over the homebuilder. Christina Parsoneville is watching the chip space. We start off with Sarah Eisen on Nike. Those shares are higher. The conference call kicking off moments ago. Sarah, what's the latest?
- [02:06]
Sarah Eisen
Well, the important thing here to remember, Melissa, is that we are in the very early stages of Elliot Hill new CEO tenure. This is his first full quarter and Nike has a big turnaround job to do ahead. But what we learned today is that there are some early signs of progress. And these numbers were actually better than expected. What Hill is calling his win now strategy. So here are the highlights. Revenue beat North America looked better, only down 4% on sales. But we're still looking at overall revenue declines of about 9%. 17% in China, 15% in digital. The earnings beat. It was a big EPS beat that was driven by cost because margins came in a little bit light. I did speak with Matt Friend, the CFO of Nike. And and he pointed to a number of things when it comes to the progress. The PEG premium, which is a new running shoe. The launch there was strong. He also pointed to some signs of cultural relevance in sports. For instance, the first super bowl ad that Nike did in decades catering to women's market. They showed up big at the NBA All Star game so they feel good about that. On China, which is a disappointment down 17% I am told that it's still a bullish story but that the market needs a reset. Cleaning up inventory, focusing on the stores and getting the right product into them. On tariffs. I do expect that you will hear them embedded in the Q4 guidance which will come in the call this hour. But don't expect a full year outlook. Why? Because there's still a lot of work to do here and they're still hard to get some visibility into when we'll get a turnaround into margins and on sales. Look, Hill has to boost the culture. He has to accelerate and innovate new products. He has to rebuild the sales team. He has to work and improve the partner relationships with key stores, get them excited about product again. Investors and analysts say that these problems have been diagnosed. He's done a number of meetings this past quarter with the analysts but now it's a show me story and investors are eager to hear just these little anecdotes about what's working on the product launches and on building Nike brand heat which is very much lost because Melissa, this is still a stock that's 30% off the highs and has basically been cut in half since the 2021 post Covid highs.
- [04:13]
Melissa Lee
What are they seeing in China, Sarah, that makes them say it's a bullish story still?
- [04:18]
Sarah Eisen
Well, in China they see obviously tons of opportunity but there was clearly a mismatch in terms of product that was resonating in the stores which is much like we've seen with some of the Nike products around the world lately. They are still optimistic. They've been in the in the market for a really long time. A Hill has traveled to China since he's been CEO and he's been part of a Nike turnaround in China before in 2015 and 2016, where they basically just had to reset. They had to clear the inventory, focus on the stores. It's kind of a mono brand kind of market in China where there's a lot of focus on the Nike stores in particular and just get the right product for what consumers want. But they're optimistic about the demographics, about the, about the brand perception, about what's happening with sport in the country. So I do expect to hear some of the bullish commentary on the call around that market in particular, which will come as a surprise, a negative surprise on the numbers.
- [05:11]
Melissa Lee
Yeah. Karen and I were discussing the quarter before we came to you care. You had the question about China specifically. Yeah.
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Karen Firestone
And I was just wondering, sir, did they absolutely just blow out of the inventory sort of at any price because you had revenue that was okay and then you had obviously a margin hit. Overall, North America was great. So is that what it was?
- [05:29]
Sarah Eisen
I think that's what it was. Right. Promotions. That's how you clear things out in retail and you just, you clear the shelves, you discount, you offer returns to some of the partners and promotions and clear the shelves for new and hopefully improved product is what they're thinking. And they need to do that overall, globally. But, but clearly China is a bigger problem as well. I talked a friend about this. I didn't hear anything specific to worry about in China. Karen, like from instance, we've seen in the past boycotts of American brand, that sort of thing. He didn't get into those, those issues and I do expect him to talk it up and what they. Knowing what they have to do and getting it done on the call.
- [06:06]
Melissa Lee
All right, Sarah, keep us posted. Thank you. Thanks. Sarah Eisen on Nike. Tim, what do you make of the quarter?
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Tim Seymour
I like the quarter, but no one was looking at the quarter. No one's looking at the next quarter. We're probably looking at 2H26 and maybe this gets pushed out to 27. So what I like is what the ladies are talking about on inventory. Essentially you've, you've cleared inventory and I think they were, you know, inventories were down somewhere going into this number around 11%. They're probably going to show down even more so. So finished with seven and a half billion. Also some, some sense that the previous management team was, was really giving ground on wholesale and that in fact you'd seen full price selling something that was a problem and that this is really where the company is going Back this is where I think the market, the investor community is gets more excited about it in terms of product and innovation and the things that I, you know, I, I don't really have a great call on this. I do think you have a case here where the stock as an investment is something that you can own now. I think you've de risked it. I think you've taken a lot out and you haven't necessarily bought into Elliot Hill as a white knight much in the way some other companies that have changed CEOs. He had that first reaction at 27. You could see an EPS inflection of this company north of 40%. I think you can own it.
- [07:15]
Steve Grasso
Here is the 800 pound gorilla in the room that Elliot Hill has been there for 40 years and he's the turnaround story. Where's the innovation going to come from? And I'm not being, I'm not being really aggressive towards him or maybe I am, but where is that innovation going to come from? If he's been there for 40 years, has he, did he have it already?
- [07:36]
Melissa Lee
So for you it's really a. Wait, wait.
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Karen Firestone
36 stock is right.
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Melissa Lee
Exactly. It's only recent.
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Tim Seymour
Fair point. And stock is the only guy tasked with innovation. I mean you know, he's the CEO but he's not necessarily the guy that's probably on the front line of product innovation. If I had to guess at this.
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Steve Grasso
Point I would say that the, when you look at the CEO, it's the guy that you're playing around a golf with.
- [07:54]
Melissa Lee
Right.
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Steve Grasso
That gives the 50,000 foot up story. This stock has been in a declining trend line since November of 2021. There's, there's more than. The problem is it's the private companies that are taking away from share. So what exactly are they focused on? Shoes, apparel, digital. If they're, if they're trying to get away from Air Force One or Jordans. Jordans are 15% of revenue. Air Force One is 1% of revenue. They're trying to build up women's apparel. So if Women's apparel is 3% of overall revenue, are you going to go and buy at Nike now?
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Karen Firestone
You know I always did so I.
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Steve Grasso
Would you increase.
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Melissa Lee
I mean if they had the right product lineup. I think, I don't think Cher is just taken away. I mean I can't believe you said that yourself. It was a set up for like Guy to say that too would buy women's apparel. But for you to say that you would.
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Tim Seymour
Whatever.
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Steve Grasso
Wrong person, wrong time. They need a new New blood. And I agree with Tim. He's not the only one tasked with.
- [08:58]
Melissa Lee
No matter what, you're not buying into Elliot Hill.
- [09:00]
Steve Grasso
No, I think you're going to get a pop. But I think tomorrow the stock is going to be down roughly 3 to 5%. This is a, this is a, this is not even a dead cat bounce. Guy could talk about the technicals on it. It's below all its moving averages. This is a lackluster bounce of 2% where you should have had a rebound.
- [09:15]
Guy Adami
Yeah, I mean Steve points out the level. Sarah said 50%. It's probably more like 65% from the all time high a few years ago. Obviously not good. And as much as people want to say, you know, it's a China story, China's the third region right now behind obviously North America and Europe in the Middle East. The problem is the deterioration in China is not turning around anytime soon. I think on the ground there there's probably a big push to get away from Nike. So you got to feel that that's going to continue to deteriorate. The question is, can North America pick up the slack? Valuation has always been reasonable the last couple of years, but I don't know if it's about that right now. I think Steve is probably right in terms of innovation. Competition is there and you have a series of lower lows and lower highs for a while. And I think this bounce is basically what we gave up during today. I think it's short lived.
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Melissa Lee
Not cheap either.
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Steve Grasso
Cheap at all.
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Karen Firestone
Right. But as you and I were talking a little bit before the show, I would say, you know, when you're a new CEO, you kitchen sink the quarter. And this quarter actually really wasn't bad, particularly North America. But what if this is the kitchen sink?
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Melissa Lee
Right.
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Karen Firestone
What if this was a very conservative quarter where they could have done a lot more with the quarter. And so I don't know, I'm long but that's not been the right place to be. But I'm staying long.
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Melissa Lee
Yeah. We'll keep you posted on everything that comes out of that conference call which is ongoing right now. Let's get to Lennar, just reporting at the top of the hour as well. Shares of the homebuilder popping on a Q1 beat. CNBC's Diana oh joins us now with the details from that quarter. Diana? Well, that's right, Melissa. Lennar's Q1 beat on the top and bottom lines. EPS came in at A$96 a share versus estimates of a DOL3 revenue of 7.6.
- [10:47]
Diana Olick
3 billion versus estimates of 7.43 billion.
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Melissa Lee
New orders increased 1% to 8,355. Also above estimates, deliveries up 6% right around expectations. Gross margins of 18.7% was just shy of guidance. Now, Lennar's executive chairman Stuart Miller noted.
- [11:05]
Diana Olick
In the release that the average sale.
- [11:07]
Melissa Lee
Price was down 1%. Net incentives, he added, our first quarter was marked by a challenging macroeconomic environment for homebuilding. While demand remains strong, persistently higher interest rates and inflation combined with a downturn in consumer confidence and a limited supply of affordable homes made it increasingly difficult for consumers to access home ownership. He added that they continue to use incentives, including interest rate buy downs, to help with affordability. And guidance, though, is right along a little shy of estimates on new deliveries coming in. But again, I spoke with Stuart Miller last week, Melissa, and about tariffs specifically, and he said that was just going to hit affordability even harder. Said it's just hard to get those new buyers in the door, especially those first time buyers. The stock just basically took a hit, Diana, just as you're coming to air. So obviously, you know, whatever happened on the conference call, we don't know about that yet, but it is down by three and a quarter percent right now. Conference calls in the morning, I believe tomorrow. Okay, that's right. All right, so we'll try and look into this. The 3% decline here, Diana. Thank you. Dana Olek.
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Guy Adami
Average closing prices continue to deteriorate. Came in about 408,000. She was looking for 4,13ish. And that continues to decline. Average price for a new order is lower than expected. The backlog is lower than expected and margins are lower than expected. And that's with rates being favorable over the last couple of weeks. I think it speaks to, in my opinion, an economy that's slowing down. And regardless of where rates go at this point, I don't think you want to be in the homebuilders. We've been saying that for a while.
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Tim Seymour
Yeah, I agree. And the valuations are not the problem. The problem is I think you have to look at the story a little bit differently both because I think the margins this guy talked about are starting to break down. We know what they've been doing in terms of underwriting some of the mortgage costs. I do think that the consumer is weaker. I think the housing sector was also, if you're an investor was getting every time you got some relief on rates, especially back into the fall, it was pushing this up to all time highs. When I thought that that story was really something that should have been priced in the first time the Fed started cutting. Even though that was the first time they started cutting. We knew the Fed was going to cut. Markets anticipate that. So you don't need to run into the sector. I actually think homebuilders are going to be under, under some water for a couple of years at this point based upon where we see demand.
- [13:23]
Melissa Lee
I mean, if the sentiment number that we got last week from you, Mitch, is not in fact an outlier and persists for a couple of months going forward. I mean, that is the pulse of the consumer. Are you going to buy one of the biggest purchases of your life when you are not feeling good? No.
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Karen Firestone
I mean, if you have to. But that's not, that doesn't change the market. That buyer who absolutely has to no matter what.
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Melissa Lee
Right.
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Karen Firestone
We keep waiting for that. Those, all that sort of tied up inventory to come to market when rates are lower. But they're far away from that inventory coming on.
- [13:53]
Steve Grasso
Yeah, you can't. The whole complex, even Home Depot and Lowe's, all the charts look pretty similar and they're all not viable charts right now. When you have what's the number? 70% of people have a mortgage rate under 6% or some silly number like that. So to Karen's point, you don't have to buy anything. You can't even. You live in that mortgage, you can't even get out of it. So I would stay away until you see mortgage rates drop precipitously, probably below 6, you probably get people starting to make a move.
- [14:18]
Melissa Lee
All right. Meantime, markets failing to hold on to yesterday's post Fed momentum with major indices all closing just in the red. The central bank kept rates steady and forecast two rate cuts this year even as inflation expectations rose. President Trump voiced his disapproval of the move on Truth Social, saying the Fed would be much better off cutting rates as tariffs transition into the economy. He also called April 2nd when the next round go into effect, quote Liberation Day in America. But Double Line Capital CEO Jeffrey Gundlach expressing a little bit more doubt about the economic outlook.
- [14:53]
Steve Grasso
I do think the chance of recession is higher than most people believe. I actually think it's higher than 50% coming in the next few quarters. I think 50 to 60 is where I am.
- [15:10]
Melissa Lee
For more Damp Spring Advisors CEO Andy Conston joins us now. Andy, great to have you with us. The last time you were on, you made a fantastic call. I mean, you called for the slowdown. And I guess you know, our question now after you make such a great call is what is your next call because it sounds like, you know, you called for the scare and now you think the scare is going to become a reality.
- [15:31]
Andy Constan
Right? And I think that's right. Last time it was about the Fed on pause. They're still on pause. Financial conditions tightening eased a little bit but they're much tighter than they were last fall. And then it's all about the Trump agenda. And the Trump agenda is, except for deregulation is anti growth and so that hasn't actually started hitting the economy yet. So we definitely had a growth scare. Bonds rallied a lot, stocks fell and that's probably over. And what's going to happen and what I think will drive a second leg down is the growth is actual growth will slow more than expected.
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Karen Firestone
Hey Andy, it's Karen. First of all, excellent call. So what do you think you said, I know you said some of the policies are inflationary so are we looking at a stagflation? I know Trump, Trump trying to talk interest rates down but that's not going to really affect the 10 year, only the front of the curve.
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Andy Constan
Right. I think what is true is that the policies are anti growth in terms of inflation. Tariffs are as I think now the Fed telling us at a primary level looking through the initial price change, level change and not assuming that it's going to be inflationary but you will have a short term inflation rise that they're going to look through. Immigration is inflationary because you reduce the labor supply. The budget cuts, the expenditure cuts are anti growth but also disinflationary. So there are, I think inflation is less a big deal right now. Of course if the tariffs do have secondary impact and start causing a more persistent inflation, then the Fed's going to not be able to cut as promised. But for now I think it's all about growth and the anti growth policies.
- [17:36]
Tim Seymour
And it's Tim, how about credit? Because there's been times at least for the last month and a half when equities have been extremely volatile. People have said look at credit markets, they haven't budged. If you look at the high yield option adjusted spread, I mean it's actually moved 35 basis points in the last month. And so I'm just curious your take on this because typically we are always following our clues on the equity markets if we're smart by following what credit is doing.
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Steve Grasso
Right.
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Andy Constan
Sure. So credit is generally moves less than equities until it moves quite a bit more. And I think we're in that phase of it moving less than equities outperforming equities, but starting to get the sense that there's this sort of convex move wider in credit spreads. But I think that's going to take another leg down and actual weakness in the economy to happen. And as it relates to treasury bonds, the Fed's on pause. So the front end of the yield curve is not likely to change rally much. But if we can continue to start seeing more slowdown, you might see a flattening where the long end continues to rally a bit.
- [18:45]
Melissa Lee
So Andy, how are you positioned for this anticipated second leg Lower.
- [18:50]
Andy Constan
Right. So I think bond markets are very boring right now because of what I just said. They're very fully priced for a slowdown. Credit, as you said could, as we were talking about could be an interesting place to be. Long protection, but I don't have much exposure at all in fixed income. I am short equities and planning on for now because this second leg may take through say for instance the earnings season upcoming to become an actual slowdown. I am beginning to short equities again. I'm short them and I'm going to add shorts on any rally.
- [19:29]
Melissa Lee
All right, Andy, great to speak with you. Thanks so much. Annie, Constant of damp spring guy, what do you think? Second leg lower on equities.
- [19:38]
Guy Adami
Makes sense. We'll talk about FedEx in a minute which will I think sort of galvanize my thoughts. But yeah, I do think so. We just traded up basically back up to the 200 day moving average. The S and P we failed. I mean we've seen it before. What happened yesterday of a rally on the back of the Fed, it's typically the next day it reverses. That happened again today. So the level we traded up to makes sense. I'm with Annie on this one. Next leg lower.
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Steve Grasso
I think you really have to look at the 200 day moving average and I think the bounce could last a little bit longer. So if you look at the 200 day moving average, it's somewhere around 5745 or so. We've already spent a week below that or nine days. I think we rally a little bit further.
- [20:13]
Melissa Lee
Coming up, more earnings action. Shares of FedEx and Micron on the move after reporting the details from the quarter's next and a controversial stock pick out of D.C. why the Commerce Secretary is endorsing Tesla and the impact politics are having on the EV makers. Business don't go anywhere. Fast money's back in two at Capella University. Learning the right skills could make a difference. That's why our business programs teach you relevant skills you can take from the course room to the workplace. A different future is closer than you think with Capella University. Learn more at capella.
- [20:44]
Tim Seymour
Edu CNBC Exclusive Chicago Fed President Austan.
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Mike Ozanian
Goolsbee first interview since the latest Fed decision.
- [20:53]
Melissa Lee
Inflation outlook, economic growth and rate policy stay out ahead of the market squawk box tomorrow, 6:00am Eastern CNBC. Welcome back to Fast Money. Earnings alert on FedEx shares are lower if the delivery giant fell short of expectations on the quarter. The analyst call just minutes away. Let's bring in Frank Holland for all the details. Hey Frank. Hey there Melissa. FedEx shares appear to be moving lower not only on that EPS miss but also just broader concerns of the impact of tariffs and economic uncertainty on the business. So FedEx seemingly trying to get ahead of that say in the release about the cut to its revenue and EPS guidance, saying that that forecast assumes, and this is a quote, no additional adverse economic, geopolitical or international trade related developments. But of course we have the April 2 tariffs. Those are coming up where the Treasury Secretary has said the numbers are basically still being calculated based on where the administration feels the real tariffs are based on duties and other measures that countries, other countries have in place. So I just spoke to FedEx. They clarified, they said the forecast only includes currently implemented tariffs, not the April 2 tariffs that are coming up. CEO Ross Subramanian referred to a challenging operating environment. However, the CFO gave a lot more specific color appearing to speak to the impact that tariffs and trade negotiations are having on US Businesses, saying in part our revised earnings outlook reflects continued weakness, uncertainty and uncertainty in the US Industrial economy which is constraining demand for our business to business services. And you really saw the impact of that and the freight segment. Take a look at this over the quarter and remember this included the holiday quarter. The average pounds per day that FedEx freight was moving here in the US had fell by more than 60% year over year. However, the holiday peak E Commerce business did post strong results and US package volume that increased 5% year over year. FedEx shares lower. U ups also trading a bit lower in sympathy. Melissa Frank, Frank, thank you. Frank Holland so it sounds like based on the forecast based on the April 2 tariffs not being incorporated into guidance that there is downside risk to the guidance they have issued, which is lower.
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Tim Seymour
I think so. And again the citing the outlook for the industrial US Industrial economy is very unclear and uncertain. And what we're hearing from CEOs and they're seeing it, this was a story that I think Coming into these numbers, we were starting to see, I think at least the guide that was getting better. You're going to start to see sequential growth. I think this is pushed out. It's rare that this company is expensive. Even to itself. It's not expensive. But what you do see with FedEx is I think it can overshoot to the downside. I mean, this stock can get cheap. And if I wanted to own one of the two, it's not a. What are you rather. It's just pointing out that UPS is really underperforming. You say substantially and therefore I think, you know, being cheap isn't good enough right now for FedEx.
- [23:32]
Melissa Lee
Yeah.
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Karen Firestone
All right. If that's not a. Would you rather. I mean, anyway, that's. Aside from.
- [23:37]
Tim Seymour
Would you rather not call it a. Would you rather it's not a. Would you rather.
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Karen Firestone
I mean, it's okay.
- [23:42]
Melissa Lee
It walks like a duck. Anyway, your thoughts on credits.
- [23:46]
Karen Firestone
Actually, I agree with everything Tim said, even though. Yeah. And if I didn't. Would you rather. I own either. I own neither right now. It's not surprising that the guidance was low, however. The bar was low, the expectations were low and the PE multiples low.
- [24:00]
Steve Grasso
DHL is actually. That'd be. Would you rather.
- [24:04]
Melissa Lee
Well, she did. Would you rather. Rather you did. Would you rather Join in. Everybody in.
- [24:07]
Steve Grasso
Look at all of these. If you look at all of these and compare them all, DHL is actually the only one who's come up with a digital strategy. The chart looks great. It looks great. If you look at their performance, it's all about the market share for international. They beat ups, they beat FedEx. They own more market share on that side. They figured it out. But I would have thought that you would see the pull forward for FedEx and UPS be a little. A little bit bigger and more obvious with tariffs coming down the pike. We didn't see that. So guy had touched on a little bit earlier. This could be a sign canary in the coal mine or a further sign that the consumer is weak. It's probably. Probably that's the way it lines up. But if you had to. DHL is where you want to be here.
- [24:48]
Guy Adami
You know, Gilead looks really interesting here.
- [24:53]
Melissa Lee
Yeah.
- [24:54]
Guy Adami
FedEx, if you pull up the crack stuff. I mean, look at this show. You want to talk about double tops. We actually pointed this out. Go back to 20, 21, 315. We traded up there last summer. Failed. Tim, Karen and Steve are right and by the way, say what they want about guidance. The quarter wasn't particularly good in terms of the numbers and in terms of the margin. So something is going on there. I think something continues on the downside in terms of the stock.
- [25:16]
Melissa Lee
And that was peak holiday and it wasn't good. By the way. We're watching shares of Nike. The conference call is about 26 minutes and the stock has turned lower so far. So pretty much at after our session lows right now. We'll continue to monitor that conference call and bring you all the developments. Meantime, coming up, an unprecedented stock pick from the Trump administration. Yes, guess, a stock pick. The commerce secretary tells investors to buy Tesla. How the EV maker has become a political issue and what is next for the stock after losing half its value. And more earnings action. Shares of Micron on the move after reporting results, numbers out of its latest quarter and the headlines from Nvidia's Quantum Day. That's straight ahead. You're watching Fast MONEY live from the NASDAQ markets out in Times Square. Back right after this. Is it time to reimagine your future? The right business skills may make a difference in your career. At Capella University, we offer a relatively education that's designed to focus on what you need to know in the business world. We'll teach professional skills to help you pursue your goals like business management, strategic planning and effective communication. And you can apply these skills right away. A different future is closer than you think with Capella University. Learn more at capella. Edu.
- [26:30]
Tim Seymour
CNBC Exclusive Chicago Fed President Austan.
- [26:33]
Melissa Lee
Goolsbee first interview since the latest Fed decision. Inflation outlook, economic growth and rate policy stay ahead of the market squawk box tomorrow, 6:00am Eastern, CNBC. Welcome back to Fast Money. Stocks closing just in the red today. The Dow down 11 points. The S&P shedding 210 of a percent of the NASDAQ. 310 of a percent lower still in the red for the week. China stocks sharply lower after their recent run. The FXI down nearly 3%. The K Web down more than three and a half percent. And shares of Metta inching back into the green for the year. The Social stock stock seeming to find Support at its 200 day moving average. It's the only MAG7 name with a gain so far in 2025. Wow, that is something to say there.
- [27:15]
Guy Adami
We pointed it out. I mean if you're looking for a level, that's your level unless you think the economy is going in the blank. I think Facebook just on valuation in this self, you've seen it before. So we've been waiting for an entry point that's as good as it gets the other day.
- [27:28]
Melissa Lee
Yeah. You mentioned the weakness in China earlier today.
- [27:31]
Karen Firestone
Yes. I mean, to me it was just more the straight up practically for several weeks. I think just this pullback. I'd like to add more. I didn't feel like today was there to do it. I wouldn't be surprised if we see a little bit more of a sell off. And I'd like to add, well, it.
- [27:48]
Tim Seymour
Looked like a day when you had a little bit more risk off, certainly around the rest of the world, which had been outperforming as we know. And I think if you like, if you're an environment where risk is starting to kick back up and as we've said tonight, I mean if equities got a little bit of a buzz from the Fed, but the reality is you're facing tread trade dynamics and heaviness. You are going to see higher volatility. Stocks underperform in that environment. I ultimately do think that some of the valuations in China, and I do mean Alibaba particularly, are going to be resilient and that's why they're going higher here. But on a day like today, it was time to take a breath.
- [28:20]
Melissa Lee
By the way, we're getting some more color off the Nike conference call, which is why the shares are going lower in the after session. Nike talking about the need to have margins be pressured. Basically they need to clear the inventory, but they also have to book higher expenses in order to get the right inventory out there on the shelves. So right now we're seeing the shares down by about 2%. I mean, this is a turner. I mean you got to give the guy some slack, right? These are things that need to be done.
- [28:45]
Karen Firestone
Right? I mean, he's one quarter in. Yeah, definitely. Tim said at the beginning this quarter didn't matter. You don't think the next quarter mattered either? It may be a while.
- [28:53]
Melissa Lee
Right? Coming up, we're shipping up to Boston.
- [28:56]
Steve Grasso
Oh, no.
- [28:57]
Melissa Lee
As the raining and the dance ingo historic deal. The new team owner and the record breaking sale price when Fast Money returns back into. Welcome back to Fast money. Tesla shares eking out again despite recalling virtually all cybertrucks on the road today. But the stock still down over 5% this week and nearly 50% from its December highs as politics increasingly surround the name. The company has been targeted by protesters and widespread vandalism in the wake of CEO Elon Musk Musk's work with Doge and the Trump White House. NBC News also uncovering a website appearing to share personal information about Tesla Owners across the country. In response, the administration has come out in strong support of the company. In an interview last night on Fox, Commerce Secretary Howard Lutnick called on investors to buy Tesla stock saying this guy's stock is so cheap yesterday Mr. Lutnick's old firm Cantor Fitzgerald by the way upgraded the stock to a buy from a neutral. For more on what is next for Tesla let's bring in Wells Fargo senior auto analyst Colin Langen. Colin, great to have you with us. You've been bearish the name overall based on the fundamentals. But if you're to take a look over at you know, your overall bearish thesis, what percentage can you attribute that now to the politics surrounding Elon Musk?
- [30:15]
Colin Langen
I mean I think regarding the news today, I mean most of my thesis is based on the fundamentals. I think some of these protests could be short lived. So I'm underweight. I think there's plenty of downside from here but I wouldn't be recommending to short the stock on protests and all that stuff. I think that could all phase out in months, weeks. But before all of this happened we talk about the Stock is down 50%, stock's still up year over year. Fundamentals are worse, earnings are down, deliveries were flat last year, probably on trend to be down this year. This is a growth company trading at 80 times consensus over 100 times my estimate. So I think there's plenty of other issues that I have that support my underweight. This does in the near term add to it but I wouldn't be underweight with just based on politics.
- [31:02]
Guy Adami
Good call by you number one. Number two they told us a couple of years ago that we're going to have trough margins and they would reaccelerate. This last quarter 16 handle was the worst we'd seen in five years. I'm hard pressed to believe it can get much better from here. Given the competition and given some of the demand. Where do margins go from here?
- [31:20]
Colin Langen
I think there's no question that they really go down in my opinion. I mean you have continued pricing pressure. That was the surprising part. Last year you're down 1% on deliveries on an 8% price cut. So you didn't actually even get those price cuts didn't translate pushes pressure on margin. I think that continues you have the affordable model coming that even if it's successful it dilutes margins and I think the big sort of risk at the end of the year as much as everyone talks About Trump benefit, IRA, EV credit, $7,500 Tesla is the biggest beneficiary of those credits markets, once those get pulled, that's going to put significant pressure on the margins. So I don't see many levers to actually raise margins this year.
- [31:55]
Karen Firestone
So Colin, the narrative around the stock has been it's not a car company, it's all these other things. How do you think about all these other things? Full self driving, robo taxi, robots, whatever.
- [32:06]
Colin Langen
Yeah, I mean I think if you look at the stock I have like maybe, I think most investors think maybe 70, $75 of auto value and the rest is attributed to, to the optimists and the robot, the cybercab. Even in my bearish valuation, I have $200 billion of value there. And look, Waymo is doing 200 rides a week and their value last valuation was reportedly 45 billion. The humanoid robot, the biggest valuation I've seen is less than 50 billion. So you have to believe that they are far ahead of everyone else, even though Waymo is out there demonstrating actually better results. Results. So you know, I have structural concerns about the strategy. With full self driving with vision. Only if you talk to a lot of experts can it pick up things like glare, dust, fog, safely, you know, so we'll see how they could get around those challenges.
- [32:53]
Steve Grasso
So to Karen's point, this is round trip from that whole run up that we've had since October 2024. At a certain point, all of the things that Karen said have to be worth something if nothing is worth anything anymore. Being as though his personality has thrown into this bifurcation of I love the car, I love what it did for the climate and everything else, but now I hate Trump and I hate musk. At a certain point, do you say it's overdone? It sounds like that's where you're on the fence with here. Could it go down more? Yes. But are we at that point where there's some innate value?
- [33:29]
Colin Langen
I think we're not even close to the innate value. Right. I mean as I said, but the stock is still up year over year and the earnings and consensus are way down. Deliveries came in way worse. The fundamentals have come in worse.
- [33:40]
Steve Grasso
Where's the level where you buy it when you say it?
- [33:42]
Colin Langen
I mean I have $130 price target, so I still have 40% downside from here. And I don't think that's crazy at all considering how weak things have gotten.
- [33:51]
Melissa Lee
Colin, thanks for stopping by. Appreciate it.
- [33:53]
Colin Langen
Thanks for having me on.
- [33:54]
Melissa Lee
Colin Langen, by the way, Adam Jonas, who just named Tesla top pick just at the Beginning of March lowered the price target to 410 from 430 and also cut delivery numbers. So we'll see how that if at all that pressures the stock. But here we are.
- [34:11]
Guy Adami
First of all I thought it was some six hundred dollar price target so I might be wrong. But with all that said, yes, I think he was one of the high on the streets. Here we are. Collins had a great call. I mean theoretically this is where the stock should bounce from. If you think about it, we've round tripped the entire thing. So if you're looking for a trade, I think it's interesting here but I don't think it's unreasonable to think you could get the Collins price target given all the headwinds they're facing.
- [34:34]
Tim Seymour
It's fascinating because the stock did something independent of the politics that some of that was driven by the last quarter's numbers. In the quarter before numbers where you know, the analyst community universally had said we don't expect anything here. We don't expect here. We have to look to kind of late 2025 force. We see a turnaround in margins. Now we're talking about catalysts in the form of, you know, fsd, what's going on with Waymo and the competitive landscape on Robotaxis. Huge. Me and where they're going to make these announcements. I, I just think that, you know, waiting for those and the crux of Cantor's call last night was, was those are the catalysts to get in front of when in fact those haven't really been important catalysts and they're not really as Colin said in the price for most analysts.
- [35:15]
Melissa Lee
We want to take a check on shares of Nike. They are at after our session lows. We're just getting the guidance here. The company expect expects Q4 revenues to be down in the mid teens range. Gross margins to be down 400 to 500 basis points. The stock is down by more than 5% at this hour as investors digest this. This could be the kitchen sink, let's hope. Yeah, that's.
- [35:37]
Karen Firestone
That is the kitchen sink. That is a. That's a very big numbers. Right, Right.
- [35:41]
Melissa Lee
But it's. We have to look through it, right?
- [35:44]
Karen Firestone
I think so.
- [35:45]
Melissa Lee
Or is there a certain point where the kitchen sink sink is too big and you don't look through it?
- [35:49]
Karen Firestone
Well, I don't think you had that many kitchen sinks so you know another one you can't look through it.
- [35:56]
Melissa Lee
Right. Coming up, more earnings action coming your way. The details from Micron's latest quarter and all the headlines from Nvidia's Quantum Day. That is next. More fast Money into Welcome back to Fast Money and Earnings Alert on Micron shares jumping after the chip maker reported earnings and revenues beat Semi is also in focus as Nvidia holds its Quantum Day at the GTC AI conference. CNBC's Christina Parts Neville has got the headlines on both stories. Christina well it's important to note you.
- [36:25]
Diana Olick
Just mentioned Micron's earnings beat, but last quarter they had significantly lowered their guidance. So this beat really comes against a reduced Benchmark. Nonetheless, Micron CEO was bullish on the call calling for record Q3 revenue. He emphasized data center demand continues to drive tight supply for high bandwidth memory with Micron already sold out for 2025, although he mentioned that last quarter the company holds a strong share of memory in Nvidia's Hopper 200 as well as Blackwell chips really, really reinforcing its position in the AI boom. But there was one key uncertainty tariffs. The tariff impacts were not included in guidance due to unclear timing and management noted that Micron does impact import only a very limited volume. That's what was in the release of product subject to new tariffs on Canada, Mexico as well as China where tariffs do apply. The company made it clear costs will be passed on to customers. Shares were coming down from their earlier 5% high. Ford P last I checked was 14 times. It's still considered cheaper than a lot of other semi names. And now let's I'm going to do a hard pivot and talk about Quantum because I am at GTC right now. Jensen Huang CEO is just nearby surrounded by a crowd. But earlier today he invited invited quantum computing executives to explain why he was wrong about quantum computing as being 15 to 30 years away from practical use. But unfortunately several of them actually did the opposite on the panel. So you had Rigetti CEO who said their technology is accessible and AWS and Azure but still quote not good enough yet for any practical use. And then Jensen really quickly cut him off when he made that sentence and then Iron Cues executive stated that quote for the quantum industry it's going to be another 10 to 15 years to get to where Nvidia and all the other giants are. So you really saw a lot of these names sell off, especially during the panels, suggesting maybe that investors may not have fully grasped the full reality of how near term and practical a lot of these names are.
- [38:26]
Melissa Lee
Melissa all right, Christina, thank you. Christina Parts Nevillis what do we make of mu? You've been in the name years ago.
- [38:36]
Steve Grasso
I've been in the name years ago. I traded it just this year underneath 90 when it, when it popped or a year ago. It's dram. It's. It's nan. 73% of their revenues comes from dram. Obviously the balance, somewhere around the balance with maybe a little bit of cushion comes from nand. With AI and with storage you need memory. And NAND was supposed to really explode and the thought was, is that enough to move the needle for Micron? I think either way you're both going to need the DRAM for short term memory. NAND for the long term memory. I think you're good on that. I think, I think the go a different direction. As she pivoted with Nvidia to start talking about Quantum when it was 10 or 15 years out. Does that seem like you're moving deck chairs around where you've gotten your full, your full bang for your buck out of AI and now you have to pull forward something that could be, could be a conspiracy. Guy's known to play along with some conspiracy theories as well. But if your AI was that a good going forward with story, it is that good.
- [39:40]
Tim Seymour
It's fabulous.
- [39:40]
Steve Grasso
It's if they were 85% of the market because Deep Seek headline came about. Everyone else is spending 65 to 105 billion. Deep seat is spending 5 million. Even if they're wrong, right? So this.
- [39:54]
Tim Seymour
But there's, there's people lining UP Enterprise Fortune 500. This isn't even about revenues come from four clients.
- [40:00]
Steve Grasso
All those four clients have to do is crimp their spending.
- [40:03]
Tim Seymour
Nothing wrong with their AI. I mean there's nothing wrong with anything. It's been a problem about meeting demand. It's so. And we just heard about the new round of chips that are ahead of schedule.
- [40:13]
Steve Grasso
So then why talk about Quantum them?
- [40:14]
Tim Seymour
You're the one talking about he is, not me.
- [40:17]
Melissa Lee
Because it's the next thing.
- [40:19]
Steve Grasso
He said it was 10 or 15 years out, but now it's the next thing.
- [40:22]
Melissa Lee
Google talked about it too.
- [40:23]
Steve Grasso
That's fine because Google actually has a problem.
- [40:26]
Tim Seymour
Let me talk about Micron because I think if anyone's out there that actually has been overly rosy about their prospects and been a little bit cheerleader. Ian Pompom. Ish. I think it's Micron. And here they are again talking about HBM and where at least the, the, you know, the demand side of DRAM is actually working and it's well offsetting a price decline in nand. So, so I would be cautious. Micron is always cheap. It's had a Pop here. It's not what I'm chasing.
- [40:50]
Melissa Lee
Coming up, a slam dunk deal out of the NBA. Who is open up? The reigning champion Boston Celtics and the record breaking sales price. They fetch the details when Fast Money returns back into welcome back to Fast Money. Reigning NBA champion Boston Celtics scoring scoring off a record breaking deal today. A group led by investor Bill Chisholm buying the team for $6.1 billion. That's about 13 times revenue. The team was previously valued at five and a half billion in CNBC's official NBA rankings released last month. As part of the deal, the current Celtics CEO and governor Will Raymond will will remain in his role through the 2027, 2028 season. CNBC senior sports reporter Mike Ozanian joins us now for more eye popping deal Mike but it's structured in a very interesting way. It's not full control transfers, right?
- [41:38]
Mike Ozanian
He's buying more than half the team. William Chisholm and his group is now and then he's going to buy out the remaining portion in three years. What I find most fascinating about this deal is most of the huge prices that we've seen. The high revenue multiples have been for teams that control the economics of the arena. The Celtics do not. The Boston Bruin control the economics so they get the lion's share of hospitality suite revenue and those types of things. So if you're the NBA, you're loving this because you're thinking wow, even for a team that doesn't control its economics, you're in a great market like this, you're going to go for an eye popping revenue multiple.
- [42:13]
Melissa Lee
Right. So what does this do to other valuations on the list for the teams that do control the economics?
- [42:17]
Mike Ozanian
Well listen, I think if you're a big market team it definitely boosts your value. A lot of this is of course as we've talked about here before is the new TV deal for the NBA which kicks in next season is 60% more than the current deal. What the advantage the Celtics have too is even over some other big market teams is they're the only NBA team in their market. So in New York we have the Nets, the Knicks. In la you got the Clippers and the Lakers. They own that market and they're probably the most iconic brand. They won the most championships in the NBA. They could win it again this year.
- [42:52]
Guy Adami
I'll be respectful and say the Nets are not part of New York. But with that said, I mean I think the Grossbeck family bought that franchise for $300 million 22 years ago. So you can do the math. And go back to Steinbrenner. We bought the Yankees for like a million two. You can do that math. My question is, 20 years from now, we talking about a team that goes for $50 billion in one of these major sports.
- [43:14]
Mike Ozanian
I agree. I remember the first time I valued sports teams. It was a long time ago, around 1989. And when I saw the valuations, because to your point, I was looking at what the Yankees were valued at then, guys were saying like 250 million. I was like, wow, versus the enterprise value of 8.8 million in 72 or 3. I said, can this go on forever? And the guy said to me he was a valuation expert. He said, no, no, no. He said, they can't go much higher because media rights aren't going to go up that much more. So I think you're right. I think the intellectual property value of these teams and now with technology, this guy, Chisholm, private equity guy, specializes in technology to expand those IP capabilities outside of the team into ways to generate revenue from other things. I think they really tapped into something.
- [44:03]
Melissa Lee
Mike, great to see you. Thanks for coming.
- [44:04]
Mike Ozanian
Great to be here.
- [44:05]
Melissa Lee
Thank you. Up next, final trades, final trade time.
- [44:10]
Tim Seymour
Tim, Smoke them if you got them. British American Tobacco. Now, tobacco stocks have been running and I think this one will continue to run.
- [44:17]
Melissa Lee
Karen.
- [44:17]
Colin Langen
Yes, yes.
- [44:18]
Karen Firestone
Boeing, I think, poised for liftoff. I like what the CFO said yesterday.
- [44:21]
Steve Grasso
Steve Tesla for a trade guy.
- [44:24]
Guy Adami
Psa. Nobody cares about your brackets tomorrow. So don't tell people how I went. You know, 13 and 2. Nobody cares.
- [44:32]
Melissa Lee
ExxonMobil Mel, thank you for watching Fast Money. All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of cnbc, NBC Universal, 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@ Capella University, learning the right skills could make a difference. That's why our business programs teach you relevant skills you can take from the courseroom to the workplace. A different future is closer than you think with Capella University. Learn more at Capella Eduardo.