← CNBC's "Fast Money"
CNBC's "Fast Money"
Nvidia Fails To Lift Markets… And The Latest Media Drama For Warner Bros. Discovery 2/26/26
00:45:58
Nvidia rolling over after earnings last night, and failing to lift markets as investors sell out of tech and semi stocks. The names getting dragged down, and where one top tech analyst sees Nvidia and chip & software stocks heading next. Plus the latest numbers out of Dell and Coreweave, weakness in China tech, and the battle between Paramount Skydance and Netflix as the media companies battle for Warner Brothers Discovery. Fast Money Disclaimer
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- [00:00]
Melissa Lee
What does it mean to live a rich life? It means brave first leaps, tearful goodbyes and everything in between. With over 100 years experience navigating the ups and downs of the market and of life, your Edward Jones financial advisor will be there to help you move ahead with confidence. Because with all you've done to find your rich, we'll do all we can to help you keep enjoying it. Edward Jones Member, SIPC before we had
- [00:31]
Dan Nathan
AT&T business Wireless coverage, our delivery GPS
- [00:35]
Carter Braxton Worth
wasn't the most reliable.
- [00:36]
Dan Nathan
Once our driver had to do a
- [00:38]
Melissa Lee
14 point turn to get back on route. A 14 point turn, an influencer even livestream the whole thing. Not good for business.
- [00:46]
Dan Nathan
Now with AT&T business Wireless routes are updating on the fly and deliveries are on time.
- [00:52]
Carter Braxton Worth
And the influencer did get us 53
- [00:54]
Tim Seymour
new followers though at&t business Wireless connecting changes everything.
- [01:03]
Melissa Lee
Live in the NASDAQ market in the heart of New York City's Times Square. This is fast money. Here's what's on tap tonight. Nvidia's big reversal from a post market pop to a 5 1/2% loss at the close. How the stock impacted the market today and how traders should make sense of the moves. And the latest in the battle for Warner Brothers. What we know now about Netflix's pitch to the White House and how Warner views a sweetened bid for Paramount Skydance. Plus what the move in Smucker stock says about the state of Staples, why Chinese tech stocks were under pressure today and the foundation for Housing, what the chartmaster sees in the technicals that tells him where the stocks are heading. I'm Melissa Lee county live from studio BE at the Nasdaq. On the desk tonight, Tim Seymour, Carter Braxton Worth, Dan Nathan and Guy Adami. We are back full force, full desk tonight. We start off with a whole day on Wall Street. Major averages closing off their worst levels but still digesting a major negative reaction to in video results. The Nasdaq down more than 2% at its low close the day down just over a percent. The S&P 500 shedding half a percent while the Dow managed to eke out a gain of 17 points. The aforementioned Nvidia sinking 5 1/2% despite a blowout quarter in guidance raise the results seemingly not enough to quell concerns over hyperscaler spending and the stability of the AI trade. Nvidia shares losing almost $260 billion in market value today, roughly equal to the size of a United Health. The results weighing down other chip makers. Taiwan Semi AMD Broadcom, Applied Materials, all among the biggest laggards there. On the other hand, the beaten down software sector as measured by the IGV, managed to rise 2%, a strong quarter from Salesforce, helping boost those stocks, even though the company gave weak guidance for fiscal 2027. CRM closing 4% higher. So what is the action signaling about the market's direction and the trade more broadly?
- [02:49]
Carter Braxton Worth
Guy, one day is not a trend make, as we've said a number of times, but today could be one of those days. You come back and say, okay, the igv, the to our ETF traded down the April lows. We almost traded down the lows we saw back in 24. So you can understand why that could potentially be a bottom and we've bounced. The smh, which has been on a rocket ship, is starting to turn a little bit. We're going to learn a lot more next week with Broadcom Avgo. However, you can start to make the case that, you know, maybe the turn is in now a lot. I'm not calling that, by the way, but Tay's one of those guys you
- [03:20]
Tim Seymour
just call the turn.
- [03:22]
Carter Braxton Worth
What did I just say? Oh, sorry, what did I just say? I however, I think even Tim would agree that it's an interesting day to sort of bookmark and say, okay, let's see how this plays out over the next couple of days. Because if in fact that was the low in the igv, it means it probably has another significant leg higher, especially if Microsoft participates.
- [03:43]
Tim Seymour
So I bet Carter is going to agree with me. So what it does mean is that nothing changed fundamentally. What we do know is that we got on the fundamental side, we got nothing new from that call. We had everything in line. We had a great number, we had this and that. What we do know is that hedge funds and long only did a lot today, the same way they did a lot yesterday and have been going into this. Nvidia, to me, if anything, has been a shorting vehicle while these guys went long memory, while they went long optical, why they did, you know, and at the same time, part of that software trade, in other words, that software short, I think it's really about reversing some of that. It's been a great trade, by the way, and Nvidia does its job certainly in terms of the, the margin and what it gives you. This gets overly technical in terms of how funds operate, but I think all this shows is the rotation. This has been the great rotation market. And I do think, and Dan's been saying this for A long time, at least a month. We've got a memory bubble here and I do think that's a place investors should be cautious. The move in Nvidia today doesn't get me terribly scared about Nvidia, but it does tell me that investors need a whole lot more here. It is cheaper than it was yesterday.
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Guy Adami
I mean, think it's a testament to the wisdom of price, right? Nvidia Unchanged 1 month, 2 months, 3 months, 4 months here for the year while semis are going higher. Why? But I'm on the why. Because I mean the what business point to the fact that it's not performing well and what happens, its results come out, they're fantastic. Stock goes down. Now, it's not a big move in and of itself, but it is a lesson for all of us to always we have to relearn the lessons every day is that certain things matter. Relative strength, relative performance is a key factor and it is in evidence here now as it relates to semis overall, that's the big question. Forget about software for now. Are semis prospectively the ones that are extended at a top? If one believes that there are two areas of the market, if you want to do a general bet, it's the Kospi in South Korea where 38% of the index is exposed to two stocks and it's the Taiwan Semiconductor Index where one stock almost 40%. So we have ETFs for that. Those are the bets. If you bet against semis, bet them show.
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Melissa Lee
Interesting.
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Dan Nathan
Yeah. A lot of folks talk about this, right? Like, so the S and P has gone flat, it's gone sideways for months now, you know, and we've seen some dramatic moves. You know, obviously we've talked a lot about them in technology. I mean software is the most interesting to me here because if you roll your sleeves up and you do a bunch of work, there's going to be some, I think some generational opportunities. If you think about like, like a workday, for instance, at its lows yesterday morning after it reported it was down like 15 something percent and it was down basically 50% on the year. Like think about this, this company at like 12 times earnings for double digit expected earnings and sales growth, you could say, well that's the problem. We don't have a good sense, we don't have visibility on that earnings. But I would say that the valuation is a buffer for you right there. So if you can figure out the names that are actually going to be able to use the technology, right. Coming off such a low Price point here, you know, it's going to be like explosive sort of thing. And you know, you had an 18% reversal off of the lows yesterday on
- [06:42]
Tim Seymour
20 million shares traded, which was about nine times normal volume.
- [06:46]
Tom Rogers
That's right.
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Dan Nathan
And you know, so those are some of the things. If you're a momentum player, great. I know you don't love to buy weakness, but when you think about it, a lot of hedge funds were pressing these shorts, pressing these shorts. Sooner or later there's no one left to sell them. And the only thing you can do is buy them back. And then what happens is you start tripping over each other. All the shorts and then longs are like, listen, maybe we're out of the woods. So, you know, I think software sets up really interesting because we really don't know about the disruption. That thing's going to play out over the next couple of years.
- [07:13]
Guy Adami
I mean, I think it's so bad, it's good. Is a trade that we've discussed many times and people do do that and overso conditions. It's extreme. The bigger issue and it has to be considered is, is the weakness that we've seen over the past six, seven months and that's accelerated over the past six, seven weeks, does that set the high for a long time for software and that is the risk so that you can trade it. And I think that's a good trade for a bounce. How much bounce? Unknown. Maybe it'll be 10, maybe it'll be 20%. But are these highs, important highs? Will Cisco back and make a new high in Microsoft? That's a big stretch and I would say not for a long time.
- [07:50]
Melissa Lee
I mean, I think that's sort of the question because for a while investors were conditioned to think that the trade was one way and that was higher and the rising tide would lift all boats. And we're seeing a real differentiation here. And the question is, are we turning or are we just in a period where we're turning around? Which is why that happens, right? That happens with the markets turning around. Your record highs, but within sectors, a lot of volatility.
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Carter Braxton Worth
If you listen this morning to Squawk Box.
- [08:14]
Tim Seymour
Who doesn't? Who doesn't?
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Melissa Lee
I mean, I watch.
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Dan Nathan
Who doesn't listen, I watch.
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Melissa Lee
What do they say?
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Carter Braxton Worth
You know, Mike Wilson of Morgan Stanley fame, he was on and he talked about exactly what. And I'm not suggesting you're pirating or it's watches though too much.
- [08:28]
Tim Seymour
And we listen to Michael.
- [08:29]
Carter Braxton Worth
Yeah, anyway, he was saying exactly what you're saying. That below the surface there's this churning going on, which is why you're seeing some of the volatility. But it's actually a healthy thing. So yeah, it looks okay. I'll add this real quick. We did the show yesterday, yesterday being Wednesday, we did with salesforce.com we had a pretty robust conversation. Robust. The aforementioned CRM and Tim actually said that $50 million stock buyback was a significant number. Huge. I don't know if he said huge but we other adjectives with that said. I think, you know, we talked about the hope for them to say would be accelerated. I don't think that came out but I think people did back of the envelope math and said hey wait a second, you know, this could be potentially a short term floor given the magnitude of that buy.
- [09:11]
Dan Nathan
Yeah. Despite all the silver lining here that I've just thrown at you guys here, there is something that's emerged over the last couple of weeks or so in this earnings earnings period. We've seen companies beat and then give squishy guidance. Right. So when you continue to do that then you're setting up for the next beat. But then if you keep putting out like slightly weak guidance, it's not a great scenario to be in. So again I think it's really important at some point you're going to get some sort of sea change where the companies miss and they guide down still or they start beating those lower expectations. You set a base to go higher.
- [09:41]
Melissa Lee
All right, we got a couple of other data points in the AI space space in the after hour session. Dell in core weave both reporting results in just the past hour. Christina. Parts nebulous has got those numbers. Christina.
- [09:50]
Julia Boorstin
Well let's start with Dell blowing past estimates. So no squishy guidance there. Dan. Sales up 39% in the quarter driven by air servers. Dell entering the new fiscal year with a record $43 billion in AI backlog and guiding to roughly 50 billion in server revenue for just the full year. The pipeline just kept growing even after absorbing of roughly 34 billion in orders just this past quarter. On the call CEO Jeff Clark flagging another tailwind quote, a majority of the install base remains on 14th generation of older servers creating a significant opportunity to modernize. And it's not just a of course traditional server demand is also outpacing supply according to management. On the call. And on top of that Dell raising its dividend by 20% and adding $10 billion to its share buyback program which is contributing to that stock jump of 10 and a half percent. Corve though let's talk about Corvepe earnings also out, the stock is clearly moving the opposite direction. Shares are up roughly 28% year to date heading into this print, so expectations were relatively elevated. Revenue backlog did grow nearly $67 billion up from about 55.5 billion just last quarter, signaling strong demand for its Nvidia GPU infrastructure. Please note that it rents out these services to people. Also provides software too. If you don't want to build a data center on your own ground. But watch the earnings call close last quarter, third party developers actually fell behind schedule on a key data center facility. For Corey, pushing out Capex data center capacity is really the critical piece that fuels future growth for Cor Weave. And that's what management really needs to answer tonight. Guys.
- [11:26]
Melissa Lee
All right, Christina. Thank you Christina. Parts nebulous. Dan, I know you scrutinize core weave because when you hear about a backlog core weave, you probably think of the financing needs that core weave has in
- [11:36]
Dan Nathan
order to fulfill that, that backlog. I mean it came in line with what I think the whisper was. And you know, so that was kind of an. And then when I look there's a headline coming out right now. I know the conference call is going on. They want to add 5 gigawatts of capacity by 2030. And we know that each gigawatt will cost at least $10 billion to do that. This is a company that continues to lose money. They're going to continue to need to raise debt. We know that situation where Blue Isle was looking to raise four and a half billion dollars for them. They couldn't get it done. This is a company that has lower than investment grade rating. Nvidia had to come in again, the second time in a year since their IPO essentially bail them out. I mean they basically invested $2 billion in the company and what does the company do? They turn around and buy Nvidia chip. So again, you know, any delays and this company is going to have a hard time because that gives their customers the opportunity to pull out of these contracts. So the mismatch they have is they have these long term leases and they have shorter term contracts that mismatch when you're losing money and you need to raise a lot of capital to fulfill those contracts. That's not a great situation right now. The slightest this slowdown in demand is going to put these guys in a really tough spot.
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Melissa Lee
There was a report just this week that they were seeking financing of eight and a half billion dollars from Morgan Stanley and Mitsubishi so that those needs are real and the interest expense wipes out any profit they generate.
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Tim Seymour
Yeah, but I think that's kind of understood out there. I would and I'd like to tackle Dell because I just think that this is a company that also the same conversation we've been having, this has been a vehicle for investors to actually express a lot of pessimism on the cost of memory. I actually think the pull forward in some of the PC business, some of the other business is actually quite bullish. So if anything this is the kind of a place where I think the uncertainty out there is more, it's, let's say it's less opaque than others. You can actually see at some point memory is going to give in a normal world.
- [13:30]
Carter Braxton Worth
Ok, given the guidance that Dell gave, which is close to $13 for the full year EPS, $10 billion stock buyback against their $80 billion market cap is significant. Listen, it's not trading a market multiple but you put a 13, 13 and a half multiple on the stock which is not unreasonable and you're looking at a stock that in my opinion should be significantly higher than we are now I understand hardware trough multiple memory risk costs. I got it. But that guide and that stock buyback should be encouraged.
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Tim Seymour
What world are we in?
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Carter Braxton Worth
I'm not quite sure you know what year that movie was, was made by 70 so you know, early 60s.
- [14:09]
Tim Seymour
Anyway, you're watching anyway Bar, you know,
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Melissa Lee
seeing a trend in the office that could signal trouble ahead. Let's bring in Mandy Hsu, the firm's head of derivatives market intelligence who thankfully bears with us. Mandy, great to see you. What has changed?
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Mandy Hsu
We've seen a very pronounced, I would say shift in sentiment to be more on the bearish or cautious side I would say of the. At the index level we've definitely seen, seen a surge in put protection buying. So measures of skew which looks at the cost of downside protection versus upside that's at a one year high for S and P. So at the index level, clear demand for portfolio protection and we're seeing it not just in terms of near term options where people are playing maybe for a tactical pullback, but also longer term options like six month one year out that's indicating, you know, a little bit more cautious longer term outlook in the market.
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Melissa Lee
Do you have enough data and whether it be maybe at the ETF level or subsector level as to where they are getting the most cautious? Sure.
- [15:08]
Mandy Hsu
We definitely, we've seen, I would say specifically from the retail segment because we get this question a lot. You know, what are retail investors doing? We've seen a shift in sentiment there to be more cautious on the tech sector, as you guys can imagine, with all the headlines and performance in recent weeks. Well, what's interesting. So what we've seen is a decline in bullish activity in terms of outright call buying that has dropped to levels kind of last seen during the 2022 bear market. But we're not seeing necessarily at a single stock level, retail investors rushing to buy put protection. Instead, what we're seeing recently is a pickup in call selling. So call overwriting activity. So we're basically, they're saying, I think upside is limited from here. I'm willing to sell that upside call against the stocks that I probably hold in my portfolio, collect that income for, for certain now and then. That also provides a cushion in case there's a further sell off in the market.
- [15:54]
Carter Braxton Worth
You address this with the answers to those two questions. But I have to ask. You're seeing volatility in the volatility index, The Vix was below 18 at the beginning of the day, traded 20 and a half, closed 18 and a half. And today was not an abnormal day in terms of the market. But this has happened a few times over the last couple of weeks where we see these spikes. To me they're tremors waiting for something bigger to happen. Am I making too much out of it?
- [16:18]
Mandy Hsu
No, I think you're right. There's definitely a lot of push and pull in the options market and in the equity market in general. And I would say where there's even more volatility is at the single stock level. Right. So there's a lot of. If you look at our VIX index for single stocks, Vix, EQ, that's in the 40s, so Vix in the 20s or the high teens, it's elevated, but it's not that extreme. But single stock volatility is very high and I think that's where a lot of the action is happening as we're seeing with these earnings reports.
- [16:43]
Guy Adami
So you just got a spike that's a one year high. Yes. You're in the indicator. Is that a leading kind of thing, is it can come in or is it lagging, meaning the fact that people are embracing fear after Microsoft has just dropped 20, 30%. So is this kind of thing that usually happens just before it all reverses or is this a leading thing that suggests there's much more to go? That's, that's the end of the day all that matters?
- [17:05]
Mandy Hsu
Yes, that's a great question we've looked at historically whether when skew reaches these levels, whether it's a contrarian or confirming indicator, it's mixed record. So really kind of depends on whether the catalyst that people are hedging for comes to pass. And I would say the kind of the catalyst that a lot of people are concerned right now is weakness in the labor market, potential shift in the macro environment. Some of the movements we're seeing in the bond market with people now pricing in more dovish, more fed rate cuts on the back of weaker growth expectations. You know that historically has been a catalyst for just higher levels of correlation in the equity market, higher levels of volatility and a more severe pullback in the market. So it just depends, I think, whether the catalyst is ends up happening. But certainly I think there's a lot of caution out there in the options market in terms of positioning and flows.
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Melissa Lee
Mandy, great to see you. Thank you for coming by. Man. Issue of cbo. Interesting the cautiousness. You want to hold your positions, but you still want to collect something.
- [17:58]
Dan Nathan
Yeah, I think there's probably something about the S and P going sideways and you say to yourself, well, volume is probably really low. But when Mandy talks about skew and the cost, you know what I mean, to ensure rather than to kind of take bets. The other thing I think is really interesting all of a sudden over the last, let's call it years. So there's other ways to express risks in the market that is not probably finding its way into some of the traditional indicators and that is event contracts.
- [18:18]
Guy Adami
Right.
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Dan Nathan
And we're seeing that. And then the flip side of that is look at CME Group is trading at all time highs and that kind of suggests that this company or at least people see this as a proxy for volatility. So I think those are two really interesting things about the risk in the market.
- [18:30]
Tim Seymour
I think what's interesting is that the places that we are most worried about volatility affects in the bond market have actually really settled down. And if I hear this kind of pessimism on the equity side, to me this is the most hated bull market, at least of all time is the kind of thing that people say all the time. So I'm not going to say of all time, but nobody, this market is just off all time highs and people are scared to death. And we're hearing it from the retail community, maybe not scared to death, but they're, they are not necessarily excited about the upside. I think this shapes up for an equity rally. I think the market feels like it's in a lot of pain here.
- [19:00]
Melissa Lee
All right, shifting gears here to the Staples space. Shares of J.M. smucker surging nearly 9%.
- [19:06]
Tim Seymour
Smucker.
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Melissa Lee
That's its best day since March of 2020. The jam and jelly maker topping earnings estimates. Naming two new board members following an activist campaign by Elliott Investment Management. Even with a modest pullback today, the broader consumer staples sector having a great start to the year XLP up more than 14% in 2026. So is this defensive sector more attractive than tech at these levels? And we should make clear that there are parts of this sector, defensive sector, staples that trade more richly than tech and have a sure do better. Yeah.
- [19:39]
Tim Seymour
We had this conversation yesterday and what I wanted to point out is that you've, you've had it from both sides. You've had the sense that Staples suddenly have a lot more tailwinds. Whether it's inflation is, is which sometimes helps their valuations, but it's actually more under control from the gross margin perspective. But the derating of tech, I think you have to be careful here. I do think there are parts of the Staples world that I really love and we are investing. I mean if you look at tobacco, tobacco stocks are breaking out to all time highs. You're seeing that these are some of the most resilient companies in the world. I think you have to be careful of the, of the staples to tech trade. You can't tell me that this isn't something that's long in the tooth over the last two months, is it?
- [20:16]
Guy Adami
Well, let's look at. It's the equal and opposite move of Hood. Right. Of Microsoft. The exact same day these started going up, those started going down. So it's a money flow thing. But at this point they're clearly overbought. We know that the sector is influenced heavily by Walmart and Costco.
- [20:32]
Tom Rogers
Right.
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Guy Adami
The two big weights. But they're not traditional staples. It's really the Proctor and Gamble. It's jelly. It's Campbell's soup.
- [20:37]
Melissa Lee
Jelly.
- [20:38]
Tim Seymour
Jelly.
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Guy Adami
Right. Soup and crackers. I would fade the move.
- [20:41]
Melissa Lee
I like jam. I know you like a cup of Folgers. That's a big. Coffee is the biggest part of jam, Smucker. That's why.
- [20:49]
Carter Braxton Worth
Cup of fake,
- [20:51]
Melissa Lee
please.
- [20:52]
Carter Braxton Worth
Well, I mean really we're doing that.
- [20:54]
Melissa Lee
Yes.
- [20:55]
Carter Braxton Worth
Yeah, I want to say it.
- [20:57]
Melissa Lee
Come on, you're taking longer.
- [20:59]
Carter Braxton Worth
Elliot and them sort of conversation conversing together that Smucker's valuation reasonable. And as Carter is probably looking at Smuckers just traded down the levels we last saw in December of 2018 and held, so I think the bounce continues here.
- [21:13]
Melissa Lee
Coming up, a retail recovery. The latest numbers out of TJX and the names our traders may want to put in their shop shopping carts. Plus China Tech takes a turn. What is weighing on the Internet stocks and the names getting hit the hardest do not go anywhere. Fast money's back in tune. Not every sale happens at the register. Before AT&T business Wireless checking out customers on our mobile POS systems took too long. Basically a staring contest where everyone loses. It's crazy what people will say during an awkward silence. Now transactions are done before the silence takes hold. That means I can focus on the task at hand and make an extra sale or two. Sometimes I do miss the bonding time.
- [21:57]
Tim Seymour
Sometimes AT&T business Wireless connecting changes everything.
- [22:02]
Melissa Lee
A Better Help Ad February is full of flowers and lots of relationship talk. But whether you're single, married or dating, just remember you're right on time. Sometimes it feels like everyone has it all together in their love lives, but the truth is, we're all still figuring it out. Therapy can help get some outside perspective from a professional. That can lead to new understanding and a lot less pressure on yourself. And remember, you're right on time. Visit betterhelp.com for 10% off what made
- [22:34]
Julia Boorstin
you confident that you could do something that hadn't been done before? I have no fear of failure.
- [22:39]
Melissa Lee
Trailblazing women, Changing the game One of my favorite pieces of advice Think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself.
- [22:51]
Mandy Hsu
Life is short and you just gotta think big to accomplish big things.
- [22:55]
Melissa Lee
Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts. Welcome back to Fast Money. Shares of TGX closing at an all time high today after some bullish calls on Wall Street. Both Bernstein and Bank of America raised their price targets on the stock to $175. That's about 10% higher from today's close. The discount retailer yesterday posted better than expected sales and earnings, but gave just shy of estimates guidance for first quarter as well as full year. But typically they are conservative when it comes to guide. The stock was higher in today's session. I know that you are a maxinista.
- [23:32]
Tim Seymour
It's obvious, right? So I mean, so let me be humble about this. Look, this is. It's a great story. It's a great story on Margin Guy. You'll be happy to know the shrink is back to pre Covid numbers. And this is the story that on on comps on at least same store sales comps up 5%. You're getting this at the end of what's been an incredible run. The gross margin on the merchandise seems to be expanding which tells you they have a lot of room and a lot of flexibility.
- [23:59]
Melissa Lee
Yeah, 30 times forward 31 actually.
- [24:02]
Carter Braxton Worth
But you know and I'm glad you mentioned that because the guidance was light but they typically sandbag and the street it says you know what we're on to your game. We're not going to say because with other companies you probably get a pretty significant sell off given that valuation on the back of that guide you didn't get it. Which tells you all you need to know. I think the stock continues higher.
- [24:20]
Melissa Lee
How does this chart look to you?
- [24:21]
Guy Adami
I mean this is just up and to the right in a very orderly fashion but the price action is fairly muted. I would sell calls against any long position.
- [24:28]
Melissa Lee
Interesting. But 30 times that sort of raises the quite like how much do you pay for the the Bernstein analysts we spoke to on closing Bell Overtime was saying that this is an AI proof business is because you have to go into the store as you know to find the deal. They don't sell this stuff online or they very little assortment online. You got to really do the tables to get those racks and all that stuff.
- [24:48]
Tim Seymour
If Wal Mart can trade at a 40 multiple, I know it's not apples to apples here but why can't TJ Max trade at 35 to 40? I mean I think that's the story. That's what the analyst community is doing on this and everything about their business right now says they deserve a multiple expansion.
- [25:02]
Melissa Lee
There's a lot more fast money to come. Here's what's coming up next. Connectivity issues for the China tech trade. What's hitting the Internet stocks and is
- [25:12]
Tim Seymour
there more pain ahead for this space?
- [25:14]
Guy Adami
Plus the latest on the battle for Warner Bros.
- [25:17]
Melissa Lee
Discovery, how the company is digesting the
- [25:19]
Tim Seymour
new bid from Paramount and whether Netflix could still come out on top.
- [25:23]
Melissa Lee
We'll talk with one industry exec to get his take.
- [25:27]
Tim Seymour
You're watching Fast Money live from the NASDAQ market site in Times Square. We're back right after this.
- [25:40]
Melissa Lee
A better help ad. February is full of flowers and lots of relationship talk. But whether you're single, married or dating, just remember you're right on time. Sometimes it feels like everyone has it all together in their love lives. But the truth is we're all still figuring it out. Therapy can help get some outside perspective from a professional. That can lead to new understanding and a lot less pressure on yourself. And remember, you're right on time. Visit betterhelp.com for 10% off.
- [26:10]
Julia Boorstin
What made you confident that you could do something that hadn't been done before? I have no fear of failure.
- [26:16]
Melissa Lee
Trailblazing women, changing the game One of my favorite pieces of advice Think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself.
- [26:29]
Mandy Hsu
Life is short and you just gotta think big to accomplish big things.
- [26:32]
Melissa Lee
Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts. Welcome back to Fast Money. China Tech stocks under pressure again today. The K web dancing its sixth straight day of losses, now down nearly 8% this year. Baidu dropping 5.6% today after missing Q4 revenue expectations. That was its worst day since October. PD Tencent JD Baba also ending the day in the red. What's going on, Ambassador?
- [27:01]
Tim Seymour
Well, I think people are feeling less clear also on the just the US China dynamic. I think that's something to do with it. I don't think it should ever be folks that you should be worried about delisting. And this is something that has haunted Baba for a long time, I guess. You know, you're really looking for some catalysts here. There haven't been any. I think there's extreme value here. There's no question these charts are broken. Alibaba, I think. I mean, was it in everybody's acronym last year? Yeah. And I don't think you should be running from this one. I am long it. We have a major position in idevo.
- [27:32]
Melissa Lee
So I stay there was a be in your tube.
- [27:34]
Carter Braxton Worth
It's been yes, it was. And it performed extraordinarily well late in the year. It gave a lot back and it's been floundering ever since. But to Tim's point, I don't think you run too far. I get all the risks associated with these names, but you just do back of the envelope math that it suggests these stocks should be a lot higher. Alibaba being one. But there are other ones as well. But this is the one that I sort of drill down on.
- [27:55]
Tom Rogers
Yeah.
- [27:55]
Dan Nathan
After the devastation we've seen in US Internet stocks, I'd much rather go there. If you just look at, let's just say a Reddit, you know, this is not a company that's probably going to be massively disrupted anytime soon by if anything, they should be A beneficiary. And I think this is is something that a lot of investors just didn't have a hard time selling a lot of these names, whether it was Airbnb or, you know, Uber, I'm looking at that sort of thing. So I'd probably stay away from K Web and do some bottom fishing here
- [28:18]
Melissa Lee
in the US Coming up, more on Nvidia's big reversal post earnings. What Corvette's earnings say about the space one Top tech analysts will weigh in on all of that much more Fast Money into. Welcome back to Fast Money. Another check on the moves in Dell and Core weave after hours, two names heading in very different directions in the extended trade. Our next guest says insatiable compute demand could keep the Volt thesis intact for this trade even after Nvidia's worst day since April. DA Davidson's Gil Laurier joins us now with more. Gil, great to see you again. Just saw you yesterday in closing bell over time. But what did you make of the price action today's session on Nvidia off of what the entire analyst community was calling a very, very clean quarter, A great quarter and good guidance?
- [29:02]
Gil Laurier
Yeah, it was a clean quarter and they guided for the rest of the year, which they haven't done before. So and into next year. So that's why we were all happy with it. But what the market is telling us is it's back to that concern about are we going to get a good return on investment here. I think that's where investors got nervous today because they're seeing in video grow this much. But then they're seeing coreweave today report pretty low margins. Are they getting the return? Are the bigger hyperscalers going to continue to to buy from Nvidia? The concentration for Nvidia has gone up. So we're back to that concern of is AI going to get good return? Is it good enough for that? We're coming off of the other type of concern that we had last few days, which is AI is so good that it's going to run over everything and software is useless. Today that trade reversed. So we saw those two cross currents and they netted out with a negative result to the whole semi complex, not just in video.
- [30:06]
Dan Nathan
Hey Gil, you know it seemed like a trend in this past earnings season over the last month or so. Is that when you had these huge Cypress scalers announced big increases in their capex, the stock got punished, right? We saw that in Amazon, we saw it in Microsoft, we saw it in Metta. You know, I'm looking at Core Weave here and they're guiding Capex. I think consensus for the year was basically 26 billion. Now they're saying at least 30. And this is a company like we've just talked about is having a hard time raising money here and there. How do you think about that? Is this a company that is going to have a hard time because they don't have the balance sheet, they don't have the cash flow, they are losing money. The cost of capital is much higher than some of the hyperscalers and they have huge customer concentration. Help me think about this a little bit.
- [30:46]
Gil Laurier
Yeah, no, that is very challenging. But what's changed just over the last few weeks is Nvidia has stepped in yet again, took an investment and is guaranteeing a lot of the capacity for Core Weave. And what's being reported is that Meta is ready to do the same thing to start backing Core Weave loans in order to reduce the interest. So Core Weave has just made itself so central to this big data center buildout that Nvidia and Meta and to a certain extent Microsoft and OpenAI just have a vested interest in continuing the growth at coreweave. The longer term challenge still is Core. We've going to get the good returns, but there's enough big market participants that are willing to back it and are continuing to come back again and again to back Core Weave. That's why they can deploy all this capital and maybe even lower the cost of capital through guarantees from Nvidia and Meta.
- [31:47]
Melissa Lee
Wow. I mean that's like too big to fail. I mean it's just, it's at the center of this and everybody has a stake in it and it's, I mean, is it throwing good money after bad in your view, Gil? Which I guess is really the question about Core Weave itself?
- [32:00]
Gil Laurier
Well, I think that's the big picture question. Is the investment from Microsoft, Amazon, Google and Metta going to create these positive returns for them? They keep telling us, especially the big companies, Microsoft, Google and Amazon continue to assure us don't worry about it, we're only building data centers that we've already pre sold or that we have very high visibility that we can use those. Then in Microsoft and Meta's case, they're going to Oracle and Core Weave for overflow. So now we just need to start seeing these returns come in at the Microsoft, Amazon and Google level. If that continues, they will both continue to deploy their own capex as well as spend money on the overflow at Oracle, core weave, Nebius, etc.
- [32:47]
Melissa Lee
All right, Gil, good to see you. Thank you, Deloria DA Davidson.
- [32:51]
Carter Braxton Worth
So the knee jerk reaction you just put up Microsoft, the crackstaff and EC is on top of this. You might as well throw Oracle up because chances are that's lower as well. I mean can core weave, is it the epicenter of this whole software problem? I don't think that it is. But given the stock action, it suggests it's part of the problem.
- [33:11]
Tim Seymour
Well, it's certainly at the center of the interdependence. And again with Microsoft and Nvidia backing you, I mean seemingly this should be enough to actually give this stock a little bit of room to actually find some bottom here in the after hours. We'll see. But it's clear it's, it's sell first, ask questions later.
- [33:30]
Melissa Lee
Yeah, ditto.
- [33:34]
Tim Seymour
Right, Carter? Yeah, let me paraphrase.
- [33:37]
Melissa Lee
All right. Coming up, the next move for media as a battle between Netflix and Paramount, Skydance for Warner Brothers discovery heats up, how the White House may be getting involved and what media mogul Tom Rogers sees in store for this space. He's here on set. That's when he's back in to. Getting some news on Anthropic. Kate Rooney's got the details. Kate? Hi, Melissa. So this is the latest in this back and forth we've seen between the Pentagon and a giant anthropic this week. In a statement, Anthropic CEO Dario Amade says there has been, quote, virtually no progress on negotiations with the Pentagon. It does come ahead of a Friday 501pm Eastern deadline for Anthropic to let the Pentagon essentially use its AI model Claude as it sees fit for confidential use cases or face consequences that could include being labeled a supply chain risk. From what we've been told the statement Amade gave just now, we are getting this in. He says here the contract language we received overnight from the Department of War made virtually no progress on preventing Claude's use for mass surveillance of Americans or in fully autonomous weapons. New language, he says framed as compromise was paired with illegalese that would allow those safeguards to be disregarded rather at will. Despite Dow's recent public statements, these narrow safeguards, as he calls them, have been the crux of our negotiations four months. A representative from Anthropic also says this does not mean that they are talks have ended. They say negotiations are still going on. They're trying to say here we are not walking away from negotiations. But the gesture that the Dow made, the latest was refused here by the CEOs you just heard. But that is the Latest still a 501 deadline tomorrow. All right, Kate. Thanks, Kate Rooney. Meantime, Warner Brothers commenting on Paramount's guidance his latest offer in just the last hour, setting a deadline for Netflix to respond. Cnbc, Julie Morrison got the latest developments. Julia.
- [35:34]
Julia Boorstin
Melissa. That's right. Warner Brothers Discoveries board has declared that Paramount Skydance's offer is superior to Netflix. This starts a four business day clock which would end midnight on Wednesday for Netflix to respond with a new offer. Warner Brothers Discovery says that for now the Netflix merger agreement remains in effect and the board continues to recommend the Netflix transaction ahead of of the WBD shareholder meeting that is set for March 20th. Now Paramount responded reiterating the terms of its increased offer. CEO David Ellison saying, quote, we are pleased WBD's board has unanimously affirmed the superior value of our offer which delivers to WBD shareholders superior value, certainty and speed to closing. Now, Netflix shares were as much as 1% higher in after hours trading on chances that this deal now doesn't go through. It had sparked some investor concerns. And amid all of these questions about regulatory approval, today Netflix co CEO Ted Sarandos was seen at the White House. That's him there. Sources telling us he was meeting with staffers, not with President Trump. No comment yet from Netflix after WBD deemed the Paramount offer superior. Back over to you.
- [36:48]
Melissa Lee
All right, Julia, thank you. Julie Warson. For more, let's bring in CNBC contributor Tom Rogers. He's also senior adviser to Versant Media, which is of course of course CNBC's parent company. Tom, it's always great to see you. The stock is telling us that investors so worried that Netflix is going to go back in. What do you think? Should it?
- [37:05]
Tom Rogers
It's hard for me to believe that you make a trip to the White House under these circumstances and you're not still in the game. There's plenty of good reason neither of these companies should go forward. I don't think Netflix needs $60 billion of debt with a pristine balance sheet and the kind of growth they have. And when comes to Paramount, if they truly believe Netflix isn't going to be approved in this transaction, they could wait and have it fall apart and probably pick it up a lot cheaper. But I think they'll go forward. I think we'll have another, at least one more round and we got a real auction on our hands.
- [37:39]
Melissa Lee
If Netflix goes back in, do you get much more bearish on this? And we've already seen the stock go from 130 to where it is right now. Now, 1 30th of June of last year to where it is now.
- [37:50]
Tom Rogers
Yeah, I'm surprised at the market reaction after market here with Netflix going up. That suggests that people think that they're going to back out and I just don't see that at this point. So I would expect another bid from Netflix and probably some downward pressure on the stock as a result.
- [38:07]
Melissa Lee
Yeah. By the way, we should know in the after hour session the initial reaction when Julia first broke the story at 4:00 clock stock that the other offer was superior. The stock was higher than it was sort of flat when we started, Tom, and now it's sharply higher.
- [38:20]
Tim Seymour
I just think so.
- [38:21]
Melissa Lee
It's interesting that the change in just the past couple of minutes now, people are very optimistic maybe that nothing's happening.
- [38:27]
Tim Seymour
Well, I mean Tom's calling it right that, that the stock should be moving lower. If you believe that they're now going hard at the White House to make sure they're going to pass regulatory and then do what they have to do. But I don't think that.
- [38:39]
Melissa Lee
We have some breaking news. Julia Borson, what is it?
- [38:42]
Julia Boorstin
Well, we have breaking news exactly about this. Netflix just now announced it is declining to raise its offer for Warner Brothers. So it is responding that four day clock is irrelevant now because it is responded just now that is declining to raise its offer. They're saying the transaction we negotiated would have created shareholder value with a clear path to regulatory approval. However, we've always been disciplined in the price requirements required to match Paramount Skydance's later latest offer. The deal is no longer financially attractive. They go on to praise Warner Brothers and they say in response to this, they say Netflix's business is healthy and this year will invest approximately $20 billion in quality films and series and will expand our entertainment offering. And they say consistent with our capital allocation policy, we will also resume our share repurchase program. So this is, this is news here. The $20 billion looks like it's probably a slight increase from what they've spent in the past. But it sounds like they are going to put this chapter behind them. Unwilling to match the offer made by Paramount Skydance.
- [39:48]
Melissa Lee
Melissa, Julia, thank you. Julia Borson. Look, everybody's a winner. Look at peace guy. That's higher in the after hour session because it got what it needed. Netflix shareholders like Tim breathing a sigh of relief here. Netflix shares poppy in the after hours. A bigger spend debt free. Right on content here. Buyback.
- [40:06]
Tom Rogers
Tom, I've been wrong before. I haven't been wrong on live TV like that before. That explains why the stock is much Higher, though. You got it right.
- [40:16]
Tim Seymour
You got the news just wasn't out yet. We hadn't, none of us had seen it. So, I mean, the, the, the direction on the stock is fascinating. What's interesting is that both companies win here. And that's, that's fascinating. This also comes on within the last 24 hours. We've gotten earnings out of Warner Brothers. We've got earnings out of Paramount. Paramount's TV business looks okay. I mean, in other words, that's the profitable part of that business. And this is a fascinating time in media. I think some of the parts really says it goes higher.
- [40:44]
Tom Rogers
The problematic part here for paramount is now 80% of the EBITDA of a combined Warner. Paramount is going to come from cable networks. And with Warner's earnings just announced today, their cable networks declined in EBITDA by 27% in the fourth quarter. And that looks like it's accelerating because it was 21% for the year over year 24 to 25. That means that Paramount, with all the leverage it's going to have and declines in 80% of its business, has a lot of work to do. And that's a very different model, I must say, with my Versant hat on, than Versant, with very little debt and a lot of capacity to be able to invest in the growth of these great franchises like cnbc. Stark contrast there.
- [41:33]
Melissa Lee
Julia's got some more details here. Julia?
- [41:37]
Julia Boorstin
Yeah, I just want to note, Melissa, that as part of the deal that Paramount Skydance has offered, they will be paying Netflix's termination fee. So originally it would have been Warner Brothers. Discovery would be required to pay $2.8 billion to Netflix to terminate the merger. But as part of its increased offer, going from 30 to $31 per share, Paramount also said, and in addition to increasing our offer, we will also pay that $2.8 billion to Netflix. So Warner Brothers no longer has to pay that. There is another termination fee that's worth noting. It's a termination fee that Paramount Skydance would have to pay if, for regulatory reasons, their deal was not approved. That's a $7 billion termination fee that would also be on the table should this deal not go through.
- [42:26]
Melissa Lee
Except that David Ellison was at the State of the Union, right, Julia? I mean, well, that's. I didn't know.
- [42:33]
Julia Boorstin
We have to note here that Sarandos was at the White House today. So you have to wonder what kinds of conversations Sarando's had with White House staffers that made him think maybe it wasn't worth fighting this or Increasing their offer financially when they have these regulatory questions ahead.
- [42:49]
Melissa Lee
Julia, thank you. Julia Boorstin what does Netflix's path, Tom, look ahead now that it is free from this, what does it do?
- [42:58]
Tom Rogers
Well, Netflix was on a great growth trajectory. It is far ahead of everybody else. Disney was number two. Their streaming EBITDA is over seven times what Disney's is. So they have a great growth trajectory. They didn't need $60 billion of debt. And to be highly leveraged given those advantages. I really think the bigger issue for Netflix is how it's going to handle AI generated content as it gets easier and easier for cheap but professional looking content to gain viewership traction. And how does all the long form programming that they're known for contend against that? And the fact that they don't have to make a 80 billion plus investment in Warner that would have been in long form programming, how much does that free them up to really deal with what looks like the big competitive issues for traditional television ahead? So I think Netflix path is, is great going ahead.
- [44:03]
Melissa Lee
So now that Netflix remains pure streaming, Tom, how does that sort of translate through to the rest of the sector? Does it make Disney look weaker? For instance, now that Netflix is free and is is charting its course straight ahead?
- [44:19]
Tom Rogers
I think Disney clearly was a winner during this process of other companies being bogged down and they were probably rooting. This would go on for a while and bog those companies down. Now that Netflix has been unleashed from those issues, I think Disney has its own issues in terms of how well it is able to drive viewership engagement and the advertising revenue it needs to drive that. Paramount is does have some antitrust issues. What you were saying before is true, I think in terms of U.S. regulators and how the Trump White House might be viewing this. But let's not forget about European regulators. Let's not forget about the fact that they are consolidating two movie studios into one. They are taking two news organizations down to one, they are taking two streaming services and probably bringing it down to one. And all that has competitive issues that may have create issues with European regulators. So that's part of the story is not over.
- [45:24]
Tim Seymour
So, so Godfather, what else will they be selling off here? In other words, it feels like maybe it's not even antitrust. David Ellson's done a nice job or Paramount's done and just science done a great job of slimming down that company, making it more profitable. We saw that in those numbers yesterday. Is this asset staying as it is? What, what's now put up for sale
- [45:45]
Melissa Lee
this is by the way footage of co CEO Ted Sarandos leaving the White House there. This is just moments ago. So this probably coincides with the release going out. Tom,
- [45:55]
Tom Rogers
I would say that certainly they have to consider asset sales because at close they're going to have six, seven times debt leverage here and that's not sustainable. The other way to get that down of course is cost synergies and they're talking about 6 billion in cost synergies. That's a lot of people who are going to be let go. There was some notion in Hollywood that people didn't want Netflix to get bigger because it was going to cost jobs. We're going to see a lot of lost jobs on the as Paramount has to get its debt down.
- [46:30]
Melissa Lee
Here again, Netflix is walking away from its offer for WBD. Guy, does the stock revisit 130 at some point?
- [46:38]
Carter Braxton Worth
115 and I think we've been pretty consistent albeit the stock is going lower whilst we've said it. But certainty regardless of outcome was going to get this stock Netflix back to that 115 level where it broke down significantly a few months ago. So the short answer is yes. And quickly, every year around May people graduate from schools.
- [47:00]
Tom Rogers
Sure.
- [47:00]
Tim Seymour
Yes they do.
- [47:01]
Melissa Lee
Yes they do.
- [47:02]
Carter Braxton Worth
Well, there's been a graduation here on the set if I may. Tom Rogers has graduated from stud to badass right before your eyes.
- [47:11]
Melissa Lee
Wow. Wow. Graduation all in one. Like a turducken.
- [47:19]
Carter Braxton Worth
Yeah, exactly.
- [47:20]
Melissa Lee
Just quickly on the charts. Carter.
- [47:21]
Guy Adami
Netflix, well Netflix is a pretty good example of so bad it's good. Down 44% from its peak of about a year ago and almost 30% below the 150 day moving average. And now bouncing whether it's news related or not, it's asymmetrical. I would say upside is much more interesting and available than downside risk.
- [47:38]
Melissa Lee
What are your thoughts on Disney at this point?
- [47:41]
Tim Seymour
Well, I have been of the view that this process was drawing light and tension on the intrinsic value of these prices properties and that some of the parts Disney is still more valuable than it's trading at. I still believe that. I can't tell you the key to Disney is this change in management and really some new direction. Netflix, let's not forget when it was at 130 all we were talking about it was trading at 40 times. It was no longer cheap and it needed a catalyst. It's bizarre that this is the catalyst to get excited about the company.
- [48:13]
Melissa Lee
Tom, it is great to see you. Badass as she did it. Thank you Tom Rogers. Up next final trades. Final trade time Tim Seymour about oil
- [48:30]
Tim Seymour
Getting up near 9 month highs on Brent actually going higher.
- [48:34]
Melissa Lee
Carter braxton work but 10 year yields
- [48:36]
Guy Adami
at 4% and going lower we think 36 by TLT whoa.
- [48:39]
Dan Nathan
Dan Nathan I think Robinhood that comes out Hood is set for a bounce here.
- [48:44]
Carter Braxton Worth
We had no final trade last night, so we didn't have the opportunity to wish Karen Feinerman a happy birthday.
- [48:49]
Melissa Lee
Chair BLO thank you for watching Fast Money Mad Money with Jim Cramer starts right now.
- [48:58]
Julia Boorstin
All opinions expressed by the Fast Money
- [49:00]
Melissa Lee
participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer what made you
- [49:31]
Julia Boorstin
confident that you could do something that hadn't been done before? I have no fear of failure.
- [49:36]
Melissa Lee
Trailblazing women, Changing the game One of my favorite, favorite pieces of advice? Think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself.
- [49:48]
Mandy Hsu
Life is short and you just gotta think big to accomplish big things.
- [49:52]
Julia Boorstin
Julia Boorstin Hosts CNBC Changemakers and Power
- [49:56]
Melissa Lee
Players New episodes every Tuesday. Wherever you get your podcasts.