← CNBC's "Fast Money"
CNBC's "Fast Money"
Oracle Drops Back Down To Earth… And State Of the Consumer Ahead Of Holidays 11/12/25
00:43:29
Shares of Oracle lower again today, as the post-earnings pop continues to fade for the semi giant. The impact it’s having on the rest of the megacap tech names, and where our traders see the AI trade heading next. Plus Lacing up ahead of the holidays, as On Holdings surges after reporting results. The momentum they’re seeing, and what one former retail exec sees in store for the industry heading into year end. Fast Money Disclaimer
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- [00:01]
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Dr. Sanjay Gupta
Hey there, it's Dr. Sanjay Gupta with some exciting news to share.
- [00:34]
Carter Braxton Worth
CNN is now streaming.
- [00:36]
Dr. Sanjay Gupta
That means you can read, watch and stream everything in one subscription. You can watch news live 24.
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Carter Braxton Worth
7.
- [00:43]
Dr. Sanjay Gupta
You can also explore catch up videos and explainer videos.
- [00:47]
Carter Braxton Worth
And you can also watch the library.
- [00:49]
Dr. Sanjay Gupta
Of CNN's originals, including my latest documentary, it doesn't have to hurt, just go to CNN.com AllAccess.
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Melissa Lee
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. Fading Oracle. It was just two months ago that the software giant was flirting with a trillion dollar market cap. It's lost over a third of its value since. What's behind this drop and can the company regain its spark? We'll debate that and a bank breakout. Financial stocks at all time are multi year highs as their CEOs head to the White House and the gains keep coming. Plus, Cisco on the move after earnings, Sneaker maker on holdings sprints higher and charting the course on Disney where the entertainment giant is heading as it gets ready to report tomorrow morning. I'm well Sally coming to you live from City of via the nasdaq. On the desk tonight, Carter Worth, Karen Feiderman, Guy Adami whose phone just rang and Julie Beal, ironic since he's always the one who says phones. But we start off with what may be the shattering of Oracle's crystal ball. The one time AI Datacenter Darling falling another 4% today day now trading at more than two month lows. It's more than a race. That 35% post earnings pop from September and is now pacing for a fifth straight week of losses. The move coming as investors seem to be increasingly questioning the pace and magnitude of the boom. Mega cap names like Metta, Amazon and Alphabet all taking an outsized hit today. Well, Palantir, one of the best performing stocks of the year, dropped three and a half percent. So. So what should we be taking from this pullback? Oracle's in particular? We've been talking about it for a while but I guess the bigger question is is this decline a cautionary tale?
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Guy Adami
For the rest, I Believe it is. If Dan were here. Dan's been talking about it for a while. I think collectively we've been talking about, you know, it's a cash flow problem at a certain point. And you have to wonder now Michael Burry has been writing about it as well. And I went back and looked at all the Twitters and the videos back in September 10, September 11, and people were tripping over themselves to say how bullish it was for Oracle and how this would be the next trillion and a half, $2 trillion company. And we sort of looked at each other and said, you know what, there's a lot to be gleaned from this in terms of what's the earnings going to be on the back of the revenue that they're talking about now? You're talking about a cash flow problem. We've retraced the entire thing. As you said, this is the September low and it remains to be seen if the stock can bounce from here. This is a logical place for it to bounce. But the bloom is off the rose here.
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Melissa Lee
They have increased their debt by 38 billion dol since September alone. I mean that is a massive build and it's still coming. I mean the whole space. They've already pledged that they're going to increase spending next year. That is going to be funded by debt primarily.
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Karen Feideman
Yeah. So. Well, they don't have the cash flow problem at the moment. That's not where they are. But you know, when we, when they talked about that enormous backlog build, the margins on that backlog were much smaller. And now we have. They're likely to have higher interest expense. Right. For two reasons. One, just the magnitude of how much debt they want to sell and others as well. So that market could get saturated. And then some concerns about okay, well what is the promise of this data center return? And so do we need to, we debt holders need more interest.
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Melissa Lee
Right.
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Karen Feideman
So you can see how you get into this sort of negative spiral there. It is it. I don't know how much of it to make is just a little bit of like a frenzy right now. My gut is that it's more structural than that. It is a bigger problem. Even while we're talking about this just today, right, we saw huge deals. It's almost like a race to just get, get your, your, your headline number out there. I don't know if that's to get a position in line for debt. I'm not quite sure what that is. But when you look at Met his response, the stock's response to that build that's as a shareholder, very, very frustrating. I think if they were, you know, if we were to see the year of efficiency next year. I know that's not Mark Zuckerberg's plan at all.
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Carter Braxton Worth
Right.
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Karen Feideman
But that would be very nice for the stock.
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Melissa Lee
2.0 would be probably pretty good. What does that chart look like? Oracle?
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Carter Braxton Worth
I mean, we can talk about the chart for a second, but I think the real thing is if one were sitting there and they were just graduating with their PhD in Finance and they had to present themselves in front of the committee and the committee said, well, you've made an analys on Oracle. And they said, yes. Did you use a dividend discount model? Did you use enterprise value, ebitda? Did you price the sales? Some of the parts? How does anyone, anyone, explain, myself included, how a stock can go from 250 to 350 back to 250 in a matter of weeks. Is anything change? The debt's not new, the story's not new. Just because it's in the news. There might be some issue with margins. They're overstating this. But this speaks to the vagaries markets. These are risk assets. Right now the question is. But here. And to your question, do you buy this 35% sell off? My hunch is that just as it was in favor, now it's so almost out of favor that I think you can play it for a bounce.
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Melissa Lee
Oh, so bad it's good in this case.
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Carter Braxton Worth
Well, it's an extreme move. You've retraced the whole thing. And again, that's a trading. That's a trading judgment. I can't speak to it and I would never want to because clearly no one else can what this thing's worth. Right? No one has a clue.
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Melissa Lee
Yeah. Julie, what's your take on this? And if we can put up the chart that shows the decline in valuations, I mean, Oracle's valuation is down 30% from its peak 45 times. It's 32 right now. I don't know if you think that is worth a play for the bounce, as Carter says.
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Julie Beal
It still feels a little bit rich for me relative to what we can see is that there's just a precipitous decline in the returns on investment that people can expect. Everyone can kind of recognize that Oracle is not the same type of business as a lean software business. What I think really has changed and has impacted all of these players is just this transition away from, we're going to fund this with cash flows, which everyone felt fine, but suddenly when we're talking about debt and we're doing secret debt with special purpose vehicles like what happened with Meta, I think suddenly that really, really changes the dialogue. And then it gets only a little bit worse when you have OpenAI CFO asking for a backstop on their debt, like asking your dad to co sign your loan on your first condo. Like that's just not how this works. And I just think that that has really spooked the market because we can all recognize that the minute debt gets involved, that accelerates the declines if they happen.
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Melissa Lee
I mean there have been a couple of major shifts for this sector. I mean Julie touched on one of them and that is funding spend with debt versus cash flow. And the other one is just the model turning from asset light to asset heavy. And what, how do you account for the depreciation of this build out? I mean these are major questions, fundamental changes to how we would view these stocks.
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Guy Adami
Yeah, we've talked about that as well. Michael Burry has written about that too. A lot of people have been talking about it. Now in terms of what's the right depreciation schedule for this industry sector, whatever you want to call it. Now they're going from a six to eight year depreciation schedule. But you go back and look at some of the comments out of some of the CEOs and quite frightened. In my opinion there should be like an 8 to 12 month depreciation schedule. If you really look at and examine how quickly things turning now. So that changes the entire narrative in terms of the debt raising. That's one of those things. You know, Karen could speak to this. Nobody cares about this stuff until they begin to care about it. Right. It's great on the way up the same way, you know, buying bitcoin every day and creating the treasury strategy works. But when things turn, everybody starts pulling the microscope out and that's when things get a little dicey.
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Melissa Lee
Yeah, we've seen spreads widen.
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Karen Feideman
Right? We've seen spreads widen. Right, exactly. They don't care about till they care about it. So if you can raise debt for free and a lot of companies could raise debt for free, then you've got a nice, you know, then a lot of models work that wouldn't work otherwise. But then you get into this, the vicious cycle of debt being more and more expensive and the project being less and less profitable. So that's not a great place to be. I think though, the, the Oracle move. I also think it is just a, a proxy for sentiment about the entire space. Whether or not you have anything particular on Oracle or not? Huge liquid debt, CDS swaps, There's tons to do. And this, this is sort of just tells you how the market feels about that much debt.
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Melissa Lee
For more on Oracle and the pullback in the trade, let's bring in DA Davidson, head of Technology research, Gil Lauria. Gil, great to have you with us. I know you were listening in to our conversation. I mean, in your view, is Oracle some sort of a canary in the coal mine? I mean, is this sort of the cautionary tale that a lot of these other players will fall to in terms of, you know, the optimism fading away, the concern about the debt levels growing, etc.
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Fidelity Trader Plus Announcer
It's a cautionary tale in the sense that they represent the bad behavior in the build out. Oracle and coreweave are the bad behavior. Microsoft, Amazon and Google have all the customers have cash on hand and have tremendous cash flow. So when they build a data center, it's already sold three years in advance. And they just told us two weeks ago that just over the last 90 days they've seen a positive inflection point in demand for AI from their customers, which is everybody. So that's healthy, responsible investment. The irresponsible investment, as you've been talking about, is when you start borrowing to provide capacity for startups. And that's what Oracle did. Oracle originally told us on their earnings, oh, we just won $300 billion of backlog from several companies. The next day we found out it was only open air. Then we subsequently found out that OpenAI has committed $1.4 trillion to and has no intention of living up to those obligations. It considers it a flexible arrangement that they can consume as much as they want. So they commit 250 to Microsoft and 38 to Amazon and 25 to Coreweave and they'll spend what they feel like. So we know that it's not real demand. And then we found out that Oracle's margins on this business are so much lower than the core business that we're not sure that we want them to grow this business. They said 30, 40% gross margins on this business, as if that's a good thing. Their core business is 80% gross margins. This is a bad business with very low margins. When you don't have the customers, which they don't, all they can do is resell this capacity back to the people that do have the demand, which is Microsoft, Amazon and Google.
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Melissa Lee
So at 227 we've basically done a full round trip in terms of the gains that Oracle made. On all the optimism and then we fallen back. Are we at a level here that's sort of as stable or should we look at Oracle differently because of the way they manage the message?
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Fidelity Trader Plus Announcer
It's more stable at 32 times earnings than it was at 45 times earnings. Because let's not forget the core business.
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Melissa Lee
Should it be lower because of what they told us, which didn't come to fruition?
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Fidelity Trader Plus Announcer
Yes, yes, we should definitely keep everything they say from now on with a little more grain of salt just because of how this all transpired. But Oracle itself has a core business that grows 5% that is very profitable. It does have a cloud business that's growing. Let's Forget about the OpenAI false promises. Their core business in cloud is growing. They have good customers there like by Dance. They may end up owning a piece of TikTok USA. Those are reasons to get excited about Oracle beyond the core business. But OpenAI and that hundred dollars a stock in Oracle stock of appreciation, it makes a lot of sense that that's completely gone away now.
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Guy Adami
Yeah, Gail, listen, absolutely. I think you're right. Their cloud business probably low to mid margin stuff. So, you know, maybe it's not deserved of the multiple. So how do you back of the envelope do it? You know, I look at this and say 8 bucks next year a 25 multiple is historically probably about right. It gives it to $200 stock. That's where I think the value should be found in Oracle.
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Fidelity Trader Plus Announcer
That's right. When we get back to the 20s or the mid-20s, it could become interesting. Right now at 32, it's not cheap. It is still getting credit for the cloud business doing better. And again, part of the cloud business is a good business. The part where they, the traditional hyperscaler business, where their big customers are companies like Zoom or ByteDance. That's a fine business. It's not as good as the core business, but that's a fine business. The renting out GPU business, if they have a positive margin at all, it's very, very low.
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Karen Feideman
Gil, it's Karen. Thanks for being on. What do you think it would take for any of these companies to tap the brakes?
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Fidelity Trader Plus Announcer
I think Open Air is going to. There's going to be a reckoning around Open Air where they have to either commit, make firm commitments to capacity or walk away. So there's going to be a lot of renegotiating of that $1.4 trillion they've committed to. There's maybe tens of billions of real demand they have over the next couple of years. So they're going to have to go around to all these companies, Amazon, Microsoft, Oracle and coreweave and say this is the actual demand that we can pay for next year based on how much money we've raised. And once we have that, all these companies are going to have to come back to us and tell us, here's how much we have to adjust down our backlog. This is real and once we know that it's real, we'll have a better sense for what the business is. But a lot of this has been caused by OpenAI inflating expectations across a broad set of companies. It's not just Core, Weave and Oracle, it's also companies like AMD and Broadcom that where a lot of that valuation has to do with promises from OpenAI. AMD yesterday at their analyst day talked about these phenomenal growth rates over the next few years. We don't know how much of that is OpenAI committing to volumes there based on now owning 10% of AMD. Maybe it's the biggest part of growth there, just like it was the biggest part of growth in Oracle. We have to get OpenAI to tell us what they actually have, how much money they've actually raised, how much money they can actually spend next year and have all these other companies take out their backlog. That's not real.
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Melissa Lee
Gil, thank you. Great to see you, Gil. Laurie, thank you. Davidson, let's assume that we're not going to get OpenAI to reveal all these things because I think that's a fair bet. Julie Beal, if there's some sort of reckoning, as Gil put it, where in the mag 7 would you want to be?
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Julie Beal
I think probably I would want to be positioned with Meta. I think Meta is the one that has the best positioning in terms of being able to leverage AI to make their own business singularly great. So I think having that ability to kind of eat your own AI and make your business that much stronger is kind of particularly unique about Meta. And I think that that positioning is really not really reflected in the valuation.
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Melissa Lee
All right, meantime let's get to shares of IBM. They hit an all time high today. The company saying it has built a new experimental quantum computing chip that could clear a path for useful Quantum computers by 2029. IBM stock is up more than 43% this year. Carter, what do you make of this chart?
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Carter Braxton Worth
Sort of a steady eddy, north by northeast. Not dynamic or exciting, but it's the definition of a stay long, be long in my world. Just stick with it.
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Karen Feideman
I've never heard north by northeast before. That's up and to the right.
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Carter Braxton Worth
Up and to the right.
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Karen Feideman
Yes.
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Carter Braxton Worth
I'm tracking well. It's not to like.
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Melissa Lee
I want the Carter Braxton Worth thesaurus.
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Guy Adami
You know, there are twos, a couple things. IBM was the eye in Sandy Canold, who's listening right now and his squid. The acronym or the anagram. Number one, squid. I think. I'm pretty sure it was squid. Now he'll come in my ear and say it was squid because I. Exactly. Anyway, number two, look at what this company has done since Gary Cohn became part of it. It's not coincidental that when Gary sort of got his got himself involved in a company immersed himself. The stock has done extraordinarily well. Now Loon and Nighthawk Quantum trade. I mean, at 26 times, which is not crazy in today's world. I still think there's value here and we've been steadfast in our love of IBM. All right.
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Melissa Lee
Meantime, Boston Fed President Susan Collins just making some comments. Changed expectations, in fact, for a December rate cut. Steve, Lisa's got the details here. Hey, Steve.
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Dr. Sanjay Gupta
Yeah. With hawkish comments in the last hour by Susan Collins, cnbc Now counting half of the voting members that the Fed is either outright against or at least cautious about a December rate cut. Collins saying in the last hour that she favors steady rates until inflation is moving meaningfully towards the 2% target. Other Fed officials have picked up that kind of language. She says rate cuts were stalling of inflation's return to the 2% target and she's reluctant to cut without more evidence of weakening labor market. Wants to keep rates steady, quote, for some time. Collins joins Casey President Jeff Schmidt, who is likely against the December cut, having dissented at the last meeting, though he hasn't spoken since the end of October. Presidents Goolsbee and Moussalam and Governors Jefferson and Cook have all suggested going slowly or cautiously when it comes to future cuts. Governors Myron Bowman and Waller, they're all presumed to favor a cut, perhaps along with New York Fed President John Williams, though he's less certain. And Fed Chair Powell I'm counting as an unknown at this point. Now, before Collins spoke, markets had a 64% probability on December rate cut that's now fallen to 58%, though there's still a 76% probability that that cut happens by January. So what would it take for this December cut to happen? Well, likely clear data on a weakening job market or economy and stable or declining inflation data either from the official data, which hopefully is coming soon or the alternative data that markets have been following.
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Melissa Lee
Melissa, in terms of the real data, we heard from the White House today that the October data will never be released. And so I'm wondering with the government shutdown, if we would even get the next month's data, considering the fieldwork hasn't been done during the shutdown.
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Dr. Sanjay Gupta
So we pretty sure they can do the November employment report at least the establishment side of the survey, the household survey, they'll have to hustle up to get done. I think they're a week late on that. The CPI data, I believe they collect, I think all month long. So they could probably get together at least something resembling it, maybe with additional imputed data. It is interesting, perhaps ironic, maybe it's significant. The CPI report for November, if it does come out in December, will come out on day two of the Fed meeting.
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Melissa Lee
Huh? That's, that's an interesting setup, Steve. Thank you. Steve Liesman, does this matter to the markets at this I think, first of.
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Guy Adami
All, I still think they're cutting into. I don't think they should. I think they will, number one, I want to be crystal clear. But if they don't, given what's baked into the market at this point, I don't think that is market friendly at all. And, and it's certainly not bond market friendly either.
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Karen Feideman
If they don't, though, that would likely mean that the labor market has improved a little bit. That seems to be the dual mandate that they're leaning towards, is the labor over inflation. Even though it's not a target. They're like, well, it's heading in the right ish directions. If they don't cut, labor's better. But I agree with you. I think no.
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Guy Adami
And you make a fair. You're right, she always makes great points. I rarely do. But I'll say this. You know, there's recently over the last couple of weeks there's been this not pivot, but this sort of slight pushback towards being concerned about inflation. So both of those things potentially could be true. We'll see.
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Melissa Lee
All right. Coming up, earnings season rolls on with Cisco and Flutter both on the move tonight. The numbers out of the quarters next, plus a number of fast movers. In today's session, the headlines behind the action in Lilly, Novo, Chipotle and more. Don't go anywhere. Fast money's back into.
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- [21:18]
Dr. Sanjay Gupta
Hey there, it's Dr. Sanjay Gupta with some exciting news to share.
- [21:22]
Carter Braxton Worth
CNN is now streaming.
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Dr. Sanjay Gupta
That means you can read, watch and stream everything in one subscription. You can watch news live 24 7. You can also explore catch up videos and explainer videos.
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Carter Braxton Worth
And you can also watch the library.
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Dr. Sanjay Gupta
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Guy Adami
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Dr. Sanjay Gupta
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Melissa Lee
FedEx the new power move. Welcome back to Fast Money. Cisco shares popping after hours after the networking company posted better than expected sales and profit in its latest quarter, the conference call is underway. CNBC's Christina Parks Nablus joins us here with more of the numbers. Christine and more from the conference call. The focus was definitely around infrastructure demand, specifically from hyperscalers the company took in.
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Julie Beal
And this is all new from the.
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Melissa Lee
Call, $1.3 billion in infrastructure orders from hyperscalers in the first quarter, which is.
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Julie Beal
What we're just talking about what CEO.
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Melissa Lee
Chuck Robbins called a significant acceleration in growth. That's from the same customers they measured last year. So these are new orders. It could be apples to apples. Some people that are buying companies, I should say four of the major hyperscalers grew triple digits during the quarter as well. Looking ahead, Cisco expects to recognize roughly 3 billion in AI infrastructure structure revenue from hyperscalers in fiscal year 2026. Remember last year it was 2 billion. That includes both networking systems as well as optical components. The company also raised its full year guidance with the CFO pointing to strong momentum in orders and that multi year, multibillion dollar campus refresh cycle that is just starting to ramp up. So that should help their guide. The guide, like you said, topped estimates, though the CFO noted tougher comps in the second half of their fiscal year. Lastly, this just right before the call before I left, the guide does not include any sovereign demand because of quote export controls that they're still working through.
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Julie Beal
Which should start flowing in the second.
- [23:43]
Melissa Lee
Half of their fiscal year. And don't miss the first on CNBC.
- [23:47]
Julie Beal
Interview with Cisco CEO tomorrow at 9am.
- [23:51]
Melissa Lee
Let'S walk on the street.
- [23:52]
Guy Adami
That's great read. I mean I was like there's energy about that.
- [23:55]
Melissa Lee
Thanks. In the reading of the prompter.
- [23:57]
Guy Adami
Well no one don't fancy like I.
- [23:58]
Melissa Lee
Wrote what I read. Of course you did. I'm not disputing that at all. And I'm sure you don't even need the prompter for that. No, normally I don't. I don't like prompter. I prefer because it sounds more natural. But there's a lot in this call.
- [24:11]
Julie Beal
That I wanted to throw.
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Melissa Lee
Totally. Yeah, she nailed it. Absolutely.
- [24:15]
Guy Adami
You stick around, I mean stick around because she's, she's spot on. I mean Cisco, we've been I think another old tech night here. Oracle, Cisco. Right. And Carter's talked about Cisco. If Tim were here he would mention it as well. But at 25 times next year's numbers it's not unreasonable. And the second quarter guide was very good and the operating margins were very good. Good for Cisco. I think it continue continues to go higher.
- [24:36]
Melissa Lee
It's not like the stock ran up ran into the earnings either. Carter, you had a great call on Tuesday. Yeah, we just put out a buy.
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Carter Braxton Worth
And buy it earnings for a pop in earnings. I think what's so remarkable of course and this speaks to the vagaries of all this, it's still although albeit barely below its.compeak so that was the 27th of March, the year 2000 hit $82 a share and here we are in the aftermarket 79. So 25 years later it's almost back to on now of course that means adjusted for inflation it's still down 50% but the irony is that it was the most viable company in the world at the time. About 550 billion. It earned about 50 cents a share and here it is at 300 billion and it's going to earn what, 4:55. So surely cheaper now than it was then.
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Karen Feideman
Yeah, that part is amazing. I mean so it's not expensive and it's certainly if you're looking for something sort of tangentially related that doesn't have a big multiple which is really, it might sound somewhat dumb but part of the reason why I like Dell, obviously the hardware margins are very different than the chip margins for example but the multiple is not demanding as you would.
- [25:43]
Guy Adami
Say guy demanding that's a good word. Wish I thought of it.
- [25:47]
Karen Feideman
I think you did.
- [25:48]
Guy Adami
I wasn't making fun of Christina. I enjoyed the like, the inflection in her voice. Stick around tomorrow.
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Melissa Lee
Yes, Tony Robbins. I want to stick around. It's not Tony, but I'm kidding around. It's Chuck. But that's ok. I know all the Robins are good. Christina, thank you. Thank you for letting me see parts of us. Coming up, even more after hours action shares. A fanduel parent flutter on the move. The numbers from that quarter plus the other stocks that caught our eyes today. You're watching Fast MONEY live from the NASDAQ marketsite in Times Square. Back right after this. Hey there.
- [26:22]
Dr. Sanjay Gupta
It's Dr. Sanjay Gupta with some exciting news to share.
- [26:26]
Carter Braxton Worth
CNN is now streaming.
- [26:28]
Dr. Sanjay Gupta
That means you can read, watch and stream everything in one subscription. You can watch news live 24 7. You can also explore catch up videos and explainer videos.
- [26:39]
Carter Braxton Worth
And you can also watch the library.
- [26:41]
Dr. Sanjay Gupta
Of CNN's originals, including my latest documentary. It doesn't have to hurt, just go to CNN.com allaccess the heaviest metal credit.
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Fidelity Trader Plus Announcer
Card of all time, rumored to be.
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Dr. Sanjay Gupta
One of only 18 in existence, plated.
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With the very same tungsten that forged the international space station and wielded at.
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Guy Adami
Business dinners like a samurai sword.
- [27:11]
Fidelity Trader Plus Announcer
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Dr. Sanjay Gupta
To end visibility on your most critical shipments.
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Melissa Lee
FedEx, the new power move. Welcome back to Fast Money. Stocks ending the day mix. The dow closing above 48,000 for the first time ever. Also setting a new Intraday record. S and P eking out a gain now on a four day winning streak. But the Nasdaq posting a small loss down a quarter of a percent. Its fourth negative session in five. Strength in pharma stocks once again. Novo up 2%. Lilly closing above $1,000 a share. It's just a touch off a trillion dollar market cap. Shares of Chipotle seeing a burrito bump today up more than 5%. The stock has still been cut in half in 2025. GM, American Express and EQT the E of course in guy's tube all trading at records and more after hours action. Shares of FanDuel parent Flutter Entertainment sinking despite topping expectations. The company coming up short on revenues. Also saying it will offer events contracts in states that do not allow sports betting. Carter, I don't know. There's a lot of records to chart there. I don't know. Take your pick.
- [28:18]
Carter Braxton Worth
Yeah, I mean I suppose let's talk about the headline would be Chipotle bounces, but they think you qualified it. And that's the point that yes, you can get a bounce, but after dropping so much, it's sort of who cares? It's usually wrong to buy a stock in an aggressive and steep downtrend. And a bounce like this, I would only consider it sort of a reprieve if you want it to get out at a better price.
- [28:41]
Melissa Lee
Yeah. Julie, what do you, what do you make of the gains here in pharma? We talked about it last night, but I mean, for the week, for instance, Novo is up almost 10%. Yeah.
- [28:50]
Julie Beal
It's been interesting to see kind of this little micro rotation into health care. And I think what people are recognizing is, gee, maybe some of these themes, they're long term in nature, but maybe I can find a little bit more earnings in the here and now. And I think we can all recognize that, you know, the GLP1 train is probably long in duration and has a lot of growth still in front of it. So I think that is where people are kind of turning to is get more quality in your portfolio by having a little bit more of these health care names.
- [29:21]
Melissa Lee
Coming up, Wall street heads to Washington. Big bank execs expected to dine at the White House tonight as their stocks trade at or near records. CEOs plan to discuss with President Trump and how to trade the stocks and fast money returns. Missed a moment of fast.
- [29:38]
Dr. Sanjay Gupta
Catch us anytime on the Go follow the Fast Money podcast. We're back right after this.
- [29:48]
Melissa Lee
Welcome back to Fast Money bank stocks well in the green today, Goldman Sachs, JP Morgan, American Express, all notching fresh records. The moves coming as bank CEOs are set to sit down with President Trump for a dinner at the White House. For more, let's bring in CNBC's Eight.
- [30:03]
Guy Adami
Hey, Melissa. Well, we don't have any official guidance from the White House about sort of what's on the agenda tonight. Maybe they'll be celebrating those records in the market today. But we have no list from the White House about who's going to be attending, not even really any guidance from them on exactly why they decided to do this dinner tonight. But we do have some reports of some of the CEOs who will be there. And take a look at the list. Jamie Dimon of JP Morgan. You see the CEOs of NASDAQ, Blackstone, Morgan Stanley, Blackrock and Goldman Sachs, all according to various reports, are expected to be here at the White House tonight. It will be a moment for those CEOs to, you know, pull aside the President of the United States have a word with him, discuss any of the issues in the economy that they want to discuss and obviously an opportunity for the President to hear directly from them about what they're seeing in the economy. We do expect that we will see reporters be allowed to come into the room and bring cameras for at least a portion of this. So we will get some pictures. Maybe we'll have a sense of who is here tomorrow. But the White House not really giving a lot of advance readout here in terms of what we expect to see tonight in just a couple of hours time.
- [31:09]
Carter Braxton Worth
Melissa.
- [31:10]
Melissa Lee
All right, Eamon, thank you. Amy Javers from the White House. Here we are, Goldman Sachs all time high. JP Morgan all time high. American Express all time high. Bank of America trading at levels not seen since 2006. So these levels are Citibank. Oh no, bank of America, bank of.
- [31:27]
Karen Feideman
America, bank of America, Citibank doing great, but still not close to Eclipse yet. Yeah. So it's a good time to be a bank. I mean you got an administration who is in your favor where deregulation is likely and has already sort of started. You've got the economy's okay, loan loss provisions are fine. If you're a big money center bank like most of these business, you've got a great capital markets business and you've got a great IB invest banking business and a very good asset asset management environment. What's not to like?
- [31:59]
Melissa Lee
So you have the year of the President. What do you complain about?
- [32:01]
Guy Adami
I'm not sure if you complain about anything, to be honest with you. I think you enjoy your dinner, say a couple nice things, radar screen. I mean there's not really a lot to complain about right now. If you want to nitpick about tariffs or the uncertainty around them, have at it. But I don't think there's any real reason to do it. But I'll say this, you know, Karen, in terms of American Express has been steadfast. I've tried to punch holes and that stock's at an all time high seemingly every day. And it's still pretty reasonable on valuation. And good for David Solomon, this is another one we've actually gotten right. He's done an extraordinary job. They're very quietly look at the stock performance under his tenure at GS.
- [32:34]
Carter Braxton Worth
You know, I mean the real message here is again size. It's the big brokers, the big banks, how poorly regionals are acting. And then of course all the private equity, the kkrs and Apollos, those are all struggling. So it's very specific to this one area of financials. We know insurance stocks are under major pressure. So do you stick with this? I would say yes.
- [32:52]
Melissa Lee
Yeah. Julie, are you a buyer? Financials at highs.
- [32:56]
Julie Beal
It's, I mean, I agree. I think that the scale really helps them. What I'm curious about, if you'll allow me to put my little tinfoil hat on, is when the president met with the tech executives in the UK, he immediately announced this $100,000 H1B visa which benefits them the most directly. So I'm really curious what will get announced as a result of this. I'm done with being a tinfoil hat person.
- [33:20]
Melissa Lee
I don't think that was too tinny. I thought that was actually very interesting. Yeah, yeah. Coming up, talk about being on the sneaker. Stock surging after results this morning. The momentum brewing as we head into the holidays. That's next. Fast Money's back in two. Welcome back to Fast Money Shares, a Swiss sneaker maker on holding jumping 18% their best day in over a year after the company beat earnings and revenue estimates and lifted guidance for the third quarter quarter in a row. But the gain only gets the stock back to where it was in late October. Shares are down 24% so far this year. So what do you do with this? Is this a read through to Nike?
- [34:00]
Karen Feideman
I think it's a read through to Nike. You know, something like Dick's was up also on this. So there is demand there. They, I think Asia and Europe were really good for them and the margins were really good. The guidance was really good. There was a ton to like here. It's still expensive though. Which means that back then when it would hit its peak of whatever, 64 or 5, it was crazy expensive. I mean the growth, the reacceleration of growth is impressive. All that being said, I don't own it. I do own Dick's Sporting Goods.
- [34:30]
Carter Braxton Worth
I mean the circumstance is very similar to Chipotle, right? You have a weak stock and that often happens. You get bounces. There is an expression or idiom called the dead cat bounce and I would put it in that category. Yeah.
- [34:41]
Guy Adami
Nike off cycle, right? Middle of December, they report. If you look in, Carter can speak to this. When we traded down the levels we saw last summer held it bouncing. We had one of the best days we've seen in a while in Nike. The other day, I think actually traded on the long side into earnings mid December.
- [34:56]
Melissa Lee
Well, a longtime retail executive telling investors not to bet against consumers this holiday season. Jerry Storch run Storch Advisors. He's a former CEO at Hudson's Bay and Toys R Us and was vice chairman of Target. Jerry, always great to see you and always great to get your take. In terms of the consumer, it does seem like there are enough stories out there where you can, you know, put together a storyline for whichever way you want the consumer to be weak, strong, etc. In your view, what is the state of the consumer and is there one story or one stock out there that you think really tells the true story of where the consumer is these days?
- [35:33]
Dr. Sanjay Gupta
Okay, look, the consumer is essentially strong. They have been all year. The last time we had a report, I have right here, remember the government published reports. The year over year sales increase was 5%. That's a very healthy number. And one thing you know about retailers, you want to predict the future. Look at what's happening right now. I heard Brian Moynihan the other day on, on CNBC saying that retail sales of his credit carp holder up 6%. A lot of forecasts. NRF, others say 4%. Anything north of 4 is a win. 4 or 5, 6, you pick it. I think it's probably, you know, more like five. I have to pick a number right now. That's a very healthy Christmas business. So why is it there are all these stories out there? Well, look, there's certainly difference in performance based upon where you are economically. The stock market is booming. We all know that that drives sales for wealthier people. So that's going way up. Now. Some will say it's a K shaped economy. I tried drawing it. I don't think it's really a K over here. It's more like a tree. Because what's happening is the wealthy is going way up and people who are lower, they're still increasing their sale, their purchases. They actually are. They're still growing. So it's like a lower branch. It's not really a K. It's just branches growing at different rates. That's what's going on. We're going to have a fine Christmas. I don't know what's going to happen next year. You know, that's a long way from now. People are going to emerge from Christmas. Very leveraged up. A lot of debt on the timber balance sheet. But we'll have to wait and see about that.
- [36:51]
Karen Feideman
Jared's Karen, thanks so much for being on. If you following the, the wealthy consumer, if that's what you wanted to bet on, is having a really strong Christmas, what would be the way you would do it?
- [37:02]
Dr. Sanjay Gupta
You know the funny Thing is we see people trading down into value based retail no matter what they are. So I still have to believe in Wal Mart. You know, they've been, they've been kind of treading water for a while after a big bang start to the year and they are still capturing massive market share. Whether you're betting on them for a month or a year or 10 years, they're going to keep winning. Another big winner that where their stock hasn't done as well lately is Costco, but again started off strong in the year, hasn't been as strong, but they are capturing massive market share like we've never seen before. And they're a great fundamental retailer. Tjx, they hit an all time high today. So I don't know you want to buy the stock or not, you got to decide that. But I can tell you as a retailer they're doing everything right. And then there's Amazon. You know, the performance of their retail unit now probably is being overshadowed or outweighed by the performance of their computing cloud based unit. Everything going on in AI, etc. It's almost like oh yeah, they're a little retailer on the side but they continue to do very well in E commerce. Those are all big winners capturing massive market share while frankly most of the others are losing.
- [38:06]
Guy Adami
All right, Larry, a week from now we get Target. What's up with them? I mean is there any hope for tgt?
- [38:12]
Dr. Sanjay Gupta
Look, it should be a good story. The problem is they're off strategy and they're not executing. Other than that it's all perfect. And so a long time ago they made a big mistake. They deemphasize grocery at a time when grocery has become the all time traffic driver for their arch enemy Wal Mart. Right. On top of all of that, when you go into the stores, you see lines, you see out of stocks, you see them promoting more when they're supposed to be a value based retailer. So they got a lot to fix but they know they have to do it. I saw they said they lowered prices on thousands of items. Good. They have to, they have to emphasize a value part of that expect more, pay less equation if they ever want to fix what's gone wrong.
- [38:47]
Guy Adami
There's all right, I got to do an on air mea culpa. So before the show, every time Gerald comes on, I say, you know Larry Storch, F Troop Agarn, the whole thing called him and then tonight I actually called him live. So I apologize, that's on me.
- [39:03]
Dr. Sanjay Gupta
Not the first time it's happened not the first time, won't be the last.
- [39:07]
Guy Adami
Probably the last from me.
- [39:11]
Melissa Lee
I always ask any former retail exec knowing full well that you might still have your, your stock in your portfolio still. But at this point, you know, we've had this debate here on the desk. Target versus Wal Mart. Given the valuation difference, what would you prefer? Which stock?
- [39:27]
Dr. Sanjay Gupta
I'm still going. I have to tell you right now, I have to go to Wal Mart. I hate to say it, it hurts me to say it. You got me. I still believe Red like you do too, probably. But still I do. And you know, the bottom line is Wal Mart is performing. They're hitting on all cylinders. Target still adrift. It's not clear what's going to happen there. I sold the vast majority of my Target stock during the pandemic. I felt like a fool because it shot way up, but it's crashed ever since then. But I bought Microsoft, so I'm pretty happy.
- [39:54]
Melissa Lee
What, what does Target need to do, Jerry, to win your favor back and the favor of investors again?
- [40:02]
Dr. Sanjay Gupta
I have a 10 point plan if they ever want to see it. But they have to. They have to fix the strategy. They have to fix grocery. Right now it's totally backwards. They have a convenience grocery store. Oh my gosh. The whole purpose of putting a grocery store in Target, I was the one who did it. The purpose of putting a grocery store in there is to drive frequency for people to make it their primary grocery store to come once a week and then buy the high margin general merchandise. Instead. They developed a convenience based grocery store. So they come in once a month for their general merchandise and buy low margin grocery. It's backwards. The whole strategy is messed up. Then when you look at the rest of it, you know, the lines are too long, they're out of stock. They're not emphasizing value enough. They put junk in the aisles. They have cardboard fixtures. The stores don't look different enough from Walmart. They used to be differentiated entirely. The number one thing Target would always be Walmart on is appearance of the stores. Not true anymore. Walmart's done a ton of stuff to catch up while Target seems to have gone a little bit backwards. The first thing you see when you walk into a Target store is the in store pickup stuff. But it looks like a warehouse instead of a beautiful store. So they have a lot to do to get back to the old days when it really was.
- [41:05]
Melissa Lee
Tarjay, tell us how you really feel. Jerry. Great to see you, Jerry.
- [41:10]
Dr. Sanjay Gupta
My pleasure.
- [41:10]
Guy Adami
I know.
- [41:12]
Melissa Lee
Julie Beal. I'll give you that. Would you rather too. Do you agree with Jerry? Would you go Wal Mart? Excuse me.
- [41:18]
Julie Beal
Absolutely. I don't. I think because. Especially because the, the problems that he's pointing out don't get fixed in a quarter. They really actually do take time. It's a mindset. Shift, shift. And I really do feel like Wal Mart is hitting its stride in terms of its ability to appeal both up and down the income stream.
- [41:35]
Melissa Lee
Carter, which charts in retail look good to you?
- [41:37]
Carter Braxton Worth
Well, I mean Wal Mart, sort of a pair of two has been going sideways for what, seven, eight months. But that's after a sharp preceding ascent. And so it's fully rested I would say of the two this is. But the problem here is that the consumer discretionary sector is up. Up what, 6%? 7% versus the S&P up 16. And that's of course influenced by things like Amazon and Tesla which are half the weight. If you look at the equal weight S&P 500 consumer discretionary sector, it's up only 4%. The consumer in general is struggling.
- [42:08]
Melissa Lee
Coming up, a not so magical year for Disney. The stock underperforming the broader market in 2025. But can tomorrow's results turn things around with the Chartmaster season? The technicals that is is next for Fast Money into. Welcome back to Fast Money. Disney is set to report earnings tomorrow before the market opens. The company still in A blackout on YouTube TV has seen shares stagnate this year up less than 5%. But the Chartmaster says he is a buyer of this media giant. So what can we expect?
- [42:39]
Carter Braxton Worth
Carter, let's get right to it. Got five charts and they're identical. So first one, which is so often the case, has nothing on it. It's the baseline. Let's put some things on it. So next iteration, what we know is that of course Disney surged off its Covid low and then gave it all back. And what we have in technical parlance is a triple bottom annotated there. The next iteration depicts another way to draw the lines, which is to say this downtrend line. In effect, since the peak of four years ago, the stock dropped 60 some percent, 200 to 80. We're toying with the prospects of moving above that downtrend line. That would be a very bullish development. Next iteration, just another way to draw the lines, annotate the story. You can call this a rounding bottom, a bearish to bullish reversal, but it has all the elements of a base After a very substantial decline. Final five, just again, this is what my eye sees. So Others might draw the lines differently, but to my eye, this is a buy we shall see.
- [43:38]
Melissa Lee
Julie, would you concur?
- [43:41]
Julie Beal
Yeah. I mean, I think of everything in this space, it's probably the most compelling. It has the ability to make its content extend well beyond what we see, and that that makes their IP just so much more valuable. I think they're really getting a very muscular approach in their defense against YouTube with their the Fubo deal. It really gives them a base of streamers that, you know, is hard to kind of offset any other way. So I do. I think it's more muscular and interesting here.
- [44:09]
Melissa Lee
Karen, is it a value stock?
- [44:13]
Karen Feideman
It's not crazy expensive, but it's not. It's sort of a little bit in no man's land. Can I ask him a charting question?
- [44:20]
Melissa Lee
Yes.
- [44:20]
Karen Feideman
So the chart you had where it's just sort of coming up to that downtrend. Yes. Would you rather buy it a little higher when it passes that?
- [44:32]
Carter Braxton Worth
In principle, that's even better technique. Right. So you wait for. Typically, what makes a chart start to come to life is the fundamentals. It has an earnings gap up and up, and then it moves above that. Now, one can also miss it. Let's say it's quite outsized and it's up 8, 9%, a little harder to chase it. So a good technique would be to wait, but also maybe be a little bit bold and go before. So go small if one's on the fence and then add to it if and as it does develop in line with presumptions.
- [44:59]
Guy Adami
We call that buying the double. Buy it now and then buy it again on the breakout above 120. That's like jargony stuff. Do you like that?
- [45:08]
Melissa Lee
Yeah.
- [45:08]
Guy Adami
Yeah.
- [45:10]
Melissa Lee
What do you think of the stock?
- [45:11]
Guy Adami
It's a no man's land, I bet. You know, I bet you if you. If you asked him, to be honest, he probably ruised the day that he came back to the company because they've been meandering around now for the last three or four years. With that said, I'm sort of with Carter on this one, but you got to get above 125 for the first time in a while.
- [45:26]
Melissa Lee
All right, up next, final trades, time for the final trade. Julie Beal.
- [45:35]
Julie Beal
I'm coming out of my earnings avalanche and was working on LMAT today, and.
- [45:39]
Melissa Lee
I thought the fundamentals looked good. Carter Braxton, Worth Regeneron.
- [45:43]
Carter Braxton Worth
A prototypical bearish to bullish reversal buy.
- [45:47]
Melissa Lee
Karen.
- [45:48]
Karen Feideman
Yes. Taking one from my acronym, I know you can hold all the suggestions that it's not proper, but that's Boeing. It's taken a little bit longer for the story to play out out for that cash flow generation to happen, but we're going to see it probably next quarter is going to be good on long Boeing.
- [46:03]
Melissa Lee
The A in car for aerospace. No, it's actually the B. You don't know guys.
- [46:12]
Guy Adami
Apologies to Jerry. I mean that's a JV move.
- [46:15]
Melissa Lee
Hilarious. Tjx, thanks for watching. Fast Mad Money starts right now. All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet, or 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 Our state has changed a lot in the last 140 years. We know because Multicare has been here guided by a single making our communities healthier that comes from making courageous decisions, partnering with local communities to grow programs and services, and expanding healthcare access to.
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Melissa Lee
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