← CNBC's "Fast Money"
CNBC's "Fast Money"
Qualcomm’s New Chip… And Opportunities Abroad 10/27/25
00:43:44
Shares of Qualcomm surging as the chipmaker announces a new AI accelerator chip. How it positions the company in the data center duels, and the semi surge its bringing to the rest of the space. Plus Japan, Argentina, and China all ticking higher as positive trade headlines move markets. Where the traders are looking for the best opportunities abroad, and the international exposure that could boost your portfolio. Fast Money Disclaimer
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B
Live from the NASDAQ Marketsite in the heart of New York City's Times Square on a record breaking day where The S&P 500 closed above 6,800 for the first time ever. This is fast money and here is what's on tap tonight. A semi surge, Qualcomm shares jumping as the company gets in on the AI game and the rest of the chip space is coming along with it. So can the rally keep going and how will this week's earnings change the game and trading the goal? It's not just US Markets hitting records, how the desk is playing the big moves higher in stocks from Japan to Argentina and beyond. Plus Lulu hits the gridiron for its latest partnership. A big earnings week kicks into gear tomorrow morning and the state of the retail trader. Schwab's head of trading services joins with his latest read on investor sentiment. Mike Santoli in for Melissa Lee today. Coming to you live from Studio B at the nasdaq. On the desk tonight, Tim Seymour, Karen Feiderman, Dan Nathan and Guy Adami. Good to see you all. Great to have, always fun. But we start with the semi surge sending stocks to new highs, the SMH ripping to a record on three major headlines from stocks that are not named in video. First up, Qualcomm soaring more than 11% to lead the S&P 500 after unveiling new accelerator chips that compete directly with Nvidia and amd. The news marks the company's first shift away from a focus on wireless connectivity. AMD also with some news off its of its own zone inking a billion dollar deal with the Department of Energy to develop two AI powered supercomputer that will be used in fields ranging from nuclear power to drug discovery and even intel catching a bit after Barclays upped its price target from $25 to 35. Last week, intel posted its first profit in seven quarters. The chip move helping major indexes all hit records as well. The Nasdaq up nearly 2%. So just how far can the chip rip carry this rally guy markets saying there's enough to go around for everybody.
- [03:04]
C
It's great to have you obviously number one. Number two, I had been trying to unsuccessfully I think collectively we have try to make a bullish case for Qualcomm just on valuation alone. And this is a stock I know you know this made its all time high in May of 2024. It's been trading horribly ever since. Now it has held an uptrend line. It's in place for the last six years. If you want to go back and look. However, this might be exactly what the company needs in order to get the valuation I think it deserves. You just put a market multiple on this stock and it should be trading new all time highs. What does that mean for the broader tech? I don't know if it's going to be a rotation out of some of the higher flyer names into Qualcomm but I think this Qualcomm news, despite there's no real, I don't know meat around it makes a lot of sense in terms of revaluing the stock in Karen.
- [03:52]
B
It's kind of like the market has this muscle memory. There was the AMD story was you know what they're kind of out in the cold on. On AI and then the bull case was if they can just slice off a little piece, just shave a little bit of the demand that Nvidia is enjoying then we have leverage to the upside and stock did in fact go vertical. So I mean can you we apply.
- [04:11]
D
That here which Qualcomm. Well, Qualcomm, I don't. I got to push back a little bit guy on the market multiple part. The market multiple is pretty high. There is still remember, remember when semis used to be somewhat cyclical?
- [04:23]
B
Of course.
- [04:23]
D
Yeah. So I mean this is good for maybe it is the thing to get them off the map though. But I'm a little concerned at how high these things are trading going into earnings. Right. I'd much rather have the bar be lower. So we've got I think amd coming up November 4th in video November 19th. I'd much rather be off of a lower base and I think what happens is if the first one comes out great, they'll all trade up and then the bar is that much higher for whoever comes out next. I'm a little bit concerned. I'm long, but I have put some.
- [04:55]
B
Callers on and just to put some numbers on, I mean, before the move today, Qualcomm is at like 14 times forward s and p is at 22. You know, you could go up from there in terms of what the NASDAQ is trading at.
- [05:05]
E
Yeah, The Qualcomm thing is not about valuation, it's about sentiment. It's about, you know, investors finding other places to express this view. But I think it's really important to kind of drill down a little bit. So if they gain $200 billion in market, excuse me, $20 billion in market cap, just today on this announcement, they are basically getting an order for 200 or 200 megawatts. Okay, 200 megawatts is point 3%. Okay. It's like literally 3% of a gigawatt. Okay. And so when you think about this, like AMD got a 4 and a half gigawatt compared to that order and it's going to a Saudi company, you know, I mean, this is like nonsensical in a way, is great if they have a product that real customers want to buy. I don't think this kind of suggests that by any means. But listen, get after it like, you know, everybody should get in on the game. It does speak to. There's going to be pricing pressure. How do you compete with an Nvidia? You underprice them. That's what AMD is doing. So the more competition that comes in is probably the harder it is for Nvidia if you look out a year or so.
- [06:01]
A
Yeah, I was going to say, I agree with that. Especially at the point that this is.
- [06:05]
B
Not a cloud provider that they partner with.
- [06:08]
A
I mean, do we, I. Look, I'm sure any buyer, any investor, anyone that's backing this type of capacity is someone that's certainly done their homework and has a view here. But are they getting this from any of the other legacy folks in the space?
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B
No.
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A
Are they a player that will hold them to a kind of a standard that we would expect some of the other partners are holding AMD to, for example? Absolutely not. So I think it just gets back to where semiconductors continue to be kind of this driving point for the market. And you know, we all know markets have gone bananas since Liberation Day and this has been one of the greatest six month periods of all time. But, but during this period, so a time when the market's gone through the moon, the stocks or the smh, whatever you're tracking for the semiconductors have outperformed the S and P by 50%, not, not 5, not 10, not 20, but by 50% in the last six months, when over the last three years in total, they've outperformed the S and p by about 120%, which is also very impressive and where you've wanted to be. But it does tell you just how powerful this is. And I don't think we're late on it. I really don't. And I think investors feel that way too.
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B
I mean, you can almost sort of read the market's mind in a sense. You talk about a 20 billion dol gain in market cap from Qualcomm. I mean, how adorable is that when it is at four and a half trillion, right?
- [07:22]
E
I mean, and it's a $2 billion order, essentially. They didn't kind of map this out. So you're getting a multiple. Just do the math on revenue that they have not received yet. And that is the story about Oracle, that has been the story about amd. And so the fact that the market is willing to value these revenues that have not actually been taken on yet is. And there's execution risk too. Like this is a company that's deploying this. First thing we remember.
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A
Hop.
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E
There were bugs in it, there were delays.
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B
Blackwell.
- [07:50]
E
There were bugs in it, there were delays. So, you know, at the end of the day, these companies have to execute Oracle on the cloud side. Oh my goodness. They were like a distant 5 cloud player and now they're going to deploy gigawatt after gigawatt of this technology and globally. It just seems like, you know, the markets are just chasing right here or investors are chasing it doesn't make a lot of sense to me.
- [08:09]
B
And we're going to hear in the next few days from most of the companies doing all the buying right from the actual hyperscaler group. So I don't know what does the market need or want to hear out of that in terms of volume of Capex is just steady as she goes. We're going to penalize these companies for upping the ante at all.
- [08:26]
C
I think upping the ante, the market rallies on upping of the ante. I think steady she goes. So it's the old saying in football, if you throw a forward pass, three things can happen, two of them are bad. In this case, three things can happen, two of them are good. The bad I think would be we're cutting back on CapEx, but I don't see that happening anybody.
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B
I mean, you were talking about the.
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A
Ball Trying to figure out. No.
- [08:45]
C
Well, three things can hold on.
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A
Three things can go through this.
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B
Incomplete interception.
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C
Interception. Both bad or you catch the ball, which is good.
- [08:53]
E
You never heard that before.
- [08:55]
C
Maybe I should follow sports.
- [08:56]
A
No, but I mean an incomplete pass isn't the end of the world. I mean, you get three more tries. What about you've used to try and.
- [09:03]
D
You haven't made any hardest. All right, all right. Anyway, okay, so meta coming up. This is my largest position. I am concerned to be the stock hit almost 800. I feel like all of that down to here at 750 is concern over the spend, not the underlying business. And so I think the very best thing they can say is, wow, we're really seeing return on that spend.
- [09:27]
B
Right.
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D
Which they haven't said to date.
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B
Well, it's concern over the spend, maybe in, in dollars, but also the way that they seem to be kind of repositioning and scrambling. Right. They dismantle one AI unit and they kind of shift their emphasis to something else. And I mean, this is the interesting part of it because obviously the stock's up so much, you know, up to that point. But like, are there going to be net losers at some point? When does the market try to decide who's got a head start that can't.
- [09:52]
D
Be matched and how much you have to spend before you decide, yeah, what.
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B
Are the table stakes?
- [09:56]
A
Right. Or something like that. But in a world where we've had such extraordinary capex and you know, everyone crunches new addressable market dynamics and nobody is expecting there to be discernible impact at least to, to top line, let alone bottom line for a lot of these players until as we get to 28 through 32. So what are we going to do about this? We're going to, you know, I mean, because I don't know that anyone's going to get their, their, their uncertainty and some of these questions answered. We're not going to get them answered in this, in this, in this earnings period. And I think it gets back to again, look at the names that are outperforming. It's the names that have underperformed to a certain point or the names that have satisfied some fear about existential threats like Google.
- [10:36]
E
Microsoft and Meta though have not confirmed any of the new highs in the S and over the last two or three months since their earnings. And I think that's worth noting because you go back to that spend. Right. So is it going to be great if Microsoft says we're lowering the spend? I'm not so sure, it might say something about the uptake of the products and they're not backing out, co pilot numbers, but that's all going to be mashed in together and we're not likely to see that. Now obviously you could look at Azure, you look at us, you look at Google Cloud, there's numbers of ways to kind of, you know, figure out what these companies are doing and how they think about their products. Matter actually to me, all that stuff that you said and going out and spending hundreds of millions of doll for talent and not really having lama rate particularly large their model, I don't think that's great for them right now. And maybe they've squeezed out a lot of that productivity that they've gotten from gains of their own use of AI.
- [11:23]
B
Yeah, I mean the market probably would just love that actually, if they just said we're going to be a free rider on this and it's just going to basically be better ads and more lucrative for the core business. For matter. Let's get more on all this on Qualcomm's jump the rally. We'll bring in Gene Munster, he's managing partner at Deepwater Asset Management. So you've, you've heard the discussion here, Gene, so how should we be thinking about it?
- [11:42]
F
All right, Mike, we need to read between the lines and beyond this Qualcomm news in 26 or 27, when they actually come out with the product, what they're telling us is that they see a big opportunity here and I think it goes beyond them just looking at the headlines. I suspect that they are also talking to potential customers for them to make this level of an investment. And so kind of the thread throughout our conversation today has been related to what's the sustainability, what's next year ultimately look like on these capex numbers because that's going to be one of the key takeaways from Wednesday and Thursday. And so Mike, I just see the fact that I'm going to put Qualcomm in a group that is, that is respectable in terms of how they think about the future. They've had some difficulties around the relationship with Apple, but the fact that they want to get into a crowded business I think speaks to how much supply constraint we have around different pieces of inference. So I want to put one final point on it here, Mike, is that the key numbers for this week is related to what Amazon and Google say about their capex growth. So Microsoft said 22% for next year for calendar 26 met is at 42%. This is the street expectations. But Amazon and Google are at 8 and 13%. Respectfully, those numbers need to come up for AI to continue to trade well.
- [13:03]
B
So they need to come up for AI as a category to continue to trade well. What about what it would do for Amazon and Alphabet respectively?
- [13:12]
F
Well, I think that the, this is still what we saw with Qualcomm today. There is no substance behind this. This is a press release that has unlocked 20 billion in market cap. And I think that the reason why that's important is that the commentary about how optimistic and the kind of investment that Amazon and Google are making into capex I think is going to be some sort of a barometer in terms of how investors generally think about their outlook. So I think that a positive, an increase in Capex will be viewed positive. Just throw a little bit of a zinger at the end here too is that Google Liz Reed, who is running Google Search, was out two weeks ago making positive comments about their search business. And so I think when it comes to Google in particular, that's a really high bar going into this earnings report.
- [14:03]
C
Gene, you heard Karen talk about the cyclicality of the space. So maybe it doesn't deserve a market multiple yet. People are paying through the nose for a lot of the space. And Mike pointed out Qualcomm trading at maybe 15 times next year's numbers. I mean, what do they have to say next year? Maybe not to get them to a market multiple, but you know, 20 times next year's numbers puts a stock at about $250 or so.
- [14:25]
F
So I want to be respectful to them and them wanting to get into some big business. But, but keep in mind this is really hard to do what they're talking about here. AMD talked about this two years ago. They're exiting version two of their chips, their GPUs, and they really haven't had much progress. The growth and the uptick in analyst expectations is based on version three that's coming out, generation three. So when I think, when I think about Qualcomm as a stock and I think about all these different levers, my general sense is it's cheap, but it's cheap for a reason. And I'd rather invest in other places, prices.
- [14:58]
B
And then in terms of the other big ones we're hearing from this week, Jean, is there one that you would emphasize over the other? You know, I point out as much as these companies have not really, you know, set a wrong step in the last three years since chat came out, every one of them besides Microsoft's had at least a 30% drawdown at some point and Microsoft had like a 25% drawdown. So they wax and wane in terms of investor favor, undoubtedly.
- [15:22]
F
And I think the big picture takeaway, I agree with Karen's assessment going into it is that investors are generally bullish, which is a negative sign going into this week. So I'm expecting a sell off. But the underlying fundamental takeaway is going to be that we're still early in AI. It's kind of hard to in some ways to even say those words because we've had made so much progress. But I do believe we're still. I think that's going to be one of the big takeaways. Keep a special eye on Apple. I think this is going to be the best performer of the Mag 7 going into the end of the year. The iPhone bar is low for December and they've got the AI wildcard next March. And I think hope springs eternal.
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B
It does.
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A
Yeah.
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B
You're starting to see a lot more folks warm to the story there. Jeanne, thank you very much. Thank you, Karen. You agree with Gene agreeing with you or.
- [16:10]
D
No, not at all. No. I'm interested what he said about Google search, because that is at the moment the weak part of the Google story. The Google story seems to really be on track, I think. I mean they had a lot of good news obviously we had that remedy issue which was huge and that really got the stock going. But now the Google, but now the cloud business, this chip thing, the deal, the chip deal that they signed. There's a lot of momentum here. It's still not a crazy price. So I like Google a lot.
- [16:37]
B
Yeah. I also like to point out that the trillion dollars or so in, in Tesla's market cap that seems to be attributable to Robotax, right.
- [16:45]
D
There's Waymo get and same with YouTube.
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A
YouTube, Netflix, YouTube.
- [16:50]
B
Yeah, it's a little.
- [16:51]
E
There's a changing narrative really quickly though. There was a lot of folks were saying there's this existential risk with, you know, Google and the ten links and, you know, all that sort of stuff. Now you're starting to read about that. Some of the traffic, the quality of the traffic that's coming from these searches, the chat bot search is much higher, it's much better. They're getting better results from that sort of thing. And I think that's something that really does help Google because they weren't able to make that case probably pretty decently earlier this year. Definitely not last year year as you see them. Talk more about overlays. And that is the kind of response that you're getting that's contextual and then also AI mode. I think these are things that, you know, that is a huge tailwind. And then the other thing anthropic, you know, to their Tensor processing unit, the TPU's, they're getting big orders for this. So there is a lot of stuff that's working there that was not part of the theme, I think, late last year.
- [17:41]
B
All right, well, we'll get to more news on another one of these names. Amazon set to announce sweeping cuts to its corporate staff starting tomorrow. CNBC has confirmed Reuters early reporting as many as 30,000 employees could be let go. That number would represent almost 10% of Amazon's corporate payroll. It would be the company's largest workforce reduction to date. Tim, it's starting to become really more than an accumulation of anecdote here. A lot of these kind of efficiency moves.
- [18:06]
A
Well, and therefore I don't think we're ready to make a call on the macro. What this means for the job market, that clearly is one that the Fed is most focused on. Right? Not inflation. I think for Amazon, this is what you want to hear as a shareholder and for a stock that has underperformed. And again, we're trying to talk about the strengths of all these folks. NWC needs to put up two on this quarter. And I think this is part of the story. We always know that that's where the valuation lies. I'm not ready to say that. Yes, these efficiency calls are, are ultimately great for the margin profile of these companies. This is what we want to hear. May not be great for the macro, but I don't think we're. This isn't going to chip away at the macro story. To me.
- [18:46]
B
Yeah, I mean, it's a question, you know, I wonder because everyone's already now okay with soft labor market data. Whether we explain it away in terms of structural stuff or not, they're okay.
- [18:55]
C
With it because the Fed has made the decision that that's what they're going to focus on. And they want the rate cuts, that's fine. But it gets back to be careful what you wish for, because the labor market deteriorates in a way that it should or they think it will. I don't think that's particularly bullish for corporate profits and then subsequently the economy as a whole. So I guess right now people are saying this is the perfect scenario. But at a certain point, an unemployment rate north of four and a half percent is going to be problematic.
- [19:22]
B
Yeah, the soft patch is fine, as long as that's all it is, I guess is the answer. Coming up, Lulu's Hail Mary, how the beaten down retailer is teaming up with the NFL and whether the deal can clinch a comeback. But first, Fortress Investment Co CEO Drew McKnight joins us next. What he sees next for the regional banks and the state of the private credit markets. The details on Fast Money Returns this episode is brought to you by Square. Every business is unique and Square is a platform designed to help them move forward. Whether launching a new location, introducing fresh offerings or reaching more customers, Square serves businesses of every kind of from the corner ice cream shop that grew into a chain to the stylist at your local salon, and whether you're selling apparel, running a coffee shop, offering services, booking appointments, or a mix of them all, there's a square point of sale to match your needs with modes customized to your business. Like if you're in retail mode, you'll get deeper inventory tools and if you're using quick service for your restaurant, you'll find quick order entry. You can even mix and match by using different settings for different parts of your business or different locations. Go to square.com go fastmoney to learn about how your business can grow with Square. That's S Q u a r e.com go fastmoney the heaviest metal credit card.
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Welcome back to Fast Money Huntington bank shares announcing today it would buy smaller regional cadence bank for $7.4 billion. Our next guest says there's even more dealmaking coming in the financial space. For more on that and to get the pulse on private credit, let's bring in Fortress Investment Group's co CEO Drew McKnight. Drew, it's good to have you here. I mean, I guess we've had the makings of, of a little bit of a roll up action and in regional banks for a while starting to see the signs of it. Should we actually be celebrating it? I mean you're seeing some of the buyers trade down a little bit. Is that just routine or is it more deep concern about what this is coming from?
- [22:22]
G
Thanks for having me. Look, I think most transactions the buyers are actually trading quite well both on a short term and also in a medium term basis. M and A over the year over year is up almost 25% and generally the deals have been well received. I think you're referencing the Huntington bank deal with Cadence which was announced today. You know, this one is to us is pretty clear. It's a, it's a movement to Texas. Huntington bank closed on a transaction with Veritex a couple of weeks ago which was a relatively small transaction. And then this deal today is a much larger transaction. Looks like you guys are pulling up a transaction was just announced today actually one that we're involved in where first sun, which is a Dallas headquartered bank, is merging with First Foundation. First foundation has one office in Dallas but is predominantly in southwestern California. So it really gives a very nice footprint across the Southwest and one that we're very excited with as we move forward.
- [23:23]
B
So yeah, I mean obviously if it's geographic synergies and obviously you got regulation that's going to encourage more activity, markets probably going to be able to live with it. I wonder what you make of what at least seems to have been holding back the broader regional bank group. You had a couple of kind of credit hiccups. The market wanted to seize on it for, you know, a few days anyway and then things have calmed down from there. So are you seeing things bubble up in private credit or elsewhere that you think make those concerns justified?
- [23:53]
G
We haven't. I think the market reacted quite strongly two weeks ago with two credits, Tricolor and First Brands. Those were two credits, neither of which are in the private credit space. But those were very, very specific idiosyncratic credit issues. We are not seeing that flow through the broader credit portfolio and we're not seeing it in our portfolio and we're largely not seeing it in, in regional bank portfolios by and large.
- [24:20]
A
Drew, it's Tim, thanks for joining us. You quoted that you think private credit is too overmarked and that you're looking for your spots. Talk about that, you know, where, where are you sizing up and where do you think things really are A little too frothy?
- [24:36]
G
Yeah, look, I think private credit's really been, I don't know that it's been overmarked. I think private credit issues have really been around a lack of deal flow. I think private equity may have some mark issues. And part of the lack of deal flow is private equity is marked at levels where they can't transact. And I think if you read any bit of, of industry rhetoric, it's there's a lot of dry powder on, on both the private equity side and the private credit side. So that would argue why aren't there more transactions happening. And I think the real reason is that the existing marks in private equity are below where that where they can transact and even below where private equity funds will put new money to work. And that, and that's really what I think is holding back deal flow in the private credit and private equity space.
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D
Drew, it's Karen Feiderman. Thanks for being on. What do you think about the banks trying to sort of take back some of the private credit loans that have, you know, that this industry has really been able to feast on.
- [25:34]
G
Look, I think it's competition's good. I think you saw the regulatory environment previously hold back both bank M and A and hold back banks balance sheets. I think allowing banks to compete in this space is good for the economy. I think it's good for the markets. And so I don't think it's a bad thing. I think the real issue and the reason private credit has grown like it has is you've seen both regional banks and investment banks balance sheet constrained and having to shrink their balance sheets. And that's a function of both, of both interest rates concerns but also pressure on fractional banking and, and deposit flight that we saw in the back of Silicon Valley and Signature Bank. You know now two plus years ago you saw banks pull back there coupled with interest rates extending their maturities across portfolios. And so I think that was what, why you saw banks pull back. I think you are seeing banks perhaps get a little more competitive which I don't think is a bad thing in general.
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B
Yeah, maybe unlocks a little more activity from, from that direction. Drew, appreciate the time tonight. Thank you.
- [26:40]
G
Thanks so much Dan.
- [26:42]
E
You, you board and you know there's another area that we, you know, should really address and I thought we've been talking about it just the debt to equity now you're seeing in a name like Oracle Right. So this is a company that has to raise debt to kind of fulfill some of these obligations that they have to build out this infrastructure. And I think I read the other day that Oracle's at 500%. Okay. You know, you have Amazon at 50%. You have Microsoft and Metta at 30%. We've all taken a look at these cash hoards that these companies have had. So they've been financing a lot of this build out through that cash and that cash flow. But a company like Oracle, they've had to raise a lot of debt and will continue to have to do that. So this is a part of the market that I think is obviously attached to this AI theme. And it seems to be getting a little too frothy because people are not even focused or they don't seem to be particularly worried. And then you see these really creative deals where all that debt goes into an SPV and all this sort of stuff. So someday the chickens are going to come home to roost and all this.
- [27:34]
B
It works a little bit, Philip. Doesn't we? For sure, then. Thank you. Well, we've got a news alert on some changes to the S and P solstice Advanced Materials, a spin off from Honeywell will replace CarMax when it begins trading on Thursday. And Cunity, is that what it is? Kennedy Electronics, a spin off from Dupont, will replace Eastman Chemical. As of Tuesday, November 4, both CarMax and Eastman will move to the small cap 600. There is a lot more fast to come. Here's what's coming up next.
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Lululemon looking to move the chains, how the Athleisure company hopes to score a touchdown with its latest partnership and how investors will react to the Hail Mary.
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Pass after a rough year.
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Plus, overseas opportunities the global markets our.
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Traders are eyeing as equities abroad outpace.
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Gains back at home.
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B
You're watching Fast MONEY live from the.
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NASDAQ market site in Times Square. We're back right after this. Hey, this is Will Arnett, host of Smartless. Smartless is a podcast with myself and.
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B
Sean Hayes and Jason Bateman where each.
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Week one of us reveals a mystery.
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E
Love like Bill Hader, Selena Gomez, Jennifer Aniston, David Beckham, Kristen Stewart and tons more. So join us for a genuinely improvised and authentic conversation filled with laughter and.
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B
Newfound knowledge to feed the Smartless mind. Listen to Smartless now on the SiriusXM app. Download it today.
- [29:14]
A
And now a next level moment from AT&T business. Say you've sent out a gigantic shipment.
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B
Of pillows, and they need to be.
- [29:20]
E
There in time for International Sleep day. You've got AT and T5G so you're.
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A
Fully confident, but the vendor isn't responding.
- [29:26]
E
And International Sleep Day is tomorrow.
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A
Luckily, AT&T 5G lets you deal with any issues with ease, so the pillows.
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E
Will get delivered and everyone can sleep soundly, especially you. ATT 5G requires a compatible plan and.
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Device coverage not available everywhere.
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Learn more@att.com 5G Network.
- [29:49]
B
Welcome back to Fast Money. Shares of Lululemon jumping nearly 5% at their highs after announcing a partnership with the NFL. The athletic apparel company will release a new collection of men's and women's apparel and accessories series featuring the logos of all 32 NFL teams. The collection will be available for sale starting tomorrow. But even with today's gains, Lululemon stock is still down 52% this year, Karen. So yeah, bounce, but what more, right?
- [30:15]
D
I don't know if this will be the thing to save Lululemon, but what might be the thing is it has not traded at a multiple like this, which is, I don't know, 12, 13 or so, in years. The balance sheet's in great shape. The street hates it. I think there's like, I don't know, 38 analysts covering it. Six have a buy. I mean, the bar is really, really getting low for them. So they report December 5th. I don't own it. Nobody owns it. Nobody wants to admit owning it. That makes me think this setup isn't bad.
- [30:42]
B
I wonder what it means for how they think of their brand. Right. In other words, they want to be kind of logo merchandise.
- [30:50]
A
Well, I don't, I don't love it. Right. I don't think of Lulu needing to attach themselves to the NFL. And I think it just speaks to that. A lot of people have does Lulu better than Lulu does Lulu at this point. If you look at the chart, though, this is the first time we've traded through the 200 day on the upside. So you know, this isn't a technical call other than to say that this stock has been going through a series of lower lows. It's been going down for three years. And as Karen said that the valuation at some point becomes interesting. And as Randy Connick at Jefferies, who's had a great column this for a long time, said, they went into this downturn at peak margin. Margin, forget peak multiple. And I'm not sure we found the bottom on the margin at this point. That's one of the reasons why I don't think you turn it around this quickly.
- [31:33]
B
Yeah, I mean look, market wants to squeeze a lot of these beaten up stocks. We'll see if it does continue more than a day for Lulu. All right, coming up, US Stocks may be at record highs, but is there even more opportunity overseas? We're going abroad to find out where our traders see the most potential fast money Back into missed a moment of fast.
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Catch us anytime on the Go follow the Fast Money podcast. We're back right after this.
- [32:08]
B
Welcome back to FAST money. Another check on how stocks closed out the day. All three major indices rallying to close at fresh record highs. The Dow jumping more than 300 points. Gains the S&P up more than 1% closing above 6,800 for the first time ever. And the Nasdaq leading the gains up nearly 2% on the day. Shares of Apple also closing at a record. The tech giant now up nearly 50% since its April low. And Tesla charging higher by more than 4%. Morgan Stanley's Adam Jonas putting out a bullish note this morning saying the EV maker has solved autonomous cars based on CEO Elon Musk's most recent and comments on its Robotaxi expansion. Jonas noting the technology isn't perfect but is enough to pull the safety driver at scale in major metros. Meantime, it's not just stocks here at home hitting records. Japan's Nikkei crossing above 50,000 for the first time as President Trump met with the country's prime minister. Argentina's Merval index soaring after its midterm elections. And China stocks also higher ahead of President Trump's meeting with President Xi Jinping this week. Trump saying today a trade deal with Beijing is close. So with all the global moves into the green, where are you seeing the most opportunity? Tim, it's been a story all year really. The rest of the world outperforming.
- [33:22]
A
Yeah, it sounds like this could be an episode of Trade in the globe back 202008 or nine. But but it is a story of the outperformance of the rest of the world. And some of this is just a function of foreign investors actually putting a little more money back at home in their home office. But I think you've got a case of Japan. So the Takaichi election is going to unleash more fiscal spending. It is going to unleash more defense spending. So the industrial stores, the some of the big tech companies in Japan. So we're overweight Japan in IDevo. We're also overweight Europe on some of the same themes which are deficit spending. And you also have a case where I think the, the multiples in some of these places start to really look interesting. So Japan as an alternative to mega cap companies that are export oriented that are involved in this new global digital economy. You know, Japan trades probably 30% cheap to the US at this point. It's somewhere around 17 and a half times forward. And I think that's really interesting. So, you know, we love Japan.
- [34:20]
B
Karen, is that enough valuation story?
- [34:22]
D
I mean I like, I think Takaichi is, you know, wants to be sort of Trump like maybe and you know, we've seen what Trump has done for the market. So there's that. I think there's also, I mean Tim talks about the multiple which doesn't even actually take out the cash. Right. So you have balance sheets generally there that are excellent. You know, you have activism there. That has been finally a little bit of action there. It used to be for years that nothing would get done. And so I think you have money looking to leave the U.S. yes. So there's a lot to like here. I am long the EWJ but also long the Yen adjusted. What is it? Daxj Currency hedge.
- [35:04]
B
Currency hedge equity. Right.
- [35:05]
D
Long both.
- [35:06]
B
Gotcha. I mean Dan, for years it's been US exceptionalism was about max 7 basically. And so there's been multiple years of outperformance really based on that sector of our market. So if you like the rest of the world to maybe outperform for a while, does that mean you're kind of saying that the story's done?
- [35:24]
E
Yeah, I don't think so. I mean here's the example I'll give. So Europe, right. So they're expected to have less than 1% GDP growth this year. We're expected to have 2%. All of that GDP growth that we've had, maybe like half of it has come from the capex spend. Right. So that's this Mag seven. So if you look at torches lock, your guy from Apollo had this chart out the other day. 5,500 data centers here in the U.S. 500 in Europe. Okay. Sooner or later year Europe's going to have to start investing there. And if you think about that contribution to GDP growth, at some point it's going to be hundreds of billions of dollars there. So you could expect, you know, some sort of build out in Europe that would make some sense. You talk about the valuation relative to the US that's probably how you're going to be able to get some exposure to the Mag 7 over there in Europe.
- [36:06]
C
Ew. Zed.
- [36:08]
A
Nice, nice job.
- [36:11]
C
He is dead. Who's that?
- [36:14]
E
Thank you Pulp Fiction.
- [36:15]
C
If you look about to break a six year downtrend that we've been in Goldman Sachs just had a positive note I think on October 9th. And if you look, I mean you get an energy petro boss vale mining and you get in banks and you holding I mean this has been underperforming for years. You see what's going on in Argentina. This could be sort of the 2026 version of that. So I think you stay long.
- [36:35]
B
EWC, I think the line is Zed's dead baby.
- [36:41]
A
Again. It's great having you here because you're contributions are kind.
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B
We would spike his narrow.
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A
This is what we need.
- [36:48]
C
Shopper.
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A
Shoppers that shopper baby.
- [36:51]
B
We'll get to it. All right. Coming up. Bowled up but treading lightly. The latest read on retail traders sentiment and how investors are positioning into year end. And tickets are now sold out for our Fast Money lot trading the Holidays event on December 11th. But you can still add your name to our our wait list, scan the QR code on your screen or go to cnbc events.com fastmoney to reserve your spot on the list. If a ticket becomes available, a member of our team will reach out to you. Fast Money back into. Welcome back to Fast Money. Retail investors are feeling confident into year end. According to Charles Schwab's latest Trader Sentiment Survey, 57% of respondents describing themselves as bullish on the market even amid rising risk tied to valuations, politics and the economy. Here to dig into the findings is Schwab head of trading services James Castelius. It's good to see you. Thanks Mike. Stopping by here. So how does this reading compare with where sentiment by this survey has been before? Do you detect any kind of evolution of the sentiment?
- [38:00]
H
Yeah, so last quarter we were at the same level of bullishness which is 57% but that's all time high. So all time high to all time high. I think the big change that we saw though was the perception of the market being overvalued. Where we went last time from about 57% this time up to 67%. So I really like the way you described it. There's a bullishness for sure, but it's a cautious bullishness. It's not a reckless bullishness. And we're, we're seeing a lot of trading behaviors that sort of support what the sentiment is saying in terms of hedging activities, a lot more option activities. Looking at some of the bigger positions that they've had and putting collars around them, using married puts, using covered calls. And so the retail investors definitely highly engaged right now.
- [38:43]
B
I was going to ask that. I mean, to what degree. They're either in protection mode or chase mode. So you're saying essentially they're. They're a little bit wary about. About maybe being hedged.
- [38:54]
H
I think they are, but they're also opportunistic. And we've seen it backs the since April when the retail investor was really rewarded for the buying the dip behaviors that we saw. And even though the market, you know, if you look at the Last quarter, again, 57% bullish to start with, the S&P was 6200 to 6700 somewhere in that range start to end of the quarter. I think there were times in the quarter where it looked a little bit choppier and they were definitely taking some risk off. I think the. What we saw in October here is actually a really good example where on the 10th, with a lot of the China Tower tariff turmoil, our clients are actually huge net buyers that day.
- [39:32]
C
This, this does not surprise me. Most bullish. Information technology is a sector.
- [39:36]
H
Yep.
- [39:37]
C
Utilities and energy, though, 2 and 3. Where's that coming from?
- [39:42]
H
I think some of that is a play off of the IT or the mega cap or the AI. So energy being a big one. And so. So I'll give you a name of Iran, which has become very popular with our clients in terms of, we think, adding exposure both to the air space, the energy space, obviously, but the crypto space as well. And so you're seeing some cautiousness over maybe some of the names before that you would have thought of more. The household plays for something like crypto, like with a microstrategy that now you're seeing something like an iron, maybe that that's taken a little bit more of that volume.
- [40:16]
A
Where would you say, though? You know, first of all, listening to Schwab and the Pulse on the retail investors. So where are their new asset classes emerging for your group? In other words, is gold now a place. I mean, gold's always been. At least it's had a retail audience outside of the central banks. And I think at different times. But to the extent that utilities are now being seen as a slightly different asset class, gold is being seen as. Or PGMs is a bigger asset class. Talk about any of these trends.
- [40:41]
H
Yeah, metals is certainly one. And I would say metals has become a crowded trade for our clients. What we saw from last quarter sort of to this quarter. But I was looking at some data recently. Our younger clients are actually into the gold and silver game, which was a little bit surprising to me. Right where you sort of normally think of that. But again, with what we saw, they both got a bit beat up today. Our clients have actually been net sellers of gold and silver four out of the last six days heading into today. So it's like think it's another example, Tim, of stuff that they're interested in, but they're not staying interested in if the data doesn't support them being interested in. And in a couple of cases at least, we continue to see the retail investor and retail trader being a little bit ahead of the trends, which I think is fantastic.
- [41:23]
B
And I mean, what about things like cash levels? Have they changed much at all? People want a cushion or not? Not so much.
- [41:30]
H
Pretty consistent, Mike. I think cash levels have been high for a while. One of the things the survey indicated was about 45 to 50% of the clients said that they're going to bring more cash into the market, either to stocks or to ETFs. So I do think there's dry powder around. Rates are still obviously high enough where they're earning a decent yield on that right now. There's also a lot of confidence. That was the other thing in the survey that jumped out at me. 70% of those surveyed said that they feel confident in the investment decisions that they're going to make. And I don't think you would have necessarily heard that a year or two a couple of years ago. I think the education we lean into Schwab, there's been huge uptake in digital education and live events, clients learning about options and derivatives and even a bit of futures these days. I think the retail investor continues to involve. They do have some dry powder, though.
- [42:17]
B
Yeah. James, appreciate you running through it with us. Thank you.
- [42:20]
H
Thank you so much.
- [42:22]
B
I mean, how do you think about readings like this, Dan? Yeah, we say people are overconfident. Or is this something that's supportive of the market?
- [42:30]
E
Listen, we're seeing some things right now. Tim started out talking about the Sox. The SOX is up 100% off its April lows. It's up 45% on the year. It's on a runaway breakout right now. We had this little consolidation. Palantir, which is up 150%, whatever it is, after being up a few hundred percent last year. You know, these stocks are just taking off right now. So it shows a level of confidence by the folks. And he just said it about retail. I Mean a lot of institutions got shaken out in April and a lot of retail didn't. They stuck it out and then they bought more. So this seems to be a little bit of a chase probably on the institutional side and then retail kind of pressing a little bit.
- [43:05]
B
Yeah, pretty much been skewed to the buy side. I think it's like I don't know, 23 to last 25 weeks or something like that. If you look at the order flow, retail has been so. All right, coming up, the busiest week of earnings season underway. Now the names our traders are watching tomorrow and what they're expecting out of those reports when Fast Money returns. Welcome back to Fast Money. The busiest week of earnings season rolls in tomorrow with UPS, Visa, Dr. Horton and UnitedHealth among the key names reporting. So we are asking the traders which results on Tuesday. They'll be watching the closest guy.
- [43:45]
C
Dr. Horton. Here's the who you remember that DHI, huge move. Everybody loved the homebuilders. You had the big sell off in April. They have not recovered back to the prior all time highs. People say it's a rate story, that that's part of it, think it's an employment story. I want to hear in terms of inventory, I want to hear it obviously in terms of average selling price and I want to see what the reaction of the stock is. I'm bearish homebuilders but this will be a big tell.
- [44:08]
B
Yeah. I mean the mortgage apps and stuff haven't really responded as much to lower rates. We'll see what they have to say there. Karen.
- [44:14]
D
Yeah, Actually so I find Dr. Horton interesting as well. Much more for the story about homebuilding. Right. And the, you know, we've seen rates, rates be a little softer but that doesn't seem to have changed the fundamental situation. And I think if there's things like layoffs at the corporate like Amazon for example, those are high paying jobs. That's a little bit concerning actually.
- [44:37]
B
Yeah. And you know the psychology of okay, prices have started to come down a little bit. Does that bring buyers out or do they actually worry about buying a falling knife, so to speak?
- [44:46]
E
Dan Seagate reports after the close. So here's a company, their biggest company customers are Dell, Hewlett, Lenovo. We just heard from intel last week. They're talking about maybe the bottoming of the PC cycle here. I know a lot of folks are thinking about co pilot PCs but they're also a big supplier obviously to servers. Right. And so I want to hear that this company has to say whether it really does back up the 150% move up on the year, 270% off the April lows. This is one where, I mean it's kind of priced perfection here and it better be something that I think, at least for this name in particular that can kind of keep this thing hanging in there because otherwise the whole group is pretty much in Western digital. And so, you know, but they were all off today and they rip roaring tape.
- [45:29]
B
All right, Tim.
- [45:30]
A
I think UPS is one of the most interesting stocks in the market because it's such an important company to the economy. It's been such an important company even for market dynamics if you think about, you know, Dow theorists and transportation. But it's been such an awful performer and it's, it's three or four year story there and a lot of this is our self inflicted wounds. And remember it was really FedEx for a long time. That was, you know, essentially the parody and it's UPS now. Now there's a, there's a cost reduction plan at the same time. So they've talked about three and a half billion dollars. They've talked about a margin story too. In execution, they're, they're focusing on higher margin sectors, they're focusing on health care and they're making some inroads there. These are things to, it's not going to be an immediate turnaround. I think investors that are committed and I am, I own the stock and I have clients in it. I think the longer term on this.
- [46:15]
B
Is very 7.4% dividend yield. That's a mark of how out of favor it is. All right guys, thank you. Up next, five, your final trade. Our final trade time. Tim, Mike, great having you.
- [46:31]
A
Let's trade the Globe into SAP, a European software Dow to play.
- [46:36]
B
All right, little news today on that one.
- [46:37]
D
Karen, second that. Thank you for being here. Just taking one from my acronym which is so clear and easy to understand. It's Boeing. I don't know if that's the B or aerospace whatever, but they report Wednesday so being bad. All right, I like.
- [46:53]
E
Yeah, Netflix getting a little overdone.
- [46:55]
C
Play it back to 1200, Michael.
- [46:58]
B
All right, once again, appreciate it. Thanks for having me, guys. That does affect Fast Money. Mad 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 Pandora makes it easy for you to find your favorite music.
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E
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