← CNBC's "Fast Money"
CNBC's "Fast Money"
Software vs. Semiconductors… And Big Box Battle 7/10/25
00:43:47
A divergence in the tech space, as software stocks trail the chipmakers. What it means for the broader market, and if the underperforming software sector can catch up. And speaking of underperforming, Target trailing Walmart in a major way over the past year. Why the big box retailers are heading in different directions, and what the Chartmaster sees in the retailers technicals. Fast Money Disclaimer
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- [00:01]
Fidelity
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Dell
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Courtney Reagan
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. A major milestone in video becoming the first company ever to close with a $4 trillion market cap. But while it leads semis to new highs, it's software sector is slumping. What does the divergence tell us? We're going to get some answers. And back on target, the long struggling retailer has been on a stealthy climb the last few months. But can it outperform rivals like Wal Mart in the longer term? We dive into the charts to find out. Plus Delta shares take off after better than expected earnings. Estee Lauder gets a glow up on a bullish. You know it from B of A. And we're going live to Lake Tahoe in the American Century Celebrity Golf Championship with seven time NBA all star Grant Hill. The strategy that he's taking off the court with his investments. I'm Courtney Reagan in this evening for Melissa Lee. Coming to you live from Studio B at the nasdaq. On the desk tonight we have Tim Seymour, Dan Nathan, Guy Adami and Carter Worth. Well, we start with that major divergence in the tech sector as Nvidia's $4 trillion market cap milestone powers the chip stock software is slumping. The SMH Semiconductor ETF closed at a record and is up nearly 30% in the last two months. The IGV SoftW Fund on the other hand shed 2% today and is far lagging the chips over that period. Big names like Autodesk, ServiceNow, Intuit, CrowdStrike and Adobe among the biggest underperformers recently. So why are we seeing the split in the sector and what does it mean for the market? Dan, what do you think? I mean $4 trillion are so putting so much credence in this for Nvidia, does it matter that much? Does it point us in any direction going forward?
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Dan Nathan
Sure, it points the direction that I think a lot of folks who've been invested in the name for last three years know that it's been in a monopoly. They have percent of high end GPUs. We know that all of their big customers are clamoring for those GPUs. They've been tripping over each other for years now. And then you have, you know, some of these sovereigns, you know, who might get more exposure to them after we kind of work through some of these export bans. I mean, listen, Nvidia to me is no longer the story. The story is how it broadens out from some of their customers and then the customers that are basically going to be disrupted by the technology that comes out of the backside of this. Right. So you keep hearing about AI agents. Well, what are they going to do? They're, they're going to replace a lot of automated tasks, right? A lot of data entry and that sort of thing, you know, per seat licenses. This has been a huge Trend for like 15 years, these SaaS companies, right? And the model has been something that people have really enjoyed. The companies have had higher valuations than lots of other different software models. Well, all of a sudden if they are basically being attacked by the idea of these agents, they don't exist yet. And that's a really important part about it. But if you look at a company like Salesforce, they have severely lagged, right? That's a big component of the igv. If you look at like Adobe, I mean Adobe can't get out of its own way. You know, a company like Figma that they tried to buy a couple of years ago is coming at their core competency and they're using a better technology to do it. So that to me is what's going on with software. But if you look at semis, it's really being dragged up by Nvidia and Taiwan semi. And that's been the story for the last two years, Guy, you're not.
- [04:02]
Guy Adami
Before I effort to answer, are you familiar, Tim, with the saying the apple does not fall far from the tree?
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Tim Seymour
You're familiar with the tree and I think I know what it means and I think I know why you're bringing it up.
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Guy Adami
Well, I'm bringing it up because we know Courtney is lovely, but now it's obvious the reasons why, because her folks are here and we had the opportunity to spend some time with Courtney's Folks.
- [04:21]
Tim Seymour
And from Ohio, it's a happy day here on the set. It's wonderful.
- [04:25]
Courtney Reagan
Bring your family to work.
- [04:26]
Tim Seymour
It's wonderful to have you. Yes. Anyway, did you want to go in or.
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Guy Adami
I'm happy I will effort to answer that question. I mean first of all the IGV is basically at all time highs and maybe deservedly so. But I think one of the reasons it could potentially roll over here or be underperformed vis a vis some of these other things is valuations now a problem. As Dan just mentioned, I think Palantir is the third biggest holding, Microsoft, Oracle, Salesforce the fourth and Adobe's in there as well. All those names you could say historically are extraordinarily expensive, especially given some of the runs that these names have. So you know, I'm not head over heels about software or semis here, but I got to tell you, software, I think it's gotten itself a little expensive.
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Tim Seymour
And I'll, I'll talk kind of the two different things that Dan and Guy have introduced. I think Dan's talked about, you know, big picture thematic dynamics with software and the threat posed by AI and some of the, you know, potentially the, the obsolescence of some of these companies, maybe not that, but certainly not the leading edge and certainly maybe not deserving of the multiples guys talking about. I think it's a little bit of both. I think it's also just technical dynam with the market. If you look at it on a one year rolling basis, software's outperformed the, the. So the IGV has outperformed the SMH by 25% now over the last three months semis have come back, they've zoomed to all time highs and people typically, if you've been following the market cadence over the last two years, it's Semi's lead, software follows and almost everything else from there. We're not necessarily seeing that right now. I think these guys have talked about some places. I mean the valuation in Paltir is lunacy if you think about it. The valuation in Salesforce relative to itself is actually really quite attractive. I like CrowdStrike. I do think that Cyber is still a place that at least has carved out more of a moat in a world where I could be very disruptive to that whole space. Adobe disaster. And again, this is, this is a company that is truly right now looks like the Apple of software. And I think we all know what that metaphor means right now.
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Courtney Reagan
Carter, what about, what about you? What did the charts tell you when you're looking at the semis versus the software names or even pull out individual names if that's what strikes your fancy on these.
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Dell
Well, Tim makes the good point that it's really what time frame one takes. So on a three month basis, of course we know that semis have almost doubled the performance if you look at the SoxIMH versus the IGV. And yet of course over time the IGV is the more enduring asset in the sense that semis are quite cyclical. But what we know today, just here and now is that the IGV close on the absolute low and volume expanded, an outlier performance in terms of underperformance versus the market. And it happened of course, right at its former high. EGV literally returned to the penny to its December 9 high some eight, nine months ago and then hit its head. I think there's probably more of a drawdown to come based on today's single very poor action.
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Courtney Reagan
Dan, if you're looking at these names, semis versus software and you're looking at them as group and there is some kind of a macro shock or disruption, are you more protected in one than the other?
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Dan Nathan
Well, I think semis for now. I mean, I think that there's so few other companies that have actually competed with Nvidia. If you think about it, AMD has actually been losing share. We don't even know like what they're doing and who their customers are and how they're competing one way or another. And you know, but AMD has kind of worked higher since the April lows. So is there comfort in video maybe? I think a lot of folks have kind of pointed to the valuation relative to where it was two years ago. But here's a company five years ago that was doing $20 billion in sales and it's up 10x now. I mean the stock price obviously the market cap is up like that too, you know, at this $4 trillion number. But I think there's probably places within the semis that will play some catch up. I know a lot of folks were kind of into this custom silicon sort of play. This is against Nvidia and it's from some of Nvidia's biggest customers. That's Microsoft, Amazon, it's Google and Meta. They're all, you know, contracting these Marvel and Broadcom to build specific chips for specific tasks. But I think as we get further into this trade, we see where the hyper scalers are going, we see there where they're spending. You know, once these models are all trained up, you Know, then you get into this inference phase and that might be another phase, the way investors think about valuations in some of these names. So again, I don't think any of it's safe because what's going on here, make no mistake about it, there is a bubble. And I don't have to, I don't mean like 2000 bubble, I don't mean like, you know, there's all these companies that, you know, we're pre earnings and this now whatever. But there's a bubble in enthusiasm about this theme. And it's yet to really play out, I think at a broad base.
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Courtney Reagan
Right. So we're just trading on sort of enthusiasm, but we haven't seen real results. We don't really know what the future looks like.
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Dan Nathan
They've been very limited. I'll let you guys kind of speak to that because you guys look at a lot of different industries. The promise is like how it infects other parts. And I don't mean in fact, but how it infuses in other parts of the economy.
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Tim Seymour
Well, if I think about software as an investment, also in the context of tariffs and also a tax bill, and these are other big things that are going on that are moving the markets in one way or the direction. There are people that feel the software companies are more defensive because they're not as exposed to tariffs.
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Courtney Reagan
Right.
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Tim Seymour
They feel they're actually better positioned in a tax bill where free cash flows are rewarded with lower taxes. So I've read that. But I still think we're right to be addressing where some of these companies are possibly in the catbird seat in terms of at least being a side by side with the hardware and the AI chip world. But also those that really, they have to reinvent their business. And yesterday's software clearly is a very different place. You know, Oracle's might be the greatest example of a company that has transformed itself on the fly.
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Courtney Reagan
Oracle's up about 32%. Yeah.
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Dan Nathan
And but they're not innovating, let's be really clear. What they're doing is they're fast following. Right. So they got a big contract, they competed on price. OpenAI gives them this $30 billion thing. They already announced the Stargate. So for instance, they're not doing anything magical relative to what some of the other, you know, data center companies are doing. And I think that's a really important distinction. And we saw this going back 25 years ago when we had the last major technological shift. So if Oracle had come out and they had like a deep seek Moment about some technology that they had, you know, was proprietary to them and it was going to be able to something that was going to help them take share, that would be one thing. But the fact here that they have to go spend a lot more than they've been spending on CapEx, $25 billion a year over the last two years. Their competitors are spending 80, 90, $100 billion a year. So that's where I come in with the Oracle and the IBM. I don't see them nearly as interesting as the other ones.
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Tim Seymour
Well, and we've had the Oracle conversation a lot because this move has been astronomical and we pointed out that they're chasing the top line, not the bottom line. They're going after a lower margin business with a much bigger tam, but maybe not as exciting, I don't know. Guy, what do you have to say?
- [11:03]
Guy Adami
Well, as Courtney remembers, Oracle was the oh, and my hope trade. I saw this coming a mile now, I'm kidding real quick. In terms of going back to Nvidia and some of the semis you have at this price to sales, which is now north of 16 times next year's revenue for Nvidia, you have to believe almost by definition that margins are going to hang in there at the levels they are now. Because if you start to see the margin contraction, that price to sales, which clearly nobody cares about right now, I think people start to focus on.
- [11:32]
Courtney Reagan
Hang on just for a second. We have a news alert coming to us from Washington D.C. with Megan Casella. Megan, what's the latest? Hey, Cort. So Nvidia CEO Jensen Huang is at the White House this afternoon. He had been set to meet with President Trump. We had confirmed that earlier based on a source familiar. Now I think we have some video. Yeah, here he is just a few minutes ago, towards the top of the hour. He's walking into the West Wing here. You can see him walking by that Marine. Now. I was not able to get any details on what the two men would be meeting about, what the agenda was going to be for this meeting. But it does come, of course, just a couple of hours after Nvidia closed for the first time above $4 trillion. And then after later the President posted about Nvidia on Truth Social saying Nvidia is up 47% since Trump. Tariffs. So tariffs, export controls, the upcoming trip to China. A lot for these two men to talk about this afternoon. Court, I was going to say you have to, you have to at least believe that there was probably a number of items on that agenda. I'm sure when we know more, you'll let us know. Megan, thank you very much. Well, for more on markets in the state of dealmaking, Tusk Ventures CEO Bradley Tusk joins us now. He's known for early investors, investments in Uber, Coinbase, FanDuel and more. Thank you so much for being here with us, Bradley. I guess I'd just love to get your take sort of right now writ large on what's going on in the markets and as it pertains to policy. Now that we have the president's spending bill that has been signed, we have a little bit more details on what's going to happen with tariffs, at least as some of these countries start getting their letters. How do you think it influences the broader market at this point?
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Bradley Tusk
Yeah, I think markets like certainty. And so there, there were three big variables and now kind of one and a half, like you said, are resolved. So the budget is done. We know what that means in terms of venture like the new QSBS provisions are really good. So that should be helpful to would be tariffs. Some are resolved, some are unresolved. There's still debate or as to what the impact of tariffs would mean if they do go to effect in the way that Trump said they would. And the third would be interest rates, which includes who runs the Fed and obviously, you know, the venture market, as much as anyone wants to see interest rates cut, you know, we're at an interesting moment in venture where there's been almost no liquidity for four years and then now things are starting to move. And I think that the venture world is looking for every possible sign of encouragement to either take companies public or do M and A. We've got a much more friendly FTC right now. So a lot of the pieces are there, but not all of them yet.
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Courtney Reagan
And so what moves the needle on that ultimately? Are you waiting for some movement from the administration on potentially deregulation, loosening up some restrictions that everyone by industry?
- [14:10]
Dell
Right.
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Bradley Tusk
So for example, where investors in circle the genius which is the stablecoin act has passed the Senate, hasn't passed the House yet. It will, but to a certain extent we'll see if the market's already priced that fully in or if once it passes the House gets signed by the president, there is sort of further movement as a result of that. So on an individual basis, when I look at my portfolio companies with another company called Kodiak that's on the screen, they're autonomous trucking company. They're going public next month. The US DOT has still yet to issue any sort of sensible regulations around how autonomous trucking interstate would work. Something like that would help a lot. So there is definitely, I would say, more activity by the Trump administration around settling some of the regulatory issues in the Biden world. It was sort of very hands off, which was good in a way, but it was also bad because things that needed to get done didn't really get done either. But by and large, I think one thing that I think investors don't necessarily realize, the vast majority of tech regulation is at the state level. It's not at the federal level. So we all think about the White House and Congress when the word politics population our brain. But most of the time that's actually not really what matters.
- [15:26]
Tim Seymour
Brad, it's Tim. Thanks for joining us. So game on in terms of Trump administration as it pertains to crypto and certainly the regulatory backdrop. You, you're an investor, you've been an investor. Coinbase, I'm sure, has excited you over the last few weeks. Talk about ancillary plays are the public are some of these companies and we talk about other ancillary crypto digital plays a lot on this desk. And the wonder is have the public markets already priced in more than they should? And as someone that's straddling both worlds where you see more opportunity, look, it's.
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Bradley Tusk
Certainly, let's just be clear on crypto hard to really know because it is the most momentum based sort of index or commodity or however you want to describe it that I've ever seen.
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Dell
Right.
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Bradley Tusk
So it doesn't totally ascribe to the normal rules of logic and gravity. But I mean, I think what we're seeing here, and some of this is things like the genius act, but overall in the Trump approach to Crypto @ the SEC and CFTC is when it is totally accepted by the federal government and seen as part of the underlying economic system and banks start to get into stablecoins, then the question becomes is this just the beginning and is there a lot more room for growth or is it priced in? I would say it's probably not fully priced in because we've seen some really proactive positive movements by the SEC and the White House around crypto so far. But there could be more to come. And so yeah, I would be pretty bullish.
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Courtney Reagan
A lot to take in there. Bradley Tusk, thank you so much for joining us here.
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Dell
I appreciate it, guy.
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Courtney Reagan
You know, I love to talk about cryptocurrency.
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Tim Seymour
That's just such a music in cryptocurrency.
- [17:05]
Guy Adami
It's Your Bally wick.
- [17:07]
Courtney Reagan
Yeah, they do.
- [17:07]
Dell
Really.
- [17:10]
Courtney Reagan
Have you seen, you see that SNL skit? That's sort of how I feel about her jam.
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Dan Nathan
You mean the one with Elon?
- [17:14]
Courtney Reagan
No, the one they bought. Cryptocurrency or the women try to pretend to understand it to each other.
- [17:18]
Tim Seymour
Anyway, it feels.
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Guy Adami
Well, I mean it's pretty clear to me that market sell offs are negative for crypto. I mean, if you sort of overlay a crypto chart with the S and P over the last six to nine months, it sort of lines up pretty well. So it shouldn't be that surprising. Although it surprises me, the crypto is where it is. However, you know, gold still hangs in there like a champ in my opinion. And I think gold is sort of divorced itself from any market concerns. I mean we have one day events, but gold to me is the winner in this entire thing.
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Courtney Reagan
Gold I get.
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Dan Nathan
Yeah, he's the gold.
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Courtney Reagan
I understand that.
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Dan Nathan
One thing I think is important to take away from what Bradley just said. He said for four years they have not had a lot of liquidity. So as a VC investor, what are you looking for? You're looking for M and A, you're looking for IPOs. That was one of the promise of deregulation. And so here we are, we're in the second half of this year and there have been a couple of high profile IPOs on the tech front over the last few months. Core weave circle, they've done very, very well. And maybe that's a scarcity thing, but as we get further into Q3, like you better see some of these IPOs, you better see some.
- [18:14]
Courtney Reagan
Where is it?
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Dan Nathan
Because a lot of the banks are trading like they're open for business as far as capital markets. So I just think that's going to be something really interesting to track.
- [18:22]
Courtney Reagan
Maybe we'll hear some from, from the banks when they start to report.
- [18:25]
Dan Nathan
Actually, probably not because they're all confidential. I mean like they don't want to get the cart before the horse. Right.
- [18:31]
Courtney Reagan
But in their guidance.
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Tim Seymour
Well, what I think is interesting, Courtney, and as we have this conversation about banks who are reporting next week, I mean certainly JP Morgan at the head of the class has been very dismissive about at least the role of crypto in their future. Having said that, we know that it's, you know, they are actively also engaging in the infrastructure of digital assets and stablecoins. And so I mean, I think we'll get some commentary and I do think, I think Bradley's call is right. I mean once it becomes part of the system. And now that the regulatory framework and the Genius act is just one of, I think many, it's very difficult to see how there isn't going to be more ways to play this than just Robinhood and Coinbase and Bitcoin. And I think there's more coming.
- [19:12]
Guy Adami
Courtney, this is not a trick question. What was Brad's last name? I. I didn't hear it.
- [19:16]
Courtney Reagan
Was it Tusk? Are you joking?
- [19:18]
Guy Adami
Thoughts on that album, Tim 79, I believe.
- [19:21]
Dan Nathan
Double.
- [19:21]
Tim Seymour
I think. I think the USC marching band is what made that whole video. Or it made. It was the video. And I think it made the album.
- [19:27]
Guy Adami
I think I'm a rumor.
- [19:28]
Tim Seymour
Miserable.
- [19:29]
Courtney Reagan
Well, Sarah, I wasn't even born then.
- [19:31]
Guy Adami
Okay. Makes sense to me. Okay, great. Tim and I were in both in high school.
- [19:37]
Courtney Reagan
I mean, if you're going to throw it out, I am too. Coming up, Delta soaring after earnings. The details from the quarter and what the CEO had to say about the airline's outlook. That's next. Plus a major mining move. Shares of MP Materials jumping 50%. How a rare earth push from the Pentagon is boosting that stock and what it will mean for the company's next move. Don't go anywhere. Fast money is back into.
- [20:03]
Dell
Say, you've always wanted to take a spontaneous trip to the Caribbean.
- [20:06]
Bradley Tusk
Here's the thing.
- [20:07]
Dell
If you get smart with your money, you can do things like that. With Empower, you can start making the most out of your money so you can get out and live a little. Isn't that why we work so hard to have some fun with our money? Like treating yourself to something special or spontaneously doing something extra for a loved one. So use Empower and get good at money so you can be a little bad. Join their 19 million customers today@empower.com not an Empower client. Paid or sponsored. Your favorite neighborhood spots run on Square. Square can help you turn your business idea into a huge success. Yes, even that brilliant idea for Ugly Lamp Market, the shop specializing in gloriously hideous lamps. Square isn't just a point of sale for local businesses anymore. What began as a little white card reader is now a behind the scenes powerhouse, helping you manage finances, schedule your team and cover cash flow gaps when they come up with Square. You could keep things at Ugly Lamp Market running smoothly even when someone tries to return a lava lamp shaped like a flamingo because it's too refined. And whether you're expanding to new cities or growing your loyal following of light loving fans with questionable taste, Square is with you every step of the way. Square helps you tackle today's to do's and bring that big light bulb idea to life tomorrow. Literally. Go to square.com go fastmoney to learn more. That's sq U-A-R-E.com go fastmoney square. Meet you there on WhatsApp.
- [21:37]
Courtney Reagan
Your personal messages stay private between you.
- [21:40]
Dell
And whoever you send them to.
- [21:42]
Courtney Reagan
So things like the passport numbers for your honeymoon stay between you and your fiance. And that video call for your gran's 80th stays in the family. Even your streaming password stays between you and your college roommates who still ask for it every week in your group chat. Because on WhatsApp, your personal messages are yours.
- [22:00]
Dell
No one else can see or hear them, not even us. WhatsApp message privately.
- [22:10]
Courtney Reagan
Welcome back to Fast Money. Delta shares flying 12% higher after earnings this morning. The airline seeming to bounce back from a turbulent first quarter and reinstated its 2025 profit outlook. CNBC's Philippe spoke with CEO Ed Bastion earlier today and he has the details.
- [22:25]
Fidelity
I feel hi Courtney. You know Ed Bastian and Delta. They said three things today that really made investors say, okay, I like where this company is positioned, especially as we head into a busy summer. And then let's see if we can ride out what might be a little patchy in the fall in the fourth quarter. First of all, Q2 numbers came in better than expected. It wasn't a huge beat. But the premium revenue, that's where they continue to make their money and continue to do well. It was up 5% year over year. But here's the key. They said what investors wanted to hear. Capacity cuts are coming. How much? Still unclear. May not be huge, but it'll happen after the summer in part because main cabin revenue, the people who are going for your basic economy ticket, that revenue is down 5% year over year. And they are planning once we get past the summer surge in travel to start dropping their low profit flights. Think early morning, think late at night. Think those routes that they just don't sell as well as your high destination markets and Mondays and Tuesdays, really the weakest times off peak, if you will. Here's Ed Bastian talking about what they're seeing with the consumer now.
- [23:36]
Dell
Main cabin is down 5% and that's where you have your most price sensitive customers you'll see post mid August is you'll see industry capacity, particularly in the.
- [23:48]
Tim Seymour
Main cabin, domestically coming down significantly. Delta is doing that. I think all the other airlines are.
- [23:54]
Dell
Doing some level that we actually expect to see domestic seats in the main Cabin negative starting in August. For the industry. For the industry and Delta.
- [24:07]
Fidelity
All right, we'll see who else is cutting capacity, whether it's this summer or more likely in the fall. Next week we are going to hear from United Airlines, and then the week after that we hear from American, Alaska and Southwest. Bottom line is this, guys, capacity has to come out. There's just too many of the basic economy seats that are out there. And it's perhaps the industry waiting to see how much of that comes up with the struggles at Spirit, you know, what's going on with Frontier as it's trying to, you know, build out a business. Because that basic economy business is just not strong right now. And at the end of the day, we are a society, at least here in the United States. We are paying up, whether it's paying up to get more leg room, get on first, whatever it is premium is selling. And Delta has, you know, you can see that in the Q2 numbers, Courtney. That's why Delta had success.
- [24:58]
Courtney Reagan
Yeah, absolutely. I mean, Phil, I don't mean to throw this out of left field, but I know you're going to be ready for it no matter what. With the changes that Southwest has made sort of to its strategy, are we seeing any impacts? I know it's early on, just a couple of weeks into it for the other major carriers.
- [25:13]
Fidelity
Too early to say. Too early to say. And in terms of the bags fly free and the change there to charging for bags, I don't think you're going to see much impact at all. You know, I have a couple of very, very close friends who are loyal Southwest flyers. They're not happy, but when I say to them, who are you going to fly instead? Well, I guess I'll still fly Southwest. You know, that's just the way it is. And it was the same thing with the legacy airlines. When they said, look, we're going to start charging for bags. There was grumbling from the core constituents of a particular airline. But ultimately, most people are going to stick with that airline.
- [25:51]
Courtney Reagan
Fair enough. I just like having an assigned seat. The Southwest seating policy stresses me out.
- [25:56]
Tim Seymour
Kind of a food fight when you have to get after that seat.
- [25:58]
Courtney Reagan
I don't care. I don't care.
- [25:58]
Fidelity
Well, you will like the changes then.
- [26:00]
Courtney Reagan
I know you'll like the change, Courtney.
- [26:01]
Fidelity
With that assigned seat.
- [26:02]
Courtney Reagan
I'm in favor of the change, actually. Thank you, Phil. I appreciate it very much. Good work today.
- [26:07]
Fidelity
You bet.
- [26:07]
Courtney Reagan
Tim, what do you make of the airline stocks or Delta in particular?
- [26:10]
Tim Seymour
Well, by the way, I'm curious Guy if you're paying up for extra torso room on some of these flights.
- [26:15]
Guy Adami
You've seen me fly though. I mean I'm. I'm probably the greatest flyer in the history of the United States.
- [26:19]
Tim Seymour
He is the greatest flyer.
- [26:20]
Courtney Reagan
What makes you the greatest?
- [26:21]
Tim Seymour
He doesn't leave his seat. He just sits there quietly with his seatbelt on. And he doesn't.
- [26:25]
Courtney Reagan
I can see that very.
- [26:27]
Dan Nathan
He looks like a sociopath. He's literally standing straight ahead and he doesn't look. There's a term for that.
- [26:32]
Courtney Reagan
Do you do nothing on the plane? Do you just.
- [26:34]
Guy Adami
I stare straight ahead. I think it freaks people out.
- [26:36]
Tim Seymour
Can we talk about the airlines for.
- [26:38]
Dell
Who brought it up? Who brought it up?
- [26:41]
Courtney Reagan
Marshals ever. Stop.
- [26:42]
Tim Seymour
So Phil, Phil pointed out the premium story. So the spread between premium and Maine is 10 points, which is something, I think it may be the widest spread they've had. It's certainly the widest spread they've had since COVID And it's a. It's an argument that again tells you that the best of breed is doing better. And as Phil pointed out, also that the domestic carriers have something to be worried about. But this full year reference is. Is great news. But as an airline investor, as someone who's been through a lot of cycles with airlines, when I hear about capacity cuts, I get excited. That's exactly what you want to hear. That's exactly what will drive the multiple higher. We also have lower air, excuse me, oil prices and airline fuel, which is something that I think airlines don't get enough credit for. The greatest stocks in the market. I think you've got a lot more room to the upside to even get back to those highs in Delta which were 68, 69 bucks before the market.
- [27:28]
Courtney Reagan
Sold off the greatest stocks in the markets.
- [27:30]
Tim Seymour
Trading stocks. Stocks in the market I believe are airline stocks. They few sectors give you 30 to 40% moves up to down, down to up. It's. It's extraordinary. And I think you got another one here.
- [27:42]
Courtney Reagan
Well, speaking of that and potentially with the charts, I. Carter, what do you think of that? The airline stocks, they do seemingly move together. So are you sort of looking at the group or looking at them individually? If you're making a trade, sure.
- [27:53]
Dell
Ever thus. I mean, we have the news out of one and yet that one Delta, right. Consider its trailing United to the tune of three acts over past 12 months. But they are trading chips. Right. These are not typically large cap names at all anymore. And if you were to look at where they are in relation to where they've been the New York Stock Exchange airline index, an old an old and revered index. We're trading right now at the same level we were as 1995, which is to say these don't grow. And they're not maybe meant to grow. They're meant to have boom and bust periods. They're highly cyclical depending on so many things, whether you're in a recession or not, cost of fuel, whether there's a war on or not so forth or Covid is on or not. But what we know is that after an up thrust and gap like today, there's likely to be follow through. And so if one is inclined, trade them on the long side.
- [28:49]
Courtney Reagan
Well, there is a lot more fast to come. Here's what's coming up next.
- [28:53]
Dell
A strong foundation for a beauty stock and a Pentagon push into a rare earths how our traders are handling the big moves in these two stocks plus a big box battle. After years of underperforming, is Target about to turn a corner versus Walmart? The chartmaster lays out the retailer's technicals. You're watching Fast MONEY live from the NASDAQ market site in Times Square.
- [29:18]
Dan Nathan
We're back right after this.
- [29:25]
Dell
At Capella University, learning the right skills could make a difference. That's why our business programs teach you relevant skills you can take from the courseroom to the workplace. A different future is closer than you think with Capella University. Learn more at capella.
- [29:39]
Courtney Reagan
Edu.
- [29:41]
Dell
Which are America's top states for business? Get all the data and complete state by state analysis. See how your state measures up. America's top states for business now on topstates.cnbc.com.
- [30:00]
Courtney Reagan
Welcome back to Fast Money. Time for a contour call of the day. Do not contouring as guy, you probably do it a lot.
- [30:05]
Guy Adami
Well, I know it's part of my makeup regime.
- [30:08]
Courtney Reagan
I was going to say you may not know it, but you get contoured every day anyway. Estee Lauder jumping more than 6% after bank of America reinstated the the cosmetics stock with a buy rating and gave it a $110 price target. That's nearly 20% upside from today's close. Analysts expect the company's beauty reimagined plant and improving demand in Asia will drive sales growth and margin expansion. Estee Lauder now trading at its highest level since mid October. That's up more than 90% from its lows of the year, Tim. Now this stock also got a little bit of a bump. This sounds morbid to say, but when Leonard Lauder passed away. And while a lot of the family members are still a part of the company now that he has passed, there's potentially some belief that strategy could change. Maybe there could even be someone that would buy the company. Is that part of this move?
- [30:55]
Tim Seymour
I think every time we've heard more news about someone from the Lauder family stepping down in a position of control, it's something that the stock has rallied and there's been a few of those in the last 18 months. But you mentioned Asia. It's to me, this is about the Asia trade. What was going on with luxury, what was going on certainly in China, what has not happened since COVID what has been a part of the travel story that also has been very difficult. Estee Lauder, who I think has built some very strong distribution channels, certainly you know, what they're doing through Amazon even, is something that was part of where I think the brand is now turning around. I am long the stock. This was the E in bicep or BICEP two years ago. So being early is certainly being wrong. And I was. But I and it's not cheap. Let's be clear right now. This is not like the suddenly the stock after being cut in half or more so is not necessarily a cheap stock, but I think it's a company cyclically with their business. This now looks very interesting to me.
- [31:49]
Courtney Reagan
Meantime, MP materials topping the tape, surging as much as 60% today and posting by far its best day on record. The owner of the only operational U.S. rare earth mine saying the Department of Defense has agreed to buy $400 million worth of its preferred shares, making the government's agency impede equities single biggest shareholder. Guy, this was a very curious announcement.
- [32:12]
Guy Adami
Well, kudos to Steve Grasser has been talking about this for a while, number one. Number two, I mean look at the amount of volume it traded to 85 million shares is like 9 times normal volume.
- [32:21]
Courtney Reagan
Right?
- [32:21]
Guy Adami
And now the stock is getting up to levels we saw probably three or so years ago. So I think a lot of the move before this was predicated on an announcement like this. You've got the event. I don't think this is my opinion. I don't think you're chasing this name at these levels off the back of that headline.
- [32:36]
Courtney Reagan
But if you want to play rare earths, is this where you go?
- [32:39]
Guy Adami
Is where you should have gone? I don't know necessarily where you're going now.
- [32:42]
Courtney Reagan
I hear you. Okay. Well, coming up, a divergence in the big box retail space. Target quietly turning the tables on rival Wal Mart in recent weeks. What the chartmaster sees in the technicals when vast money returns. Welcome Back to Fast Money. Stocks in the green today. The S&P 500 and Nasdaq both closing at fresh record highs. The dow jumping nearly 200 points, shares of Tesla jumping nearly 5%. The EV maker applying for certification of its Robo taxi service in Arizona, according to the state's transport department. A decision is expected by the end of the month. Earlier today, CEO Elon Musk also said Robo taxis would be coming to San Francisco within two months. Robinhood down slightly after hours on a Bloomberg report that Florida's attorney general is probing its crypto trading promotions. Meantime, bitcoin hitting fresh records in the last few minutes. We talked about it earlier on the show topping 116,000 for the first time. And shares of Levi Strauss jumping after beating top and bottom line estimates. Don't miss an exclusive interview with CEO Michelle Goss on Mad Money tonight. That's right after Fast Money. Meanwhile, shares of Target have been quietly climbing recently. The stock is up 6% this month while Wal Mart long and outperformer is down 3%. But where do the two retailers go from here? The chartmaster is looking into the technicals. Carter, what do you see in the charts? I know people like to compare them, but we know fundamentally there are some big differences between these two names.
- [34:16]
Dell
Yeah, I mean in many ways they are not comparable. Right. And certainly over the past several years the performance of Walmart versus Target shows that they are not. But I think you're starting to see a bit of convergence in the prior divergence. And you can see that here Walmart starting to sort of roll and hook down, whereas Target is starting to curl up now on this basis, of course, two years, Walmart up 84, Target down 21. But look at the past three months and you had a table on the screen just before for one month. But this is really the interesting part. This is the other story we've got, of course, Walmart up only 3 and Target up 14. So can this continue? I think it does. Let's look at two absolute charts of the two stocks individually and on their own. And again you have this slight, a gentle rounding bottom that you referred to coming to life a bit. Target and on the other hand by contradistinction, Walmart, which is starting to ever slowly stall and roll. So can this current trade, which has been going on for about two months, continue? I so and then if one wants to play it, of course it is as a pair. It's being short Walmart and long target.
- [35:29]
Courtney Reagan
Interesting stuff, Carter. This exact conversation came up on Squawkbox the other day. And Dan, you flagged this potential pairs trade here?
- [35:36]
Dan Nathan
Yeah, one of the reasons I mentioned I was talking to Brian Belsky from BMO Capital and he runs a portfolio and they try to be contrarian on one of the portfolios he was talking about value and sometimes he likes things that the street kind of hates. And I was just taking a look at this one and the street hates this one. I mean, this is the target, right? And so at some point you have to say, like if they're going to get some of this stuff and I don't know what execution issues, maybe a little better. You know, that sort of, it wouldn't take much to get this stock going. So I think it's interesting. And Wal Mart is stuck in the mud right here.
- [36:03]
Tim Seymour
I think there's also some, there's, there's a, there's a catalyst potentially in a CEO change, whether that's going to happen or not. I'm not gunning for Brian Cornell's job, but he's been the CEO since 2014 and, and after a tremendous run and certainly a run through the early part of COVID that was extraordinary, especially with the, with the segment mix of a lot of the stuff that they were selling. It's really been under a lot of pressure. I think a CEO change would be something if you asked investors, they'd be bullish on.
- [36:30]
Courtney Reagan
Very interesting. We'll have to watch and follow and see. Of course, retailers report at the very end of the earnings cycle. So we got some time to go. Well, coming up, the annual American Century celebrity golf tournament kicks off tomorrow in Lake Tahoe. And former NBA star Grant Hill joins us from the green to discuss his latest projects. Fast Money is back in two. Welcome back to Fast Money, the American Century celebrity golf tournament at South Lake Tahoe, Nevada, tees off tomorrow. CNBC's Dominic Chu has the hardest assignment today. He's sitting down with NBA hall of Famer and Atlanta Hawks co owner Grant Hill, one of seven newcomers at this year's tournament. Dom, must be hard to sit there all day and work at that tournament.
- [37:16]
Dell
No. Tough assignment for sure, especially with this backdrop. But as you point out, Grant Hill, NBA hall of Famer and now an astute business person as well. This is his first time in Lake Tahoe. And maybe I'll just kick things off, Grant, with that, your first time in Tahoe, your first time at the American Century Championship, Just how much do you value this opportunity?
- [37:36]
H
Oh, man, it's been absolutely tremendous. I've watched this championship, American Century Championship, for years on television. The videos, the photos don't do it justice. It's absolutely stunning here. Breathtaking. Every hole, the mountains, the water, the weather, and of course, just the tournament itself. The people, you know, the players, the. The people working here, the fans. It's been an absolute joy. And we haven't even officially started yet.
- [38:05]
Dell
You know, it's very funny. I was speaking with Jay Bilis earlier today, and he said getting the invitation in the mail for this thing is akin to a pro golfer getting his invitation to the Masters Tournament. So that's how he treats it.
- [38:16]
H
You know, he might be right. I mean, I. This is my first time. I'm a rookie here. And when I got the email invitation, I was thinking, are they sure it's me? Like, I was shocked by it, but certainly excited, proud, cleared my calendar, and I'm here.
- [38:31]
Dell
All right, now. It's also a fun spot because you get to mix and mingle with so many kind of captains of industry, business and whatnot. And you in your post NBA life have gone very much towards the business side of things. So take us through a little bit about how you view your portfolio these days. It involves sports investments, real estate, all kinds of different ventures. How exactly do you keep it all straight?
- [38:52]
H
I have a very good ad admin. Certainly difficult at times keeping everything organized, but I do have a lot of interest and, you know, I try to pursue, you know, a lot of these things all at once. Very bullish on sports. And, you know, I'm a history major. I remember studying about the ancient Greeks and they would halt wars in the years of Olympics then because they knew the power of sport, how it brought people together, it inspired it, entertained. And that's only been magnified as you fast forward to present day. I've lived it. My dad was in the NFL. I've been a professional athlete. So the opportunity to invest in sports, an opportunity to continue to be a part of this incredible growth trajectory, is something that I've been fortunate to do on a number of levels.
- [39:36]
Dell
You've also done so at the NBA level and now at the WNBA level as well. Take us through the thinking behind the new expansion franchise in the WNBA for.
- [39:46]
H
Well, I know you talked to Kathy, Kathy Engelbert, who's our WNBA president. But we, you know, we won the bid. Tom Gore is, or untilem we have maybe the most diverse ownership group from, you know, Mary Barra at General Motors to Sheila Ford Hamp, the Ilitch family, you know, Eminem, Chris Weber. I mean, it's just everyone that has connectivity to Detroit coming together, really embodying, I think, the spirit of Detroit, the idea of collaboration and bringing the WNBA back to Detroit. And so there's a real. I think we've passed the inflection point when it comes to not just the wnba, but women's sports overall. My wife and I are investors in NWSL Orlando Pride. We won the championship last year. Shout out to the Pride. But there's a. There's a movement happening right now in women's sports, I think, all over. And it's about time, you know, it's about time. And so. But it's reflected not just in terms of the engagement, in terms of the fan support, but really in the valuations which you've seen in recent years go, you know, go skyrocket high. So it's fun to see these women, you know, on the court, on the field, behind the scenes, finally getting the attention they deserve. And I'm proud to be a part of this movement.
- [41:05]
Dell
You mentioned the bull market you're seeing in sports. Take us through whether or not you see a bull market for the Knicks in hiring Mike Brown as their new head coach.
- [41:12]
H
Oh, yes, yes. Well, first of all, the Knicks had a fantastic season. I know they came up short, but to get to the conference finals, coaching change, never easy. A little bit of uncertainty about who was next. But Mike Brown's been around the block. You know, he's coached. He was coached LeBron, he. He's coached Kobe. He's been in some, you know, environments. He turned things around in Sacramento. I actually like. I like that hire for them. I think he has the right personality, the right, you know, temperament, and I think he'll be able to handle. New York is tough. You know, it's tough. The expectations, obviously, the fans, the media. But Mike Brown is a good man, a smart man, and I think he'll take what's there and continue to hopefully accelerate things. And things are kind of wide open right now in the Eastern Conference. Injuries with Boston, unfortunately, as well with Pacers and Halliburton. So the Knicks, they have a window here.
- [42:08]
Dell
Grant Hill, bullish on sports and bullish on the Knicks and Mike Brown as well. Courtney, you heard it right here. We'll send things back over to you in New York in Times Square from here in lovely Lake Tahoe.
- [42:19]
Courtney Reagan
Thank you very much, Dom. And thanks to Grant Hill as well. You can watch full coverage of the American Century Championship Friday through Sunday on NBC and on Peacock. Well, coming up, CNBC out with its annual ranking of America's top states for business, the state that took the crown and the categories that proved to be the most competitive. That's next. More fast in two.
- [42:44]
Dell
Thousand and twenty.
- [42:47]
Courtney Reagan
Welcome back to Fast Money. North Carolina may be this year's top state for business according to CNBC's annual rankings, but it's far from the only one to achieve high marks in categories like the economy, quality of life, infrastructure and more. Scott Cohn is here with this year's top states honor roll.
- [43:03]
Dell
Scott, what do you got that is right, Courtney? So as the way that our study works is it's based on points through the 10 categories of competitiveness. North Carolina had the most points overall and but it did not win any one category. These are the states that did. Our top states honor roll for economy, our top weighted category this year, it's Florida, strong growth, healthy state finances for infrastructure, Courtney, it's Ohio with access to more people in a day's drive than any other state. Texas has the top workforce, lowest cost of doing business. Oklahoma, with low wage and utility costs. North Carolina is business. North Dakota, I should say, is business friendliest, especially its legal climate. Vermont, top for quality of life. California first for technology and innovation. In education, it's Virginia. California offers the best access to capital and you'll find the lowest cost of living in West Virginia. The other part of our top states honor roll is all the great people that work on this every year from our great technical team on the ground here in Wilmington, our digital team, CNBC.com and Englewood Cliffs and our amazing top states producers this year, Noah Broda, Casey o'. Brien. We thank everybody. Check out what everyone has done@topstates.cnbc.com that's top states for 2025.
- [44:14]
Courtney Reagan
Courtney, that is awesome stuff. I know. It is a big labor of love every year. I love that Ohio cracked the top five too this year. I know you mentioned it there. It's about time. Time you're talking about innovation in Ohio in the 1800s with Wright Brothers before the show started. But you know, maybe they'll come around again. Scott, thank you so much. Congrats to the team.
- [44:33]
Dell
You bet. Thank you.
- [44:34]
Courtney Reagan
Well, coming up next, it's oh, wait, wait, wait. We get to talk about the stakes.
- [44:39]
Tim Seymour
First of all, we should talk about what's Scott does great stuff. I love seeing Scott on the road. This is a great I know he's.
- [44:45]
Courtney Reagan
One of the great field reporters. Like get him out there.
- [44:47]
Tim Seymour
He's been doing it forever. He's the best. Noticeably absent from that list, of course, is New York, which is not doing so well.
- [44:55]
Dell
No.
- [44:55]
Tim Seymour
Yeah.
- [44:56]
Guy Adami
But I will say this. I think what I heard this morning on the Squawk box, it's a fine show from 6 to 9 that 143 million people in this country are within driving distance in order to work in the state of Ohio. It's unbelievable.
- [45:10]
Courtney Reagan
It's critical because also I 70 and I 75 intersect in Dayton, Ohio, which is where I'm from. And it is a great place to locate things like distribution centers. Also, Columbus, Ohio is often looked at as this like perfect sort of demographic mix for Ohio. Like it or for the country rather, it represents all of Ohio, which is why it's a big consumer test market too.
- [45:32]
Tim Seymour
I think the Big Red Machine was one of the greatest baseball teams of all time. No doubt about 75. So I mean, you know, whether you talk about Johnny Bench or Joe Morgan or Cesar Sedano or Concepcion is short.
- [45:45]
Courtney Reagan
I remember Darryl Strawberry.
- [45:46]
Guy Adami
He didn't play for the Reds.
- [45:52]
Courtney Reagan
Baseball. I'm so good at baseball faction, right guys? Yeah.
- [45:55]
Tim Seymour
That's why we love you. Many reasons.
- [45:58]
Courtney Reagan
Coming up next, your final trade. Time for the final trade. Let's go around the horn.
- [46:07]
Dell
Carter, Amazon, catch up Train.
- [46:13]
Tim Seymour
Great having you Courtney. Estee Lauder, Dan, I think Target's worth.
- [46:17]
Guy Adami
A look at a lot of time. We have a bevy of your parents are fans. Fantastic. Almost as good as Valero.
- [46:24]
Courtney Reagan
Oh, there you go. Thanks for watching. Fast Mad Money starts now.
- [46:31]
Dell
All opinions expressed by the Fast Money.
- [46:32]
Courtney Reagan
Participants are solely their opinions and do.
- [46:34]
Dell
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.
- [47:00]
Courtney Reagan
Or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such.
- [47:05]
Dell
To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer how will you shape the future of banking with confidence?
- [47:14]
Tim Seymour
Industry consolidation, crypto, the rise of fintechs.
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Dell
All create a complex landscape for banks to innovate and grow.
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Tim Seymour
EY provides domain led insights to navigate today's fragmented banking sector.
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Fidelity
So whether you're tackling regulatory complexities, integrating.
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Dell
Digital assets, or seizing MA opportunities. EY sees your business from every angle.
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Tim Seymour
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Dell
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