← CNBC's "Fast Money"
CNBC's "Fast Money"
S&P Closes in on a New Record After the Fed Cut and Oracle Drops after Earnings 12/10/25
00:46:15
The Federal Reserve cutting rates by a quarter point, as expected, at its last meeting of the year, and stocks rose on the news, with the S&P finishing the day just shy of a record. Meanwhile Oracle shares were dropping after its latest earnings report. The traders dive into all the details from the call. Fast Money Disclaimer
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- [00:00]
Tim Seymour
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- [00:15]
AT&T Business Announcer
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- [00:48]
Melissa Lee
Live from the NASDAQ Markets 8 On a night when Tim Small caps close at a record high, dow jumped nearly 500 points. This is fast money. Here's what's on tap tonight, a bad omen. Shares of Oracle dropping after the software giant missed revenue estimates for the latest quarter. What the results say about the state of the air and tech trade and the Fed in focus, stocks taking a leg higher after the central bank cut rates at its last meeting of the year. But how many more cuts are coming in 2026? And what will it all mean for the markets? Plus, Uber sinks as Amazon ups its delivery game. Netflix hit seven month lows amid the battle for Warner Brothers and a rare bright spot in the Staples space. What's got shares of Pepsi bubbling higher today and how long can the caffeine high last? I'm Melissa Lee coming to you live from Studio B at the nasdaq on our super sized desk tonight night because it is a very important day. Very big desk. Tim Seymour, Dan Nathan, Guy Adami and Michael Schumacher, Wells Fargo securities head of Macro Strategy. And we begin with the market reaction to the Fed's third and final rate cut of 2025. The committee cutting its benchmark lending rate by a quarter of a percent in a 9 to 3 vote while also reiterating its forecast of just one rate cut next year. Stocks finishing near their best levels of the session. The S and P ending just shy of a record close. The dow gaining nearly 500 points. Nasdaq adding a third of A to the small cap. Russell 2000 set an all time record close. Treasuries meantime firmer across the curve after the central bank said it will start buying $40 billion of T bills this Friday. The yield on the two year down more than 7 basis points while the benchmark 10 year pulled back after hitting its highest level since September 4th. For more on today's decision, let's get to senior economics reporter Steve Liesman who is in Washington. Steve?
- [02:30]
Steve Liesman
Hey, Melissa. You have the Fed following through on an expected hawkish rate cut, reducing rates by a quarter point to the new range of three and a half to 375. But signaling might be done cutting, at least for now. It appeared to buoy markets, however, with a more aggressive policy than expected for the balance sheet on Rage. The statement what it did, it used language that it had used in the past to signal a pause. And Fed chair Jay Powell several times said policy is well positioned.
- [02:55]
Michael Schumacher
We now cut a total of 175 basis points. And as I mentioned, you know, we.
- [03:00]
Steve Liesman
Feel like where we're positioned now, we're well positioned to wait and see how the economy evolves from here. Fed Futures embraced that outlook pricing in just a 24% probability of a cut in January, 44% for March and a little bit more in April. A little bit more confidence as the year goes by. By the way, when a new Fed chair comes in in June, the vote count was nine for cutting, two against cutting, one for cutting 50 basis points. First time since 2019 we've had three descents. But the dot plotter forecast of future rate cuts was somewhat more hawkish. Six officials wanted no change in the fed funds rate at this meeting. 7 want no change for next year from the current rate. The median, however, came out with one cut for next year and another one for 2027. More dovish was that balance sheet outlook that Melissa mentioned. It will begin on December 12th. The Fed going back in and buying securities sooner than the market expected. Focused on bills, but potentially up to three year maturities. And here's the one that really was a bit of a shocker. Totaling 40 billion for least several months. Also more than expected. Powell insisting this is not quantitative easing, but the Fed maintaining the size of the balance sheet relative to the economy and providing liquidity during times of strong demand. Call it what you will. The markets seem to like it.
- [04:16]
Melissa Lee
Melissa, Call it what you will. I call it qe. I don't know if you're, if you're basically enacting a measure that will push down rates further beyond the rate cut that you, that you just voted on. That seems to me a form of, of qe.
- [04:32]
Steve Liesman
Yeah, I mean, I like the way you phrase that. In other words, judge it by its effect, not Its intention? I think that's right, but I think what we're going to want to do is watch it over time. Does the size of the balance sheet actually grow in a way that's greater than the growth of the Fed's currency and other reserve liabilities that are out there? I think what's going to happen is you're going to get a flood for a couple of months and then it's supposed to drop off in April. We'll have to watch the management to see if this is quantitative easing in the sense of adding a lot of reserves to the system. Powell is going to tell you, hey, this is just reserve management maintaining what they call an ample level of reserves. Yeah.
- [05:11]
Tim Seymour
So, Steve, it's Seymour. And part of this is understanding Seymour, what the intention of this is. Maybe you just hit it. Maybe we can put it to bed. There have been some spikes and massive repo infusions over the last month, month and a half. Is this something to counter, you know, like so much for the end of Kutty this. Do we need this here? I mean, I understand there have been, between the government shutdown and whatnot, reasons why we've seen a spike and concern around liquidity. But talk to me, Tim, I think.
- [05:43]
Steve Liesman
You'Re raising some really important context that the Fed's change in its balance sheet and its balance sheet stance and doing so quicker than had been expected by the market is in response to some of the tightness we've seen essentially in the plumbing of the financial system. These repo rates have traded towards the high end. There's been some disruption out there, and I think the Fed was getting the signal from the market that it had brought reserves down too, too far and too much relative to what the market required to operate in a way that would allow it to maintain the funds rate where it wanted it to maintain it. So I think the context is important that the Fed is doing this in response to that tightness in the repo market. And now we'll see if the provisions out there. I will say for another day, there's a debate that the Fed could have done this differently in a way of not introducing the balance sheet, not increasing the balance sheet. Guy named Bill Nelson, former Fed guy Kevin Warsh, other people had other ways to do this, but this is the way that Powell and the Powell Fed are running this system here. The ample reserve regiment which probably doesn't deserve, but still requires an hour to talk about.
- [06:52]
Karen
Steve, it's Karen, just to talk about it for a little bit more. Does the News itself, as long as.
- [06:56]
Steve Liesman
You like, I'll do it.
- [06:57]
Karen
Okay. Does the news of it itself help the situation and that maybe they really don't need to do it for very long.
- [07:04]
Steve Liesman
It could be that this is coming and so banks should not, you know, husband their reserves. That's an idea that's out there. It could definitely help. You don't want to be talking about the repo market on tv. And I think that's a good metric because if we're talking about it on TV it means we're in trouble. Right? That's when we start to talk about. And it's not something you should be thinking about. It should be operating in the background where essentially a trillion dollars every day of stuff is repoed out there. It's like a trillion dollar daily trade in this stuff and it goes seamlessly. But we've had some tightness in that market. It was the kind of thing that during the financial crisis we would look at every day. It was the kind of thing that kind of exploded. You might remember after the reciprocal tariffs were put in place and was a pretty good warning to the President that he needed to step back from those initial reciprocal tariffs. The market got very tight and maybe within a few days of things this would be melting down, so to speak. So I think that's a good point, Karen, that maybe they've nipped this in the bud, providing enough liquidity out there. We'll have to see. There are some key points that are watch when these big 10 year sales come from the Treasury. Watch year end watch tax day. The chair mentioned that April 15, next year, after April 15, there's this demand for money to pay taxes, then things should ease off and that 40 billion number should ease off as well.
- [08:30]
Melissa Lee
Since we shouldn't be talking about repos on tv, let's. Can you talk to me about the message that Fed Chair Powell has about inflation. He says that inflation remains somewhat elevated relative to our 2% goal. But then he also said that something to the effect of further normalization will help us, will help the labor market, but also help the downward move of inflation after the pass through of the tariffs.
- [08:55]
Steve Liesman
Well, I think what they're waiting for is, is. And he see there was this one point where a somewhat exasperated Powell said if there are no further tariffs, the idea that essentially if these tariffs would pass through the system and the Fed could get back. I would say now I'll use a term that Paul McCullough used is sort of in the suburbs of neutral, not quite at neutral, maybe a Little bit tight relative to the 3% neutral rate there. So it's, it's possible there's more room to bring rates down in order to.
- [09:29]
Help the economy along, help the job market and not exacerbate the inflation problem. I think the Fed wants to see the data and wants to see what all this looks like on the other side. There's some interesting stuff coming down. I don't know if you guys are talking about this. I think you must have the idea that there are big refunds coming next year. The average refund might be as much as $1,000 more than, than a year ago that could help the economy. There's stuff in the, and the, in the triple B, big beautiful bill about expensing that might pick up investment next year. So there's stuff the Fed chair wants to see. What's interesting right now? We got the employment cost index this morning. We'll have to watch this. It does not appear, and Powell talked about this, that the job market is going to be a source of inflation that the Fed has to worry about. And that's something I think they want to see. When you look at the household report, the unemployment rate tells you about that kind of tightness out there. If that happens, we could go lower. But I still think the Fed wants to see things clear a little bit. The fog of having no data. The fog of what? How these tariffs are going to affect the economy. The Fed wants to see that stuff clear and then it can make policy maybe head a little bit more towards neutral. You see that chart you have up there? I like that chart. Where would it want to be? Well, down towards 3%, maybe a little bit below that. Think of it this way. 3% funds rate minus 2% inflation gives you 1% real. I think the Fed would be comfortable in that zone.
- [10:56]
Melissa Lee
Steve, thank you.
- [10:57]
Steve Liesman
Pleasure.
- [10:57]
Melissa Lee
Liesman in Washington. We got to go straight to Michael on this. Thank you for being part of our extended desk on this very important day, final Fed day of the year. What did you make of the Fed's moves?
- [11:08]
Michael Schumacher
Yeah, I disagree with Steve. I think it was dovish. Despite the, quote, fog of having no data, the Fed cut. What does that tell you? They want to cut some more? I think probably not in January, maybe not in March, but the door is open. So Powell could have said, we're done, which is what the Reserve bank of Australia did a couple of days ago. The Fed did not do that. So the Fed said, hey, look, we might do this again. And buying T bills, that's a very dovish move. Equities ripped. You all saw that. I will say the bond market didn't react as much as I would have expected. Given a fairly dovish response to your treasury yields down 7, 8 basis points, something like that. I thought it could have been 15, but still I would take it as a Dover sign.
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Melissa Lee
Do you also disagree with Steve?
- [11:47]
Guy Adami
I understand what Steve saying I somewhere in the middle because there's a lot to decipher here. But I'll say this. No, no. I think in terms of the 40 billion, they're trying to put out a fire before it starts, they see the potential for one and they're like, we're not going to let this get to that point, which I'm okay with. But I think you can make an argument this is Bond bearish and I'm on the bearish side, but this is definitely precious metals bullish, in my opinion. And I think if you look at the price action in some of the miners, the initial reaction was to sell off on the back of what they interpreted. And now the, the knee jerk reaction is, wait a second, if we're going down this QE route, like you said, I mean, gold should continue to move. And I think that's my biggest take.
- [12:26]
Melissa Lee
We're going to break protocol here because while I said goodbye to Steve, we'll bring Steve back in because Michael so decisively said that he disagreed with him.
- [12:34]
Michael Schumacher
The rebuttal. Here we go.
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Melissa Lee
Yes, the rebuttal.
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Tim Seymour
You didn't know you had to do this either.
- [12:38]
Michael Schumacher
No, this is news to me.
- [12:40]
Steve Liesman
I don't. We did not say it wasn't dovish. I hope I don't know how you got that impression. I said it was a hawkish cut in the sense that they suggested, using a variety of language that they were not going to cut in January and maybe the next cut was further down the road. But I don't think this was more hawkish than I thought. I also thought the balance sheet stuff was pretty dovish. So I just want to correct that. If you misunderstood me, I think when.
- [13:03]
Michael Schumacher
You lead with hawkish, the natural interpretation I would have is it was hawkish and I think versus market expectations, which were pretty bowled up. On the hawkish side, the Fed didn't quite get there. So Powell wasn't sufficiently hawkish to placate the hawks out there in market land. When you look at the moves in yields over the last five, six days, I think they'd really gone a bit to one side and he wasn't quite there. So I'd still Go. It wasn't particularly hawkish. Meaning I thought it was dovish, not screaming.
- [13:30]
Steve Liesman
But I think the one thing that would be interesting would be if you're so. If you think it's that dovish that you're now saying they're going again in January. Are you that dovish?
- [13:38]
Michael Schumacher
No, no, we're not saying that at all. I think the door is okay. So the market in terms of a hawkish cut, what I would have labeled a hawkish cut, as Powell says, no, we're effectively done. We're not going to Jan, not going in March. I'm going to pass the baton to some other lucky soul in me and that person could deal with it. But I'm not going to do anything else. He didn't do that. So that's how I.
- [13:57]
Melissa Lee
Your hawkish bar was much higher.
- [13:58]
Michael Schumacher
I think it is. That's probably the takeaway.
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Melissa Lee
Steve, we got to let you go this time for real.
- [14:03]
Steve Liesman
I'm going. You can't fire me. I quit.
- [14:06]
Melissa Lee
Thank you as always. Dan. What's your take?
- [14:09]
Dan Nathan
Let's bring it back to repos. I'm just kidding. We're not supposed to talk about that on tv. You know, I take issue with the fact that the market ripped. I mean we closed up 70 basis points. If you look at the intraday S and P from 2 o'. Clock, I mean it was kind of muted, you know. And then you look at yields, small.
- [14:23]
Tim Seymour
Caps finished it at all time high.
- [14:24]
Dan Nathan
Your small caps did. But you know, maybe that's a little bit of a catch up trade. Tim, I know you've been on it for three years, but it's back, baby. No, I just think that, you know, yields didn't move. The dollar was down a little bit. Bitcoin didn't really move like stuff that I was looking for like some macro reactions. They just really didn't happen. All that said, we are very near, you know, the all time highs in the s and P500. It really feels like this is it. We get through these earnings this week and have a ball. What do you call it guy? Like a Santa Claus rally or something?
- [14:50]
Guy Adami
Yeah, I use that term every year. Yeah, mistletoe.
- [14:54]
Karen
One thing Powell said that I thought was interesting how he just said, you know, we are still committed to 2% and then moved on to something else. We're nowhere near 2%. Did he mean a 2 handle to something percent? Because we are. If that were the case, if they were still committed to 2%, we would have seen a lot more hawkish rhetoric.
- [15:14]
Melissa Lee
Unless he believes that the impact is solely because of tariffs and that there is a, a time at which that impact will roll off. So do you want to, you know, move monetary policy based on something. Exactly. Based on transitory inflation? That was my take. I don't know.
- [15:30]
Tim Seymour
I think the Fed was influenced by the freshest data it had, which was this morning's employment costs index, which ECI at 3 and a half percent on wages is not that hot. And, and, and the implication from this report also is that a 2% target, you're not far off with all the productivity gains, that the labor market can certainly be absorbed and actually some of the tariffs can be absorbed. And this gets you to a Fed that really should be on hold, seemingly. It's funny, Michael, because you are, you know, you've definitely been very adamant that you thought it was, it was we're done or. But that yet they. I'm sorry that we're not done. We threw a lot of stuff out there. Didn't he say three times, like we're going to wait and see. Wait and see? Is wait and see mean we're not done? Because, because when I heard that three times and he said it maybe, maybe more than three times any time he had a chance to say we went today, but we're now going to wait to see how the economy responds. And that to me sounds like a Fed that is on hold. And it sounded more hawkish, but I.
- [16:28]
Michael Schumacher
Would interpret that as being a Fed that's taken the right stance. They've got tons of data coming in just next week, as a matter of fact, so why prejudge it? But at least he didn't say we're definitively done, which other central banks have done. So that was, that was my read.
- [16:41]
Melissa Lee
On what does this mean for the markets. I mean, as Dan had mentioned, we're just, you know, we're still basically at all time highs.
- [16:48]
Steve Liesman
Yeah.
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Dan Nathan
And I guess when I say 70 basis points on the close, you know, you didn't have matter, you didn't have Microsoft, you didn't have in video.
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AT&T Business Announcer
Right.
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Melissa Lee
That good.
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Tim Seymour
But you had 493.
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Melissa Lee
I mean, equal weight outperformed what I.
- [16:59]
Tim Seymour
Sorry. Because what I think was really extraordinary, the other part of where he was. This may have been not a hawkish cut that was definitely expected, but this was absolutely a call where the Fed said the economy's in pretty solid shape. This was a growthy Fed today. And I think you saw the kind of a barbell in the market that you actually got. So, you know, your Small caps have a ball with your 1% position and small caps and whatever. I just think by the way to re, you know, to reiterate my view on small caps, it's not that small caps are a bad place to be. They've been a great place to be. I just think they get a disproportionate amount of attention for the amount of market cap and for the amount of exposure in people's portfolios. But, but discretionary retail materials as guy said all rallied big but so did semiconductors. So I mean all of those sectors were up more like than 140 basis points today. That, that's a big market day.
- [17:51]
Dan Nathan
Yeah, I didn't mean that, you know that the 493 versus what I'm saying is when they join the party, if they do join the party, I mean Powell did mention on a couple of occasions, you know, the contribution of Capex and what that means for the economy and I just think that's important. Maybe these stocks or saying something different, maybe you know, these bands, you know, for the Nvidia H200, maybe they release, you can have a ball China, buy as many as you want but maybe they're not buying it, you know what I mean? And maybe that's the sort of thing that puts some pressure on Capex, who knows. I just think we're gotten to a point where we got to see some new models because I got to tell you Chachi Beauty 5 did not light the world on fire. And I think some folks are thinking that some of the scaling laws that they're relying on, you know, I mean to keep this thing going, maybe they're not as sound as a lot thought though.
- [18:34]
Melissa Lee
And we should note that Oracle is down 2%. We'll get a little bit more on that in a bit. But the fact that the broader markets rallied today and it wasn't the Nvidia's of the world and maybe we don't need that sort of Capex or that Blackwell and Deep Sea can exist in China etc. And the rest of the markets can still go higher. And by the way Powell did address the rise in the 10 year yield and said well maybe it's because it's reflecting growth out there.
- [18:59]
Karen
Right?
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Melissa Lee
It's right. It was a growth.
- [19:00]
Guy Adami
The Fed brought up tariffs as well as. Yes, all those things. Absolutely. I'll say this to me, it's going to come down not necessarily what the S and P does. How does the dollar react overnight tomorrow? What does the bond market do? I think the Dollar sells off on the back of this. I think gold rallies. I also think the bond market deteriorates from this as well. We'll see over the next 24 hours.
- [19:20]
Melissa Lee
All right, meantime let's get to Oracle. We did mention that 10% move shares are at after hours lows. The company missed revenue estimates for the latest quarter. The company just giving Capex guidance on its call. Seema Modi is here. She's been dialed in. She joins us the details these people.
- [19:35]
Michael Schumacher
This is like a party. We got the right with the party.
- [19:38]
Seema Modi
And guys, we have new details just coming from the conference call. Capital expenditures as you just point out Melissa, to 12 billion. That's up from 8 billion the previous quarter in terms of funding. Right. We wanted more transparency on the company's ability to finance this mega data center build out. They say that they have a variety of sources available through the debt market. Public and private debt market was mentioned. Executives also adding that there are finance financing options where customers can bring their own chips to be installed in their data centers. Suppliers who can lease their chips rather than sell them. Remember, when it comes to Oracle's role in AI cloud computing, their number one expense is graphic processing units. And unlike other hyperscalers, Oracle is even more dependent on Nvidia. And that brings me to the comments that founder and CTO Larry Ellison made in the press release today where he talked about chip neutrality and how this is going to be a big policy for Oracle going forward. Yes, continuing to buy GPUs from Nvidia. But he also said that they will be looking at other players as well. And we know that Oracle already has bought thousands of chips from amd. There's also been talk about Google and, and Amazon among others when you look at where other hyperscalers are investing. So that that was also significant. Going back to the road ahead, the remaining performance obligations for that's the backlog of new cloud computing deals that came in at $523 billion. That is up from the 455 billion that was announced last quarter. Remember that specific metric is what sent shares higher by 36%, the biggest one day pop we saw since 1992 in shares of Oracle. But again the street seems to be sort of overlooking that number right now focused on the financing options. A more definitive answer on what that could look like in the next three to six months. The call is ongoing. We still haven't heard from Ellison who I imagine will address some of those questions.
- [21:24]
Melissa Lee
There is a lot to unpack. But getting to the RPO number Because that was, that was what caused the stock to spike on the back of the last earnings and then we found out it was because of one customer. Do we have any clarity on, on who is behind this bump?
- [21:36]
Seema Modi
Glad you mentioned that. And that was the narrative that the company has been trying to build in recent weeks. Even on the investor day in this press release and even on the call they mentioned that there is matter, there is in video. So they are starting to show that it's not just about OpenAI which is that $300 billion five year deal. There are other customers in the pipeline but we want more details and we'll get them.
- [21:56]
Melissa Lee
Yeah, we should note that Nvidia shares are down 1.2% on the back of this sort of slid along with Oracle down in the aftermarket session.
- [22:04]
Dan Nathan
Yeah, I think you framed it. I mean she surrounded the trade obviously. But if you go back to September 10th when they kind of released this number and everyone, everyone knew who it was. Right. Let's be honest, they've been thrown around contracts all over the place is open air. So you can talk about an RPO that's a half a trillion dollars, whatever you want. If they can't finance the build out well then they're not going to get the revenue. Right. So like that's what the I think the market is calling BS on right now. And look at the stock. I mean it's well below where it was the day that reported in September. So to me, I think the market, you know, is both the equity and the debt markets are saying they're not going to be able to do it.
- [22:39]
Melissa Lee
Yeah, I mean the notion that they're going to increase spend by $4 billion quarter on quarter. But how do you do it when there's a spate of debt offerings in the market? I mean the competition to raise money at this point is fierce.
- [22:50]
Karen
Right. And so you just get into this vicious cycle of the price of the project goes up because the price of the debt goes up as everyone's trying to tap the same market.
- [23:01]
Tim Seymour
Yeah, I mean and you just get back into where we've often talked about with the company. We don't know anything about what really the RPO pricing is going to be. But what we do know is that their large language kind of a model dynamics the margins there they've already said are going to be below the corporate average. I mean there's waving, there's nothing attractive about that business. Having said all that, I thought the set up for earnings was pretty good and I actually thought it was going to bounce here. So I need to be clear. I mean, this was a stock that had rallied almost 17% into today and it looked like we'd been level set. And because there's zero price into the stock, I think this presents an opportunity. I don't like the stock's reaction and the focus is too much on the business ahead rather than the business that's here now. Which, by the way, OCI was good. Everything there was good. I think there's a room for this to bounce.
- [23:53]
Guy Adami
I thought it was going to bounce as well. I said it yesterday. I thought we get back into the gap to 45 to 50. I thought the setup was really good into earnings and obviously didn't come. But it comes to a free cash flow on the back of that spend. Negative $10 billion is a problem when the street was probably looking for negative five and comes back to how are you going to finance this stuff and what does the balance sheet look like? And they're being penalized for it, despite the fact that on the margins it was a pretty good quarter.
- [24:18]
Melissa Lee
Sima, what did you make of bring your own chips? It sounded like they're trying to reduce their cost by saying you can buy your chips and bring them here so we don't have to pay for the chips.
- [24:27]
Seema Modi
I think it suggests the company is looking at all sorts of favorable financing terms that they can lock in with not just their main supplier, Nvidia, but others as well. There's also been the topic of vendor financing. This idea of another player like private credit, playing a role in buying the GPUs and then using those GPUs as collateral. But then that brings up the whole topic of GPU depreciation. What is the shelf life of these chips? Is it three to six years? Which makes it seen as potentially risky.
- [24:55]
Melissa Lee
Yeah, the term college vendor financing is the muscle memory around that is, remember.
- [25:01]
Tim Seymour
The term of college. Bring your own chips. It was like byob.
- [25:06]
Your own brewskis.
- [25:07]
Dan Nathan
One thing I'll just tell you, if this Stock goes to 150, the government's definitely taking a stake in it. So, like shorts beware. I mean, just think about, you know, Trump's relationship with Larry Ellison, that sort of thing. And there's no bid for this thing. I mean, like the bounce that you got over the last two weeks, that was the bounce. Have a ball buying it here at 200 bucks.
- [25:24]
Melissa Lee
What is. Is this an Oracle? Is this a specific story or is this a broader read in your view?
- [25:30]
Michael Schumacher
I think when I think about Oracle, and about data center financing and consider the impact on the bond market. It makes us nervous. So it's not this particular company. It's more this massive amount of issuance coming out. US Government's got tons of bonds to issue. Government after government globally does the same thing. Who buys all the long term debt. So we've been negative, as I've said a few times in this program, on very long term debt. That's very much the case going forward. So to me, it just gives it a little bit more underscoring.
- [25:56]
Melissa Lee
What do you think about.
- [25:58]
Guy Adami
I mean, think about what you said. I mean, now it becomes it's a balance sheet cash flow flow thing because the obviously you're not valuing the business as well as you should have, as well as it might have done prior to September 10th. I still think it's worth the flyer here. Dan's probably right that the government steps in, but they're not stepping in at $200. But I still think it's worth a shot here on the long side.
- [26:18]
Karen
If Open Air were public right now, I got to think it would be trading lower. Yes, trading lower. And that seems to be that sort of the epicenter of the whole thing. So I'm kind of with, with Downer.
- [26:30]
Dan Nathan
Dan, but this is Sam Altman. You remember he was on Brad Gerstner's podcast like a. Or whatever. And he got up all in Brad's grill. He's like, if you want to sell your shares, you want to. I'll find a buyer. Well, good luck with that. Like, who's buying the thing right now?
- [26:42]
Seema Modi
I mean, no mention of Open Air just yet on the conference call. I had this, the verbiage coming in on Otter, but any type of reassurance on that $300 billion deal with Oracle will be key.
- [26:52]
Melissa Lee
Yeah, Seema. Thank you, Sima Modi. Keep us posted. By the way, on the conference call, there's a lot more fast money to come. Here's what's coming up next.
- [27:00]
Karen
Next.
- [27:02]
Tim Seymour
A soda pop. Shares of Pepsi fizzing up on a bullish call from JP Morgan. Why this recently struggling staple could be a sweet buy now. Plus, more international intrigue for Nvidia. China's Deepseek, reportedly using the company's most advanced chips, will wade through the AI trade fallout here and abroad. You're watching Fat Money live from the NASDAQ market site in Times Square. We're back right after this.
- [27:38]
Steve Liesman
This ad is only 15 seconds. In that amount of time, there are.
- [27:42]
Tim Seymour
Likely to be an average of over.
- [27:43]
Steve Liesman
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- [27:53]
AT&T Business Announcer
And now a next level moment from ATT Business. Say you've sent out a gigantic shipment of pillows and they need to be there in time for International Sleep day. You've got AT and T5G so you're fully confident, but the vendor isn't responding and International Sleep Day is tomorrow. Luckily, AT&T 5G lets you deal with any issues with ease, so the pillows will get delivered and everyone can sleep soundly, especially you. AT&T 5G requires a compatible plan and device coverage not available everywhere. Learn more@att.com 5G Network.
- [28:23]
Melissa Lee
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@capella.edu.
- [28:41]
Welcome back to Fast Money. Stocks taking a leg higher after the Fed cut interest rates by a quarter point at its final meeting of 2025. The Dow gaining more than 500 points, the S&P 500 narrowly missing out on a record close, the Nasdaq up nearly half a percent and the small cap Russell 2000 notching an all time intraday high. Meanwhile, Pepsi with a nice pop after JP Morgan upgraded the consumer stable stock to overweight analysts saying it could outperform its peers in 2026 shares though basically flat for the year. GE Ver Nova soaring more than 15% to a new record. The power giant last night talked about this. Doubled its quarterly dividend, gave strong guidance through 2028. Finally some after hours action in the software space. Take a look at shares of Adobe which are trading higher right now. Top and bottom line beats Knops is jumping after its own beat and big guidance boost. Where do you want to go here Tim?
- [29:30]
Tim Seymour
Well just the price action in Adobe is concerning with that kind of a beat and where this thing hasn't gone that's interesting on Pepsi I'd rather drink Coke and I don't mean my consumer taste. I do mean you know what I would rather own as a stock. So you didn't ask me but Coke over Pepsi here.
- [29:46]
Karen
So GE Vernova was just extraordinary. I don't know if you saw the interview with Jim and this morning just the size of the beat, the sort of Runway. You know how great they think the business is, the leverage of the business, improving margins. I mean there is so much to like here. I don't own it. I wish I did. I'm almost wondering, is it better today at this price than it was yesterday at that price?
- [30:11]
Tim Seymour
So much more visibility and doubling your dividend. I mean that's crazy. The dividend.
- [30:16]
Melissa Lee
Yeah, yeah.
- [30:17]
Guy Adami
I go back to Adobe and say given the valuation and given the sell off the stocks had, I thought this quarter should have been good enough to get a rally on the back of it. I'm surprised it's on high. Adobe should be significantly higher when I say significantly 7 or 8% from where it's currently trading based on the quarter and based on the recent sell off.
- [30:35]
Melissa Lee
Coming up, all eyes on Nvidia. How deep seeks reported use of the semi giant's most advanced AI chips could trip up the tech titan that's next.
- [30:51]
Tim Seymour
Missed a moment of Fast Catch us anytime on the go Follow the Fast Money podcast. We're back right after this.
- [31:01]
AT&T Business Announcer
And now a next level moment from AT&T business. Say you've sent out a gigantic shipment of pillows and they need to be there in time for International Sleep day. You've got AT and T5G so you're fully confident, but the vendor isn't responding and International Sleep Day is tomorrow. Luckily, AT&T 5G lets you deal with any issues with ease, so the pillows will get delivered and everyone can sleep soundly, especially you. AT&T 5G requires a compatible plan and device coverage not available everywhere. Learn more@att.com 5G Network.
- [31:31]
Melissa Lee
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@capella.edu. what made you confident that you could do something that hadn't been done before? I have no fear of failure. Trailblazing women, changing the game One of my favorite pieces of advice. Think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just got to think big to accomplish big things. Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts. Welcome back to Fast Money. We are watching shares of Coca Cola After Hours, the company just announcing a CEO transition. Let's go to Mackenzie Sagalis for the details. Mac hey Mel. So Coca Cola says that CEO James Quincy will transition to executive chairman in March 2026. He'll be replaced by the current Coca Cola Chief Operating Officer Enrique Braun, Quincy. He was named CEO in May 2017 and since then stock has risen about 63%. Mel Mac, thanks. Mackenzie Seagallos. We were literally just talking about this you do here, said you'd rather Coke.
- [32:49]
Tim Seymour
That's what we do here.
- [32:50]
Melissa Lee
Would you rather Coke With a new management?
- [32:52]
Tim Seymour
Yeah. Again, Coke doesn't make moves hastily and these management changes were expected. Coke's business is a company that's not reacting to evaporating carbonated soft drink sales. It's a company that's thinking about global alternative beverages and waters and vitamin stuff. And, and they do it very efficiently. So I like it.
- [33:13]
Melissa Lee
All right. Meantime, in video rebutting, reports that China's AI startup Deep Sea is using smuggled Blackwell chips. They are considered Nvidia's most advanced AI chips. That was a report in the information. Nvidia shares falling today, now down almost 8% over the last month. Let's get a reaction from fast money friend Gene Munster, managing partner at Deepwater Asset Management. We will get into Nvidia and all that, Jean, but I got to ask you about Oracle, which is down 10% here. I don't know if you want to speak specifically about the Oracle story or how the market reaction to the Oracle story informs you about where the market and how the market is thinking about the trade.
- [33:49]
Gene Munster
I mean that's the key takeaway I think for most investors on this Oracle news is Oracle had, I would say inline ish results. The guidance was really solid. The backlog increased 68 billion sequentially from the previous quarter. They had that big jump up to the 455. Now we're 60 billion plus on top of that. And yet you have a stock down 10%. You have the first two questions on the call were about how much capital they have to raise to fund this growth and, and when. What's the exact timing about when margins on their cloud business are going to get to this 30 to 40%? Is it years away? Is it two, is it five years? And I think what it just ultimately speaks to is this funk that the AI trade is in. And we've, we've been kind of going through this for the past since really October 30th after the mega caps had reported it is, I would describe it as investors, AI investors are almost exhausted from good news. And, and as we get incremental positive data points, I think Oracle, even though I'm neutral on the stock, I think that they're, what they showed tonight is positive for the broader AI trade. Investors are just shrugging it off and not just like mildly shrugging it off. Oracle is down. The stock is lower than what it was before. They even gave that big update three months ago. And I think it just really captures down 13% in the past month and Nasdaq's up 1%. So we're just in a funk right now and the question that I'm asking is what's the timing of when we're going to get out of that? What, what are the catalysts that are going to get investors more excited about believing that we're still early in?
- [35:31]
Karen
AI Jean, it's Karen. Thanks for being on. How do you think about trying to value Oracle? They've got this big ramp, but you got to discount that somewhat and it's not seemingly inexpensive on the surface. So how do you think about it?
- [35:47]
Gene Munster
Well, again, I'm generally neutral on this and part of it is because you not only have this big ramp but you have these expectations that they have these high expectations out there. And so in some ways when I think about valuation, I think the multiple piece is one of the more complicated parts to it. So effectively, if they don't get to this big ramp of the, you know, 500 billion-plus in backlog, if they don't get there over the next few years, then that's negative for the multiple, you're going to get some compression. So I'm at a spot right now where I see this more as a value trap and I think of this as, you know, what are your better alternatives out there? I think I look at in the context of where Google is trading or where Meta is trading, for example, as better alternatives.
- [36:34]
Melissa Lee
Let's switch gears. Gene, I want to ask you about Nvidia because you're actually very bullish, more bullish than the street in fact, when it comes to sales for Nvidia next year in terms of this China, you know, the information reported that these Blackwell chips are basically being trans shipped, so shipped to countries that are allowed to have the black haul chips installed in data centers. They were then dismantled and shipped to China. And so that's how they got around the export ban. And separately the information was reporting that the Chinese government is going to meet and decide basically whether or not to allow companies to buy the H200 chip. So there's a lot of stuff going on. Sort of throwing into doubts that Nvidia will actually see any sort of a China bump.
- [37:14]
Gene Munster
Well, I think for starters, I mean the question, you know, did Deepsea train on Nvidia chips? My sense is that, yes, I would put a high probability that that happened. There is this still disconnect. A year ago, when we saw the performance of Deep Seq, there was this question about how did they do it? And I think that at the most basic level is that when you think about advances in AI, the type of chips, the GPUs are really important and more advanced GPUs are what drives better insights. And of course, Deepseek had a lot of insights, and they, they proclaimed a very low cost of training. I don't think that that was representative of what was actually as part of it. And I think that there probably was. Nvidia. Nvidia is motivated to say that they didn't get those chips because of geopolitical reasons. They don't want to say that that had happened. As far as this turn that we saw this week with Nvidia getting the green light to sell H20s. And then almost instantaneously, Chinese leadership said, well, maybe, maybe we're not going to be buying as many of those chips as you thought. I think that, again, it comes down to is, chips are important. And the reason why that this has been held out as such a carrot in the whole trade negotiations and even beyond trade is the reason why these H20 chips have been held out for that carrot is because they are important. And so I see the commentary since Monday from China as more or less theater. I'm not sure why they're doing it, but more or less theater. And ultimately they are going to be buying these chips. And I think that Nvidia is going to capture probably something like 30 billion in revenue. So that should raise their growth rate from the streets looking for 51% to 65% or better. And so I think that. And that, by the way, is a kind of a more conservative estimate. So I think that at the end of the day is that these chips are important and Nvidia is going to do some business in China in the next year.
- [39:15]
Dan Nathan
Jean does the H200.
- [39:17]
Michael Schumacher
Okay.
- [39:18]
Dan Nathan
Let's just say Nvidia is able to sell them. Let's also assume that they have plenty of them. Right? And that's the thing we were talking about last night. There is a black market for these. These are, you know, these chips are being deployed in Malaysia and Singapore. They're getting used. Right. And Deep Seq was probably trained on them. But how much of an advancement is Blackwell, the 200 there to, let's say the age 200. Does it really matter if we're 18 months ahead of them training our models. And obviously this is most important for training the models, not for inference. And so I guess if we had that wide of a gap, does it really matter if we're selling the H200 stone?
- [39:50]
Gene Munster
I don't think it matters that I think there's an opportunity for them, for us to sell, for Nvidia to sell the power down versions. But as far as like, does it matter having the most advanced chips in the grander scheme of AI And I think the answer is yes, it does. I mean I think that that's just having the most advanced chips. Think about the power on these is somewhere in a magnitude of 4 to 8 times each generation in terms of its compute and battery improvements or not pattern improvements, power improvements, that is a 4x8 improvement cycle over cycle. And so why that matters is there is a race to get to general intelligence. I think there is an inherent benefit to being some of the first companies that get there. And so I think it does matter. And why does it matter 1, 2 years at getting there? You know that that can make a big difference when you think about how the world is structured. And Jane, just to be really clear.
- [40:48]
Dan Nathan
I don't mean it doesn't matter for the training. What I mean is the advance that we have in them, like if you have national security concerns. That's what I meant. So that's fine. I just want to clarify. Great answer.
- [41:01]
Melissa Lee
All right, Gene, thank you. Great to see you. Gene Munster. There is a lot to trade there when it comes to the Nvidia conversation. I think this is sort of an interesting, it's interesting to see, you know, BABA is in both of your acronyms. So US investors are hoping and aiding the AI trade in China by investing in the likes of an Alibaba and a Baidu. And yet we are trying to on this side of the, you know, on government side of things to try and undermine the success of these very companies. It's just an interesting dynamic to think about. As you were an investor in.
- [41:37]
Tim Seymour
Yeah, I'm an investor.
- [41:38]
Melissa Lee
I do.
- [41:39]
Tim Seymour
I have to, I have to point out that it's not my tube, it's actually guys tube, guy's tube but. And it's my band which actually is a different beat. But last year it was bicep. And I do think that Alibaba is a China trade that is an important one. And it's important one because it absolutely has a lot to gain here. Is a lot to gain by Ali cloud. Most important, importantly, I think so I think it's A great opportunity. And yes, I think US investors are waking up to those opportunities. I certainly think they should be.
- [42:09]
Melissa Lee
Yeah. Michael, in terms of US versus China, I trade, where would you prefer?
- [42:16]
Michael Schumacher
I'm going to think about it from a currency standpoint. So Chinese government's been keeping its currency intentionally weak for quite some time. That could go on a bit longer. But how much? That's our question. So I'd want to be long US dollar versus of C and H. I can't say I'd want to be long dollar versus very much after today, but that's one I would choose.
- [42:32]
Guy Adami
I think. Alibaba. I think the chip portion is sort of the cherry on top. I think it's a valuation story, it's a cloud story. And I think. Where to close? 158 or something. I still think it's too cheap. I mean, this was $190 stock earlier this year. That made sense to me. This to me is a discount.
- [42:47]
Melissa Lee
Coming up, shares of a Netflix have now fallen six days in a row. What the move says about the streamer's chance of winning its bid for one Warner Brothers, how it changes the landscape in the media business. More fast Money into.
- [43:03]
Welcome back to Fast Money. Shares of Netflix down for a six straight day and have now lost more than 10% since announcing plans to buy Warner Brothers Discoveries streaming and studio assets. Over the past month, the stock has shed nearly $100 billion in market cap, more than the price tag on its offer. In just the last hour, Paramount Skydam sent a letter to WBD shareholders saying Netflix faces severe regulatory uncertainty and closing risk. Karen, you pored through this letter.
- [43:29]
Karen
I only got through half of it. Ok, you poured it through right before we started the show, but in very.
- [43:33]
Melissa Lee
Detailed way for half of it. What did you make of it?
- [43:36]
Karen
I thought it was really directed to retail shareholders. I think that a lot of it was sure they were spinning their own story. Right. I thought a lot of it was misleading. They talked about Netflix's stock portion being buried in the ak. It was not buried, I mean, at all. They talked about two years for Netflix to get it done. I don't know where they came up with that. So I think they also said, tender your shares right away. That's not going to happen. Why would you do that? You know, if anything, you want to send a message, 30 isn't enough, Paramount, you got to pay more. I do think Netflix is trading down because people think Netflix will counter they're already winning bid. But I mean, Paramount presents a compelling case that 30 might be better than their package, certainly, because Netflix is below the bottom of the collar now. So that's important. So Netflix, I think is down because they have to bump. If they want it, I think they want it, I think they will bump.
- [44:36]
Tim Seymour
And WBD goes higher and higher and it does get to a place where the, you know, the numbers just tell you that you have to at least expect this when you consider all the different pieces. I mean, right now it's a $33 stock. Now do you have to wait for $33? I don't think so. I think this, you know, back to the Netflix call, it loses if it wins. But I also think that there's a new light on Netflix which may also hurt it even if it loses, which is that people view that the Warner Brothers and the other talent that's been a big part of kind of a royalty plan that's working very well for them, almost seems more essential than it ever has. And that there's a new day and age of AI content that people I think are concerned about and that ultimately the value on legacy media assets is going higher here.
- [45:24]
Melissa Lee
You think Netflix is a buy here?
- [45:27]
Dan Nathan
It's close. I mean, like I think what Tim just said. Would you say if they win, it's.
- [45:30]
Tim Seymour
A, you know, like I think they win, they lose.
- [45:32]
Dan Nathan
Yeah, I think it's the best thing that could happen. I mean, I think a lot of folks would like they were dying to buy this stock at this sort of discount. So again, it's, you know, they know what they're doing.
- [45:41]
Tim Seymour
But I sold half my WBD calls today.
- [45:44]
Melissa Lee
Did, yeah.
- [45:45]
Dan Nathan
Trade.
- [45:46]
Melissa Lee
Coming up, a delivery downer. Amazon's latest grocery push slamming Uber, DoorDash and Instacart today. Just how tough the competition in this space could get. That is Next, more fast money in to.
- [45:58]
Welcome back to fast money Gig economy stocks taking a beating today. Lyft, Instacart, Parent, Maple Bear, Uber and DoorDash all seeing outsized losses during the session. The moves coming after Amazon announced it is expanding same day grocery delivery service to more than 2300 cities. So all of a sudden that prime membership became much, much more valuable. You get a lot more there. And why do you need an Instacart subscription guy?
- [46:20]
Guy Adami
Well, it's a good question. I'm canceling mine today. And obviously you don't need Uber Eats.
- [46:24]
Tim Seymour
What about your Maple bear?
- [46:26]
Guy Adami
You know what, it's funny you say the maple bear. We like the maple. Actually Haribo people are watching, by the way, gummy bears. If you're watching. We Tim show them we eat your products every day. We're looking for our holiday swagbuck.
- [46:39]
Tim Seymour
We deserve, we deserve shameless.
- [46:41]
Guy Adami
It is shameless. That said the Uber sell off, 5% sell off on the back of this, to me it's too much. Go back to last quarter. Listen what they said. Look at the valuation. I think Uber's a buy right here.
- [46:51]
Melissa Lee
Wal Mart was also lower on the back. I mean this is very interesting. Who.
- [46:54]
Tim Seymour
Well this is Amazon fights back to Wal Mart. Wal Mart who's been eating their lunch in terms of Wal Mart plus and also the grocery biz and their ability to do e commerce online. I mean that has been part of the Wal Mart story and the investment. I, you know Michael, I were just talking. I'm not sure this is profitable business for anybody. I do think this is a market share grab for Amazon which is, you know, makes sense for them but I don't know that it's going to help the company's pnl.
- [47:18]
Melissa Lee
Yeah, it does seem strange that you can order everything the same day and not pay a dime more for the service like that now. Yeah. As a, as an Amazon prime subscriber that sort of.
- [47:29]
Tim Seymour
Is that just groceries or is that everything it's for. Okay, I thought we were just talking about.
- [47:34]
Melissa Lee
This is for groceries grocery. Yeah.
- [47:36]
Tim Seymour
Because my son called me today and he's got to be in a parade at school tomorrow and he said he needed something like for his costume and I. Why are you telling me this now? And I went on Amazon actually and we got a shot. Connor shot.
- [47:48]
Melissa Lee
I'm sure he's watching. Up next, final trades.
- [47:53]
One more check on Oracle. Shares are still down pretty much at after our recession lows down by 10.7%. Fairly in line quarter RPOs were up but the need to spend in order to support that business has increased. Capex going to 12 from $8 billion. Time for the final trade. Let's go around the horn. Michael Schumacher, thanks so much for joining us tonight.
- [48:11]
Michael Schumacher
Long euro versus US dollar, it's about 117 now. Probably goes to 122, 123 quarters.
- [48:17]
Tim Seymour
Tim, much like gold miners have been rallying with the gold move. Get the copper miners with the copper move. Copex Karen.
- [48:23]
Dan Nathan
Yes gf Dan Xle breakout candidate.
- [48:27]
Guy Adami
Staying with the X theme. Xom.
- [48:29]
Melissa Lee
Thanks for watching Fast Money. Remember, tomorrow is Fast Money live Mad Money Jim Cramer starts right now.
- [48:36]
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 Save over $200 when you book weekly stays with Vrbo this winter. If you need to work, why not work from a chalet? If you haven't seen your college besties since, well, college, you need a week to fully catch up in a snowy cabin, and if you have to stay in a remote place with your in laws, you should save over $200 a week. That's the least we can do, so you might as well start digging out the long johns because saving over $200 on a week long snowcation rental is in the cards book now@vrbo.com.