← CNBC's "Fast Money"
CNBC's "Fast Money"
Stocks Rally As Iran War Continues… And Salesforce CEO On The Software Slump 3/4/26
00:43:14
Stocks jumping across the board as investors digested the latest developments out of the Middle East. The groups leading the charge, and the oil spike impact on equities, rates, and currencies. Plus software stocks are looking to make a comeback this week, as the group looks to rebound from its recent sell-off. Salesforce CEO Marc Benioff joins Fast Money for an exclusive interview on how he’s navigating the tech trouble. Fast Money Disclaimer
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- [00:00]
Melissa Lee
This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and subscribe@schwab.com Market Update podcast or find Schwab Market Update wherever you get your podcasts.
- [00:31]
Guy Adami
Why have we asked our contractor we found on Angie.com to be our kid's legal guardian? Because he took such good care when redoing our basement that we knew we could trust him to care for our kids, all eight of them, should something happen to us. Are you my dad now?
- [00:46]
Melissa Lee
No, sorry, I do basements Connecting homeowners with skilled pros for over 30 years. Angie the one you trust. Define the ones you trust. Find pros for all your home projects@angie.com
- [01:00]
Guy Adami
live from the NASDAQ markets in the heart of New York City's Times Square. This is fast money. Here's what's on tap tonight. Markets in rally mode. It was a sea of green on Wall street today as the tech heavy NASDAQ more than a race, its losses for the week. Why are investors seeming to look through the conflict in the Middle East? Can the momentum continue? Plus shares of Salesforce trying to bounce back after hitting three year lows last week. We'll hear from CEO Marc Benioff about what is next for the company and where it stands in the air race later this hour. And and Nvidia CEO says it may be done investing in open AI. What's next for the dollar after its recent rally and bitcoin breaks back above 74k. Has the crypto trade found its footing again? We'll debate that. I'm Melissa Lee coming to you live from studio Be at the nasdaq. On the desk tonight, Steve Rosso, Karen Feinerman, Dan Nathan and Gaia Dami. We start off with that big market comeback today. The dow adding nearly 240points, the S&P gaining 8.10of a percent while the Nasdaq led the charge rising over 1% to turn positive for the week. The tech heavy index putting in its best day since February. Six investors warming back up to tech after a bumpy start to the week. Amazon and Tesla among the biggest winners each gaining over 3% in video and the broader semi trade also sharply higher. But it wasn't just tech breathing a sigh of relief. The discretionary sector, she tried to say leading the S and P putting its best day since October. And even financials, which have been slammed by credit concerns, managed to gain back some ground. The energy trade meantime, cooling down after the President pledged support for oil tankers in the strait of Hormuz. WTI crude settling fractionally higher, just below 75 bucks a barrel, while the global oil benchmark Brent settled flat around the $81 mark. Energy stocks measured by the XLE fell less than a percent. But with uncertainty and geopolitical tensions far from resolved, can stocks keep building on this recent momentum? It is amazing to think that this is day five of the conflict with Iran and we are flat on the week for the s and P500 basically.
- [02:56]
Karen Finerman
And up for the NASDAQ is Wednesday. Yes, Day five. I mean, Saturday can do that. So Monday you were sitting in that seat.
- [03:03]
Guy Adami
Yes, I.
- [03:04]
Karen Finerman
Top of the show. I said, you know, this is something that Karen says all the time. I said at 21, Vix is sort of in no man's land. Karen, by the way, subsequently agreed with me. And what we said was at some point in the near future you're going to Vix. It trades up to 28. And that over the last six to nine months has been sort of these short term bottoms for the market topping the vix. I didn't think it'd be the next day, but at 10:30 on Tuesday, the Vix traded 28 and change and that marked the low of the S&P 500. So it does make sense through the lens of that. I will say though, that I think with the VIX still north of 21, there's still some uncertainty out there, without question. And I don't think the tape bombs on the back of what we're hearing now in the Middle east are over the but remember, some of the uncertainty in the market started long before Saturday's hostilities.
- [03:49]
Dan Nathan
So once again I agree with just about everything that Guy said. Now the VIX doesn't live at 21. Yes. So I agree with Guy. I don't. I think we'll see it higher in the near future. I don't know when, but I think we're getting used to this new mode that we're in. Right. And so I think there's going to be sort of a more muted response to some of the things that would have moved the market more. I do like when we have earnings, we don't have that many earnings left to sort of peg our valuations on. So then it becomes more of a macro tape. But I'm not trading around the war. I'm just long Right. Still long energy, it'll go up or down, but staying long.
- [04:29]
Steve Grasso
I think if you look at it, the market has become immune to so many different geopolitical events. We started with Russia, Ukraine. Well, we started before, way before that. But if you think about it, financial crisis, Russia, Ukraine, Covid, if you in the background it's always been Taiwan.
- [04:47]
Melissa Lee
Right.
- [04:47]
Steve Grasso
In the background there's Taiwan way before there were tariffs. So I think if you look at the market, what the market's really focused on is 14 to 16% growth in the 493 other stocks. So we've become more worried about growth in EPS growth, growth in revenues, which is where the market should focus. But to Guy's point, you have a tape bomb, you have something of this straight of Hormuz, you're going to see the tape dive and you're going to see it rally back. Right now the market is focused on earnings and maybe a shorter dynamic in the Iranian conflict.
- [05:27]
Gaia Dami
Yeah, I think one of the stories of the market this week, if you want to kind of take out the geopolitical stuff, is that things that got oversold, really oversold, they bounced a little bit. Things that got kind of overbought, you know, I mean kind of came in a little bit. And, and so Steve just mentioned the 7 versus the 493. When you look at estimates and I think facts that has been doing some work on this, you know, double digit expected growth is the thing. It's like low teens. I think that's it. We've had that expect that expectation for the last few years or so. But the 493 is growing at less than half of that of the top 10 or so. Whatever you want to, you know. So if you have this price performance of these top 10 is kind of started to level out a little bit or has really underperformed the broad market, then you're really going to need to see a pickup in earnings from some of those other names to keep powering it further. And I think that's kind of evident of the returns that we had in 23 and 24. I think they're about 25% higher in the S&P 500 and last year I think was like 14 or something percent. So you're seeing some of the gains because of the concentration slow down a bit and you're also seeing those names underperform a little bit. But you've seen this extension of some of these, whether it's industrials or financials or some of these other groups. And I guess at the end, Energy, which guy has been talking about for a while, but at the end of the day their earnings contribution is not going to be enough. Right. To kind of override if you start to have overwhelming weakness, whether it's the semis come back in or software stays down or something like that. So again, I think you need to do a lot of heavy lifting. I think the 490 have gotten ahead of themselves probably from a price perspective. But there will be opportunities in the, you know, in the sell offs. And I'm really interested to see what Marc Benioff has to say. I know they just reported a couple of weeks ago the quarter looked fine, the guidance was, you know what I mean? It really is a sentiment, it really is about this long term narrative that I think it's going to be really hard for them to shake off until they can point to some customer stuff where they're saying we're here, we're not switching, we're not going to kind of press. You don't, I mean price down, their margins are going to be under pressure.
- [07:22]
Guy Adami
I mean we've had a nice bounce in IGV, for instance, from the low, recent low, about 76 and change or so to where we are right now, 85 and change. And to Dan's point, that narrative is still there. There is nothing that happened to that narrative that has changed over the past week or so, except for maybe that people were tired of selling this thing and saw some value. But is this, are these kinds of bounces, whether it be this or private credit, which we saw today, are those viable bounces or these are just trades?
- [07:51]
Karen Finerman
So I think the answer is just trades. But the trades can last longer than people think. So I don't know, I'm not trying to duck the question, but I think that's what's going on here. And we talked about it last week. We saw a day where it appeared as though the IGV had put in a pretty tradable bottom. We saw the crackstaff and puts up a chart. You'll see it traded down to levels we saw last spring. That was to me an inflection point. And as you mentioned on the show that night, it did it on pretty tremendous volume. Now you're starting to see this grind higher, which I think will continue. But also to your point, it doesn't mean the fundamentals are improved in any way, shape or form. Nor does it mean not on the private credit side. It means it's bouncing off an oversold condition.
- [08:29]
Steve Grasso
And if you look at the Software, you have to differentiate between the software that becomes real infrastructure based that people really just want to have plug and play on their desks or is it just glitz and stuff on an app that you can do and replicate yourself? So that is probably pretty obvious where you get a ServiceNow or Salesforce where they're more of an infrastructure based anomaly than just, you know, something using unicorns on your cell phone. I think that's an easier thing to figure out.
- [08:58]
Karen Finerman
What is that? Unicorns?
- [08:59]
Guy Adami
I guess that's what Grasso does with his cell phone.
- [09:02]
Karen Finerman
Remember in the movies you probably didn't
- [09:03]
Gaia Dami
watch the movie Dodgeball?
- [09:05]
Dan Nathan
Yeah.
- [09:06]
Karen Finerman
Remember she had a whole apartment, her house filled with unicorns.
- [09:09]
Guy Adami
I of you, Dan. Pretty unbelievable along the lines of software. You know, we had this report that OpenAI was taking aim at Microsoft's GitHub and Microsoft didn't move. Excuse me, it went higher. And you know, three weeks ago it would have been a whole different story when the narrative of, you know, AI is need software was really in full gear.
- [09:28]
Gaia Dami
By the way, I thought of you today. Oh, it had nothing to do with software. I mean, I'm just saying that this is where our relationship is after not on break. We've been talking about this a lot, you know, you know, OpenAI is pretty much, much in business or been able to do a lot of what they were able to do in 22 and 23 because of Microsoft and they've had this relationship. Sam Altman had his job saved because of Satya, Nadella came in, that sort of thing and they've had this frenemy situation, which is pretty interesting. I think Satya for the most part and Microsoft in general have kind of sat back. They've kind of done what they need to do on the cloud side. They've made some investments here. They, you know, obviously have tried to incorporate this technology into some of their really important applications. Maybe they haven't had the uptake, but on the flip side of that, OpenAI, man, they are just going around them in any which way they can. And you know, GitHub is a really important part about this whole build. So you know, I listen, I think Microsoft is probably preparing for a day without, you know, open air technology. They haven't been building their own models, which tells me that they think this is going to be highly commoditized and they are the ones because they have the cloud, they have the corporate relationships with hundreds of thousands globally, you know what I mean? That they're going to be able to kind of ride this storm out. So to me, you know, I'm betting on Microsoft over open air right now, hoping it comes public this year. You know, you might see some of these big cloud guys get hit, but I think there's going to be a really nice opportunity to buy them then, so.
- [10:52]
Dan Nathan
Well, I'm thinking about the igv. Think about who the biggest components of the IGV are. Microsoft is first.
- [10:58]
Guy Adami
Right.
- [10:59]
Dan Nathan
Palantir second. So we don't think that they're going to be displaced. Right, right. And third was Salesforce. That. That's sort of been the poster child for displacement. Sure. I think it was sort of really overblown. The one that I've been looking at is Zoom Communications had a nice bounce back. I don't know if it's just pendulum swung too far. I don't think the threat, though, is over for a lot of the soft, a lot of the ones that you're talking about on your.
- [11:26]
Gaia Dami
But, you know, Oracle is a bit different. They report next week, I think, on Wednesday. And that one's really interesting to me because again, I think all of us on this desk have been really negative going back to September. When you see a contract of $300 billion, literally the market gives it a $300 billion valuation right there, you know, and this is kind of five years out. This one seems like right in the eye of the storm and it seems a bit overdone. And, you know, I could see this thing popping pretty aggressively on not too positive a news either.
- [11:52]
Dan Nathan
All right.
- [11:53]
Guy Adami
Well, President Trump making fresh comments this afternoon on the war with Iran as the conflict nears its sixth day. Eamon. Javier's is the latest developments. Eamon.
- [12:01]
Melissa Lee
Hi, Melissa.
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Gaia Dami
President Trump gave tech executives who were there at the White House for a meeting today on energy an update on the war with Iran this afternoon, telling them that the US Military is performing well, but noting that the US And Israel have killed so many Iranian leaders
- [12:15]
Karen Finerman
so far that it's difficult to know
- [12:18]
Gaia Dami
who might run the country in the long term.
- [12:21]
Melissa Lee
We're in a very strong position now and their leadership is just rapidly going.
- [12:28]
Guy Adami
Everybody that seems to want to be
- [12:31]
Melissa Lee
a leader, they end up dead.
- [12:34]
Gaia Dami
Meanwhile, the White House declined to set a timeline for when the Strait of Hormuz might be safe for oil tankers, even as President Trump says the U.S. navy may escort tankers through that region. And White House Press Secretary Caroline Levitt saying today that President Trump will attend
- [12:50]
Melissa Lee
the dignified transfer of the remains of
- [12:53]
Gaia Dami
six US Military members who were killed in Iranian counterstrikes over the weekend. The White House has not yet said when that will happen. Melissa, back over to you.
- [13:02]
Guy Adami
Amen. Thank you. Amen. Jabbers. Well, a pause here in what we've seen in the recent action in the dollar, the rally, the greenback pulling back after hitting its highest level of the year yesterday. For more, let's bring in Vanda president Jens Nordvik. He's also the founder of Exante Yan. It's great to see you. What do you make of how the market today took the liberty of actually moving higher despite what's going on in the Middle East? And how do you sort of view what's happening and frame your trades?
- [13:34]
Jens Nordvig
I think a part of what's going on now is that the United States is very energy independent. So if you'd seen this type of oil shocks 20 years ago, right. US markets would have been more impacted. Right. There's a degree of isolation because of that energy dependence. The other thing that is different is that risk sentiment really varies quite a bit by specific asset. Right. We've had a lot of volatility this week, but we've talked about the bounce in software stocks, right. Crypto bounce as well. Right. So the way risk sentiment is behaving is like much more complicated. It's not like everything is having the same risk sentiment. So even if we look at what's happening in terms of US versus international stocks, like we spent a lot of time crunching the flows. That's what we do day to day, right. And we've had this big trend where US investors were buying international equities. Right. And clearly we've had like a real test of that. And surprisingly, actually, that flow continued even though the price action was extremely concerning yesterday, that underlying flow was still there. Right. So there's some of these themes underneath that. Even though we have this incredible shock, actually some investors are trying to hold on to those high conviction trends.
- [14:54]
Karen Finerman
Yes. The last five days we'd learned what we probably already knew, the dollar, US dollar, still the reserve currency of the world. Given the rally we've seen since the hostility started, the question is, is it sustainable? Because over the last year, year and a half, the trajectory of the dollar against major currencies has been lower.
- [15:11]
Jens Nordvig
Yeah, I think, I think this was a pretty important test for the dollar this week, right? Because obviously last year, everybody remember the crazy correlations from Liberation Day, right, Where we had dollar down, bonds down, equity down at the same time, and nobody really loved that. So the fact that the dollar has had a pretty good week this week is, is A sign. Okay, there's still some of that safe haven characteristics of the dollar. But it's a complex situation. Right. Because you would have also thought in this situation US Investors would maybe repatriate back to the US and we're actually not seeing that in the flow. So there's a lot of things going on. At the same time, I would say when we're speaking to clients this week, really what's going on is that the energy prices actually especially the natural gas gas prices, really the epicenter of all the price action from obviously energy itself into bonds and equities. And today it weakened a little bit. Yesterday was just everything moving together. But we still have to look at that like when is the energy actually going to flow? And obviously we can see that we've reached sort of a pain level where the administration wanted to talk the market and be a little bit more relaxed. We're going to ensure the energy flow is there, but it's going to be hard to do that quickly. So we're going to have at least a couple of weeks Right. Where the flow is not going to be there. And it's only going to be the hope of some kind of resolution further down the line that's going to avoid oil prices going even higher.
- [16:40]
Steve Grasso
So to Guy's point, so we've seen China moving away from U.S. treasuries for the last 10 years. Right. So they were at 1.3 trillion. Now they're roughly around 800 or so.
- [16:49]
Karen Finerman
Yeah.
- [16:50]
Steve Grasso
What do you look into when you see Iran, you see Russia and you see sanctions putting on these countries, Is that creating an upward bias to gold? Downward on the dollar? How does that go into your calculus?
- [17:03]
Jens Nordvig
Yes, we've seen an incredible run in gold for the last several years. Right. With with many different players. First China coming in, then all the ETF players. And that trend is pretty mature by now.
- [17:17]
Karen Finerman
Right.
- [17:17]
Jens Nordvig
So we saw some knee jerk and then we had a 6% drawdown in gold. So it's a very volatile situation. I think from a medium term perspective you are having US investors trying to hedge themselves a little bit more. So if the dollar is not going to be on that 10 year appreciation trend we had from 14 to 24, it's good to have some gold in the portfolio and we start to see longer term investors like take that allocation higher and higher, but it's still not that high in a way. We've had a period where people were not involved in gold for many years and they're getting involved. It's moved a lot, but the allocations are still not that high. So there's more potential there from a structural perspective.
- [18:02]
Guy Adami
Yes. Thank you. Great to see you in person. Yes. Nordvig Vanda so if energy, let's play this out. If energy prices remain elevated for the next one or two weeks, let's say longer, does that then hit equities? It seemed like today equities were able to have a respite from what was going on because energy prices backed off.
- [18:22]
Karen Finerman
I think if we last into May, so the rest of March, April, but if this is extended into May, and I have no reason to think that it will be, that's going to be problematic. I think couple of weeks the market's going to look past. We always say the market's forward looking, discounts a lot of things. But if this thing lasts into the spring, then we have a problem. But you know, it's the dollar portion of this equation gets pretty interesting because obviously a flight to quality in the dollar. But if the dollar starts to reaccelerate to the downside, that's going to be supportive of gold and then obviously support of other commodities as well.
- [18:51]
Dan Nathan
So if it lasts longer, we start to get into driving season and then, you know, then you really see the hit to the pocketbook and for the consumer that's stretched already, they've got to be giving up something else to be able to drive. So that's concerning. But we've got a while before that.
- [19:07]
Guy Adami
The Senate voting on whether to block the president from using further military force against Iran. Emily Wilkins got the details on this. Emily? Hey, Melissa. Well, as we expected, the Senate did not have the votes needed to pass this war powers resolution continuing to allow Trump to move unilaterally when it comes to actions in Iran. Now we are expecting to see another similar vote in the House tomorrow. We expect a similar outcome. But I think, Melissa, the big question at this point is the White House going to wind up sending Congress a request for additional funding that would have to come from Congress. And it's not clear at this point if that would have the support to pass both chambers or exactly what that request would be. But at least at this point, it doesn't seem like Congress is going to try to put a check on Trump's power at least when it comes to Iran and when it comes to what we've already seen. Melissa Emily, thanks. Emily Wilkins. Coming up, a number of names on the move after hours, including Broadcom. The latest numbers out of the quarter, the results moving American Eagle, Stubhub and Octa as well. And Salesforce CEO Mark Benioff will join us in just a few minutes for an exclusive interview how that company is navigating the recent moves in software stocks. Straight ahead. Do not go anywhere Fast Money's back in June.
- [20:22]
Melissa Lee
This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and subscribe@schwab.com Market Update podcast or find Schwab Market Update wherever you get your podcasts.
- [20:51]
Guy Adami
Why have we asked our contractor we found on Angie.com to be our kid's legal guardian? Because he took such good care when redoing our basement that we knew we could trust him to care for our kids.
- [21:00]
Melissa Lee
We only met a month ago, Angie the one you trust. Define the ones you trust. Find pros for all your home projects@angie.com Close your eyes. Listen to Monday.com Feel the sensation of an AI work platform so flexible and intuitive it feels like it was built just for you. Now open your eyes, go to Monday.comstart for free and finally breathe.
- [21:25]
Guy Adami
Welcome back to Fast Money. We've got an earnings alert on Broadcom, the chip maker beating estimates but giving light guidance. Shares popping in just the past few minutes. Our Christine Apart's Neville has been listening in on the call. She's here on set up 4% now. Christina yeah, and it has to do with Broadcom CEO Hock Tan, who just really gave the market what they needed. The bigger number for 202710 says Broadcom has a line of sight to AI chip revenue. Just chips in excess of 1 billion. Wall Street's buy side was modeling roughly 90 to 95 billion dollars, so that's a meaningful beat on forward expectations. The customer story is also getting better. Google is expected to see even stronger demand from next generation TPU's in 2027. Anthropic is scaling from 1 gigabyte a gigawatt of custom TPU compute this year to more than 3 gigawatts in 2027. Meta's custom chip roadmap, which there was a report some analysts the market had kind of written off as quote according to Hawk 10 alive and well. Some are worried about Meta signing chip deals with AMD and Nvidia. That's why. And Broadcom now has a sixth customer OpenAI, so they're finally admitting that too. On the software Business One of the bears concerns heading into the print was was quite direct, just you know, concern about software weakness. But 10 said quote infrastructure software is not being disrupted by AI. However software did fall a little bit lower than what estimates were expecting. And lastly on supply the key overhang heading into this print to 10 said Broadcom has fully secured capacity in leading edge wafers as well as advanced memory through 2026 to 2028. So that's a lot of memory that they've pre bought in some way or contracted for. I was taking a look at Nvidia in the after hour session because you know if you're thinking that Broadcom is gaining and TPU's are the ticket custom chips then maybe Broadcom could be seen as like being left out of the party for custom chips as opposed to Broadcom. What's, what's the read on that? Well but they are creating custom chips for Google and they just, and then they just listed all their customers that that is growing exponentially for Broadcom. Broadcom. Yeah, yeah, yeah. No I mean for. But I guess not when you look at the 4 guidance for Nvidia and the fact that that pie keeps on growing. So then that's the argument that all of these CEOs keep making right now is that the pie just keeps getting bigger and bigger and bigger and that's why our capex for a lot of these hyperscalers keeps growing. There's just enough room for all of us at the moment. But. And these numbers are actually showing that, right? They are showing that to answer your question. Yeah. Yeah. Okay Christina. Thank you Christina.
- [23:57]
Karen Finerman
Parts Navalis $10 billion stock buyback is not relevant at all in a trillion and a half dollar company. The guidance I thought was actually good, the revenue guidance and the margins are hanging. This Stock since its 415 all time high in December has sold off pretty significantly. So this what you're seeing is a relief rally. And I will tell you that at a market multiple often next year's numbers 22 and change, it's still a reasonably priced tech stock in my opinion.
- [24:20]
Gaia Dami
What about below market multiple for Nvidia that's expected to have 65% earnings and sales growth by the way gap is going to equal adjusted. You saw that announcement here today which I think is interesting. I think it's going to put pressure on a lot of high growth tech stocks. But you have a 74% gross margin. I'm just saying, you know if we want to compare this two, are you
- [24:39]
Guy Adami
saying you would rather 21 I didn't hear.
- [24:45]
Gaia Dami
And you know, I haven't heard a lot of people talk about this, but they announced, I think it was on Monday, like an inference chip. And you know, this is one of the things where people like, why would I, you know, upgrade to the next thing if I can, once we get done training the models and then all it's going to be is inference and this. So they seem to be like plugging every hole to the bear story and the growth just keeps. I don't know, it's accelerating year over year. I know they had those years of 100%, you know, year over year growth, but. But, you know, I mean, the stock doesn't reflect it though.
- [25:11]
Dan Nathan
I do really believe the pie is growing. I mean, I don't know what inning of pie we're in to mix a few metaphors, but. But I, I do think it is growing. So I think, I mean, they delivered anything a shareholder would want. This earnings release. I'm not long, though. I am long in video with Dan or not with Dan.
- [25:27]
Gene Munster
Ish.
- [25:28]
Gaia Dami
Maybe soon.
- [25:29]
Steve Grasso
In December, they reported a good quarter to and it went from $425 down to $320, $20. So I think it's just a point of entry where it's being viewed. After they reported it traded down 11%. So I think it's been rerated. I think the growth is there and margins have been sort of, you know, incremental at that point.
- [25:47]
Guy Adami
Coming up, a retail run up. The upbeat results pushing shares of raw stores higher and whether the traders are giving this one a try on plus more earnings. Bring you the details on the numbers from American Eagle, Stubhub and Okta. That's next. You're watching Fast Money live from the Nasdaq MarketSite in times Square. Back right after this.
- [26:08]
Melissa Lee
This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and subscribe@schwab.com Market Update podcast or find Schwab Market Update wherever you get your podcasts.
- [26:38]
Guy Adami
Why we asked our contractor we found on Angie.com to be our kid's legal guardian because he took such good care when redoing our basement that we knew we could trust him to care for our kids, all eight of them, should something happen to us. Are you my dad now?
- [26:53]
Melissa Lee
Uh, no, sorry. I do basements connecting homeowners with skilled pros for over 30 years. Angie the one you trust to find the ones you trust. Find pros for all your home projects@angie.com Close your eyes. Focus. Listen to work getting done with Monday.com relax as AI does the manual work while your teams are reliant on a single source of truth. Feel the sensation of an AI work platform so flexible and intuitive it feels like it was built just for you. Notice you're limitless.
- [27:31]
Gaia Dami
Now open your eyes.
- [27:33]
Melissa Lee
Go to Monday.comstart for free and finally breathe.
- [27:39]
Guy Adami
Welcome back to Fast Money. Stocks jumping as investors seem to look past the ongoing conflict with Iran. The Dow jumping 238 points ending a three day losing streak. The S&P up three quarters of a percent and the Nasdaq leading the gains up 1.3%. Now positive for the week. Shares of raw stores jumping more than 8% after topping earnings and revenue expectations. Sales rising more than 12% year on year. The stock stock now up nearly 20% this year. And some more after hours action. American Eagle and Octa both topping EPS and revenue estimates. And StubHub dropping after coming up short on revenue expectations. What do you want to trade?
- [28:13]
Dan Nathan
Ross stores okay, so I'm long TJX Ross stores a really, really impressive beat there and guidance is good. I think similarly to tjx which also had inventory up which normally you don't like to see in a retailer but you do like to see in a retailer that's doing well. So there's a lot to like here. It's not cheap. Neither is TJ Max. I think they're both good when I'm
- [28:35]
Karen Finerman
just long TJ 25 times is not cheap. But it's not absurd either. I mean TJ Maxx is probably incrementally more expensive and it's exactly the same chart. So I'm not going to do it because it's not fair me to do the would you rather game. But you got to stay with not allowed.
- [28:51]
Gaia Dami
It's not fair about it because I don't do that.
- [28:54]
Karen Finerman
Melissa puts the did you get a
- [28:55]
Gaia Dami
lollipop with that haircut?
- [28:57]
Karen Finerman
All right, so just want to know
- [29:00]
Gaia Dami
what cut is it though Now I
- [29:03]
Karen Finerman
was saying you can leave on network tv but that's a good, that's a good cut.
- [29:07]
Gaia Dami
Woman has turned side like a summer cut something.
- [29:10]
Guy Adami
It's very close.
- [29:11]
Karen Finerman
America wants America does want to know.
- [29:14]
Guy Adami
Not really. Coming up, Salesforce CEO Mark Benioff will join us for an exclusive interview as the company looks to continue recent software comeback how he's navigating the company through all this volatility when Fast Money returns.
- [29:27]
Gaia Dami
Missed a moment of fast. Catch us anytime on the go Follow
- [29:31]
Melissa Lee
the Fast Money podcast.
- [29:32]
Steve Grasso
We're back right after this.
- [29:41]
Guy Adami
Welcome back to Fast Money Software outperforming the broader market this week. The IGV ETF jumping more than 5% since Monday. The group, of course, has been lagging year to date. For more, Sara Eisen joins us now with the head of one of the biggest companies in the space and in the IGV salesforce, the chair, co founder and CEO Marc Benioff joins her. Sarah. Hi, Melissa, good to see you. And Marc Benioff, welcome to the show. Thanks for coming.
- [30:04]
Melissa Lee
Hi, Sarah, how are you?
- [30:05]
Guy Adami
I'm doing well. I know, I know you have some issues. Look, the market's been been paying close attention this week to, of course, geopolitics and Iran. But you saw this AI question hanging over the overall market and software. What, what is the biggest issue that you think the market has wrong right now?
- [30:24]
Melissa Lee
Well, Sarah, you saw we had a phenomenal quarter at Salesforce and we're giving incredibly strong guidance for the year. You know, we finished the year ahead of our expectations and we're giving guidance for about 46.2 billion in revenue this year with over $16 billion in cash flow. To put that in perspective, Sarah, I don't think there's ever been an enterprise software company that has given this level of growth and this level of guidance both in absolute numbers and also relative numbers. So we're having a great quarter. We just had a great year. And I expect us to have a really strong Q1 as well. We talked about that last week on our call. We gave strong guidance for the first quarter. So maybe the sasquatch ended up beating the SAS apocalypse. I'm not sure. You know, it's hard to talk about when you see that AI has made all of our products better. And I think you know that I've shown you great products like Slack Bot, you know, which has made Slack a better product. Even our sales product. I mean, internally, Sarah, we're qualifying 50,000 leads a week using our sales cloud agent. You know that we have answered millions of customer service inquiries with our service cloud agent. It's AI is amazing for Salesforce. We pioneered it for more than a decade. We had Einstein now that we have Agent Force, customers love it. It's been fantastic.
- [31:50]
Guy Adami
But there is, but Mark, there's a side and I know you have the growth to prove it and you're seeing it and you have accelerated that. And yet there's this narrative out there that in the future, ultimately a lot of what you do for your enterprise customers either can be done cheaper and more efficiently by a Claude cowork or at least it will dent the moat that you have have when it comes to pricing and software as a service model. I know you're making fun of the Saskap Sasbach apocalypse, but that's ultimately what the problem is with the market right now.
- [32:26]
Melissa Lee
Sarah, I was, I saw the movie Minority Report. I get it. I, you know, I know the future. There's going to be a lot of robots around, a lot of AI talking to me. But Sarah, I don't know what it's like at CNBC today, but here at Salesforce, oh, we have no robots walking around. So, you know, there's a lot of things, I'm sure not yet. You know, there's like, that is the. Really, Sarah, you just summed it up. Thank you. That is the whole thing. Not yet. And you know, the future is very exciting. We've seen the movies, incredible. But we've also used, all of us have used the current generation of AI and we've all seen, you know, the upper limits and there's a lot of exciting things we can do. I just went through them. I can answer a lot of my customer service inquiries, but not all of them. I still have thousands of people in the call centers and contact centers. So do my customers. I still need direct face to face sales. Evidently the CEO also still needs to get on cnbc. You didn't ask for a company's AI on the show today. So there's a, there's still a job there. And we're qualifying, as I said, so many leads every single week, even closing deals autonomously and even in the ability to augment and elevate every employee with incredible new tools like Slack Bot. So there's lots of things to do with AI. There's a lot of ways to make your company more productive, more successful, do incredible new things. Even on our earnings call. And I know that you're watching it, you know, we even had like Wyndham hotels talking about how they've radically increased their productivity. And Shark Ninja was talking about how they're selling machines.
- [34:07]
Guy Adami
I saw on your call. I know the examples are there, Mark. But then we get an announcement like Jack Dorsey from Block who's going to lay off 40% of his workforce at a company that he says is growing. And people are wondering, uh oh, is this the future? Is this the reality that we're all facing.
- [34:23]
Melissa Lee
Listen, obviously that company has its own unique issues, okay? We all know that. So let's put that aside. And it's not that you can't achieve more productivity with AI. You can. But these pronouncements of these mass white collar layoffs, I just do not see it. I tell people all the time, I joke with them, show me exactly what I should be doing in my company that I'm not doing because I'm running a more efficient, more effective company. Yes, I did trim some areas and move more capacity into sales. What else want me to do when I talk to the world experts on how to run a really effective, fast growing company like Salesforce. You know, here we are delivering a quarter at 12% growth, at scale, close to $50 billion in revenue. That really goes to show you can do more with AI and our customers are doing more with AI. But to say that there's some kind of a SAS apocalypse going on. Well, we don't see it in our pipelines and we don't see it in our numbers. So I asked Ernst and Young, who's our accountant. I said, what am I doing wrong? They're like, you're not doing wrong. You're actually ahead of everybody else. And I'm like, when there is definitely people who have narratives who come out of a lot of movies, I get it, it's totally great. But let's come down to what reality is right now. And these numbers are the reality dollars.
- [35:44]
Guy Adami
Well, and I know you're putting your money where your mouth is with the $50 billion buyback, Mark. Well, we're going to leave it here for now.
- [35:49]
Melissa Lee
Oh yeah, our stock is too cheap. You know that.
- [35:51]
Guy Adami
And also you say, yep, 7 over
- [35:54]
Melissa Lee
$70 billion in RPO, Sarah. Unprecedented for an enterprise software.
- [35:58]
Guy Adami
Mark. We're going to continue the conversation and we're going to air it tomorrow on Squawk on the street. But because we have a lot more to talk about, including Anthropic. But for now, Melissa, I will send it back over to you.
- [36:08]
Melissa Lee
Great to see Sarah.
- [36:09]
Guy Adami
Bye bye Sarah. And thank you, Marc Benioff, the CEO of Salesforce. The thing is, is that it's not just the issue of his own business being quote unquote eaten by AI, but if people can, if companies can do more with less and have fewer workers, that's fewer seats to be sold by the software companies like a Salesforce or like a Microsoft. And that's the other layer of AI design displacement concern.
- [36:38]
Dan Nathan
Yeah, I know. And so Sarah sort of got it with the, the XYZ or Square.
- [36:43]
Guy Adami
Right.
- [36:43]
Dan Nathan
But I think his answer was, well, that's unique to Square. That may be that they were bloated,
- [36:49]
Guy Adami
but it does 5% or 10% that you can lay off.
- [36:53]
Melissa Lee
Right.
- [36:53]
Dan Nathan
Two receipts. I think we're going to see that.
- [36:55]
Guy Adami
Yeah.
- [36:55]
Dan Nathan
Right.
- [36:55]
Guy Adami
And that's a change to the tam.
- [36:57]
Dan Nathan
Yes. And therefore you would think a change to the multiple sock has gotten crushed.
- [37:02]
Karen Finerman
Yes. Yeah.
- [37:03]
Gaia Dami
He was a visionary. He actually displaced a whole other way in which software was sold and it's gone on now for 20 years. And you know, again, I think a lot of this stuff from a price perspective is out of their control, which is one of the reasons why I think they're saying, you know what, we're going to invest $50 billion over whatever period of time in our stock. I think everything that we know that there's going to be fewer seats for this sort of stuff. You know, they've been talking about agents for a very long time, long time. And I think sooner or later we're going to start to see what the benefits are within their own business, but also what the uptake is from their customers. So again, I'm kind of with him. I listen to him there and having to defend against, you know, sci fi movies and this and that or whatever, he's like, what else can we do until there's a massive guide down. I think you probably say to this thing, it's probably discounting a lot in the near term right here.
- [37:52]
Steve Grasso
Yeah, I mean, we're going back to March 2023 price on this, on the stock at least. And he did say it. He did, he did say he's, he's laid off workers, he's cut some from certain different departments, added some to other different departments and they have to figure out a strategy. So if you're, if you're a technician, you're going to look at the chart and say, this is probably a viable spot where I could take a flag on it.
- [38:17]
Guy Adami
Coming up, a multibillion dollar change of plans. Why Nvidia might be done Investing. Investing in OpenAI and what it could mean for the startup's IPO plans. Fast Money's back into. Welcome back to fast money. Nvidia CEO Jensen Huang saying its $30 billion investment in open Air might be its last before the company goes public. He added that the original $100 billion promise is no longer in the cards. While speaking at the Morgan Stanley Tech conference today, Huang also said in video's $10 billion bet on anthropic. Anthropic would also be its last pre IPO investment. For more, Gene Munster, Deepwater Asset Management, joins us now. Gene, good to see you. Why do you think all of a sudden video is showing such discipline and restraint in throwing money at OpenAI and Anthropic?
- [39:06]
Gene Munster
Well, I think first as a perspective of when that $100 billion announcement was made that came back from a Wall Street Journal article in September of last fall and some helpful context here. At the time the street had expected Nvidia to grow at 25% in calendar 26. And now that expectation is 70. And the reason why I want to start there is from Jensen's view, he probably didn't have clarity in terms of that 70% number at the time, but their business is doing much better today than when those original numbers came out. So then why is this, what's this concept of kind of paring back to your question? I think it's twofold. Number one is that they are getting closer to an IPO and that does change the the dynamics in terms of investing. They can obviously continue to invest as a public company, but that may change OpenAI's kind of paths for getting funding. And separately this is really not at Jensen this topic because there is a lot of interpretation in terms of how to read where are the state of the current AI buildout based on their investment profiles. And so I think he is also kind of taking the temperature down a little bit and saying back off, no need to continue to ask these questions. So I don't think it has any impact in terms of the foundation that we're still very early second inning in this AI build out.
- [40:33]
Gaia Dami
Gene, it's Dan. Thanks for being here. You've been a tremendous resource to this desk, I want to say for over 10 years helping some of these companies or helping our viewers understand how, how these companies went from 200 billion to a trillion to 3 trillion to 4. Okay. This year we might have two IPOs that literally have a trillion dollar market cap. Obviously the floats are going to be pretty low. What does that do to the makeup of the market? Are you going to see money come out of some of those top five names and find their way into these and are we ready for trillion dollar IPOs?
- [41:08]
Gene Munster
I mean there's definitely going to be money has to come from someplace and I guess who are the losers, I think more broadly is that the exposure that a typical investor is going to want within AI is going to increase. I look at personally I'm you know, a partner at a venture fund of about 80% of my investable net worth is within AI. It probably should be a higher number and I don't recommend that for everybody. But the concept is I don't think it's quite sunk into the market about how big of an opportunity this is. And so if in fact that is the case that we are so early and this is going to be as disruptive as I believe, then I think that there can be a lot of equity. Those are your two paths. Basically we talk about this job disruption. I'm at a conference right now. There's numbers getting thrown out of 30 to 50% unemployment from white Collar. I mean just really kind of show stopping numbers. If in fact that's the case, investors are going to want more assets in the companies that are enabling that change. And I think that that kind of leads the way to these sustainability. These SpaceX could be a generational company to own for the next decade.
- [42:20]
Guy Adami
Gene, we're going to have to leave it there. Thanks for joining us. Good to see you.
- [42:23]
Melissa Lee
Thank you.
- [42:24]
Guy Adami
Gene Munster, Shares of Trade Desk are jumping after hours. The information reporting that OpenAI has held early touch talks to the company to sell ads. And of course this is a company that has been under tremendous pressure, you want to put it that way, in recent months. Guy, you're familiar with this company because
- [42:40]
Karen Finerman
the CEO is a huge Fast Money fan. I am certain he's watching right now. In this stock you talk about upper left, lower right. This has been it. Put up a longer term chart. You'll see what I'm looking at. I will tell you with that announcement, I'm surprised the stock is not higher than it is given to sell off. We've seen over the last couple of years, yes, people say it's still expensive, that's true. But this should be a short term boon for the stock.
- [43:02]
Guy Adami
Without question up 9% after hours. Coming up, bitcoin bounces back. The crypto trading above $73,000 for the first time in a month. Can the comeback continue? We'll debate that. More fast money and. Welcome back to Fast Money. Bitcoin soaring today, briefly trading above $74,000 for the first time since early February. Crypto focused names like Coinbase, Bullish Strategy, Robinhood and Circle also spiking. The latest moves coming after President Trump threw a support behind the Clarity Act, a key crypto regulation bill. The president posting on Truth Social last night. The Genius act was the USA's first big step to make the United States the crypto Capital of the world. And getting the Clarity act done is the next step to finish the job. Bitcoin sold down about 16% this year and about 40% off of its October record. Steve, what do you think of the bounce?
- [43:55]
Steve Grasso
Yeah, so, so I think the fact that President Trump is backing crypto and the complex over a JP Morgan or a Citigroup or the traditional money centered banks is seen as extremely bullish. Problem is we were looking at Bitcoin 126,000 and now it's a mid-70s, so you're going to need more follow through. We have the Genius act act and I think the financial industry is going to try to gut it even after it's passed. So you want to see the Clarity act pass and have some teeth to it or else it's not going to rally and be sustained.
- [44:30]
Dan Nathan
Karen, so the Clarity act fell apart when, when Coinbase said, no, we no longer like the Clarity. It doesn't have our stamp of approval. So I don't know if we are to assume maybe from Trump's statements that, that their coinbase is happy with, with whatever adjustments are. If that is the case, then I think there's still more, more to go on the upside.
- [44:50]
Karen Finerman
We bounced to this level a couple of times over the last couple of months. It's critical. And each bounce has been sold off pretty aggressively. This one maybe feels a little bit different. We will see. But it's in my opinion, technically, it's imperative to get this thing above 75,000. That would be the first time in a long time if it did that.
- [45:08]
Guy Adami
Up next, final trade. Final trade time.
- [45:24]
Steve Grasso
Stephen Tesla was oversold. I'm still long it. I think it bounces higher.
- [45:28]
Guy Adami
Chairwoman, you know, we didn't get to.
- [45:30]
Gene Munster
Which is worse than having a nice.
- [45:32]
Jens Nordvig
Whoa.
- [45:32]
Guy Adami
Very nice. That was, by the way,
- [45:37]
Dan Nathan
my final trade.
- [45:37]
Guy Adami
We got some more retail coming up next week. We have Ulta Beauty.
- [45:40]
Dan Nathan
I like the name.
- [45:42]
Guy Adami
Dan.
- [45:43]
Gaia Dami
Karen, are we playing the Benioff Bounce? Is that what we're doing here?
- [45:46]
Dan Nathan
A little salesforce at 14 and change times?
- [45:48]
Guy Adami
Te.
- [45:49]
Karen Finerman
Let's do it.
- [45:49]
Gaia Dami
Benioff Bounce, Salesforce.
- [45:51]
Karen Finerman
You know, sometimes companies lie in the weeds and they pounce when they have the opportunity. That came in the form of Barrick Gold, who finally got the letter B. Oh, yes.
- [46:01]
Melissa Lee
As a ticker.
- [46:02]
Guy Adami
Not Ava. Thanks for watching Fast Money. Mad Money with Jim Cramer starts right now. All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable and 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 why have we asked our contractor we found on Angie.com to be our kid's legal guardian? Because he took such good care when redoing our basement that we knew we could trust him to care for our kids, all eight of them, should something happen to us. Are you my dad now?
- [46:59]
Melissa Lee
No, sorry. I do basements connecting homeowners with skilled pros for over 30 years. Angie the one you trust to find the ones you trust. Find pros for all your home projects@angie.com.