← CNBC's "Fast Money"
CNBC's "Fast Money"
Strong Memory Momentum… And The Next Move For Retail Stocks 3/17/26
00:43:29
Storage stocks rallying to record highs, as demand for AI memory continues to climb. How much farther the group has to run, and what Nvidia CEO Jensen Huang said about the next evolution in the space. Plus The numbers out of Lululemon’s latest quarter, and where a top retail analyst sees the space heading next as the consumer grapples with a messy macro backdrop. Fast Money Disclaimer
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Edward Jones Narrator
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Sarah Eisen
Live from the NASDAQ market site in the heart of New York City's Times Square, this is fast money. Here's what's on tap tonight. Good memory Shares of storage chip makers continue to rally toward records. What's driving the gains and how much longer can the strength last? And Lulu's lessons. What we can learn from the number last posted by the athleisure maker and what it says about the state of the consumer and why one analyst called Eli Lilly a value trap. Airline stocks taking off Despite a host of headwinds and a utility trade, the Chartmaster says this group is ready to break out to new highs. What he's seeing in the technicals that support his case. I'm Sarah Eisen in for Melissa Lee tonight. Coming to you live from the Studio B. Studio B at NASDAQ on the desk tonight we've got Carter Worth, Dan Nathan and Guy Adami. Great to see all of you, but we're going to start with the storage stocks and they're making core memories in this market. Western Digital, Seagate, Micron, SanDisk all surging as a memory demand skyrockets. Here the shortest continue. SanDisk in fact has more than tripled now year to date, while the others are all up 50% or more. And Nvidia CEO Jensen Huang told our Jim Cramer this morning that the next evolution for this space is close at hand.
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Nvidia CEO Jensen Huang
Listen, we're the only company in the world that now optimizes the entire data center across three different types of memories. HBM and we have some excellent partners there. HBM 4 coming LPDDR 5, the world's first low power memory used in data centers. We invented the whole idea Everybody's going to use it in the future, but we're the only company in the world that optimizes around that today.
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Sarah Eisen
So, Guy Adami, how do you even value these stocks? Micron's up 350% in the last 12 months into earnings tomorrow, before we get there.
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Guy Adami
Welcome, Sarah. It's great. Isn't it nice having Sarah here?
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Sarah Eisen
It's been a while. I'm happy to be back with my friend.
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Guy Adami
So welcome to the show number number two. It's hard. I mean, I've missed the, the entirety of this move. A lot of people been on top of it. Jim Cramer's done a great job. But, you know, look at a Micron chart over the last, just call it the last six months. It's remarkable what we've seen historically, a space that's highly commoditized, somewhat ubiquitous, very cyclical, is trading like something's going on here. Now, on a trailing basis, these stocks are expensive. On a forward basis, though, you can still make a case that there's still some value here left. The question is, will the cyclicality come back and will the highly commoditized space come back in a historical way? And if that's the case, these stocks have gotten way ahead of themselves.
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Sarah Eisen
Yeah, I mean, not, they're not trading cyclically at all. They're trading on super high demand at Dan and shortages.
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Dan Nathan
Yeah. And I mean, it's sentiment, it's supply demand. It's also secular. Obviously, when you hear Jensen talk about, you know, what, these new products and they bought a company for 20 billion. Right. Just to put out a chip that actually uses less energy and has more, you know, you know, works better with kind of, you know, different sorts of memory. I mean, this is one of the last bastions of this trade that we've been talking about now for three years. It's a trade that, you know, has actually drawn, you know, the markets much higher over the last three years. We know that there's been like $10 trillion of market cap accrued in just a handful of names. So when you think about how a lot of the hyperscalers, even in video, have just slowed down. Right. They just haven't been gaining anymore. Some of them are down 10, 20, 20% from their recent highs. So this, to me seems like a supply demand story about the stocks, about the sentiment towards the trade. And to me, I just don't think in chase him here, you could have said that last week because of that last month, but it's very narrow. And I think when things Slow down. When there's any indication that there's going to be some digestion in and around the demand for these products, I think these stocks are going to hit really hard.
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Carter Worth
I mean, you asked the question, of course, how far can they go? Can they keep going also? But what are they worth? The very frank answer is nobody knows. Let's just go to the facts. The price target right now of the 50, 60 analysts that cover it, you're talking about Micron. Yes, right. Micron 443 in the 12 months. Do you know what it was on January 1st?
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Sarah Eisen
A lot lower than that, 300.
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Carter Worth
So if 50 analysts think in the year ahead it's worth 300 now, they think it's before 53. What have they done? They predict it. They've just chased it. That's right. Nobody knows. But what we do know is, and there's no way around this is it's extended. It's come a long way. And extended things have a way of out of nowhere, whether it's oil or silver or Palantir or Microsoft have a way of coming back to earth quickly.
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Sarah Eisen
I do think that, look, I mean, the demand is there. Yeah, we get that in the updates. And there's no question there's a shortage. And the backlogs last for years in these stocks, which is why, you know, everybody scoops them up. I do wonder, though, you mentioned cyclicality, like what's on the other end of that once they do finally meet some of the demand that that's been years in the making.
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Guy Adami
The other side of that steep decline, as fast as these, that's what's on the other side of it. Now, the trick is for people like us is to tell you when that's going to happen. And I would have thought that would have happened already. Clearly, it's not. And what you learn is the moat, the timeframe to sort of catch up and to get into the space is anywhere from three to five years. So they have a huge head start. But your question is the right question. What happens on the other side of demand? And that's going to be a pretty steep decline. But what the market is saying right now is we're nowhere near that.
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Sarah Eisen
No, but. And you also raised, Dan, the Nvidia question, which is what's wrong with Nvidia? Why did it go down another percent today? The, the forecast from Jensen just go from bullish to more bullish.
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Dan Nathan
Yeah. And it's been that way for like three years. And so if you look at the last nine months or so, the stock has gone sideways to your point. And I think, you know, a lot of investors are just looking again ways to express this view in other places. Right. And I think that you've saw money come out of, let's say in video and it its way into, you know, custom silicon names like you know, Broadcom, which had a really big move just I want to say six months ago, but then given it all back, right. Money went into Google, right. So all of a sudden it became Tensor processing units, not just, you know, GPUs, that sort of thing. So I think there's been a lot of money that's looking to kind of take less risk if you will, about the concentration that we saw in 23 and 24. And you know, when you think about all these memory and storage names, the fact that you that they're up like a thousand percent in a year or so, it's kind of interesting to Carter' point about investors and analysts chasing some of these stories. I mean you can add all you wanted of any of these stocks, you know what I mean? Like you know, a year ago and the fact that a lot of investors didn't, didn't put it together. So you can't feel so dumb like when it's up here because I'd actually feel really dumb when they were just left for dead about a year ago.
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Sarah Eisen
But then where do you play in the trade?
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Dan Nathan
Well, I mean like I think then you have to start looking again. Okay, who are going to be the big beneficiaries of the cost of compute coming down? Who are going to be the beneficiaries? Once you get the supply, you're able to kind of to deploy, you know, this kind of infrastructure, that sort of thing. Because Microsoft down 22% from its recent all time highs, you could say, all right, there's a lot of things there that could be going their way. If they see better uptake with Azure, if Open Air is not a problem and they start deploying that $100 billion that they just raised. Because Microsoft obviously is sitting in the catbird seat from a cloud perspective, they're also going to integrate that technology into their enterprise services. Right. If they can start getting some uptake there. So I just think there's going to be stories in the back half of the year. Apple is another one. Apple hasn't been spending tens, hundreds of billions of dollars on creating their own models, but they're going to benefit it. When they ever get Apple Intelligence going, they are licensing Google Gemini for $1 billion. Just think about that they did not have to do this infrastructure. All they have to do is make hundreds of millions of iPhones and iPads and deploy it on there and get greater services revenue. So I think there's going to be other plays away from this hardware.
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Sarah Eisen
Apple's down six and a half percent this year. Definitely not part of what's working.
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Carter Worth
No, Microsoft too. But I think to your point about Nvidia being down and what's wrong with Nvidia, it's really a testament to what can happen to the High Flyers. Meaning you can't have anything that was more adored, more owned, more over owned than Nvidia, period. Hard stop. And it is exactly the same price it was in August, right? It was 180 in August. And here we are basically April of the next year and it's 180. This is what can happen. Meaning you get steep and uncorrected and you either correct, give back 10, 20, 30% or you just turn sideways as valuation as the stock sort of builds into valuation. That's the risk with High Flyers always. And that's the risk in my opinion for Micron, SanDisk and Western Digital, others that are really what's the move after
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Sarah Eisen
it does nothing for a while.
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Carter Worth
So that's the regression. And this is the biggest single question. It's not really important whether Wal Mart does something here at Costco or GE or IBM. Nvidia, dead flat, the most important stock of all since August. And here we are, April. Does it break out? Right, Meaning is it the consolidation that rests before the next leg or is it the stall and roll over and listen, I think I'm as qualified as anyone in the planet. Not more qualified, but it's qualified and I have not a clue. Yeah, literally a pair of two.
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Sarah Eisen
Well, the analysts, I don't know if this is a counter indicator or not, but the analysts like it. They're very bullish.
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Carter Worth
Well, they keep liking and it's not working. So we shall see.
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Guy Adami
The average price target for analysts for Nvidia is 267$268, which is remarkable in terms of where it's trading now. But to Carter's point, now you can say pair of twos. Well, let the market decide for you. I think it closed below 170 and you're looking at a textbook bullish to bearish reversal over the course of what's now been seven or eight months. And then obviously on the counter that if you can take out the all time highs which we made in November, then it looks a lot Different. I happen to think that that 170 level is going to be tested.
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Sarah Eisen
All right, we're, we closed just below 182 on Nvidia. Meantime, got to be checking oil prices. They settled above $96 a barrel. As investors digest the latest developments out of the Middle East. Our Eamon Javers has the latest on the conflict with Iran after the President spoke today. Eamon?
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Eamon Javers
Yeah, Sarah, the latest is the President is extremely frustrated with NATO. You heard from him yesterday that he had a list of countries that would come to the aid of the United States Navy in the Strait of Hormuz and help with minesweepers and naval clearance and all that. He said he couldn't release the names yesterday. Well, this morning he said, actually, you know, from NATO. Anyway, there are no names. He said the NATO countries have declined his request to help the US Navy in the Strait of Hormuz and the Persian Gulf. And he expressed some real frustration about that. Here's what he said.
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US President
All of the NATO allies agreed with us and, but they don't want to, you know, despite the fact that we help them so much. We have thousands of soldiers in different countries all over the world, and they don't want to help us, which is amazing. I mean, amazing. And I didn't do a full court press because I think if I did, they probably would be. But we don't, we don't need help.
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Eamon Javers
So the President's saying the United States asked for help but doesn't need help in the Persian Gulf. Still, it's not clear, Sarah, exactly how the Strait of Hormuz is going to be reopened, if or when that's going to happen and certainly who's going to do the job, given the strategic realities of the Iranian position over the Strait. So we remain in a real impasse here. The president also, by the way, said that he is postponing that trip to Beijing that was scheduled for the end of this month that he said is going to be pushed back at least five weeks, given that the war is ongoing. He said he'd rather stay in Washington.
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Sarah Eisen
Sarah okay. Amen. Jabbers. Eamon thank you very much. WTI crude actually is little change, Dan. I mean, it's down 210 of a percent, $96 a barrel. Brent is above 103. Do these, do these prices to you look reasonable given the current risks?
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Dan Nathan
They speak about uncertainty. Our friend Brian Kelly used to say this all the time, that oil is the new vix. Remember that one guy, kind of a deep cut right there.
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Sarah Eisen
And I remember amazing bk he liked currencies like me.
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Dan Nathan
He did like currencies, but you know, it's stuck here at 95 right now. Like given all of the uncertainty, I mean, if you're listening administration, they would make things sound like maybe this thing gets wrapped up pretty quickly and then there's other ways to think about it, that even if we were to kind of, you know, pull back from the military operations, things might stay a little uneasy and therefore crude could kind of find a home, you know, much higher than where it was just a month or two ago. So I think $95 oil reflects that. I also think, you know, going Back to the Vix though, the Vix at 22 and not breaking it, you know, given the fact that it doesn't seem like things are coming off the bust right now, also tells that there's a lot of fear out here, despite the fact the S and P is just stuck. Doesn't move, doesn't go down well.
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Sarah Eisen
I mean it's what we're 4% off the, off the highs right now. And it rallied today even with a rally in oil major markets adding to their gains for the week. As we just said, less than 24 hours before the next Fed decision tomorrow, policymakers are expected to hold rates steady as they gauge the impact of war with Iran. For more on the market impact to Texas lead portfolio strategy strategist Jack Genesiewicz joins us here on set. Jack, welcome. It's good to see you. How do you think the market is positioned for the Fed tomorrow?
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Jack Genesiewicz
You know, I think the market is hoping for basically a nothing burger here. Right. But the, the bigger one there is the potential of changing the acp and you know, yeah, you got to be a little bit careful in terms of reading into that because to me, if you get any sort of change, is the Fed just simply marking to market that outlook to what where the market is right now and is that really necessarily a bad thing? So they're just basically getting in line with what the market outlook is. For example, look at if they move the cuts, you know, take some cuts away. If they looking out towards the end of the year. The market's already done that for us. Right. They're already taking some of those cuts away.
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Sarah Eisen
Market expects one cut this year and it not, it's not fully priced until December.
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Jack Genesiewicz
Right.
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Sarah Eisen
That sound right to you?
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Jack Genesiewicz
Yeah, but I think the bigger one here is the balance of risks. Right. We should, we actually should see both of those moving higher with regard to, you know, the concerns with the, the unemployment rate Pushing higher as well as the potential for inflation to push higher, that to me is the bigger one. And if the Fed actually shows the balance of risk shifting higher for both of those, I think that's the bigger takeaway for us.
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Guy Adami
So what's Kevin Wash walking into in May? Because you're just talking about their risk on either side, you can make a case that inflation right now is just as viable as the labor market in terms of where the Fed is looking. And I don't know which sort of coin you want to flip. So he's walking in. The administration clearly wants to cut. They made that very clear. How does he navigate this?
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Jack Genesiewicz
Yeah, and this is going to be tricky because I think if you sort of walk through the iterations here, you know, if oil prices remain elevated, that's going to start to pass its way through to the consumer. The consumer is going to face that incremental tax, so to speak, consumption is going to pull back. That in of itself creates the demand destruction and probably puts a lid on inflation for the longer term. You start to augment that with rate hikes that might precipitate that sort of growth slowdown even more. So now all of a sudden you're potentially tipping in a recession. So the risks here are for a Fed mistake and probably the best thing for them is just to sit on their hands right now.
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Sarah Eisen
I disagree. I think that, I don't know, but I feel like Warsh, if he wants, could still make a case for cutting coming in. I mean a lot could change between now and June if he gets confirmed for June. But the case for cutting is that payroll growth went negative, the unemployment rate is higher, oil prices are, they hate this word transitory. The market expects them to come down to what, $75 a barrel by the end of the year. And so they have to look through that and see that there are actually some demand problems here. They could cut.
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Jack Genesiewicz
I would take, I would actually agree with that. I look at the number one that are on the committee right now. It certainly feels like it's going to be a little bit harder to get those people over the line to actually agree with making a cut going forward here.
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Guy Adami
And then my pushback would be to Jack. Yeah, maybe they do cut, but they've cut a couple of times now and the 10 year yield doesn't seem to want to respond to that. So they can control the front end of the curve, but they obviously can't control the back end. And the, the thought that they'll do something is a knee jerk reaction. I think the bond market will test them on the back of something like that.
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Jack Genesiewicz
100% agree, because that's where you get all of the action to be in the shape of the curve. Potentially, if you end up getting the cut, you're just going to get a massive curve steeper.
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Sarah Eisen
So what do you think? You think higher?
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Guy Adami
I think they should, you said, sit on their hands. I think that's exactly right. Now that's not going to be the stance that the administration wants, but I think that's probably, given the circumstances right now, I think that's in everybody's best interest.
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Dan Nathan
Jack, I don't know if you caught it earlier today, but Sarah had a great interview with Gary Cohen on the floor of the New York Stock Exchange. And you know, Gary, it was interesting, he said, you know, I got to remind you, it's not just crude oil. He said, you know, obviously LNG and then there's. What is it? Nitrogen. Nitrogen that goes into fertilizers and stuff. So I guess the point is, is like, yeah, you get the straight open this and whatever, but we've had now four or five years of supply chain disruptions here and I just wonder how quickly it is to go back to all these. So how do you think about, you know, Sarah just said, well, maybe we go back to 75 oil. Well, that's still 20 bucks higher than where we were six months ago. How do you think about the impact even on a transitory sort of oil given this other stuff? I mean, what does it mean to the economy? We just agreed labor markets getting weaker, wage growth get weaker. Is it have the potential? You start hearing recession a little bit here.
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Guy Adami
Yeah.
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Jack Genesiewicz
And I think everybody keeps talking about the actual spot price of crude oil. I would say look at the distillates markets, right. Jet fuel spiking. I mean, what you're seeing is the distillates are way overreacting or at least reacting a lot faster than what you're seeing in crude prices. So even though crude might be 95, 96, distillates are way above that. I think that's the more important one because that's the one that's going to roll through to the consumer. Right. You're going to see that reflected in, you know, airline ticket prices because the jet fuel concerns there. So keep that in mind in terms of how we're thinking about this. Not necessarily just spot crude prices, it's all the derivatives. And you sort of talked about that for ag. So, you know, there's a potential here that if you look at that forward curve for the, for, for oil, it's starting to push higher and starting to flatten out which means the market is telling you they're starting to price in higher for longer. That's just going to be a continued
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Sarah Eisen
dragon to Dan's point. How, how, how much does that drag on the consumer and the overall.
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Jack Genesiewicz
So starting points matter here.
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Dan Nathan
Right.
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Jack Genesiewicz
Coming into this, I would argue that the consumer is probably not in as better, not in as great shape as it has been in prior shocks. You're seeing, you know, wages that the last GDP print that came out nominal income or real income X transfers basically running at 0% year on year savings rate continues to get whittled down. We can't keep up this consumption rate and then you start throwing on this energy shock that's adversely impacting prices at the pump, for example. I just don't think the consumer set up to really withstand this and you're going to see some slowing.
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Sarah Eisen
So, so, so what do you do?
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Jack Genesiewicz
I think yeah, slowly you're going to start to see recession is ticking higher. What does that mean?
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Sarah Eisen
Buy consumer staples.
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Jack Genesiewicz
I don't know about that but I would certainly start off by rotating out of cyclicals and start to maybe move back into the growth complex. So you're maybe looking at buying things like tech, pharma, biotech, moving away from materials, financials, industrials, that sort of thing.
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Sarah Eisen
All right, Jack, thanks for joining us on the eve of a Fed meeting. Jack, Tennessee, what's from Texas.
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Carter Worth
Carter, I think the answer to your question is what to buy. It's by Treasuries Treasury. Yeah, of course, I mean of course.
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Sarah Eisen
Well not of course. I don't know. Well let's just talk about higher yields despite lower rates.
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Carter Worth
Yeah, but here's the, here's the thing and around this we never once closed above 5%. Not in the past 3 years. 5 years, 10 years, 15 years. Meaning you have to go back to 07 to be above 5. If you were to do a ChatGPT search higher for longer. Has anyone used that phrase on this desk tonight? No, it disappeared. Do you know when the peak, when
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Sarah Eisen
that was actually he just used it for oil.
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Carter Worth
Okay.
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Sarah Eisen
But not.
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Carter Worth
The point is higher for longer was a misnomer. Whenever you hear something so melodious like higher For Longer or Mag7 it's usually time to run in the opposite direction. We never once closed above 5%. 10 year treasuries. This is all academic to some extent. Right now they're pinned at 4%. It's why the equity market's multiples are so high. If and as we go lower, which I think what's happening, because it all does point to something sort of recessionary and soft. The odds of. And you yourself, you think they should cut, right?
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Sarah Eisen
I know. I was just making an argument in case they want to.
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Carter Worth
In case they want to. Okay. Thank you for choosing a side.
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Sarah Eisen
I think there are good. There were good arguments on both sides.
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Carter Worth
Sure. I'm in the lower yields camp and I think the action in certain parts of the market reflect that.
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Sarah Eisen
Got it. All right. Coming up, no love for Lilly, why Wall street is toning down expectations in the obesity market and where they see the stock heading from here, that's next. Plus, private equity heavyweight Orlando Bravo weighing in on the recent credit concerns, what he told CNBC about the firm's portfolio and why he's not letting the credit crunch get to him. Don't go anywhere. Fast money back into the
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Sarah Eisen
Welcome back to Fast Money. We've got a news alert on regulation for the crypto space. Mackenzie Segalos has the details. Mackenzie?
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Mackenzie Segalos
Hey, Sarah. So the SEC and CFTC have just issued the first real federal framework for classifying crypto assets in the clearest regulatory guidance that this industry has ever gotten from Washington. In a direct break from the SEC era under Gary Gensler, most crypto assets are not themselves securities under these new rules. Now, another big change here they are saying that a crypto asset can be tied to an investment contract in one context without being a security forever. That kind of off ramp from a securities classification is new. Atkins was also asked about the possibility of eliminating mandatory quarterly earnings reports. Here's what he had to say.
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Paul Atkins
We're going out for comment to see what people say about that. But you know, I think it probably depends on the company size or type of industry or whatever some people have said. I've had CEOs say to me, well, you know, I receive monthly reports from internally and so maybe I should do a monthly reporting type of thing. I wouldn't necessarily wish that on everyone. And I'm not sure it's, you know, appropriate for every kind of company. But, you know, let's see, let's have I think it's appropriate to ask for companies, you know, at this point in time.
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Mackenzie Segalos
But SEC chair Paul Atkins says he's agnostic on the quarterly reporting regulations and that he looks forward to the comments from the public.
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Sarah Eisen
Sarah? Okay, Mackenzie, thank you very much. I'm curious here on the desk who's in favor of getting rid of quarterly reporting requirements?
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Guy Adami
You know what, I can make an argument that, you know what? If you're just, if you're running your company to beat quarterly results, then maybe you're not running it the way you should and that maybe twice a year might make sense. Like I can understand the argument around twice a year instead of four times.
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Sarah Eisen
That's kind of what CEOs say.
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Dan Nathan
But then investors, three months is different than six months arbitrary.
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Carter Worth
I mean, at what point would you want to check in? If you have a doctor looking at a patient, maybe every hour. How about your children coming home from school? You want a report card every day, every week, Meaning there has to be some frequency. And is it arbitrary? Quarterly, biannual? How about every three years? That would work, would it? No. So what is the problem with quarterly stages to minuscule?
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Sarah Eisen
I think, I think you have a point that you don't want to run your business for like beating numbers in three months, it's up to the company management. Agree. But I will say I think more information is better generally for investors, for journalists.
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Carter Worth
Right, but the person who did that more than anybody was Jack Welch, a GE. They'd be by a penny every quarter for like 15 years. If he had to sell the floorboards out from a factory to make that
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Sarah Eisen
thing, he would do it.
- [25:21]
Carter Worth
I mean, that's just manipulating the quarterly results. We know that that's up to the management. But there has to be a frequency to report your results in all of life, in all of things. How about a star athlete? What should it be? What's wrong with quarterly?
- [25:32]
Dan Nathan
Yeah, they could make this hour a little less interesting. Just tell you that. Yeah, we disagree about the volatility. Eli Lilly's down 3%.
- [25:43]
Guy Adami
You can at least there's a conversation going. You can understand. It's worthy of a conversation, I think is the point.
- [25:48]
Sarah Eisen
Well, let's see what they get from the comments. They I'll be curious as a lot of.
- [25:51]
Dan Nathan
We just love that's right here lobbying for that.
- [25:53]
Sarah Eisen
Yeah, well, you know, write it in to the SEC. Comment period is open. Eli Lilly dropping almost 6% today after HSBC downgrades the stock to reduce from hold and cut its target to 850. Analysts growing concerned over there over the true size of the obesity drug market, saying that Lilly could face greater pricing and competitive threats. Assets moving forward. Lilly shares have now fallen over 13% year to date while its GLP, GLP1 rival, Novo, has lost nearly a quarter of its value. Guy, do you agree with this call?
- [26:27]
Guy Adami
Actually, I do now. I'll remember this like it was yesterday in December of 2023. Ken Langone, what's that morning show you like?
- [26:34]
Jack Genesiewicz
Squawk?
- [26:34]
Guy Adami
It's Squawk Box said that Eli Lilly would be the first trillion dollar company. And you know what? To the penny. He nailed it. Now it's an $800 billion company and they have a bit of a problem. It's a valuation problem. And if pricing is going to start to sort of work against them, then the valuation that they enjoy sometimes two and a half, three times their rivals suggests that maybe the cushion's not there. So this might be the other side of the Lilly growth story. And I actually think there's a sort of a. I think there's an air pocket below even this current level that we're trading at.
- [27:04]
Sarah Eisen
Wow, you're almost a $900 billion company. Novo's 171 billion. Quite a gap. When we come back. Navigating the credit crunch how billionaire investor Orlando Bravo is riding out the storm here in Private Credit and why he's not letting the trouble change his strategy. You're watching Fast Money live from the NASDAQ markets at Times Square. We're back after a quick break.
- [27:31]
Dr. Guy Winch
Men are struggling with their mental health at some of the highest rates we've ever seen, but most aren't getting the support they need. And that needs to change. I'm Dr. Guy Winch, your host for season three of the Visibility Gap, presented by Cigna Healthcare. This season we're focusing on men's mental health, bringing together real stories and expert insight to explore the pressures men face every day and why opening up can feel so difficult. Join us for the new season wherever you stream your podcasts.
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- [29:03]
Sarah Eisen
Welcome back to Fast Money Alternative asset managers Ares Management and Apollo and Blue Owl getting a boost today. Thoma Bravo CEO Orlando Bravo, pushing back on the heavy criticism that the private credit space has been getting lately. Here's what he told CNBC's Leslie Picker earlier.
- [29:20]
Carter Worth
We integrate how we invest in credit as to how we invest in private equity. That sector expertise is more critical and more important now than it's ever been. And we are so comfortable with our private credit book given the choices we've made as a specialist in space.
- [29:39]
Sarah Eisen
Dan, what do you make of these comments and today's action, especially from someone like Orlando Bravo, which has one of the biggest private portfolios of software companies?
- [29:48]
Dan Nathan
Yeah, I mean, that's the one. It's not a public company. Right. So we're like, see all the commentary around Apollo and KKR and Aries and I mean, the list goes on and on and they all have way different exposures, you know, so it's hard to kind of lump them all together. But I think the sentiment and the names that were listed was so bad. Right. Like, think about it. These stocks have sold off so dramatically in such a short period of time and there's not a lot of transparency out there right now. It's a bunch of narratives and we've been talking about it here. So private equity, maybe they have that software problem, private credit, you know, there's, there's issues there as it relates to maybe AI, infrastructure build and a handful of other sorts of things. Really poor direct lending to like companies that are not going to be around in a little bit. So, you know, all the unknowns. That's why I want to hear these companies report every three months, you know,
- [30:30]
Guy Adami
and they don't want to hear, I
- [30:31]
Dan Nathan
want the transparency, I want to hear what they say in the calls. I want to hear the Q and A, that sort of thing. So I think the stocks were set for a bounce. I mean, if you look at Apollo, it got right back to its April 25 lows after falling off a cliff and it wasn't going to take much to get that thing going higher.
- [30:44]
Sarah Eisen
Yeah, it had a nice move today, five and a quarter percent. But would you still stay away?
- [30:47]
Dan Nathan
No, I mean, like, I think you can go with like these really high quality names. I think kkr, I think Apollo, I think ares. They all fall in that bucket right there.
- [30:55]
Sarah Eisen
All right, there you go. Coming up, we're watching shares of Lululemon after earnings. Retail expert Dana Telsey is here to dig into the numbers where she sees opportunity in the consumer space. Despite kind of a messy macro environment here, Fast Money back into.
- [31:11]
Jack Genesiewicz
Missed a moment of fast.
- [31:12]
AT&T Business Wireless Tagline
Catch us anytime on the go. Follow the Fast Money podcast.
- [31:16]
Sarah Eisen
We're back right after this. Welcome back to Fast Money. Stocks higher for a second straight day. The dow up about 50 points. S&P 500 gaining a quarter of a percent on the session. And the NASDAQ jumping nearly half a percent. Shares of Uber and Lyft jumping after Nvidia announced expansion of its partnerships with both of those rideshare companies. Uber planning to roll out a fleet of robo taxis powered by Nvidia chips next year. Airlines also had a good day. Delta, American, JetBlue all raising revenue guidance for the first quarter ahead of a J.P. morgan industry conference. Delta CEO Ed Bastian telling CNBC that strong demand is offsetting the rising cost of fuel which has been a headwind. And some after hours action. DocuSign higher after topping estimates on the top and bottom lines, hiking Q1 and full year revenue guidance. So some good news there. Also after hours Lululemon shares they're off the lows of the after hours. The athleisure retailer giving weaker guidance but did post better than expected Q4 earnings and revenue. Lulu seeing headwinds from tariffs and this ongoing proxy battle. I did speak today with the interim co CEO Megan Frank ahead of the earnings call. She told me quote from the top line in the last quarter US was better than expected. China was better too. But she did say we had a higher penetration of markdowns than we'd like going forward. Really made a point to tell me that embedded in this new guidance and what the goal is for 26 is to bring it back to full price merchandise. Let's bring in retail analyst Dana Telsey who is fresh off of lululemon's conference call. She's the Telse Advisory Group CEO and Chief Research officer. What's your takeaway from Lulu this afternoon?
- [32:59]
Dana Telsey
Overall, I think they delivered what kind of was expected. You look at the stock now which did gap down but now is kind of flattish. You think about the green shoots that they talked about with full price selling improving, still no CEO appointment. I think that is going to be the next trajectory to look for and the guidance that they give then. But the fact that you had better full price selling, that the new product that's coming in is being accepted is solid. We need to see what the numbers look like and also what the trajectory is going to be as we go through the year. Because the first quarter it's a 1 to 3% increase. They're guiding to a 2 to 4% for the year. So you've got to see some improvement from Q1.
- [33:35]
Sarah Eisen
Yeah, I mean her point to me was basically we're not waiting for new leadership. We're taking action now and we're implementing the strategy and that includes they have this brand new designer so they have some of his new product hitting this quarter where she said green shoots in terms of performance. But it's still a company that's sort of embroiled in proxy drama, CEO drama and has really slowed down in its key market in the US you get to recommend this stock here.
- [34:02]
Dana Telsey
I have a hold on it right now. I mean also I was out there at the end of January and I met with the whole leadership team including the new chief creative director, Jonathan Chong. They're going through every core item they have and how do you update it, how do you make it new, give people a reason to buy. I think the other thing you're going to see is enhanced marketing. I think they're going to go the social way in order to try to capture not only more new customers, but capture more from existing customers.
- [34:28]
Guy Adami
Jack Mackey used to say that specialty retail, that's the lemon, is where hope goes to die. And when they create a category, they dominate the category. The stock acts in, kind of, and then competition comes in, margins decrease and that's what happens. That's the other side of growth and we're seeing it now. Valuation is compelling, but competition is there. Can they stay connected? Can you reaccelerate? Because it rarely ever happens.
- [34:52]
Dana Telsey
It takes time to reaccelerate. Dick Hayne, who's the founder and CEO of Urban Outfitters, always said big is the enemy of cool. So basically being cool again and being able to get these new products, we have a lot of events, whether it is the World cup that's coming up. You've got America 250 that they can be a part of. You see that they're now also doing ambassadors of athletes. That helps, like Francis Tiafo on the
- [35:16]
Sarah Eisen
tennis side and Lewis Hamilton on the F1 side.
- [35:19]
Guy Adami
F1. Love F1.
- [35:20]
Sarah Eisen
Yeah.
- [35:20]
Dana Telsey
So there's things that can continue. I think you have a loyal customer to them because I think the quality of what they have is better. And yes, you have imitators out there, but some are fashion, like Aloe, some are lower priced, like what you have with Fabletics. Some are going in a different direction, like Viori, who's now focused on skiing in a big way in addition to activewear. So reinvigorating is important. And when you think about retail, retail is a roller coaster. You have to remodel, rejuvenate and re merchandise in order to get back to the top of it.
- [35:52]
Dan Nathan
Can Nike be the opposite of big? Can they be cool?
- [35:57]
Dana Telsey
Well, I think they have an opportunity to be cool. I mean, you think of some of the new product that's coming in there. I think the market share that they have globally is just so impressive. But also we're going to need to see that whether it's physical, whether it's digital and product all at the same time. You need to see it all come together. I think they can have an investor day coming up in the fall. There's a reason they're having it then. Outlook for 2027 on a calendar basis.
- [36:21]
Sarah Eisen
What's the best opportunity in retail right now?
- [36:24]
Dana Telsey
I think you have a bunch of them. I think you have legacy companies that are improving like Victoria's Secret, like a Gap. I think a value whether it's tjx, Wal Mart, Costco, look at every off pricer, their comp store sales up high single digits, high single digits in off price comps typically they've been 2 to 4%. They're capturing more dollars from wealthier consumers. I also think you have some of the brand names out there. Chip Berg obviously joining Lulu Levi's. I mean see what's happening. They're outfitting is impressive.
- [36:55]
Sarah Eisen
Yeah, I guess. You know, one question is also just with this rise in gas prices, we're following the risks around Iran. Does it make you rethink any of the names that have particularly high exposure to people who are sensitive around gas prices?
- [37:07]
Dana Telsey
So definitely. Watch carefully. We just put out a big piece on gas prices on Monday. Around 6% of consumers disposable income is spent on energy and gas prices. We look back to the 1970s at the last oil price spike hikes, the one which impacted consumers the most. 73, 74 with the Arab Oil embargo that's out there, you haven't seen such a big headwind yet. But it's what you what definitely what you're watching and what we're hearing so far we haven't seen it really impact spending yet. But the focus on value, the Wal Marts of the world, they're there and you're seeing higher income consumers trade down.
- [37:43]
Sarah Eisen
So what would it take to get you to upgrade, Lulu? Because I feel like you're kind of, of flirting with a positive view here.
- [37:49]
Dana Telsey
I think it's, it's more balanced than it was two quarters ago when it was weaker. I think I need to see greater sales acceleration. Could you hit better than that? 1 to 3 in the first quarter, in the second quarter and then you could have people get attracted to it again because what you see with these legacy brands, whether it's Gap, whether it's a Victoria's Secret, they can reinvigorate themselves and that's an opportunity.
- [38:13]
Sarah Eisen
All right, Dana, good to see you. Good to have you here. Thank you. Glad you got your question in on the call before you came on Fast Money.
- [38:19]
Guy Adami
Dana Telsey guy, a couple things I Want to know. F1 drivers wearing Lululemon, how would you know? So that seems like a wasted opportunity.
- [38:27]
Sarah Eisen
That's quite a social game.
- [38:29]
Guy Adami
Okay, fair enough. I'm sure you're familiar, I'll say this Dana's spot on. But I will tell you what it felt like to me is the full year guide. They're sandbagging a little bit which sets up for a decent first quarter which should surprise people to the upside. So maybe for the first time in a while Lulu's worth a look.
- [38:43]
Carter Worth
I mean look, these business are all very idiosyncratic but the word disaster has to be applied here. I mean you're talking about a Stock that's down 55, 60%. It's the exact opposite of a micron. Analysts have been lowering their price target, responding as the stock goes down lower, lower, lower. We have one of the great retailers of all time and she has a hold on it. There's a reason for that. Now you kind of maybe said are you thinking about, about but it'll take
- [39:05]
Sarah Eisen
sound of kind of.
- [39:06]
Ondeck Advertiser
That's right.
- [39:07]
Carter Worth
But guess what, we'll really do it. Stock starts moving up, basing and bottoming like I made a little bit better. It's a show me matter here. And right now Lulu's not showing anything other than it just dropped and gapped after earnings. Maybe it's stable but at a 35 year low, no thanks.
- [39:21]
Sarah Eisen
Not impressed. All right, coming up media money, the more than eye popping pay package for Warner Brothers CEO David Zaslav and the tax tax benefit that could mean hundreds of millions more those details when FAST MONEY returns. Welcome back to Fast Money. Warner Brothers Discovery CEO David Zaslav could stand to earn almost $1 billion this year if his company sale to Paramount Skydance does go through. CNBC's Julia Borsten with a breakdown. Julia?
- [39:57]
Julia Borsten
Well, Sarah, Warner Brothers Discovery disclosing in a filing today that once the company sale to Paramount closes, CEO David Zaslav could collect as much as $887 billion. Now that includes $34 million in cash severance, $517 million in equity. And Zaslav could receive additional payments for tax reimbursement worth as much as $335 million. Though if the deal closes next year, he would not get that tax reimbursement payment. This mega payday sparking some frustration here in Hollywood given the layoffs that are expected once this deal closes. Paramount has said it is looking for $6 billion in cost synergies. And historically David Zaslav has drawn criticism for his high pay packages, including last year when shareholders voted against his $52 million pay package in disapproval of his management of the company. Although that vote was non binding. So more Symbolic. Now, between when David Zaslav took the helm of the combined Warner Brothers discovery and when he announced that they will be would be spinning off their linear networks, the stock had dropped 53%.
- [41:12]
Sarah Eisen
Sarah okay, Julia. Julia Born. These numbers are staggering, staggering. And especially, you know, when, when you have these, which it's not as common to have billionaires that are not founders, you know, of companies like Steve Ballmer, Jamie Dimon, billion dollars, what do you
- [41:30]
Guy Adami
think their board of directors have to approve pay packages? So you can be mad at Mr. Zaslav, but you shouldn't be mad at him. I mean, he's playing by the rules of the game. I mean, boards approve these things. So if you have some consternation or so if you're upset about it, then it has to happen at the board level and they clearly push this through. So, you know, I don't want to spend other people's money and I don't begrudge anybody. It's obviously a staggering number, but it's not him that did well.
- [41:53]
Sarah Eisen
I think the reason it gets attention is because it's, you know, there have been thousands of layoffs.
- [41:57]
Guy Adami
100%, Sarah it's been a broader cord
- [41:59]
Sarah Eisen
cutting, kind of shrinking business story. And as you heard Julia, the shareholder, I mean, he definitely managed to sell it, though, and he sold it for what I think people think is a very good price, because he had a bidding warrant.
- [42:10]
Dan Nathan
It seems like the divisiveness around this deal, the bidding war, you know, like Hollywood, I don't know where they shook out who they wanted. They didn't want Netflix, now they want him to get paid $1 billion. It just seems like one that no one could win. Except David Zalzow.
- [42:23]
Sarah Eisen
Yeah, well, he, he definitely is a winner. Does he deserve it?
- [42:26]
Carter Worth
Carter, you know, to your point, I mean, if you're the founder, you invent the Model T Ford or you're Steve Jobs, that's one thing. And you say you just were the custodian of this enterprise for a while and all of a sudden you've got several billion dollars like you, Jamie. But they do create value. Or let's talk about the real pay package.
- [42:41]
US President
How about Musk?
- [42:42]
Carter Worth
Forget about a billion. That's a trillion. Right. So who knows? There is always discussion about the spread in America between the line worker and the C suite versus other countries where it's not as wide.
- [42:54]
Sarah Eisen
Media executives in particular, though.
- [42:56]
Carter Worth
Yeah.
- [42:57]
Sarah Eisen
Have done very well.
- [42:58]
Carter Worth
Yes.
- [42:58]
Sarah Eisen
Up front. When we come back, utilities on the rise. The group, one of the best performing sectors this year. And There could be even more room to run here what the chartmaster is seeing in the technical. That's next when Fast Money returns. Welcome back to Fast Money. The S&P 500 utilities sector outperforming the broader index by double digits since the start of the year. And the chartmaster says the group has run to room to run even further. Carter Worth, what do you see in the technicals?
- [43:31]
Carter Worth
Yeah, that's my point. Before we get right to the charts. I mean, obviously the very defensive area, and it's sort of the opposite of the market. Market's under a bit of pressure and this very defensive area is moving well. But before we look at the charts of the xlu, the etf, it's important to note, of course, how important yield is. This is going back to literally the dot com peak. And we see, of course, that utilities, as would be expected, have lagged the market substantially. The S and P is in orange, utilities sector in blue. But total return, next chart is a totally different story if you include dividends. And this is the shocking thing. The total return of The S&P 500 utilities sector matches the total return of the S and P. Think about all that work we're all trying to do to figure out the market. And you could have just been in utilities the past 25, 26 years. In any event, let's look at the chart of the XLU that is the etf. Now, we had a very bad October, November, December, selling off almost 11% when the market was flat. But we've recouped that. Let's put some lines in here. Next chart will be one way to annotate it. So we've returned to the October 16th high and we're coiling. Consolidating. The arrow indicates a judgment. Of course, that's mine. I think we break out same chart, a different iteration just depicts how important this level is. Again, 11% sell off, recouping all the losses. And I think an important breakout type move is at hand. Next iteration, you can also draw the lines this way. You could also put in another cup here and call that an important head and shoulders bottom. Any way you slice it, my hunch is higher for Utilities, a very small sector at only 2.3%, about the same weighting as a matter, but I think you can have your cake. You need it to be long and be defensive at the same time.
- [45:12]
Guy Adami
I'm with Carter Braxton Worth. So next era is the largest component of the xlu. That's done extraordinarily well. If you want to Pull up a chart. Our crack staff and EC can do that. Then other names like Village, vistra and Southern Co. And those types are in as well. These names, have a lot of them been parabolic. So I'm with Carter on XLU going
- [45:32]
Sarah Eisen
higher because of the AI and the power.
- [45:33]
Guy Adami
100%. Vistra is a name that we never talked about until the last two years for good reason. Look at that stock chart over the last, you know, four or five years, and you can see what's done.
- [45:43]
Sarah Eisen
The Last 1 up 61%. Constellation Energy up 41%. So you see more room.
- [45:50]
Guy Adami
I do, yeah. And Carter sees it in the charts. I mean, I'm going with CB Dubs.
- [45:53]
Sarah Eisen
You don't want to fight the chartmaster.
- [45:55]
Guy Adami
Why would you?
- [45:56]
Sarah Eisen
Thanks, Carter. Up next, your final trades. We'll be right back. It's time for final trade. Let's go around the horn. Carter Caesars.
- [46:14]
Carter Worth
I think probably the deal gets done, but either way, a bearish to bullish reversal by Dan.
- [46:18]
Dan Nathan
Yeah, Carter had a great note out and description yesterday on the show about meta about fading it. I'm in his camp. Fading meta.
- [46:26]
Sarah Eisen
Fading meta guy.
- [46:27]
Guy Adami
On a scale of 1 to 10, Sarah Eisen, 10 being I had the best time of my life.
- [46:32]
Sarah Eisen
11.
- [46:33]
Dan Nathan
Whoa.
- [46:33]
Sarah Eisen
I love being with you guys. Seriously. I do have a 11. I'm happy to do it.
- [46:37]
Guy Adami
She didn't even hesitate.
- [46:38]
Sarah Eisen
No.
- [46:39]
Guy Adami
You can catch Sarah Eisen each day, I believe. From 10 to 11.
- [46:41]
Sarah Eisen
10 to 12.
- [46:42]
Guy Adami
10 to 12.
- [46:43]
Carter Worth
My bad.
- [46:44]
Sarah Eisen
least Dan watches. He quoted an interview today. It's called Squawk on the street and Money Movers.
- [46:48]
Guy Adami
Gap.
- [46:49]
Dana Telsey
Gap.
- [46:49]
Guy Adami
From Dana Telsey.
- [46:51]
Sarah Eisen
Gap.
- [46:51]
Carter Worth
Sure.
- [46:51]
Sarah Eisen
All right. There you go. Thank you guys for having me. It is always fun. And thanks everybody for watching Fast Money. Mad money starts now.
- [46:59]
Fast Money Disclaimer
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, 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 Snoring, gasping during sleep.
- [47:32]
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