← CNBC's "Fast Money"
CNBC's "Fast Money"
The Battle For Warner Brothers Discovery… And The Outlook For Banks In 2026 12/22/25
00:43:26
Another chapter in the battle for Warner Brothers Discovery, as Larry Ellison steps in to back Paramount Skydance’s offer. How the father & son combo could help seal a deal, and where the development puts Netflix. Plus the financial sector just underperforming the broader market this year, but could 2026 see a bank breakout? Why one bank researcher says there’s big opportunity in small banks. Fast Money Disclaimer
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- [00:00]
Steve Grasso
Introducing Fidelity Trader Plus.
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Melissa Lee
With customizable tools and charts you can.
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Steve Grasso
Access across all your devices. Try our most powerful trading platform yet@fidelity.com TraderPlus investing involves risk, including risk of loss.
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Melissa Lee
Fidelity Brokerage Services LLC Member NYSE SIPC.
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Steve Grasso
The heaviest metal credit card of all time, rumored to be one of only 18 in existence, plated with the very same tungsten that forged the international space Station and wielded at business dinners like a samurai my sword. It's a classic corporate power move, but the real power move having end to end visibility on your most critical shipments. FedEx the new power move.
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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, a new twist. Paramount's guidance making a major promise as it tries to reignite its bid for Warner Brothers. Will it help the company succeed? And what's the long running battle for the media giant mean for the industry? And banking on gains sitting group trading at levels not seen since the financial crisis. J.P. morgan and bank of America setting records. But are more gains coming in the new year? KBW's top bank analyst lays out his forecast. Plus, shining bright what is driving gold and silver to new highs? Alphabet Inc's a nearly $5 billion deal for an energy infrastructure company and small caps hit all time highs in the late stages of the year. But what's in store for 2026? Our resident expert gives her outlook and a few picks you might want to add to your portfolio right now. I'm Melissa Lee live from TDOB at the NASDAQ on the desk tonight. Steve, Dan, Nathan, Gai Adami and Julie Beal. We start off with the latest chapter in the battle for Warner Brothers Discovery. WWBD shares popping 3 1/2% today after Paramount Skydance beefed up its bid for the media giant. While the $30 a share cash offer stays the same. Larry Ellison, the father of Peace Guy CEO David Ellison, is stepping in personally guaranteeing over $40 billion in equity financing. It comes almost a week after Warner advised its shareholders to reject Paramount's hostile bid, citing concerns over the Ellison family's commitment to funding the deal. Paramount's shares jumping over 4% today. Then there's Netflix, the streaming giant previously reaching an agreement to buy Warner's film studio and streaming businesses, valuing those assets at almost $83 billion. But shares falling more than a percent today even after refinancing part of its $59 billion bridge loan to bolster its bid for the company. So has Paramount's guidance pulled ahead for the fight in the fight for Warner Brothers? And what does it tell us about the media landscape right now? Pretty convincing when Larry Ellison steps in and says, you know what, we'll provide you the information, we'll give you the documents to show you that we've got the funds to backstop this deal.
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Dan Nathan
It's funny because Dan talks about do they have the money? With completely different context. But that came up many months ago and now he's backing up and saying, guess what? We do. And this makes the deal seemingly should, well, I don't want to say fall in their lap, but should put them in the pole position. But to answer your question about what does it tell you, the importance of content in an AI world is really coming to the forefront and to me that's what's exciting. We'll talk about a stock that we've talked about on this show in a few minutes. I don't want to bury the lead, but we'll have somebody come on that talks much more intelligently than I about it.
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Mel Bevis
Yeah, so somebody is going to talk not intelligently about this deal. I mean when you think about like Oracle and the fact that obviously that's Larry Ellison's company and the Stock sold off 45% since they got this big open air deal and the concern was they don't have the money to fund the build out yet. Larry Ellison, the founder, and I think he's like CTO of Oracle now, is willing to back and he's one of the wealthiest men in the world, but to give $40 billion to his kids so he can buy this asset that was literally trading at like a hat size, you know what I mean? Like six, nine months ago. It just seems really odd. You think he really circled the wagons around this Oracle thing? Because this guy just said content in an AI world.
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Dan Nathan
Right.
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Mel Bevis
If they can't build out the world, I'm not sure what the content is going to be worth.
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Steve Grasso
Yeah, I think with the relationship with the Trump administration, first of all, I think Trump has played this really down the middle of the fairway. I can't tell who he wants at this point. Really. Yeah, I don't know. Maybe lately. Maybe lately he hasn't said much. But I do think it's going to be an Ellison win. Even though up until about a week ago it was probably 6040 Netflix's way. There's a good shot that Ellison and Skydance takes it from here. But I think to guys point it's about Content, it's about streaming. That's where the puck is going. Who's going to be the most competitive in five years after this deal?
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Guy Adami
Right.
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Steve Grasso
That's what you have to ask. Which side of the fence? So I'm not sure if Skydance should be the most competitive. I think Netflix might be, but I don't like it for Netflix's stock. I don't like the price action either.
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Guy Adami
Well, I think it's interesting to see the reaction in Netflix shares in particular today. I mean, declining on the thought that it might lose this. Because at first, really, it was thought that, why would Netflix want this in the first place? And does this signal sort of a lack of growth opportunities going forward to the point where Netflix has to reach out and make this deal?
- [05:09]
Julie Beal
Yeah, I mean, it's never been in their history to be very acquisitive. And so it did feel a little bit out of left field. I think it makes sense when you're able to have this subscriber base that is as large and as deep as theirs, to recognize that the opportunities to monetize an existing library as well as an organization that can really put together even more content helps them be differentiated. But, you know, how hath no fury like a father whose son's multibillion dollar offer has been scorned, Right? It's not. And we're sort of acting like this is just the backstop off of, you know, I want a new condo. Dad, can you co sign on my loan? Is that all right with you? It's a strange situation, but I actually think that what really does matter is who can get this deal over from a regulatory standpoint. And I think both have good arguments for them. The thing is, is that it's more problematic for Paramount if they don't get this deal than it is for Netflix. I think Netflix is just fine. They can sort it out. They know how to make content. But I think Paramount is in a lot of trouble if they can't get this deal.
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Guy Adami
Do you like Netflix more with or without the deal?
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Dan Nathan
I like it more without the deal. But I'll say this. I think one of the reasons it might have fallen to your earlier point was the concern that maybe they're going to have to overpay here and they're going to continue to jack this thing up. And I think that's what the market is saying. I'll say this. Steve is right that I think there's a concern in terms of what it says. Maybe the growth stage of the company is in the Back in the. In the rearview mirror, which is probably true. But that doesn't mean enough has been taken off the stock. I think we're at a level now where regardless if they get it or don't, you're going to see a relief rally in Netflix.
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Guy Adami
I mean, Barry Diller said that he thought it would be an auction. He thought it would take months. I mean, to the, to the point of it'll just be bid higher and higher and higher because of the desperation.
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Dan Nathan
Yeah.
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Guy Adami
Particularly on the Paramount guidance.
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Mel Bevis
Well, just think about what this means for the company. Right. I mean, this is a company that obviously manages a huge global network of streaming, and there's all sorts of content that they're producing that they're buying, that they're doing for different markets here. And so, you know, maybe all these. Maybe you're all right. I mean, maybe they need this content. Maybe they've run out of growth. Maybe a whole host of things. I think investors kind of got hip to that earlier this year. The NASDAQ was making new highs. It felt like every day, all spring and all summer. And Netflix was really stuck in the mud. But if they do win this and they do overpay it and they have to take out a bunch of debt, you know, what does it mean for the company going forward? They're going to be mired. This is going to take over a year to get done. And just. It just seems like a huge distraction. It seems like the opportunity cost is not really great right now.
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Steve Grasso
I agree with that. And it's a less regulatory hurdle for Netflix. Netflix does not need FCC approval because they don't have the TV stations where, if you look at Paramount, they do need FCC approval. So that could take longer.
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Guy Adami
Yeah. For more on the battle for Warner Bros. Discovery, let's bring in Lionsgate vice chairman Michael Burns, friend of the show for more than a decade at this point.
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Dan Nathan
No, since the beginning of the show.
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Guy Adami
Since the beginning of the show, yes.
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Dan Nathan
Since the Carl Icahn, like the first.
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Guy Adami
Michael Burns sitting on set. Yes.
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Dan Nathan
We should play some of those clips.
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Melissa Lee
Michael, please don't.
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Guy Adami
It's great to see you. How do you see this shaking out?
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Melissa Lee
Well, I don't have a horse in the game, but I think it's in many ways great for us, certainly validating the value of premium content because obviously the library is. Is attractive for both bidders in this particular case. So I don't know who ends up with it. I think that. That it's good for us.
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Guy Adami
There are reports over the summer that legendary was eyeing a deal along with Apollo for Lionsgate. What is the status of that? Are you still in talks?
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Melissa Lee
I never really talk about deals or potential deals, but there's a lot of. Obviously everybody overuses the word synergies. There's a lot of value to what we have to a lot of different companies, which is scale, particularly on the library with premium content. It's a core asset. John and I have assembled that library over 25 years. It's a billion dollar run rate and it's a big margin business, $500 million plus. So it's a valuable asset.
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Guy Adami
Have you been entertaining calls?
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Melissa Lee
Have I been entertaining calls? We're paying it. We're paying attention to what's going on there. And look, we're at a place that our stock since the separation has moved nicely recently. But again, we're a pure play, that we weren't a pure play when we were combined with stars. So now you have stars trading on nasdaq, where we are right now, and you have Lionsgate trading on the big board. And so we are now back to where we were, which is a pure play content company, which we think is the right place to be right now.
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Dan Nathan
It is the right place to be. And this is out there in the public. We've talked about it. Steve Mnuchin has been buying stock, Steve Cohen's been buying stock. If you just do back of the envelope math, you look at where Lion Gates is trading in terms of this deal and it's too cheap. And I've said that before. That's not my question. My question, who do you think needs it more? You know, my sense is Netflix could use it, but they don't need it. Paramount, the one, to me is the one that really needs this. Does that make sense?
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Melissa Lee
I think it's actually great for either company. I think Netflix always wants additional library. Look at some of the big performers. Performers. They've had, you know, look at suits, for example. So I think they could use that. You always need, you know, great library. I think David Ellison and the team there, they want scale and this certainly would give that to them. So I think it's good for both. Again, I don't have a horse in the race. I think it's. It's nice to see valuable content being valued higher.
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Mel Bevis
Michael, Mel just mentioned Apollo. Taking a look at you guys, do you think, you know, obviously version is being spun out of NBC Universal. There's talk that obviously private equity is going to take a look at a lot of these assets. Do you think that You've been around this business for a long time. What does it mean when private equity starts looking at these sorts of businesses? Because I have to assume it gives you guys some more room to basically put your head down and just work, focus on the things that you want to focus on.
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Melissa Lee
Private equity has. I don't know, I saw the trillions and trillions of dollars that they have. They want to put it to work. They don't get paid unless they put it to work. But I do think if you take a look at the landscape, the strategic alliances, I would think could pay higher prices than private equity because of the synergies that are there. I could say I could name three or four companies, which I won't. That I think there'd be a great strategic alliance with us and there'd be a great deal of synergy savings. And if you put a. Synergies, not only. Not not only. Not only letter. Not only synergies, and again, for cost synergies, but also revenue synergies. And if you put a multiple on that, it's. I think. I think we're in a good place.
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Guy Adami
What do you think unlocked the ability of Warner Brothers to go up? So, I mean, if you think about where it traded eight months ago, and then all of a sudden it has a different multiple now in this environment with a bidding war going on, what do you think happened? It was like a light switch went off.
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Melissa Lee
I can't speak for Ted or for David, but I can tell you that there are two ways to grow organically or by doing acquisitions. And so obviously, this would create real growth for Paramount as well as Netflix.
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Guy Adami
What kind of partner would you. In theory, you know, what would make Lionsgate a better company? What would help it showcase its library the best in terms of what kind of partner? Like a pure play streamer, somebody with broadcast networks. I mean, how do you think about the media industry and where you fit in in the future?
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Melissa Lee
I remember one of the first times I was on the show, I said that we were a benevolent arms dealer. And this is before stars. I think that's a really good place to be. And so the idea of who we would potentially strategically align with, the idea that we could keep that opportunity would be good. But there will also be some places. For example, if you take a look at the deal that's getting made right now or potentially getting made, it could be one captive audience that really wants to have that product. And remember, we're not just. It's not just the cadre of franchises that we Have. We're always coming up with new ip. You know, we have House Made that's out this weekend, which is terrific. We have a great slate that looks like it's coming out in television. We've had two new series that have really taken off the studio. If you haven't seen that, it's worth on Apple and Kevin Beggs and his group have done a great job of coming up with new content that's working for us. And as well as going back to the well with our existing franchises, there's a new Hunger Games coming out that's being shot. Mel Gibson is in Rome right now and he's shooting Resurrection Part one and Part two. And then we have a faith based look at the results of David, which I wish it was ours, it wasn't. But look at the results this weekend. And we have, I can only imagine the sequel coming out in the faith based space. So we're not only creating new television ip, we're also obviously mining the library and it's the gift that keeps on giving.
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Guy Adami
As an arms dealer, who are your best customers these days?
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Melissa Lee
Everybody. You know, from now you've got these new buyers that have emerged like diginets and streamers and fast channels and avod. It's the gift that keeps on giving. And what's happening is we're getting growth in our library. And the reason it's growing is because we've got all these different platforms all with the same need, which is to fill with content, to fill their platforms with content.
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Dan Nathan
Going to walk in one day and Michael won't say it, but I'll say it for him, and the market's going to realize that the stock's just mispriced at these levels and that there's no, listen, I would say there's no better content out there in terms of a library than what they have at Netflix, excuse me, at Lionsgate. And I think the market in the streets going to start to realize that in the terms of the price of the stock.
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Melissa Lee
And I'm just going to add one thing if I could, which is, you know, we really set up the last two years. What's going to happen in 26, the end of 26, and then obviously fiscal 27 for us starts in April. And so I think we're in a really good place from a standpoint of we've got, you know, don't typically get a lot of visibility in this business. We have a lot of visibility. We see a lot of acceleration in not only the television deliveries which are Going to be twice what they were last year. But also the movie slate, you've got the tales from shows, movies like now youw See Me. You'll have the Tales from House made. And then on top of that, you add in all those television deliveries and new shows getting picked up again. Pretty good spot to be in terms.
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Guy Adami
Of though of, you know, one of the many or some of the partners who you might see yourself with, let's say in theory is the most attractive one where you could still be a benevolent, benevolent arms dealer or would you rule out, you know, a captive audience kind of partner?
- [16:14]
Melissa Lee
I think we could go either way. We don't have to go either way. We feel like we've got momentum both, you know, top line and what we're. We're talking about in fiscal 27. Look, I could make an argument. I'm not, I don't want this to be the headline, but, you know, these, some of these valuations of these AI companies are astounding. And are they going to ultimately get in the content business? I don't know. I could make an argument on why they. They might. But again, we are really focused on making sure that we have battened down the hatches and also gotten to a place where we've got the right projections of earnings in all of our businesses. Our management business is doing well. The television business is doing well. The feature film business is doing well. And then on top of that, you actually have the gift that keeps on giving, which is the crown jewel, which.
- [16:58]
Guy Adami
Is our library movie recommendation for the holiday season.
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Melissa Lee
I think Housemaid is terrific. I don't love all of our movies, to be honest with you. I mean, some of our horror films, it's like, that's really rough. But you look at the relationships with talent that we have. Paul Feig did a great job with Housemaid, and It's one of three books and this one opened at $19 million. And the nice thing about opening when you're right around Christmas, it's going to have a pretty good multiple. So it'll have real legs and the movie will shock you at times. And the performances by the lead actors is extraordinary. And I'll send you your 20 bucks back for a movie in New York. If you don't like it, you will really not to the viewers really like it.
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Dan Nathan
And look.
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Melissa Lee
And we didn't even talk about it. Look, I don't want to. I just know that the best debut of a trailer we ever had. And second place is the new Hunger Games, which is the haymitch Story, which we're shooting right now with Francis Lawrence, who also directed the Long Walk, which was great. If you haven't seen the Long Walk, it's. It can be tough at times, but it's great. But we haven't talked about Michael. The Michael Jackson movie is coming out in April. And you know, I think we almost broke the Internet when we launched the trailer.
- [18:13]
Guy Adami
We'll be looking for it. Michael, great to see you. Happy holidays. Happy holidays.
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Melissa Lee
I feel like I came home this weekend, so thank you so much.
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Guy Adami
Or this week, Michael Burns, Lionsgate did come home.
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Dan Nathan
I mean, I will say this, and it's a holiday week, but it's important to say in the infancy of the show Michael would come on when a lot of people would not come on. And he's a gentleman. He's been here with us ever since. And I mentioned the Carl Icahn stuff. Go back and look at what was going on in 08 09, 2010 with Lionsgate and Carl Icahn. And it was a fascinating conversation we seemingly had on a weekly basis with him.
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Guy Adami
Meantime, investors striking gold in the precious metals market. Both gold and silver settling at record highs today. Both pacing for their best years since 1979. Miners including Pan American Silver, Newmont and Wheaton closing at records as well. So how much more upside remains for this trade? You like the metals.
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Steve Grasso
I do like the metals. And if you look at gold, gold really has no industrial use and silver does. And just to keep it really simplistic, there's a demand of over a billion ounces per year of silver. There's a supply of about 800 million that will, that will stay the same. So you need to really expand. And silver can go probably much higher than people think it can go. And the market finally woke up this year.
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Dan Nathan
Yeah, I think that's, it's all true. And if you just need to sort of galvanize those thoughts, mining stocks typically don't participate. They always look at and say commodities getting ahead of itself. Pan American Silver all time high. Even Newmont Mining, which historically you don't see all time high gdx. So the mining stocks are telling you that they believe in a rally and I do as well. The core reason to be long gold has not changed. As a matter of fact, I think it gets more bullish. And I'll say this, keep an eye on what's going on in Japan. The yields are at now all time highs across a different series of different durations and their currency continues to weaken. That is bullish. Of gold.
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Guy Adami
What is the message of the markets here?
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Mel Bevis
The divergent? Well, okay, stock market makes highs and gold's making new highs. And again, forget silver because what Steve just said, the industrial uses, I mean, something's amiss here. There's two different messages to your point and the other one is bitcoin. I mean, I have a bearish position in the. I bet it's a ETF that tracks, can't get out of its own way. I mean, I really feel like it's going to close at the lows of the year and maybe it really does overshoot to the downside. So to me, and on a day like today, I know we're doing metals, but MicroStrategy can't bounce, you know what I mean? There's like something going on there with these treasury stocks. So it'll be interesting to see how this one shakes out over the next few months.
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Guy Adami
Julie, your thoughts?
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Julie Beal
Yeah, I think it's just the analog way is recognizing that bitcoin is not the level of diversification that people were hoping for. And gold seems to really be that place. And so to me it's just a reflection of the nervousness of how much duration and strength there is in this rally. Can we diversify away into a different kind of asset?
- [20:59]
Guy Adami
Coming up, Alphabet's data center deal. The infrastructure name they're scooping up and what it'll mean for their buildout. That's next. Plus Tesla charging higher. The EV maker hitting all time highs. But can shares stay plugged into new records into the new year now going or fast money's back into.
- [21:15]
Melissa Lee
This is Fast Money with Melissa Lee right here on cnbc.
- [21:24]
Mel Bevis
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- [21:52]
Guy Adami
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Julia Boorstin
Trailblazing women, changing the game.
- [22:00]
Deidre Bosa
One of my favorite pieces of advice.
- [22:02]
Guy Adami
Think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta.
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Julie Beal
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Julia Boorstin
Julia Boorstin hosts CNBC Changemakers and power players. New episodes every Tuesday, wherever you get your podcasts.
- [22:23]
Guy Adami
Welcome back to Fast Money. Alphabet announcing plans to acquire data center and energy infrastructure company Intersect. The acquisition, worth almost $5 billion, aims to bring power generation capacity online faster. Shares of the Google parent, up almost 1% today. For more on this deal, let's bring in CNBC's Deidre Bosa. Hey Dee.
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Deidre Bosa
Hey Mouse. So Alphabet, as you said, acquiring intersect for nearly 5 billion in cash and debt. This is a move aimed at locking down power and data center capacity, of course, as the demand surges. Now, Alphabet already owned a stake, a minority stake in the company. This deal brings Google control over multiple gigawatts of energy and datacenter projects already tied to Google's infrastructure buildout. It gets at a key question in the air trade right now, and that is where do the hyperscalers get the energy to power the next wave of datacenters? Chips are no longer the only constraint. There's power permitting grid access. This is Alphabet doing what it does best, vertical integration, moving upstream to secure its own supply. Now it largely comes down to this one chart. This is the impending US power crisis. The black line is the peak supply anticipated where the orange one is peak supply needed. And as you can see, there's a huge gap here and Google is only starting to try and fill it for its own needs with this deal. There's likely more to come and we've seen deals among other hyperscalers as well.
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Guy Adami
It does seem interesting because it seems like a lot of the big players, they have made purchase power agreements for, for energy supply. But this is just one step further in securing that supply. Is there a sense that there'll be bigger deals? I mean for, for Alphabet, this is small. $5 billion, right?
- [24:03]
Deidre Bosa
And like I said, it may only be the start. You're right. There's been sort of purchase power agreements. This is the first full on acquisition. Google says that the company is still going to be operating independently. There has been sort of talk that maybe Softbank is looking at something similar and this is only going to become more essential if you want to have the compute power that is necessary that everyone seems to need from the hyperscalers to open AI. You may want to do more of these deals to make sure that you have sort of upstream supply, direct supply of the grid when everyone's going to be looking for it in the next year, years ahead.
- [24:37]
Guy Adami
Debo thanks. Died in San Francisco. A lot of energy companies were up on the back of this. So what do you make of it.
- [24:45]
Mel Bevis
Listen, there's just not an infinite amount of energy for these things. And so, you know, Dee just said it like the idea that you'd vertically integrate makes some sense. I mean there's all these potentials to see delays in the build out of these data centers, but there's none more important than the access to energy. So to me, I think it's probably a rounding error. If you think about how much money, you know, Google has committed in spending in Capex, this might be, you know, an easy little $5 billion tuck in that gives them sort of multiple, you know what I mean, as far as leverage is concerned on the power front.
- [25:14]
Steve Grasso
Yeah. And when you look at it, it gives them the flexibility, it gives them the ownership of it. So they're not relying on the US grid at all at that point. So they have backups and they have going forward, they have hiccups. This is a smart deal for them. And by the way, they're going to be able to sell power to others.
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Dan Nathan
As well through this company on the margins. It's inflationary. I think the market's going to realize that in 26. And that's an entirely different conversation. But Bloom Energy has been trading with Oracle, which makes sense to a point. At some point it will decouple. Oracle can go nowhere and be goes higher. But CG Renova, all these names we've talked about should continue to go higher from here.
- [25:49]
Guy Adami
Inflationary meaning just the draw the power causing increases. Virginia has 666 data centers and electricity prices have gone up 13% year on year.
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Dan Nathan
I'm into a theater in the you I mean they're, they set up really well. They, if you're down in that area, they do news newscasts on this seemingly on a weekly basis. It's a problem. But it's not just going to be Virginia. This is moving across the country.
- [26:12]
Guy Adami
Yep. Julie Beal, do you like this sort of deal from the Alphabet shareholder perspective?
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Julie Beal
Yeah, I think, you know, for them they really have to find ways to be in control of their own destiny. And it's funny because if you think about the whiz bang excitement around generative AI, the things that are impeding it are very basic and pedantic. It's our ability to integrate it into our workflows, which is not necessarily the easiest thing if you've been to the DMV and the power that they get and that is really being inhibited by many, many districts recognizing that they don't necessarily want these data centers in their backyards because they don't necessarily provide a lot of jobs past the construction phase and they draw down on power. So I think this is going to be the most relevant gating factor to the adoption and broader expansion of generative AI. And it's a real challenge because it's not that easy to just make the power happen.
- [27:05]
Mel Bevis
Yeah. On a different note, I mean, Guy's point about inflationary, you might have made it actually, you know, as it relates to energy. And just think about what's going on next year. You can roll back tariffs on cocoa or, you know, coffee beans and bananas, but when you have your health care premiums going up like this, you have your energy prices going up like this, I think it's kind of underappreciated in the near term.
- [27:26]
Guy Adami
There's a lot more fast money to come. Here's what's coming up next.
- [27:29]
Melissa Lee
EV Velocity shares of Tesla plugged in and pumping. But can the stock keep charging into 2026? Our traders debate next. And speaking of the new year, we're checking in on the financial sector. Why our next guest says there could be major opportunity in regionals and smaller banks. You're watching Fast Money live from the NASDAQ market site in Times Square. We're back right after this.
- [27:58]
Guy Adami
What made you confident that you could do something that hadn't been done before? I have no fear of failure.
- [28:04]
Julia Boorstin
Trailblazing women, changing the game.
- [28:07]
Deidre Bosa
One of my favorite pieces of advice.
- [28:09]
Guy Adami
Think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta.
- [28:18]
Julie Beal
Think big to accomplish big things.
- [28:20]
Julia Boorstin
Julia Boorstin hosts CNBC Changemakers and power players. New episodes every Tuesday, wherever you get your podcasts.
- [28:30]
Guy Adami
Welcome back to Fast Money Shares a Tesla hitting fresh records today. The EV maker now at more than 21% this year and more than doubling since its April lows. A court on Friday overruled a 2024 decision to void CEO Elon Musk's monster pay package, restoring stock options worth about $138 billion. There's also what happened with Waymo over the weekend in terms of the blackout in San Francisco. Waymos were stranded in the crosswalks and Elon Musk said our robotaxis not affected by that at all because of differences in technology.
- [29:01]
Mel Bevis
Listen, I mean that's the driver right here in the stock. I mean it's closing at a new all time high and you know, the auto business is like an afterthought at this point. And you Think about the optionality or the upside, you know, to this whole story right now. I'm not saying it's deserved like 1 1/2 trillion or on its way to $2 trillion, but he's got 10 trillion. What's his number? What is pay package $1 trillion or something like that. He's got a lot of reasons to continue to make this work. It just continues to be a hard story. You got to believe in a lot of stuff that we haven't seen so far is a rollout of Robotaxi, a rollout of Optimus, and you know, a lot of the AI stuff that's all kind of in between the cracks.
- [29:36]
Dan Nathan
Yeah.
- [29:37]
Steve Grasso
And when you look at Ford and GM, both have pulled back completely basically from EVs. It doesn't seem like they're putting any money economy. This is a direct play. And Rivian is actually left for dead. They've shown signs of life. So I think Tesla could actually go higher from here.
- [29:53]
Julie Beal
Yeah, Julie, it would be surprising to me because we are pretty decoupled from the fundamentals. Right. We have deliveries that are probably going to be down double digits in the next quarter because the EV tax credit has rolled off. You're not seeing really a ton of improvement in Europe because he still remains quite unpopular there. And you know, I can understand the excitement over robo taxis, but the early indications are still not great. We're talking about Austin and the space of like a New York City apartment is the. Where you can drive to is not great. And then the robots, you know, the biggest challenge with the robots is we're still probably five to 10 years away from having a robot battery that has the capacity for eight years of work. Right now we're at two. Sorry, eight hours of work. Right now we're at two hours. That's not enough. I mean, that's how much I work in a normal day, it's very little.
- [30:43]
Steve Grasso
So Julie could be replaced by a robot right now.
- [30:46]
Guy Adami
Right now.
- [30:46]
Steve Grasso
Right now, Julie. Two hours easy.
- [30:49]
Dan Nathan
I'm all time high today. This iteration of GM at least. And I think that story continues. I mean, Tesla for, for all those that said your guy, you're looking at it wrong. It's not a car company. They were right because the car company clearly is a loss leader. And if you believe in this pay package, one of the metrics of the 18 metrics is stock price and market cap. And I've said now since that came out, you got to bet along with him in this one for sure.
- [31:12]
Guy Adami
In terms of what happened with Waymo and the versus Robotax and the technology though, do you think that this is a defining sort of moment in terms of underscoring the differences and in the technology that power both of these Robotax?
- [31:25]
Mel Bevis
I don't think it's one versus the other. I think it's the ability to kind of think about scale. I mean, these are not at scale right now, but they're also two different technologies and there's going to be lots of different issues that both of these face and they're just really isolated kind of rollouts right now. And generally they work pretty well. But I think we're going to be surprised at some of the things that don't work, which is going to be one of the reasons why we probably don't see the expansion of the rollout too aggressively in a city like New York. I just can't imagine how it could work anytime soon.
- [31:54]
Guy Adami
Coming up, New Year, even better. Bank trade. Can 2026 see a financial breakout for the group where our next guest sees the most opportunity when Fast Money returns?
- [32:05]
Melissa Lee
Missed a moment of fast Catch us anytime on the Go Follow the Fast Money podcast.
- [32:10]
Steve Grasso
We're back right after this.
- [32:19]
Guy Adami
Welcome back to Fast Money Stocks jumping to start the shortened holiday week. The Dow climbing more than 200 points. The s and P and Nasdaq both up more than half a percent. All three indices now on three day winning streaks. Chip stocks helping fuel the tech trade Nvidia higher and reports the company plans to begin shipping H200 chips ships to China by mid February. This according to sources. Oracle, Micron, Broadcom, AMD also higher today. And check out shares of Airbnb up for a 10th straight day. That's its longest winning streak since going public five years ago. The stock up 12% in that time. And shares of Citi jumping nearly 3% today, hitting levels not seen in more than 17 years. Our next guest says the stock will be the top big bank performer next year. For more on the 2026 outlook for financials, KBW's head of US bank research, Chris McGrady, joins us here on set. KBW is a stifel company. Chris, great to have you with us.
- [33:08]
Chris McGrady
Great to see you.
- [33:09]
Guy Adami
So why Citi? What's the backdrop here?
- [33:11]
Chris McGrady
Well, Citi's in the midst of a multi year turnaround, right? They're simplifying the business, they're exiting countries and they're taking the ROE from a bottom tier to average. And you can make a lot of money going from bottom tier to average. So the stock's Been a great stock this year. But if you look at the valuation, it's just breaking through tangible books. Right. The last 10, 15 years that's been the ceiling. We think the narrative on deregulation in capital markets helps bring that ceiling higher.
- [33:39]
Guy Adami
In terms of the deregulation narrative, I mean, that has been, you know, some of the fuel for this bank trade for this entire year. How far are we in terms of realizing those gains?
- [33:50]
Chris McGrady
It's less of an unknown. You know, people expect it. If you look at expectations, expectations for capital return broadly are up about 30% this time versus a year ago. But if you think about it, there's still 100 to 200 basis points of excess capital that is yet to be put in our projections in the buy side, sell side models. So there's still the use of capital debate.
- [34:10]
Guy Adami
Right?
- [34:11]
Chris McGrady
We're talking about buybacks, we're talking about dividends, we're talking about inorganic growth. But earnings, earnings have a real big impact on the trajectory of estimate revisions. Has a big correlation over my career to stock. So earnings revisions for the largest bank up 16% year on year. That's 2x the smaller bank. So those banks are outperforming, but for good reason, Chris.
- [34:29]
Dan Nathan
We're making the same argument for Citi. So let's play the math game. I don't think it's deserved of a JP Morgan price, a tangible book, but somewhere between where it is now and where JP Morgan is makes sense. Does 1 8, somewhere between 1.8 and 2 make sense? Because if that's the case, this stock has another 65, 70% of upside.
- [34:49]
Chris McGrady
Yeah, that's not our base case. That feels a little aggressive. But 12 to 1 5, you can make a lot of money. JP Morgan's trading at three times and they're delivering 20% returns. Citi's target for next year is 10 to 11. And I think what's really going to be important as you look into May, they have a very important Investor Day on May 7. I think what they're going to talk about there. Investor days have been the topic of du jour for the banks. They're going to talk about that medium term target probably going 12, 13, 14. And they're going to give you the path over the next couple of years. If that happens, they're going to be compounding book value, they're going to be simplifying the business and earnings estimates are going up. So I think there's a lot of room between my number and yours.
- [35:27]
Steve Grasso
So Chris, you're focused on Citi, but broaden out for me, every time you go into the regionals, people sometimes get burned.
- [35:34]
Chris McGrady
Are you.
- [35:35]
Steve Grasso
What were you on them for? 20, 26?
- [35:38]
Chris McGrady
I think selective would be the word. They're making a lot of money. They're building really great competitive companies through acquisitions. Our experience studying this for 20 years is as that is occurring, as they're building more profitable companies. The stocks don't necessarily outperform. But would I be doing anything differently? No, I'd be, I'd be deploying the capital to where the highest returns are. But we are selective. So one of the names we really like is Citizens Citizens Bank. Again, this is a pre, you know, predescribed. You know, the ROE improvement story is baked. Right. They're going from 10 to 15, 16%. Just basically with the passage of time. Another reason we like it, you get that capital markets exposure, middle market, capital markets. And then finally we don't think they're going to be acquiring another bank. They've been very clear about there's enough organic momentum and that can continue. So you can make a lot of money even without the help of M.
- [36:29]
Mel Bevis
And A. Chris, are there any foreign banks you like here? And again, maybe you don't cover them. I'm just curious if there's any like, geographies that you find pretty interesting here.
- [36:36]
Chris McGrady
Yeah, we focus on the domestics, but if you think about the universal largest banks broadly, they all have a international component, right? J.P. morgan, Morgan Stanley, Goldman Sachs, they have international businesses. And the capital markets tailwinds across the world are really strong. B of A is more of your domestic place. Citi is your international place. So you can kind of get the international exposure through the domestic banks.
- [36:58]
Guy Adami
I'm curious as to whether or not the banks should be rerated in any way, not just because of the, the fundamentals in place, capital markets, deregulation, etc. All these sort of known narratives, but also for AI specifically, is there any, is there any component of AI that should be reflected in a bank's valuation?
- [37:15]
Chris McGrady
I think it's, it's a great question. I think if you think about the technology wallet. Right. So we're a big proponent of scale scale in banking capital markets. Technology is a scale business. JP Morgan spending $18 billion on technology this year. You have to think that there are going to be benefits. And they've, they've kind of given you the bad news on the expenses for next year. I thought it was really strategic. Right. They've gotten the expenses adjustment out of the way and in January I think they're going to tell us great efficiency. JP Morgan is a growth company. It's probably not a consensus view but if you look at the last five years, JP Morgan grows revenues high single digits, they grow expenses high single digits slightly lower and they generate operating leverage. So that's a company where technology over time that's going to continue to support that through the cycle. Are we in the high teens?
- [37:58]
Guy Adami
Chris, great to see you. Thank you.
- [37:59]
Chris McGrady
Happy holidays.
- [38:00]
Guy Adami
Happy holidays to you. JULIE Beal TOP BANK PICK I probably.
- [38:05]
Julie Beal
Mold this on the small cap side. I think I really like having the capital markets exposure of that business and so I think it's one that's the most interesting from here. But on large cap, it's still probably JP Morgan. I agree that it trades at a premium, but I just think that its positioning is allowed it to be so flexible and so robust in a way that no one else has really been able to match.
- [38:25]
Dan Nathan
It's great to have Chris on set number one. Number two, the rerating of Citi will continue in 26 and more people going to realize that Jane Fraser has done a remarkable job there. I think the stock continues to go higher.
- [38:36]
Mel Bevis
Yeah, I mean for all the reasons that Chris just mentioned. I mean JP Morgan, despite the valuation, no one seems to care ever. You know what I mean? It just seems like if it's going to play some catch up on the capital market stuff to Goldman and Morgan, I think this is probably the place to be.
- [38:49]
Steve Grasso
And if you look at the performance for the year, Citi has outperformed everyone else. But a close second, or not so close second is Morgan Stanley.
- [38:57]
Guy Adami
Coming up, standouts in small caps are Julie Beal. Our resident expert sees the most opportunity in the space in the names that could lead The Russell in 2026. Fast money's back in two. Welcome back to fast money. The Russell 2000 has had a strong year, hitting all time highs a few weeks ago and pacing for its eighth straight month of gains. Its best run since mid 2021. But what can we expect for the group in 2026? Let's turn to our residential small cap expert, Julie Beal. What do you think the backdrop will be for small caps, Julie?
- [39:28]
Julie Beal
I think it looks pretty positive. You know, small caps are more economically sensitive and they should be benefiting from lower interest rates because they tend to borrow on a variable interest rate market. But it's been kind of a crazy year. It's been 18 months of me saying look, small caps are going to start to outperform once the Earnings really comes through and then what ends up happening is the small caps outperform, but it's the companies that have no earnings. It's companies like biotech, it's companies like Quantum. It's the lowest quality part of the small cap market. And it's been pretty confusing for most active long managers. I think something like 1% of them are beating their benchmark, certainly not me. And it's left us all kind of in a real quandary, like waiting for, you know, to be the bridesmaid. And finally, no, we're still not chosen right. It's for quality. But I do think that over the long term, earnings growth is what really matters. And the setup for 2026 is more favorable for small cap than it is for large cap and mid cap, even the Mag 7. So I think that's a good place to look. A few names I like. Ollie's is this discount bargain value retailer and I think everything that's in value, customers are so starved for value, it doesn't matter what income spectrum you are, if you can prove that you can deliver real value, you really tend to outperform. And I think they're still well positioned. They've been doing great. Lemaitre is a healthcare company that has very differentiated products that it sells to vascular surgeons. It's just been this kind of quiet compounder that's finding pricing, that's finding margin, and I think it's really well positioned. And so if you don't have a lot of health care exposure, it could be an interesting name for you. And the last one we talked about briefly, Molis. This is a company that has been swooping up all of the best bankers in the downturn of private equity. And so they have some of the best investment bankers. They were on the Netflix deal and they announced with Warner Brothers. I just think they're quite well positioned and their earnings can really inflect pretty materially from here, especially with a better regulatory backdrop. So. So those are just a few names I'm thinking of.
- [41:20]
Guy Adami
Guy.
- [41:20]
Dan Nathan
Yes, yes. Melissa, by the way.
- [41:22]
Guy Adami
Yes.
- [41:22]
Dan Nathan
I mean, she worked more than two hours to bring that to light.
- [41:26]
Guy Adami
Well, three picks. Yes, absolutely.
- [41:28]
Dan Nathan
Tremendous job by Julie Beal. Please.
- [41:30]
Guy Adami
At least two and a half hours at least. Did you like any of those picks? Melissa's sort of an interesting one, you know, and she's.
- [41:38]
Dan Nathan
Julie's been talking about it for a while and it's performed for a while. I will say this though quickly. In terms of small caps, obviously economically sensitive. Very. I'm going to paint with a broad brush here. But if rates are going higher for the wrong reasons, if the unemployment rate starts moving higher and back again, which is what we're going to see, it's going to be very hard in my opinion for small caps continue in 26.
- [41:57]
Guy Adami
Good caveat there. Coming up, NASDAQ in rally mode. And we're not just talking about the index shares of the company behind the exchange hitting an all time high today. Can that climb continue? Next, more fast money is to. Welcome back to Fast Money. Shares of nasdaq, the company that runs this exchange. Our landlord sending an all time high today. The stock rallying 2% bringing its gains for the year to more than 26%. Shares have outperformed other exchanges like the CME Group and NYSE operator ICE this year, but are trailing the CBO. You flagged this. You've been tracking this impressive gains and.
- [42:34]
Dan Nathan
I think for the longest time Wall street investors, whatever community was looking at this as simply as exchange. And it's not just an exchange, it's a technology company. And now people are starting to see that. I think Morgan Stanley had a piece out $111 price target. People will say it's way too expensive in terms of valuation. But it might be for an exchange. It's not for a tech company, which they are obviously extending hours means more fees for them. Dana Friedman is one of the great CEOs in the country. She understands that it's a technology company. So now at least the market is figuring it out.
- [43:06]
Steve Grasso
And when you look at the Nasdaq, they're correlated to tech stocks as, as Guy was saying. But they're, they're correlated to listing fees. So when you look at the other exchanges, they have a lot more diversified income streams. Sometimes it works in the case of cbo, sometimes it doesn't work. But Nasdaq, this was the year for them with AI spend and technology stocks doing very well.
- [43:25]
Guy Adami
And then think of anthropic to come, open air potentially to come. I mean what should be all the great things for the bank trade will be great for also the Nasdaq.
- [43:33]
Mel Bevis
Yeah, no doubt. But there's also other things. I mean we've spent a lot of time in the last few months talking about prediction markets. And just as we're on the exchanges, we know that CME Group did a deal with FanDuel. And so all these new products are coming to market. And you know, when you think about those sorts of businesses, you ask yourself what's the moats for a polymarket or a Kalshi when you get a company like CME partnering with somebody who has the know how with like a fan dual, I mean that's going to make it really hard, hard for some of these upstarts, in my opinion.
- [43:58]
Guy Adami
We do have a news alert here on Novo Nordisk. The FDA just approving an oral version of its GLP1 drug, WeGovy, the first pill to be approved in the U.S. novo expects to launch the pill here in January. Shares are trading higher in the after hours session by about 4%. Up next, final trades, quick check on Novo, which just got approval for its oral Wegovy, the first in the United States to launch in January. Those shares are higher by more than 7% right now. Final trade time. Julie Beal I think those regional banks.
- [44:29]
Julie Beal
Are going to be doing better and they're going to be buying more software probably and Sino will probably sell it to them.
- [44:34]
Steve Grasso
Steve if Paramount Skydance does not get Warner Brothers, they're going to be looking at something else.
- [44:38]
Mel Bevis
Lionsgate Dan Mel, I think you probably fade that Novo mood in the aftermarket snap in 2026. Might have an AI moment.
- [44:46]
Dan Nathan
Guy 1 of the founders of Fast Money floating around, Andy Bar is here. Hi Andy, Paying attention, Bristol Myers bmy.
- [44:54]
Guy Adami
Thanks for watching. Fast Mad Money with Jim Cramer starts right now.
- [44:59]
Julia Boorstin
All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of cnbc, NBC Universal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer what made you.
- [45:40]
Guy Adami
Confident that you could do something that hadn't been done before? I have no fear of failure.
- [45:46]
Julia Boorstin
Trailblazing Women Changing One of my favorite.
- [45:49]
Guy Adami
Pieces of advice Think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta.
- [45:59]
Julie Beal
Think big to accomplish big things.
- [46:02]
Julia Boorstin
Julia Boorstin Hosts CNBC Changemakers and Power Players New episodes every Tuesday. Wherever you get your podcasts.