← CNBC's "Fast Money"
CNBC's "Fast Money"
The Ultimate Would You Rather… And Trade or Fade Stocks At Records 6/25/25
00:43:52
Would you rather own Microsoft, Nvidia, or Apple? How our traders are navigating the moves in three of the largest companies in the world, as some hit record highs, and others lag behind the broader market. And speaking records, the S&P 500 just a whisper away from touching its own, and some individual names are paving the way. But are there more gains in store? The Fast Money crew lays out whether to Trade or Fade the winners. Fast Money Disclaimer
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- [00:00]
Melissa Lee
A rich life isn't a straight line to a destination on the horizon. Sometimes it takes an unexpected turn with detours, new possibilities and even another passenger or three. And with 100 years of navigating ups and downs, you can count on Edward Jones to help guide you through it all. Because life is a winding path made rich by the people you walk it with. Let's find your rich together.
- [00:28]
Christina Partsinevelos
Edward Jones Member SIPC Introducing the new Dell AI PC. Powered by the Intel Core Ultra processor, it helps do your busy work for you so you can fast forward through editing images, designing presentations, generating code, debugging code, summarizing meeting notes, finding files, managing your schedule, responding to Jim's long emails, leaving all the time in the world for the things you actually want to do. No offense, Jim. Get A new Dell AI PC starting at 749.99@dell.com AI PC how those ahead? Stay ahead.
- [01:05]
Melissa Lee
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. Titanic tech surge. Shares of Nvidia and Microsoft hitting fresh all time highs. Is this a good sign for the health of the bull market or a new reason to worry? We'll debate that. Plus a record breaking edition of traded or fade at the desk set to break down the big moves in big blue. Ge, Vernova, JP Morgan and more. And later inside a soggy session for General Mills, the of tech unicorn tied to the stablecoin boom and met his massive Louisiana purchase, one it hopes will power its AI ambitions. I'm Melissa Lee, come to you live from Studio B at the nasdaq. On the desk tonight, Tim Seymour, Steve Grasso, Guy Adami and Dan Nathan. We start off with the ultimate game. Ultimate okay of would you rather sell? I mean we're starting the show with this right off the top.
- [01:54]
Dan Nathan
If you have to build it up.
- [01:55]
Tim Seymour
That much though I worry that anything that's had, you know, when you say this is the ultimate game, I feel like this better be good, guy. This better be good.
- [02:03]
Melissa Lee
We are pitting the three biggest companies in the world against each other.
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Guy Adami
Okay.
- [02:07]
Melissa Lee
Both Nvidia and Microsoft setting intraday and closing records today. While Apple's gain helped it climb back into the trillion dollar club. But these stocks have had very different runs so far this year. Microsoft has been in stealth rally mode for more than two months and has set nine record closes just in June. The stock is now up more than 16% this year, second only to Metta among the so called Magnificent Seven. Nvidia Meantime, hitting a record today for the first time since late January, it's up more than four. And that move helped it reclaim the top market cap spot from Microsoft, bringing it within spitting distance of the $4 trillion mark. But then there's Apple, the only company that's come close to the $4 trillion level before. But that was way back in December and the stock is now down 20% since then. It is the worst performer in the mag seven year to date, the only one with a loss in Q2. So when you take a look at the performance of these three tech titans, would you rather stick with the stocks on top or bet on the laggard? I mean it is ultimate because we are talking about big cap.
- [03:08]
Tim Seymour
You are, you're right.
- [03:09]
Melissa Lee
And it's also not just would you rather it's would you rather rather rather. Okay, now Guy, can you process that?
- [03:16]
Guy Adami
Maybe you should start with Tim because I got to think about the rules.
- [03:18]
Melissa Lee
Of the game rules and how to play it.
- [03:19]
Guy Adami
Well, hold on.
- [03:20]
Dan Nathan
Would you.
- [03:20]
Guy Adami
So you have three stocks, you're picking one.
- [03:22]
Melissa Lee
Yeah.
- [03:23]
Guy Adami
Okay, I figured it out. I'm smarter than I look, which is not a high bar. So in terms you would think the answer is Apple the underperformer. It's going to play a little catch up. Then you'd think maybe in video has all this sort. I'm going to take Microsoft, which is odd but at 32 times it's where it's trading. I mean it's expensive but not expensive to itself over the last couple of years and I think in my opinion they probably still have the widest and the deepest moat. So in this game of would you rather rather that I just played correctly It's Microsoft.
- [03:51]
Melissa Lee
Do either of you agree with Microsoft? Tim?
- [03:55]
Tim Seymour
I'm afraid I do. And by the way, when we're done with this, you're going to have the ultimate game of would you rather rather guide Tim or Steve?
- [04:02]
Melissa Lee
But that's Dan.
- [04:04]
Tim Seymour
Well Dan was here in person. It would be the greatest game of Would you rather rather rather. But it's Mike. It's definitely Microsoft to me because relative to itself this valuation guy saying on a forward basis actually looks the most interesting. Certainly relative to Metta which would be my number two and Apple would be number three. I think I just Would you rather think you had better.
- [04:23]
Melissa Lee
Okay, so something that wasn't so when.
- [04:25]
Tim Seymour
Guy didn't know how to play the rules by the rules of the game he was really talking about Tim. I think if you look at Microsoft from a year over year perspective it's only up 9% on a rolling one year basis. That's enough to mean anything except for the fact that this was dead money for a year and a half. I think what we've done is we've rekindled the concept around both the margin around software, Microsoft's leadership in terms of AI, their partnership with Chat GPT and if I'm going to pay up for growth here I actually think on a relative basis it's Microsoft. It seems to be the most defensive but again I doesn't mean I don't like Nvidia.
- [04:59]
Melissa Lee
Don't tell me you're going to say Microsoft.
- [05:01]
Steve Grasso
I was but I'm not going to say because I don't want to say.
- [05:04]
Melissa Lee
I don't want to triple your gut instinct is Microsoft Joe?
- [05:07]
Steve Grasso
My gut instinct to agree triple my gut instinct was where guy was going secondarily to Apple because it's been the underperformer But I will tell you that in video I would pick that last out of the whole group I think that everyone's working on their own chips got to take away from revenue from Nvidia that's got to be a headwind so every One of the Mag 7 names are all working on their own specific chip. Having said that Microsoft has done the best job at working at it and they also cut back on data centers so they seem to think they've got it pretty well covered with the capex that they've already spent. So it would be Microsoft But I do like to catch up play with Apple So many wow. I'm going to go Apple with the install base. Apple's install base utility margins on Apple. Exactly. Margins on Apple the services revenue you have over 2.3 billion users. Got to be able to continue monetizing that everyone's bet against Apple and I think Apple is going to pull a rabbit out of a hat. Whether it's perplexity or whether it's something else I think that they will catch up in the stock.
- [06:17]
Melissa Lee
Dan, you're in San Francisco and I feel like you have said negative things about all of these stocks at some point in recent history. So where do you stand here?
- [06:27]
Dan Nathan
Yeah I think for Apple that installed base is actually a problem because I think that they will not have a phone in 2025 that is going to be attractive to those folks who want some sort of integrated AI experience. Apple Intelligence was a total bust. Siri has not kept pace. So as far as I'm concerned this is a company that spends low single digits of their revenue on CapEx and R& D. I think that's correct for both of them and it's way below all of those names in the hyperscaler space that have actually been making these investments for a while. So Apple to me is the dead bang loser and I think you can continue to bet against it especially as you get into 2026 because they're not going to have products that folks want right now. So Microsoft go back to that quarter they just reported they had. Their cloud was better than expected. They guided cloud up for the current quarter a few percentage points. AI is making up a greater percentage of cloud revenue. That's the story right now. And to the point about capex is like yeah they were growing capex at a massive pace, double digits percent of their revenue but that's coming down now. They just said it's going to be in line basically with their revenue growth. So hopefully they start to get some leverage on that spend and when you think about their installed installed base and their ability to kind of cross sell these products. But I'm not buying it here and I'm not buying in video here and I'm not buying Apple here and I'm not buying Meta here because the market feels like it's kind of taken in. All of this good news about this trade right here and some of these stocks, the way they performed up the lows, I just don't think the valuations right here and the optimism as we go into the second half, I think it's going to be a bit misplaced.
- [08:05]
Melissa Lee
Okay, so that is a fair option which we did not include in the original game. We were right, let's be printing the game. But I mean another option could be as and it said not none of them, none of them look good. And that is a valid point especially as we sit here basically within 1% of of all time highs and I.
- [08:22]
Steve Grasso
Don'T think that's a valid option by the way. That's a trade off it a valid.
- [08:25]
Melissa Lee
Option though by entering into the game.
- [08:28]
Tim Seymour
Don'T mess with Melt not getting in those process.
- [08:31]
Melissa Lee
So given that new option right, would that be it? I mean are the market levels here worrying to you?
- [08:39]
Guy Adami
Okay, I'll answer that honestly. I mean they've been worrying me for quite some time now. I thought, listen, off the April low we all collectively thought the market could bounce. I thought it would stop at 5600 Tim Steve thought we'd go to 6000. Here we are. So you know that excess to me is exactly that excess. It's all multiple expansion, which might be fine. I mean maybe you're willing to pay more for a dollar's worth of earnings. But if I were to add that little nuance into the game, I think it does change it. You know, I do think it changes it a little bit. You're not chasing necessarily here, but I want to play by the original rules and say I think Microsoft is the best of the three.
- [09:14]
Tim Seymour
So I'm a buyer of the market here. And Guy, hold your ears because you're not going to like this term, but hold your ears. Powell gave Goldilocks signal today.
- [09:25]
Guy Adami
What do you say?
- [09:26]
Tim Seymour
Yes, that's right. Because he, look, he, he pointed out that the US economy is the strongest economy in the world while at the same time saying, you know, we need to wait for tariff dynamics before we do anything. If you have the perfect storm of an economy that's not slowing down, that's the strongest in the world, that has inflation relatively under control. But a Fed that just has to be on hold because they have to be on hold. And we have a place here where the Nasdaq's at all time highs, it's within a whisper of making a new relative high to the S and P semis have actually outperformed in that the market leadership you want is exactly the market leadership you have with lower oil prices, lower dollar heading into the best month of the year for equity performance. I don't know why you'd not buy this market here.
- [10:06]
Melissa Lee
Yeah, Guy, why are you on the meat?
- [10:09]
Guy Adami
Why sitting here holding my ears. I didn't even hear what Tim said.
- [10:14]
Melissa Lee
You agree?
- [10:15]
Tim Seymour
Well behaved. I'm glad you followed the rules.
- [10:17]
Steve Grasso
I 100% agree. If you look at what matters on multiples, it matters beat rates. Right? So the last earnings season that we had there was a beat rate of 78%. That's above average for the longer term average of beat rates and that's with tariffs factored in as well. Earnings will push the market higher. Deregulation will push the market higher. The market is climbing that wall of worry. It's done so in the past. I think we're going to move dramatically higher and it'll be led by tech and growth.
- [10:46]
Melissa Lee
I think those numbers are interesting but at the same time in the last earnings season we also didn't have the impact of tariffs on anything. I mean Fed Chair Powell said yesterday, June and July is when we'll see the impact. So it's really the next earnings season, the one coming up where we will start hearing the guidance and the tariffs will actually be factored into the guidance in a, in a more meaningful way. And Waller did say sort of a.
- [11:08]
Steve Grasso
Guess and Waller did say it could be a one time effect. Go ahead with your.
- [11:11]
Melissa Lee
Yeah, yeah, Dan.
- [11:15]
Dan Nathan
I think your point. All right, guys, whenever you're ready here. Some of us are on a schedule. Q2 earnings are going to be good. The guidance is probably going to be clear as mud. There's a tailwind about the U.S. dollar. You know, 40, 45% of U.S. stocks in the S&P 500 get their sales from overseas. The average of the U.S. dollar in Q1 was basically, I don't know, 106, 107 or something like that. It was basically 100. That's the U.S. dollar index, the Dixie in Q2. So you're going to have good Q2 results. And I guess the question is, is like what is the environment for the economy? I kind of disagree with Tim a little bit. Is like if the Fed chair was basically saying we have this Goldilocks situation, or at least the way you're interpreting it, they just kind of ratcheted down growth for the year to 1.6%. And to me, I think that's there's more potential downside once we get through Q2. And I know we're going to talk about housing and I know we're going to talk about the labor market. The Fed seems to be worried about the labor market. If the economy starts to slow down, both of those things are going to be negatively impacting the market, in my opinion. And then you have a situation where Q2 earnings might be as good as it gets for the back half of the year. So you might see a material slowdown. And I think the stock market will sniff that out.
- [12:29]
Tim Seymour
Yeah, I think we're on a schedule here. So, you know, I think I heard you say a weaker dollar is good for earnings. So. And I'm not saying the economy is the market. In fact, I'm saying the market's the market. And I'm saying that the Fed is giving you reason to believe that if anything, they will be supportive to the market and reaffirming that the economy is not falling apart. I don't believe we have a great economy here. And I think it's all on a relative basis. And I think we do have still to pay the piper on tariff. And it'll be interesting to see now that we've split up the screens. Exactly, exactly what tariffs impact will be, but more importantly, what companies will do in terms of guidance. The they completely had a mulligan to throw guidance out the window. And in fact, on some level the market almost is ready for that. The market is ready to get guidance that says if we have no tariff or policy or political interruptions, we think things could be X versus if those things happen, we think things could be. Why we never did that before last quarter. They're going to have to do it again. Well, we've had a big move.
- [13:27]
Dan Nathan
Yeah, yeah. But Tim, the only thing is when These companies gave Q2 guidance, they were basically five weeks into the quarter. They had some pretty decent visibility. Right. And when you think about it like the base case for tariffs, you could have worked that in. And you just said that the Fed is going to lower interest rates to accommodate what the market. No, they're going to be accommodating the economy. And that's what they did last September, November and December when they cut interest rates. They were worried about the labor market. So to me, I think the optimism in the market right now is that you think that they're going to be able to cut interest rates because they can, because inflation is where it needs to be, because the economy is going to in a direction where they can bring the yield or the fed funds rate down. And I think just that's where the debate is about the market. I think it's as good as it gets as we get into Q3. But if you guys are calling for 7,000, the S&P 500, who's calling better.
- [14:19]
Tim Seymour
Have raised on the S and P. I mean what do you.
- [14:21]
Dan Nathan
I just heard you guys take it off.
- [14:24]
Tim Seymour
Not that we have a great economy and not that we're going to 7,000 tomorrow. You know, I mean, and ultimately again, if the Fed is not cutting, they're not cutting because they, and we all acknowledge that they're overly, that there's, that interest rates are overly austere and that in fact they probably are holding back on cutting and that's something they're only doing because they're worried about inflation.
- [14:44]
Melissa Lee
Well, we have a schedule so we're going to move on. By the way, we'll be taking a look at a few other stocks at all time highs and what you should be doing with the moves later on in the show. Meantime, let's talk new home sales down nearly 14% in May. It was the biggest month over month decline in three years as buyers continue to grapple with stubbornly high mortgage rates. Today's data sending housing stocks lower with the ITB Home Construction ETF down over a percent and snapping a four day winning streak which had been its best stretch since January. For more, Zillow Senior economist Orfeh DeBonge joins us right now. Or. Great to have you with us.
- [15:18]
Orfeh DeBonge
Thanks for having me. I was, I was actually enjoying the debate there. That was great.
- [15:22]
Melissa Lee
Really. I'm glad there's at least one person out there. All right, let's get to housing or what are you seeing on the site on Zillow in terms of listings? I mean, we know that homebuilders are under pressure to make it work. The numbers work for potential buyers who are on the sidelines. But how about existing homes? Is there movement in the market?
- [15:42]
Steve Grasso
Yes.
- [15:42]
Orfeh DeBonge
Although housing affordability has improved slightly from, from a year ago, home sales continue to bounce along the bottom. On the demand side, of course, we were hit hard with consumer confidence dropping drastically in April. We have a frozen labor market and I think that's still a headwind for housing demand going forward.
- [16:04]
Melissa Lee
Right.
- [16:05]
Orfeh DeBonge
The unemployment rate is poised to move higher. You're seeing it in continued claims. Labor market tightness is linked to residential mobility. People move for jobs.
- [16:14]
Guy Adami
Right.
- [16:14]
Orfeh DeBonge
And so, so you're seeing kind of that pressure on the demand side. But ultimately existing home sales still manage to increase slightly in May despite.
- [16:25]
Guy Adami
Right.
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Orfeh DeBonge
And despite, despite those headwinds. And so I think that's a positive. Builders are now facing more competition from homeowners that are basically come back on the, on the market. Resale inventory is up 20% compared to last year.
- [16:40]
Guy Adami
So in your world, what's more important? What's more dangerous for the industry? Higher rates or an unemployment rate that starts to sort of creep higher in a noticeable way?
- [16:52]
Orfeh DeBonge
Look, you can't get a mortgage if you're unemployed. And I think, I think the labor market is, is really what I'm paying attention to. And that's why I was enjoying the discussion earlier. I think, I think the Fed, everyone is kind of paying attention more so to the labor market. Inflation is roughly what, 2.1%? We're going to get PC this week. So we're, we're not far off. Right. And some research also shows that some of the impact of tariffs is already kind of playing itself out. So yeah, I think the Fed will probably be looking at the unemployment rate and the labor market that's cooling maybe.
- [17:28]
Melissa Lee
Faster than expected in terms of seller mentality. Orphan. I'm curious as to know whether or not sellers are, are now saying, you know what mortgage rates are going to be where they are. The economy is a Little bit iffy. And I'm going to cut my, my price. Are we at that point? We are seeing more. I mean, just as an observer, recreational observer of Zillow listings, I've noticed that there are a lot more price cuts recently.
- [17:51]
Orfeh DeBonge
Yes, we have the most. We had the most price cut for Any May since 2018. Sellers are find. Sellers and buyers are kind of coming back together. There was a big gap between sellers and buyers. We've been talking about a rebalancing for the last three years. I think the rebalancing is finally here. According to the Zillow Market Heat Index, the bargaining power between buyers and sellers is, is, is the best for, for buyers it's been since 2018. So I think sellers now facing more competition means they're going to have to be a bit more strategic, work a little bit harder and making sure their listing reaches the most potential home buyers.
- [18:33]
Steve Grasso
So Orfeh, when you look at it, how much of this really is accounted for, seasonality as well? When you look at the spring selling season, summer selling season, is this something we're all getting excited that existing home sales finally starts to tick up and it could peter out as well. Do you classify that on a percentage basis at all?
- [18:51]
Orfeh DeBonge
So, you know, we talked about a kind of a delay because of the headwinds that we were facing at the start of the home shopping season. Right. Everybody knows what's going on with, with tariffs, et cetera, et cetera. The big stock market correction that we had in March and April. Right. So we talked about a delay. Our forecasting team still believes, you know, home sales could increase slightly. Right. Modestly increase and finish the year slightly higher than in 2024 or we got.
- [19:20]
Melissa Lee
To leave it there. Always great to speak with you. Thank you.
- [19:22]
Orfeh DeBonge
The pleasure.
- [19:23]
Melissa Lee
Orfei Divan Gui all right, so what do we make?
- [19:27]
Guy Adami
Well, I mean, as many lagging indicators are out there, one of the most important leading indicators, I think, is housing. And things are absolutely slowing down. Now, if housing slows down, if that's the leading indicator, it stands to reason the economy might be slowing down. So the economy at some point has a bearing on the multiple of the S&P 500. So if you're in this sort of, I don't know, prolong, but if you start to get yourself In a slowdown, a 23 multiple, I don't think makes a lot of sense.
- [19:53]
Tim Seymour
I think it comes down to interest rates, which tying people into both the houses they're in, the mortgages that they're in, their inability to buy more house for the money. I mean, I think we're coming out one of the greatest periods of housing appreciation over the last decade for a lot of different reasons, including Covid, including some other dynamics. I'm less worried about the labor market. I mean, right now the labor market's showing a level of resiliency and we're near record lows in terms of unemployment. So I don't want to own homebuilders here. And I can understand on some level where Orpheus coming from in terms of the resale market and kind of their core business is certainly one where you want to see certainly a lot of buyers and sellers out there on both sides. And I do think at some point at the right equilibrium there will be that, but at lower prices.
- [20:33]
Melissa Lee
Coming up, a serial slump. Shares of General Mills at five year lows. Why Investors think the stock has lost its lucky charm Earnings alert on Micron shares jumping after its latest results. The details and the numbers from the quarter and more on the semi trade when Fast Money returns. Back in two.
- [20:56]
Christina Partsinevelos
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Steve Grasso
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- [22:59]
Melissa Lee
Welcome back to Fast Money Earnings Alert on Micron, the stock surging on an earnings beaten better than expected guidance for the current quarter. The conference call kicked off in the last hour. Christina parts nebulous here on that with the details. Christina.
- [23:10]
Nikhil Vaswanathan
Well, not only did the largest US manufacturer of memory chips beat earnings, it also provided gross margins in fourth quarter guidance that was well ahead of analysts and buy side estimates, revitalizing the trade right away. And you saw the Stock Pop about 7% and it's come down since then. But on the earnings call, Micron CEO said they are seeing increasing demand for high bandwidth memory which are used to run AI machines. Its most advanced offering is HBM for high bandwidth memory 4 and is already shipping to quote multiple customers. And a ramp up the expecting a ramp of production in 2026. The company also says their bullish guidance was driven primarily because of DRAM's higher pricing and continued cost improvements, all which benefit gross margins. Dram, I know it gets confusing, but it just means you can run more programs simultaneously without slowing your data center down. Or yeah, you're listening. DRAM versus NAN and hbm. But as for PCs and smartphones, management say both markets should grow in the low single digit percentage in 2025. The adoption of AI enabled PCs and smartphones helping Windows 11 upgrade should also help, but I feel like everybody's been seeing that for quite some time. Results though are positive from Micron stock reaction reflecting already high expectations. We have to keep in mind the stock ran up what, 51% into today's close year to date. So very high expectations for this name.
- [24:28]
Melissa Lee
There was commentary on the call. I believe that tariffs caused some may have caused some inventory pull in. Yeah, there was a year. So you know, it's interesting to give this very bullish guidance assuming that this also accounts for the tariff impact.
- [24:41]
Nikhil Vaswanathan
He also said so I didn't add it in the script and right before coming up he did say that the guidance does not reflect any expectations.
- [24:47]
Melissa Lee
Oh it doesn't. Okay.
- [24:48]
Dan Nathan
Yes.
- [24:48]
Nikhil Vaswanathan
Which is what we've been hearing and almost what does that tell us about leaders right now? That they're just you know, Trump may say one thing, but they're really not going to put it into their guidance or have that reflected just yet because it can all just turn on a dime.
- [24:59]
Guy Adami
Yep, yep, Christina breaking it down. And yes, I do know Tim. And I will also say that dram is 70% of basically their business. And the margins, to me, the story, I mean, operating margins came in close to 27% a year ago. They were less than 14. So to Christina's point, they're operating better. However, is this the catalyst to get it back to where we were June of last year, which is 154. Given the run that it's had, it should probably stall right around here.
- [25:25]
Tim Seymour
One of the things I just want to say is Micron doesn't have an earnings release. They don't like. Like, I feel like these become overly enthusiastic statements about their business around. I think this is usually when you want to sell this one. It's had a massive move. It's not cheap. I don't think that HBM is something that has enormous barriers to entry even though they are a monster player there. So I just, you know, I listen to all this excitement and in fact this has been the time to sell Micron, especially after these big earnings releases where they talk about their exposure to AI more than I think they should.
- [25:59]
Melissa Lee
You've traded Micron in the past.
- [26:00]
Steve Grasso
I have. And it's as Christina touched on this a little bit, if you chart DRAM prices, you could overlay the stock price and it really follows in lockstep. So DRAM prices go up, the stock goes up. They have about 20, 25% of market share. I would still think I'd be a buyer. Tim will be a seller. That's what makes markets. I buy it here.
- [26:22]
Melissa Lee
Dan Nathan, thoughts?
- [26:24]
Dan Nathan
You're going to be surprised. I would be a seller here. I mean, I know that, you know, this data center business is up a whole heck of a lot year over year. They spoke to this in their guidance that they see increased demand. I just feel like the stock has doubled off the April lows. And I think a lot of good news is in a stock like that. I know on a day like today where Nvidia is back towards those prior all time highs, people feel like we're kind of back in this trade a little bit. But I think the price action in the market and thus these stocks, because they've been leadership is probably encapsulating a lot of good news for the back half of the year. So I'd be a seller here.
- [26:58]
Melissa Lee
Christina Always good to see you. Thank you Christina. Parts Nevilles. There's a lot more fast money to come. Here's what's coming up next.
- [27:05]
Christina Partsinevelos
Clean up in the cereal aisle. Shares of General Mills getting hit after its latest earnings report. The profit warning sending shares to five year lows plus digital dollar details. We're going inside the stablecoin boom and the infrastructure powering the pop. You're watching Fast Money live from the NASDAQ market site in Times Square. We're back right after this. Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If sounds like you, you're stuck in the past. Discover is accepted at 99 of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn more@discover.com credit card based on the February 2024 Nelson Report.
- [28:07]
Steve Grasso
Hey, it's Ryan Reynolds here from Mint Mobile. Now I was looking for fun ways to tell you that Mint's offer of.
- [28:12]
Melissa Lee
Unlimited Premium Wireless for 15amonth is back.
- [28:16]
Steve Grasso
So I thought it would be fun if we made $15 bills but it turns out that's very illegal. So there goes my big idea for the commercial. Give it a try@mintmobile.com Switch upfront payment.
- [28:29]
Melissa Lee
Of $45 for 3 month plan equivalent to $15 per month required new customer offer for first 3 months only. Speed slow after 35 gigabytes of networks busy taxes and fees extra. See mintmobile.com welcome back to Fast Money. Shares of General Mills down 5% today, hitting a five year low. The company seeing EPS fall more than 25% and said profit for the current fiscal year would be down 10 to 15% as consumers shop for cheaper options. Shares of the Cheerios and Lucky Charms maker now down 20% this year. They talked about having a lot of protein products coming in the pipeline. They got protein Cheerios, there's going to be protein, protein, creamy Nature Valley bars, et cetera, Protein Mac and cheese.
- [29:11]
Steve Grasso
Yeah. These are the competitors to it. People are having eggs, they're having yogurt, they're having smoothies, they're having protein for breakfast. People don't want. You think cereal. Not that it's not my opinion. People think the perception is it's unhealthy. You look at the stock chart, people have been moving away from their bread and butter, which happens to be cereal. So I would still stay away from the stock. I think it's been an underperformer. And a lot of these dies have come into focus with RFK sitting where he's sitting right now. So I think it's still a big headwind for him.
- [29:42]
Melissa Lee
I mean, they didn't outright blame GLP1s but the CEO in interview with CNBC this morning said 12% of the population on GLP1s right now. So and then he mentioned the protein. So it does sound like there's an impact to the business of some sort.
- [29:55]
Tim Seymour
It sounds like they're scrambling. It does sound like, I do think they're, you know, like a good sugary cereal that, that takes you up and drops you down. Was something I remember as kid. I mean whether it was King Vitamin or and I will say this about Lucky Charms guy, I think you feel the same way. When they went from just a clover, a diamond, there's now like 15 different.
- [30:12]
Melissa Lee
Charms, rainbows and unicorns and such.
- [30:14]
Tim Seymour
You knew what you were getting. Now you don't know.
- [30:17]
Guy Adami
Well, it's the same with Cheerios, by the way. Just used to be, just used to be Cheerios.
- [30:20]
Melissa Lee
Well, now there's more.
- [30:21]
Tim Seymour
Now there's all honey nuts.
- [30:22]
Guy Adami
By the way, the apple cinnamon Cheerios are bad.
- [30:25]
Tim Seymour
No, Apple cinnamon Cheerios are.
- [30:28]
Guy Adami
Yeah, but they do, they do horrible things to my constitution. But if you're looking for the trade, do you have a trade? I actually do. Melissa Lee, Negative EPS growth, negative revenue growth. This could trade that back to the March of 2018. Low is about $43. You don't buy the stock here.
- [30:44]
Melissa Lee
Coming up, markets close to record highs but some individual stocks have already gotten there. Are there more gains in these names? We'll find out what our traders think with a game, a traded or faded America's favorite game. That's next. Welcome back to Fast Money. The s and P500 closing flat. The index still less than a percent away from its record high. The Dow down more than 100 points in the NASDAQ with a small gain up 3.10of a percent. Some moves in the biotech space. Shares of Surrepta Therapeutics dropping 8% as the FDA investigates the deaths of two patients taking the company's gene therapy drug. And shares of Scholarock up more than 7, continuing its run since data last week showed its SMA, spinal muscular dystrophy, atrophy, excuse me, drug helped weight loss patients retain more muscle mass. CEO David Hallal joined us on Fast Money last night. And some New York based real estate companies falling today after State Representative Zoran Mamdani won the City's Democratic mayoral primary. Mamdani has pushed for rent freezes in city run grocery stores. You guys had a lot to say about him on the call today. But in terms of the impact on the stocks, there's a lot of uncertainty. Part of his platform in terms of winning the primary was affordable housing, which is a real problem in New York City. The question is how do you get to affordable housing in New York City without some sort of, I don't know, government intervention, if you will perhaps.
- [32:13]
Tim Seymour
Yeah. And this isn't a political show, so. And I don't think anybody wants to hear my politics on last night's election in New York City, so I'll stay out.
- [32:19]
Melissa Lee
Okay, fair enough. We did see the impact on the stocks though, which is why we bring it up. Meantime, a handful of names across industries from legacy tech to finance hitting fresh records today. But what should you do with these standouts? Let's find out in a little game of trade it or trade it. All right, so we've got JP Morgan, GE Renova, IBM, Nasdaq and CrowdStrike. Just some of the names hitting records leave efforts in today's session. So let's start off with J.P. morgan. I'll go to you Tim for that.
- [32:47]
Tim Seymour
Well, I love money center banks here for the combination that is the tailwinds on regulation. But we've got a steepening yield curve at this point at interest margins. I think we have an uptick in M and A and investment banking revenue. I think you've got a dynamic here where their capital adequacy but their ability to give back capital for the entire space is good. This is best of breed. I like this name Even after a big, big move.
- [33:11]
Melissa Lee
What if Jamie Dimon retires which is coming closer and closer.
- [33:15]
Guy Adami
Karen's chagrin who is in Italy docs her. When I said that.
- [33:18]
Melissa Lee
Well, you just said it. So you doxed her.
- [33:20]
Guy Adami
No, I think, listen, I think five years ago that's a problem. I think today it's not as much of a problem. My problem with JP Morgan, it's a problem I've had for a while. Price to book price tangible book is at levels we've seen since pre financial crisis is expensive. There are banks that I like. Citi is one of them. J.P. morgan. Fade it, Mel.
- [33:37]
Melissa Lee
All right, let's get to G.E. verd Nova, Steve Grasso, what do you say?
- [33:41]
Steve Grasso
Yeah, I still think this one is a buy. Their. Their wind segment of their revenue is obviously being challenged right now. Margins and this is not the right administration for wind Energy. But the electrification, that one has a tailwind and that one with AI and everything that's going on with data centers will never run out of steam. And I think this will One is.
- [34:03]
Melissa Lee
Still a buy I traded Dan Nathan.
- [34:07]
Dan Nathan
I'd be fading it. I mean the stock's up 100% in two and a half months. I think everything that Steve just mentioned from a fundamental standpoint was known in early April. It's pretty well known now. I think investors are full up on the thing. If you own it, keep owning it. If you don't and you're interested in the story, I wouldn't buy it here. You're going to get a pullback.
- [34:25]
Melissa Lee
All right, let's get to IBM here. I mean, ever since the quantum computing announcement that really helped use the stock.
- [34:32]
Tim Seymour
And I think for that reason I want to fade this one. I realized that was an easy thing to do in years past when IBM was essentially dead money. It has been one of the biggest outperformers, one of the biggest surprise names. And I think there's been less coverage of IBM success story and where they sit also in some of the new trends here. I just don't think it's cheap anymore.
- [34:51]
Steve Grasso
Yeah, I think they could do a lot more efficiencies with IBM and they were the original player in AI with Watson. Never got the, the adequate amount of claim for that acclaim for that. I think they're going to be as equally impactful with quantum computing. I think they're turning around the ship. It's very difficult to do for them. I'd be a buyer. I traded.
- [35:11]
Melissa Lee
All right, Nasdaq, our landlord here, the Nasdaq marketsite. Guy, what do you say?
- [35:16]
Guy Adami
I'm a trader, a bit of trader. It's been wrong for a while, but today I think it made an all time high valuation. It's not unreasonable and I think if you believe that IPOs are coming back in the way they are, if they look at the calendar, NASDAQ is a place you want to be. So I trade it melts.
- [35:29]
Melissa Lee
Dan, nasdaq, what do you say?
- [35:31]
Dan Nathan
Yeah, I agree with Guy, but again it's had this huge run. If you had like a check back, you know, maybe at 75 or something like that, you're going to want to reload. I think the performance of some of these IPOs over the last couple of months, it should be. You know folks, if you were thinking about going IPO and you kind of, you dust off that S1 and you get it out here right now, now with the market back at the all time highs. So to me, NASDAQ is definitely something you want to buy in a pullback.
- [35:54]
Melissa Lee
All right, we've got time for crowds. Let's do it. Tim. CrowdStrike buyer.
- [35:58]
Tim Seymour
Trade it. I think it's a case of securities cyber trends. This is the name to own. This is a valuation that's not easy to own. This is a growth profile that I like, an order book. I love Guy.
- [36:08]
Guy Adami
Big valuation, I don't care that much. They got through that obviously, that huge downdraft a year, year and a half or so ago and they did it swimmingly. You trade this one.
- [36:18]
Melissa Lee
All right, coming up, inside the stablecoin boom with the CEO of one company powering the infrastructure, the opportunities and the risks as competition heats up. That is next. Plus, dueling for data centers, how states are battling it out to land the nerve hubs and the power problems that come with them. Stay tuned. Welcome back to Fast money. The crypto industry locking in a major win with last week's passage of the Genius act by the Senate. The legislation establishes the very first federal framework for dollar pegged stablecoins. Circle, Internet, Coinbase and Robinhood seeing massive gains around the vote this month. And our next guest says stablecoins will be the currency of the AI revolution. Joining us, Alchemy CEO Nikhil Vaswanathan, whose company powers stablecoins for names like Circle, JP Morgan, and more. Nikhil, great to have you with us.
- [37:10]
Scott Cohn
Thank you for having me.
- [37:11]
Melissa Lee
What was interesting was to hear about the companies who are interested in issuing their own stablecoins and how the payment processors reacted to those potential stablecoins hitting the market. So we saw Visa and MasterCard drop when Wal Mart, Amazon said they were going to issue their stablecoins. How do you see if you fast forward five years, are we going to be dealing with a host of stablecoins out there issued by various retailers and companies trying to get consumers to transact on their specific stablecoin.
- [37:42]
Scott Cohn
That's a great question. So maybe stepping back a little bit. I think the crypto industry and stablecoins will evolve in two ways, just like the Internet industry did. Existing businesses will have their financial systems upgraded. So the banks, the financial institutions, and then you'll see new types of applications that are completely from scratch that were never possible before. And in terms of the stablecoins, we will actually see stablecoins disappear and the user experience will just be about moving money from one person to another. And you won't even have to worry about the technology will know stablecoins have succeeded when the technology is no longer been talked about.
- [38:18]
Dan Nathan
Give us a sense, you know, for some of the newbies or the normies, whatever you want to call us here, we're seeing all these companies that we know in the financial institutions. They're kind of moving here. They were kind of slow to do so. What do you think the risks are? Right, there's going to be lots of different stablecoins and there's going to be B2B applications, are going to be B2C application. What are the risks? As we've seen big block ups in the past, obviously Tether was one of them.
- [38:41]
Scott Cohn
Yes, that's a great question. I think it's really important to split apart a core technology versus the applications of the technology. If you look at the dot com bubble, there are several companies that were not real businesses that died similar to the ICO boom in 2017. I'm sure we will see stablecoin applications that are either scammy or not technically sound that die. But the core underlying technology is very solid. And that's what you saw with the Internet. Just because there was a dot com bubble didn't mean the Internet died. It just meant that some of the applications weren't high quality.
- [39:13]
Melissa Lee
From a consumer, I can understand the desire to have a stablecoin from a retailer standpoint, etc. I mean the settlement time is going to be reduced, the cost to transact is going to be reduced tremendously. It's going to be crushed basically. From the consumer standpoint, we are so used to credit, we are really attached to a our credit card rewards and we can easily move money. I could, I could give money to Tim right now, Zell or Venmo for free. So can you make the case for that application consumer to consumer adoption?
- [39:45]
Scott Cohn
Yes, that's. That's a great question. So the first piece of it is that stablecoins is really an infrastructure technology. In the future, it's not going to be something that people think about. They won't think I'm using a stablecoin. They will just be able to move money seamlessly between one person to another. And you're right, you can venmo someone if they live in the United States and you have their phone number and you have a way to contact them to get their information. However, if you want to send money to someone in France and it's $10,000 and it's Friday night, the fastest way to do it is get on a plane with a briefcase of cash at JFK and Land in Paris. So what you'll see is a complete rewiring of the entire financial system built from the ground up that replaces the rails that were built 50 years ago. And changes throughout the experience will be made because of that new technology.
- [40:30]
Melissa Lee
All right, Nikhil, great to speak with you. I'm sure we'll talk to you again. Thank you so much for joining us. Appreciate it. It's interesting to hear, you know, in terms of cross border transaction, that has always been sort of the use case for any sort of crypto stablecoins even more so because before it was you would transfer Bitcoin and then all of a sudden it would drop in value or go up in value. And that was the difficulty here. Stablecoin obviously retains its value. But imagine the trouble that would be for a western union or you know, one of these other.
- [40:57]
Guy Adami
Well, I mean so about existential risk. We have the eastern co Eastman Kodak situation. I mean that's for them for sure. And look, I understand this is not for me obviously because I, the last time, the, the next time I send somebody in Paris, 10 grand will be the first time. So it doesn't apply.
- [41:12]
Steve Grasso
But even if it's an emergency and they text you that they lost their wallet and there's a number of family.
- [41:17]
Melissa Lee
Emergency, get on Nigerian prince.
- [41:19]
Guy Adami
But with that said, I mean obviously coming in this, this company's at a valuation right now, I think north of $10 billion. I mean that's not small. I mean that's significant. There are a lot of companies out there that are sort of solving for the same thing.
- [41:31]
Steve Grasso
This is the regular currency, this is the bridge, right? So it's a regular currency, it's a bridge to digital. So everything that you said that people worry about with, with Bitcoin moving in the volatility, stablecoins by their nature, by their name are taking out that volatility. This is the next big thing. And if this works, crypto and bitcoin specifically probably doubles quicker than it would have without a stablecoin.
- [41:54]
Tim Seymour
But where's the margin? I mean what I don't understand is all this is doing is facilitating, we all understand why, facilitating trade, facilitating settlement. I mean these are all things we've understood even with blockchain. But my, you know, my assumption is that Visa and MasterCard, even if we're redoing the rails, still are the ones that control the rails. They are still the ones that are extending credit, credit to people to then use these cards. I think they're going to be right there in the Middle of the stablecoin world. I still don't really understand why we're paying a premium for a company that is leveraging off of T bills.
- [42:21]
Melissa Lee
Coming up, the hunt for data centers. Demand for the powerhouses a major factor in this year's top states ranking around. Scott Cohen is live in Louisiana with more.
- [42:30]
Jim Cramer
Scott hey, Melissa. This has become one of the big battlegrounds in the state amongst the states in the perpetual battle for business but not necessarily jobs in this case. We'll tell you what's at stake, why the states are bidding so hard, and what they get when fast money returns.
- [43:01]
Melissa Lee
Welcome back to FAST Money Stuff. States rushing to build tech data centers across the US as the AI and quantum race heats up. But these expensive construction projects require large amounts of space and electricity. CNBC's Scott Cohn is at the site of what will be Meta's $10 billion facility in rural Louisiana with more.
- [43:19]
Jim Cramer
Scott yeah, Melissa, this is the biggest data center of all, biggest in the western hemisphere at least. It is under construction on massive site the size of 1700 football fields here in northern Louisiana. When all is said and done, only 500 people will work here. But the governor says that's just fine.
- [43:41]
Steve Grasso
500 jobs.
- [43:42]
Dan Nathan
I'll take it here.
- [43:43]
Steve Grasso
Five jobs in this area was a.
- [43:45]
Dan Nathan
Big thing before this came here.
- [43:47]
Steve Grasso
I don't know where other people are that complain about 500 jobs or where you are, but I'll take them.
- [43:54]
Jim Cramer
The the state is forking over potentially billions of dollars in tax breaks which we're told Meta demanded. And the local utility energy is building not one, not two, but three power plants, which has some concerned.
- [44:08]
Scott Cohn
You're talking about a huge load growth. So while they're building new power plants, they're also adding a huge consumer of electricity and one that could potentially destabilize.
- [44:18]
Melissa Lee
Other people in this area.
- [44:21]
Jim Cramer
Energy says no, adding more power plants will actually stabilize the grid. And the utility says that even though it is paying more than $3 billion to build these power plants, it will bring everyone's electric bills down.
- [44:36]
Melissa Lee
Melissa this is fascinating. I would imagine this is a very small town where this data center is located and so even 500 jobs is very meaningful to that population. I would also think that the 500 jobs are kind of higher paying jobs.
- [44:51]
Jim Cramer
That's what they're saying. Yeah, it's Richland Parish. It is one of the, it is one of the poorest counties parishes in Louisiana, one of the poorest areas in the country, they tell us. And yes, the jobs they say will be higher paying it is not clear yet how many of the jobs will be local. And we should point out that at the peak of construction here, which is going to be over the next couple of years, it's going amazingly fast. They will have 5,000 construction workers.
- [45:16]
Melissa Lee
Wow. Scott, thank you. It's always great to see you. Scott Cohn in Louisiana. Imagine this multiplied by I don't know how many times across the country in terms of the race to build the next data center. Tim.
- [45:30]
Tim Seymour
Yeah. And by the way, Louisiana is an incredibly diverse, interesting state. And I think the opportunity there to build this out and build out infrastructure there is a lot easier here than it is in places. You want my view on New York? I mean, I don't think you could do that here. And I think you have to think about states where we can actually build up that kind of infrastructure. The country needs this. And I think this is one of the most important bipartisan issues in terms of the importance of power and electricity.
- [45:53]
Steve Grasso
You know, when you look at these, there's a lot of REITs that specialize in data centers, but Vertif holdings specializes in thermal management. And now you look at Quantum, you look at AI, they need everything to be really, really cooled and Quantum actually needs it to be at zero. So I would be a buyer of.
- [46:10]
Guy Adami
The stock Raymond James initiated a lot of these energy stock Tim talks about. Constellation Vista is one though, that I still think has legs here. Mel.
- [46:17]
Melissa Lee
All right, up next, final trades, final trade time. Dan Nathan.
- [46:31]
Dan Nathan
Yeah. Tesla roundtrip. That entire move from Monday the quarter the delivery is gonna be hilariously bad for Q2.
- [46:38]
Melissa Lee
I would not be a buyer, Tim.
- [46:40]
Tim Seymour
Hilariously good for Google, which I think could have been in that. Would you rather? Rather, rather, rather in the A block.
- [46:46]
Steve Grasso
Google Steve playing that data center, Vertiv.
- [46:49]
Guy Adami
Holdings vrt Last night we had interns from Morgan Stanley. This evening from Skybridge Capital, the Internet. Give yourselves the round of applause. Skybridge people. Isn't that nice? I mean, people come to see the show.
- [47:04]
Melissa Lee
We like to see America.
- [47:05]
Guy Adami
GDX Mels thanks for watching.
- [47:06]
Melissa Lee
Fast Mad Money starts right now. All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet or another media. 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 is buying a house on your bingo card? Then CNBC Naked's new online course, how to buy your first home is for you. Three experts share the keys to buying your first home. Register right now@cnbcnaked.com homebuying.