← CNBC's "Fast Money"
CNBC's "Fast Money"
White House Affordability Push… And Incyte CEO On Drug Pipeline 1/13/26
00:43:45
Another affordability push from the White House, as the Trump administration targets power costs associated with the AI buildout. The companies in focus, and how they could help offset the electricity costs. Plus The latest from JPMorgan’s Health Care conference. What one bipharma CEO sees in store for the industry. Fast Money Disclaimer
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Narrator/Commercial Voice
What does it mean to live a rich life? It means brave first leaps, tearful goodbyes and everything in between. With over 100 years experience navigating the ups and downs of the market and of life, your Edward Jones financial advisor will be there to help you move ahead with confidence. Because with all you've done to find your rich, we'll do all we can to help you keep enjoying it. EDWARD jones, member, SIPC Ugh.
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Melissa Lee
Could this vintage store be any cuter?
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Dan Nathan
Right.
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Melissa Lee
And the best part, they accept Discover. Except Discover in a little place like this?
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Karen Feinerman
I don't think so.
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Melissa Lee
JENNIFER oh, yeah.
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Guy Adami
Huh?
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Melissa Lee
Discover's accepted where I like to shop. Come on, baby, get with the times.
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Narrator/Commercial Voice
Right.
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Karen Feinerman
So we shouldn't get the parachute pants. These are making a comeback, I think.
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Guy Adami
Discover is accepted at 99% of places that take credit cards nationwide. Based on the February 2025 Nielsen report.
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Melissa Lee
Live in the NASDAQ marketsite in the heart of New York City. Times Square. This is fast money. Here's what's on tap tonight. Powering up utility stocks on the move as the administration takes aim at rising electricity costs. What the latest focus on affordability means for these names and the broader markets. And JP Morgan kicking off bank earnings season with a big move lower. Is the pullback justified or is this the time to buy in? We'll debate that. Plus software where stocks slump on new air concerns. Insight CEO joins us to break down the pipeline at the biotech firm. And more trader acronyms. Will Tim and Karen follow the rules to score here? They'll reveal their picture yourself. What do you think later on this hour. I'm Willisley, come to you live from CDO B at the nasdaq on the desk tonight, Tim Seymour, Karen Feiderman, Dan Nathan and Guy Adami. We start off with the big data center builders pulling back amid the latest demands from the White House. Microsoft among the laggards today after pledging to pay higher utility bills that come from powering its AI models, Meta and Oracle. Also dropping President Trump last night posting on Truth Social that he, quote, never wants Americans to pay higher electricity bills because of data centers. It's the latest line of the administration's focus on affordability. Let's get to Eamon Jabras for more on the White House's demands. Eamon.
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Dan Nathan
Yeah, Melissa, interesting to see the one, two punch there. The president's social media post last night and then Microsoft this morning announcing their five principles around data centers. The idea here is from Microsoft's perspective, not to jack up the cost of Water and power and other things in these areas where they do business. So they're pledging on five specific points. I asked Brad Smith, the White House, the White House, the Microsoft president, exactly what the conversations with the White House have been between Microsoft and the White House. Here's what he said.
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Guy Adami
I think they are also quite properly.
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Bill Murray
Pushing the tech sector, including us, to.
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Guy Adami
Do right by local communities to ensure.
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Dan Nathan
That we pay for our electricity costs.
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Guy Adami
And don't leave consumers picking up the tab. And that's one significant part of what we're doing today, providing that kind of.
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Dan Nathan
Reassurance to the public where we are operating these. So Microsoft also saying they're not going to ask for subsidies in some of the areas where they're doing business. All this, Melissa, seems to me to be sort of a reflection of political reality here, which is that if the AI data center build out is going to continue, the AI industry has to make sure it doesn't make political enemies everywhere it's doing business.
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Guy Adami
And so they have to come up.
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Dan Nathan
With a way for this to be a big win win. They understand, says Microsoft, the reality that these tech companies are so profitable they can't be seen as pushing these costs off onto individual communities.
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Melissa Lee
All right, Eamon, thank you. Eamon Travers from Washington. For us, the reality though is that it takes a long time to bring the power online. So what are the solutions at this point and are there trades based on this or is it just is the timeline too long at this point?
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Tim Seymour
There are no solutions in the near term. I mean the fact that Microsoft list this is actually one that I agree with. I mean the community shouldn't be saddled with the burden of all these costs. So you know, good for the administration for finally addressing it. But it's been known for a long time if you live in Northern Virginia, you absolutely know what's going on. With that said, it's a long fix and Microsoft seems to be on board. What does it mean for the stocks? Well, it doesn't mean anything in terms of negative downside. I think Vista wins to this. I think names like Bloom Energy, which is ridiculous valuation, continue to win to this. And I'll say this, Microsoft, I think into earnings on the 28th. This is as good a setup as you've seen in a long time. Minstock has been awful now for the last six or seven months. This level is the prior all time high from the summer of 2024. I think you want to get along Microsoft into their release Virginia, the state.
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Melissa Lee
With the most data centers in the United States has seen electricity prices go up 14% year on year in the fourth quarter. Illinois, the second most data center in the United States, up 16% year on year as of 4Q4 of last year. So consumers are already feeling the pinch. Open up your bill and you know what I'm talking about.
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Guy Adami
I think they're feeling it everywhere. The places you're highlighting, maybe Datacenter concentrated. But you know who's not getting that notification from your utility company telling you when you should actually optimally use your appliances and whatnot. Guy.
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Tim Seymour
Well, Tim, you have a smart refrigerator. You mentioned that. I didn't know where it means.
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Guy Adami
What else would I have? So, so I do think back to the trades that, you know, when you see a headline like this, I go back to NAT Gas and I go back to nuclear. I know the lead time on nuclear is a lot longer, although there's no question this administration has already talked about fast tracking. But I think about a Cheniere Energy, I think about lng. I think NAT Gas is absolutely. Especially those utilities that have targeted NAT Gas. And I would go to Constellation Energy with their Calpine acquisition. I mean, these are places where I actually think people are underestimating where NAT Gas is the solution of at least alternative, cheaper, cleaner power. I do think that the utilities overall and xl, you look very interesting here. We've had a nice pullback in the xlu and over time, even independent of this trade, this is I think an interesting opportunity.
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Dan Nathan
Yeah. You know, on the trading front, I mean, this can't be good for the Neo clouds. Right. So if the idea is that these, you know, big cloud operators are going to use their profits. Right. To kind of reduce the cost for everyday citizens. On the energy front, I just think think those companies, the neoclass, are very unprofitable. And we know that. Right. So they got to hit the debt markets. The other thing is Brad Smith also had an interview today with the FT and he was saying that the Chinese have a lead here. And if you think about the Chinese and the lead that they have with the models in particular outside of obviously the US and they're taking over in Africa and some of these other places, a digital belt and road. And if you think about it, the Chinese have the cheapest cost of capital and they have the cheapest cost of energy.
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Lawrence Golub
Right.
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Dan Nathan
And those two things are really, I mean, this is why Microsoft is warning against this. And I do think it's interesting that yes, the regulation has been very favorable to these companies, but if you get caught in this kind of populist sort of situation where it's going to be very hard for a lot of these companies that are happy about the deregulation but are building out these data centers with closed models versus the Chinese again with open source models. So this is where this, I think it's a battle. This is where this battle is going. We're to hear a lot more about it in the next couple of years.
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Melissa Lee
I mean the cost of compute is much lower as we learn from Deep Sea in terms of the efficiency. But maybe that also plays into Nvidia, whose latest chip is a lot more efficient in many ways.
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Karen Feinerman
Right. So I mean you could look at it. Were you going to get a lot more bang for your buck, right, in terms of power or was it just cheaper? But I mean, I do think this, I agree with all of you. I think that this is a smart thing, it does play well and it does seem fair actually. Right. So. And Microsoft is saying all the right things, including, well, look at China. And I don't know if that's a plea to the US you got to help you have an even playing field. I think it's going to be difficult to even the playing field because of this populist message. It does seem fair to me. So what are the implications of on the margin now data centers are more expensive, right? So financing will be a little more expensive. Does that mean that demand becomes do that. Is there an inelasticity there? I think at the moment there is an. It is a demand will go up regardless of price right now. So. And also as you all said, it takes a while for this to play out. So I don't know that we can calibrate it so easily, but it's definitely not a positive. And I don't know who's going to get the cost. I mean aws, who are they going to pass the costs on to their customers? Do they eat some of it? I don't know.
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Dan Nathan
Well, it comes at a time where a lot of these companies are having a hard time monetizing, right? So if you think about open air, the longer they stay unprofitable, this gets harder for them if the cost of compute goes higher. Now Microsoft obviously and us, they're in Google Cloud, they're in different positions here. But you know the other thing that you just mentioned in video, you know, the information in an article this morning and we know we've been going back and forth between these export, you know, like charges, whatever you want to call it, taxes that the Trump administration is putting On Nvidia right to sell these chips to to China. The information article today China restricts Nvidia chip purchases to special circumstances and to your point they are making do with less. And when these models are spreading the way they are, this turns into a very difficult situation for I think our model makers.
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Melissa Lee
Are we to think though for a name like a Metta which also traded lower today that because they have different purchase power agreements with various utilities they are, they have you know ExoMars small module reactors, you know on the build to come but they're off the hook from this that they've already satisfied the demands. Are we, are we in some way talking about the same thing?
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Guy Adami
I'm not sure. I mean again I think there's a scramble that we're seeing in the headline and the attempts and what they've locked in versus where we don't even know where the demand is going to be. We don't know where is currency and where some of the efficiencies as you indicated where compute power needs are going to be. I would just bring it back to the stock and I would bring it back to the NASDAQ 100 versus kind of if your barbell trade is you want some growth and you want some value. You know you've got semis that are outperforming the entire market this year and then you've got small cap and you've got equal weighted also outperforming. The NASDAQ 100 hit a peak in October, late October and has not made new highs while the S and P continues to. I think the market is telling you exactly where you want to be positioned and I think that will continue to be the case which is that those that are benefiting from AI that EPS expansion is part of what the market is rewarding right now, not the companies that were yesterday's trade.
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Tim Seymour
Karen looks remarkably radiant this evening, more so than usual, which is a high bar I'm not quite sure of night but acronym night. But I think there's something else that's about to happen that I think is going to captivate our audience.
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Melissa Lee
Well that maybe, maybe not.
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Lawrence Golub
Well that.
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Melissa Lee
All right. Well Gallup capitals out with its quarterly middle market report. It finds a steady growth trend with middle market private company earnings up 3% year over year. In Q4 revenue increased by 2%. Gallup Capital CEO Lawrence Golub, aka Mr. Karen Feinerman is here to give us an early look at the report which will be released in full later this hour. Lawrence, it is always nice to see you welcome.
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Lawrence Golub
Nice to see you, Melissa. Thanks for having me back.
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Melissa Lee
Everybody is extra radiant tonight.
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Guy Adami
Every time I clap for you and. Not now. I said we can't. Not now.
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Melissa Lee
So the middle market looks great. Is that in contrast with what you're seeing in the other parts of the economy?
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Lawrence Golub
I wouldn't say it's in contrast, but let's roll the clock back a year. A year. There was ago there was a consensus, the economy slowing down, high chance of recession, problems in all different directions, and the consensus was wrong. And we've seen quarter after quarter in the middle market, real economy, not the hyperscaler AI topics that you all were talking. We're talking about nice steady Progress, growth, profits, Q4 for the consumer, US consumers, about 69, 70% of the US economy, strongest quarter of the year. And I think this is consistent. I don't think the message is this is instead of what's going on in the rest of the economy. I think the message is, hey, the real economy, sometimes with a little bit of the benefit from AI, but the real economy, separate from all the news about AI, is actually doing pretty well.
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Melissa Lee
We talk about AI constantly. Yes. In the credit markets. Are you, are you lending in that area at all? What kind of exposure, if any, does gold capital have to AI?
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Lawrence Golub
We do not do any hyperscaler.
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Melissa Lee
Is that, is there a reason behind that?
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Lawrence Golub
Yes. You tell me what data centers are going to be doing four years from now. You tell me what kind of chip, whose chip is going to be used. You tell me what the price of an Nvidia chip is. You let me lock that in for four years from now, then I'll think about lending there. Now we have many, many other players in private credit are making a lot of loans, and I'm not saying the loans will turn bad, but ultimately compute is a commodity. It's a commodity with constantly changing technology. I think that if you get the equity play right, if you're the right owner of the right piece of it, you can make a fortune as a lender. You're just waiting to get your head chopped off. It's like the railroads in the 19th century.
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Tim Seymour
Lawrence, the other thing we talk about all the time is the bond market, the Federal Reserve. I mean, I know it's important to you, but do you think we talk about it too much? At what point does it start to get on your radar screen?
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Lawrence Golub
Well, we have, we're focused on floating rate debt, floating rate loans. So we care a lot about the interplay of short term interest rates and inflation. Federal Reserve Issues as it relates to, you know, independents are much more about what does that do to inflation a year from now, two years from now, three years from now? We've got so far at about three and a half percent, 3.6%. The forward curve show it coming down 50 or 75 basis points over the next 18 months. And it made a question is what does that do to the 10 year? Because the 10 year drives capital spending, the 10 year drives mortgage rates. I think that the we're in a period now where we're talking a lot about the Federal Reserve, about executive action, but really what's going on is this about politics and this is about the November election, and this is about different parties maneuvering to try to turn out their base.
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Dan Nathan
LAWRENCE in the middle market, obviously this is a big hiring component right here in the US and if you think about, if you keep reading about this is a no fire, no hire sort of situation. What are you guys seeing with the companies that you're close to about just this and productivity and maybe how they're using AI yet? Because there's a lot of really confusing, conflicting sort of stories about that.
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Lawrence Golub
So job creation, the US Economy has slowed down. That's been plus for inflation. It's taken some of the pressure off. Wage growth is still pretty good. Same job wage growth running about 4%, which is higher than inflation, and that's because of productivity. We had a Q3 print on unit labor costs down about 1.9%, best in years and years and years. That comes from more careful hiring, comes from use of AI, comes from not just AI, but software in general. You know, efficiency producing. It's really important to the health of the middle market economy. I would think about it, and the way our borrowers and the private equity firms think about it, they don't think about hiring first. They think about how do we improve productivity, how do we improve capacity, how do we grow our revenue and then hire for what, what they need in a period of time where hiring is lower, it's easier to grow productivity. But unemployment's also 4.4%. That's not bad.
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Guy Adami
LAWRENCE let's talk a bit about the business that you're in, which is middle market lending, but the private credit world, that's exploded. And you've been there, you've been in the space for a long time. We're in an environment where banks seemingly have a tailwind from deregulation. What does this mean both for the particular corner of the lending world you're in, the customers that are or at least the investor base that is now broadening for you. And it seems like it's a wildly exciting time. Are you just as much of a beneficiary from D Reg as Citibank is?
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Lawrence Golub
Yes. And I think that the deregulation where it benefits us and it benefits the banks is as it relates to capital charges for banks actually being lenders to firms like ours. We are not going to see Citibank or what's that other big one I've heard. Yeah, yeah. We're not going to see them as actual lenders, be giant players. They'll be players in their lending activities, whether it's buying AAA securities and close or doing bank lines. And the deregulation is helping that quite a lot and making that market grow both here and abroad. And the big banks, through their wealth management arms, also do a lot of capital raising for the equity piece. Really the. There have been significant inflows into private credit and it's a market with supply and demand like anything else. The bank piece of it is, is very healthy.
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Karen Feinerman
So JP Morgan on their call today, that other big bank said they're they're going to be active in the space as lenders as well. Do you see them as frenemies?
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Lawrence Golub
Frenemies is a good word, but they're being a little loose with their language. So JP Morgan has been very aggressive in raising money through the private wealth channel to do lending and to invest in lenders. They have not been especially aggressive in actually putting loans on their regulated bank balance sheet. Now, from a shareholder's point of view, maybe that's all the same thing. From our point of view, it's not. They're trying to be a little bit of a competitor with us, but really in the very largest deals, the deals that compete with the broadly syndicated loan market, and they're important business partners, ours. They raise money for us. They lend money to us. They had a bad quarter.
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Karen Feinerman
It was a good quarter.
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Melissa Lee
We'll discuss that later on. Lawrence, great to see you. Thank you so much.
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Lawrence Golub
Thanks for listening. Thanks.
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Melissa Lee
Great.
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Tim Seymour
We love Lawrence.
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Melissa Lee
What's not to love?
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Karen Feinerman
Yeah, well.
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Melissa Lee
More on that later. Where you, I mean, a lot of interesting comments on the middle market.
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Guy Adami
I love the comments on what he's seeing through and the unique position GOB Capital is in to actually see 120 private middle market companies in their index and the correlations, he's saying, the predictive quality of what's going on in the strength of those business to the S and P. We had a parade of analysts coming on the last year, month of the year, talking to us about EPS growth rates that were as high as I've heard in a long time. And look what Lawrence said largely was consistent with that, that there's a lot of health there and we're going to see some of this in the S.
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Melissa Lee
And P. Meantime, President Trump just making some comments about Fed Chair Powell and more. Let's listen to what he had to say.
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Guy Adami
He's done a bad job. We should have lower rates. Jamie Dimon probably wants higher rates. Maybe he makes more money that way on sanctuary cities.
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Melissa Lee
Also was talking about the 10% credit cards.
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Dan Nathan
The House speakers said that it could have negative side effects if it was imposed through Congress.
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Guy Adami
Are you concerned about that if you talk?
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Bill Murray
No, I'm not.
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Tim Seymour
I think that people that are paying.
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Guy Adami
28% interest should be protected. We're talking about for a one year period. But when you have a bank, whether it's Jamie Dimon or anybody else, charging.
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Tim Seymour
People 28, 32%, 30%, 31%, one case.
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Guy Adami
35%, no, I'll help those people. That's all right.
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Melissa Lee
So there are two pieces of that. One, what Jamie Dimon, the CEO of JP Morgan, had to say about Fed Chair Jerome Powell and the threat to the independence of the Fed, which he then said, Jamie Dimon said would stoke inflation, would be inflationary, basically. And then there's the credit card piece of this.
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Tim Seymour
Take the Fed piece first and let us attack because we talked about credit cards last night. I mean, the Fed piece is extraordinarily important. You know, once again, I think Jamie Dimon is right. Obviously it does not make the President happy, but it doesn't mean it's without merit. The independence of the Fed is why this system works. If you lose it or if it's somehow vulnerable to the, you know, the attacks from outside, then our bond market's in jeopardy, which puts the entire stock market at jeopardy as well.
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Guy Adami
Well, it's also a strategic conversation within Congress. And you know, pushing out on this and really fighting in this direction against the Fed is something that is going to, at least the rhetoric referred and the headlines from key members of the Republican Party that are legislators and can sway. I mean, it just feels like this is a, an area to be pushing that's running into more unanticipated opposition and we've even heard. I mean, you know, the idea is that Scott Bessance behind the scenes has made some things. I don't want to put words in his mouth. I realize this is a very unified Administration and team. But there's no question that there's been outspoken reaction to this Fed probe.
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Dan Nathan
When you talk about the disruption in the bond market, I mean, all you have to do is go back to September 24th. Right? You saw yields come down significantly into that first 50 basis point cut in September. Then there were 225. So we had 100 basis points of cuts in that last quarter essentially of 24. What did we see? We saw the 30 year yield go from 4% to 5%. So we cut fed funds or they cut fed funds, 100 basis points. But then over the next few months we saw the 30 year. Wouldn't you think the 10 year yield and the 30 year yield are really more important if you're talking about credit card rates, if you're talking about just debt in general and then obviously mortgages. So the idea that you're going to hire somebody or put somebody in place at the Federal Reserve that's going to do your bidding and dramatically lower interest rates. I think this is exactly what you guys.
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Guy Adami
I don't think there's any debate about the value of an independent Fed. I mean it's, we can talk about what's going on here, but, but if there's anybody out there that thinks having the Fed not be independent and be totally aligned with the White House in any administration, if they think that's good, I'm having trouble finding that person. So I don't think this is a question about, you know, Fed independence being being a critical piece of how our economy and how our reserve currency works right now.
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Melissa Lee
Yeah. Coming up, we'll have much more in the J.P. morgan Quarter as well as a sell off that we saw across the board in software stocks. Fast when he's back into.
- [22:37]
Guy Adami
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- [23:03]
Dan Nathan
Powering possibilities. Restrictions apply.
- [23:06]
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- [23:36]
Dan Nathan
Before we had AT&T business Wireless coverage, our delivery GPS wasn't the most reliable. Once our driver had to do a 14 point turn to get back on route. A 14 point turn, an influencer even livestream the whole thing. Not good for business. Now with AT&T business Wireless routes are updating on the fly and deliveries are on time. The influencer did get us 53 new followers though.
- [24:01]
Guy Adami
AT&T business Wireless connecting changes everything.
- [24:09]
Melissa Lee
Welcome back to Fast Money. The software trade getting hammered today. Salesforce tumbling 7%. That's its worst day since May of 2024. DocuSign Adobe Snowflake also taking a significant leg lower. Adobe trading around November 2022 lows AI driven disruption worries sparking the latest weakness in software names. Adobe is in your stash, Dan, and you actually flagged the weakness here.
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Dan Nathan
Yeah, I mean it is pretty interesting how these are just being thrown out wholesale and I think that some of these names were actually initial good like beneficiaries of the narrative back in 2023 if you think about that. And how many of them are down 50% since then? I have a hard time believing that the loss of market cap, you know, relative to what we've seen as far as earnings, makes a lot of sense here because I just think that the valuations are getting cheap. I think a lot of stuff is being discounted and at some point some of these companies with, you know, really widely used products right now are going to kind of get the narrative and they're going to have a couple of moments here that I think are going to cause investors to rethink it. Especially when you think about the strength that we've seen for three years now out of the semis and obviously, obviously some of the cloud players. So yeah, it's not like you know, Microsoft is part of that.
- [25:21]
Bill Murray
Right.
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Dan Nathan
Metta is part of that too. But I think at some point these stocks catch a bid.
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Melissa Lee
But there is an existential sort of risk to these stocks or some of them in particular. I mean CRM today was specifically because of concerns that is going to replace.
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Lawrence Golub
Some of what they do now 100%.
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Tim Seymour
But then you say okay, is the valuation discounting everything that you just. And in terms of Adobe I think you're pretty close levels, you just mentioned the levels were trading down to and this was a stock that made its all time high in November of 2021. So you're looking at Adobe here. Even if you sort of give them a bit of a haircut on earnings, it might be trading 11 and a half 12 times next year's numbers. So Adobe reports I believe on March 12, so it's off cycle but this is 1 to 85 or higher. You know, in this area I think you start to add to a long position.
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Guy Adami
I mean Adobe is one that, that you know, certainly in hindsight looks a little bit like a value trap. And it wasn't terribly cheap a couple of years ago, but it's now three years of, you can see that chart. Some of the headlines today were just around Apple beginning to kind of get into their space. And this was, you know, some of the, some of the concerns we've all talked about with some of these. I think folks that have had a core business that there's different ways to chip away. Salesforce to me is value. That I think is very interesting. I think we're out of place here where there's, it's, it's very underappreciated the different pieces of this puzzle. And I think, you know, we just got done talking about how we don't really know where some of the commoditized parts of the world are going to be. Software, such a high margin business. I, I would tend to be looking at things that look really cheap here.
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Melissa Lee
There's a lot more fast money to come. Here's what's coming up next.
- [26:58]
Guy Adami
Two big stock moves catching our eye today.
- [27:01]
Dan Nathan
What's behind the jumps in Target and.
- [27:03]
Guy Adami
Structure Therapeutics and how those names factor into our trader Acron this year. And speaking of the pharma space, the latest action out of the JP Morgan Healthcare conference.
- [27:13]
Dan Nathan
Insight into one Biopharma's drug pipeline and.
- [27:17]
Guy Adami
What the CEO sees in store for the industry. You're watching Fast Money live from the NASDAQ market site in Times Square. We're back right after this. You have a vision for your business. Your priority might be to expand facilities or bring in the best talent. At Sentry Insurance, we listen, learn and.
- [27:42]
Lawrence Golub
Work to understand your business and your plans.
- [27:45]
Guy Adami
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Dan Nathan
We had AT&T business Wireless coverage, our delivery GPS wasn't the most reliable. Once our driver had to do a 14 point turn to get back on route. A 14 point turn. An influencer even livestreamed the whole thing. Not good for business. Now with AT&T business Wireless, routes are updating on the fly and deliveries are on time. And the influencer did get us 53 new followers though.
- [29:21]
Guy Adami
AT&T business Wireless Connecting changes everything.
- [29:30]
Melissa Lee
Welcome back to Fast Money. Netflix reportedly weighing a change to its bid for Warner Bros. Discovery assets assets potentially making it an all cash offer. Julia Borson's got the details.
- [29:39]
Julia Boorstin
Julia hey Melissa. That's right. Netflix is reportedly working on revised terms for its Warner Brothers Discovery bid and it has discussed making its offer all cash. This according to a report in Bloomberg. Now we have no comment from Netflix and we have not heard back from from Warner Brothers Discovery that we have reached out now. Currently Netflix is offers 84% cash, the rest is in stock. Going all cash would aim to speed up a sale that is expected to take months to close and of course faces regulatory approval as well as competition. Paramount Skydance has offered an all cash offer for its bid for all of Warner Brothers Discovery. Just yesterday, Paramount Skydance sued WBD and CEO David Zaslav as part of its hostile takeover attempt following WBD's board recommendation that shareholders reject Paramount's amended offer. Now Netflix reports its quarterly earnings a week from today, with Netflix shares down about 12% since this deal was announced late last year. We do expect this how they manage this going forward to very much be in the spotlight. Back over to you.
- [30:52]
Melissa Lee
Karen's got a question.
- [30:53]
Karen Feinerman
I've Got a question for you, Julie. I don't know if you'll be able to answer, but this still leaves the question of the rest of WBD and how that trades. And so the cash part, obviously we can compare cash to cash, but we can't quite compare cash and a stub to whatever Paramount ultimate bid might be.
- [31:11]
Melissa Lee
That's right.
- [31:12]
Julia Boorstin
So that's absolutely important to point that out, Karen, because Netflix is only buying the studios and streaming division. That leaves the linear networks, what you might think of as the legacy discovery assets. And of course, you have Paramount Skydance, which is looking to buy the entirety of it. Now, if this were to go forward as it is now with Netflix just buying the studio and streaming, you would see those old assets, those old legacy discovery assets continue to trade as a separate, as a separate company. But of course, they might be subject to some M and A activity as well. So as you look at shareholders trying to decide what to do here, you're right, it's not apples to apples. But at least now if Netflix does make this change, it would both be cash versus cash.
- [31:59]
Melissa Lee
All right, Julia, thank you. Julia Boorstin, what's your take? I mean, the appeal of the speed of the transaction I get, but I.
- [32:07]
Karen Feinerman
Don'T get that, actually, because I think the speed of the transaction isn't due to the stock part. You just need to file a proxy. You need to, the shareholders need to vote. They would need to. I don't think that timeframe is longer than what approval would take. So if they went through that and got the approval, they could do it. So I'm not, unless I miss it, maybe I'm missing something there. But that part I don't quite understand.
- [32:32]
Guy Adami
What I'm missing is why the all cash offer, like, you know, what is a gain. Yeah. If they've already won this, you know, my sense is that you're already deep into breakup fees and things that looks insurmountable. Why do this?
- [32:48]
Tim Seymour
Yeah, Netflix reports on the 20th and this is not going to be resolved. I don't think it's going to be resolved by them. But I think you're going to see a pretty significant relief rally on Earn on the earnings release. So I think the average price target According to street accounts, 127ish from analysts, this has gotten itself to levels where valuation, regardless of outcome is very compelling.
- [33:09]
Guy Adami
Right.
- [33:09]
Melissa Lee
Coming up, insight in focus. The biotech CEO joins us from the JP Morgan Health Care Conference with more on his company's growth strategy in the face of a huge patent cliff. Looming back right after this. Welcome back to FAST money. Stocks pulling back from records as earnings season kicked off. The dow falling nearly 400 points. The S&P down 2.10 of a percent, snapping a three day winning streak along with the Dow and the Nasdaq also with a small loss down 0.1%. Silver continuing its climb, hitting a fresh all time high in today's session, settling about 1.5% higher, up more than 22% this year already. Shares of Shake Shack higher again today. The stock now on a nine day winning streak up more than 23% in that time. Boeing up 2% after saying it delivered 63 planes in December, bringing its 2025 annual total to 600 aircraft, outselling rival Airbus for the first time since 2018. And intel jumping another 7% today after analysts at KeyBank upgraded the stock to an overweight with a $60 price target, citing AI data center demand. The stock is up nearly 30% already this year. Well, Insight is one of the big winners in biotech over the past year, surging 43%, adding over $6 billion in market value in that time. The company, though, faces loss of exclusivity of its bestselling blood cancer drug jakify in 2028 and is increasing its focus on commercialization and R and D to offset that patent clip. For more, Insight CEO Bill Murray joins us now from the JP Morgan Healthcare Conference. Bill, great to have you with us.
- [34:42]
Bill Murray
Thanks for having me.
- [34:43]
Melissa Lee
Melissa, how should we think about how those revenues, which are projected to be around $3 billion in 2025, Jackify, how you will replace those revenues? You've already laid out a plan. You started laying this, this groundwork in October, I believe the prioritization of seven products that you will then find two or three blockbusters. How confident are you that you'll be replaced? You'll be able to replace that $3 billion when the time comes?
- [35:10]
Bill Murray
Yeah, we've made a lot of progress in 2025, as you know, you can cut or buy your way through these, these loes. And I think there's two parts to the solution. One is to continue to perform in terms of our core business, ex Jackify, which will be up almost 40% in 25 over 24. And that's an important part of the solution. And the other is we advanced, you know, seven programs in 2025 and they're being supported today by 14 phase three trials. I think that people have much greater visibility into the growth trajectory of the business and the breadth and depth of the pipeline and I think we're going to be able to navigate this cliff in a way that's acceptable to everybody.
- [35:50]
Melissa Lee
You've said you only need two or three winners out of the seven. So how should we think about when you do deliver those phase three results in terms of total addressable markets and potential revenue?
- [36:02]
Bill Murray
Sure.
- [36:03]
Lawrence Golub
Yeah.
- [36:04]
Bill Murray
You can never be perfect and you have to assume some attrition in your pipeline. I think the outlier opportunities and Insight are the three targeted therapies we're developing for blood cancer, and that is the central identity of the company. There are no targeted treatments today for people with blood cancer. We have three in development. Our monoclonal antibody targeting calr, which is sort of a rogue protein that produces problems in the bone marrow, is number one. We also have two solid tumor oncology programs, a G12D inhibitor for pancreatic cancer and a TGF beta by PD1, which is a bispecific for colorectal cancer. Those are two high incidence cancers that have essentially missed the IO revolution. I think those are the outlier opportunities. And if we were successful with those compounds, I think we'd set out a high watermark for Insight and go way beyond Jakify supply. And there are others that are relevant too.
- [36:58]
Melissa Lee
Are you completely focused on what is in your pipeline? You had mentioned you can't buy your way out of loe, but some other companies are trying to do exactly that. So how do you view sort of strategic M and A or possibly, you know, selling some compounds yourself?
- [37:15]
Bill Murray
It's a really good question. We have a balance sheet that the end of the year is roughly $3 billion. It'll grow to roughly $5 billion by the end of 2026. And so we have firepower. It'll be important part of the growth strategy and it'll be used to either strengthen or extend the core. We're not going to chase deals or try to fill a revenue gap. We'll look for assets that are high fit in terms of insights, sort of capabilities and where we have a great deal of knowledge and expertise and assets that can produce over the long term durable revenue, earnings and cash flow. So definitely part of the growth strategy that will complement what we have inside the company.
- [37:55]
Melissa Lee
And in terms of getting that pipeline to commercialization, are you going to attempt to use or obtain a national priority voucher from the FDA in order to move some of these products through the finish line faster?
- [38:11]
Bill Murray
It's a good question. I think there are a lot of options for accelerating the development and ultimately the approval of these compounds. We're evaluating all of them. As you know, our job is to convert science into FDA approvals and ultimately business results. And so that'll be part of our consideration.
- [38:27]
Melissa Lee
All right, Bill, great to speak with you. Thanks so much for your time.
- [38:31]
Bill Murray
Thanks, Melissa.
- [38:32]
Melissa Lee
Bill Murray, the CEO of Insight again, up 45% or so in the past year.
- [38:38]
Tim Seymour
Yeah, it's had a great run. I mean, not that it matters. Go back historically, we're nowhere close to we've met. With that said, this is real earnings with real revenue with real meaningful valuations that I think are reasonable in this environment. I don't know if this becomes an acquisition target, it's probably sort of maybe at the upper end of value in terms of market cap. But I think there are a lot of reasons to like the stock, especially this phase three study. It's about to happen.
- [39:03]
Melissa Lee
Yeah, the interest just in biotechs overall in health care. This conference seems to be very different. The flows into the sector have been, you know, remarkable from the generals community for the first time in many years and also venture capital going into this.
- [39:18]
Karen Feinerman
Area, which is kind of surprising given what you think the administration wants to do. And you know, for the last year, for certainly the last year, it felt like, all right, there is a bullseye on this industry and it's a very different feel right now.
- [39:32]
Melissa Lee
There's a lot more from the J.P. morgan Health Care conference on Mad Money. Jim is chatting exclusively with with the CEOs of Amgen, Regeneron, Novartis and Cardinal Health. Catch the full interviews, top of the hour. Next up on FAST Day 2 of the 2026 acronym unveiling. Will the chairwoman follow the rules this time? Could this be Tim Seymour's year? We'll get their picks a few minutes. Welcome back to Fast Money. It is time to unveil two more 2026 Trader acronyms. Today. Karen Feinerman and Tim Seymour layout their picks. But before we begin, we thought we would revisit the rules, please. The acronym number one must spell out a real word or name. Each letter must match the first letter of the ticker and one letter per company or ETF. Now, last year's third place finisher, Karen was up almost 34% with Carbed. Although A stood for Baba, E stood for Oil, Oih. And somehow R was for United Rentals. Oh, it's for Rentals. R for rentals.
- [40:37]
Guy Adami
Somehow.
- [40:38]
Melissa Lee
All that said, Karen, what is your 2026 acronym?
- [40:42]
Karen Feinerman
Well, what's your point there? My acronym is I'll be dang. B. Dang. That Is my acronym I'll be dang. Yes, I'll be Dang.
- [40:53]
Melissa Lee
If you go to a doctor.
- [40:54]
Karen Feinerman
If you go to a doctor and you want their opinion, do you say please give it to me in haiku? No. You just want to know what they think. So this is mine. Boeing again. I like it. We all the reason reasons we know why. Cash flow positive coming up. Dell really disappointing last year up mildly should have been up way more. I think they'll get it together this year. Amazon. When you look at where Wal Mart is trading and when you look at their nwc this is just too cheap and is Novo. I love that they're in front now they're ahead in the oil oral GLP space a related one. And I did not come up with this acronym today. I came up with it last week was a deadline.
- [41:29]
Guy Adami
It's obvious you were thinking about this.
- [41:31]
Karen Feinerman
G which clearly means structured therapeutics.
- [41:33]
Melissa Lee
Although it's.
- [41:34]
Karen Feinerman
I don't want to hear it. Why it isn't. Today was a good day. This is. You know. But that has. Because I do think they are a takeover target. It is a land grab in the oral GLP1 space and they have some land.
- [41:46]
Melissa Lee
So basically you did follow many of the rules except for making it an actual word because obviously B Dang is.
- [41:53]
Guy Adami
Not a word and can structured bg. I mean that's ticker.
- [41:58]
Dan Nathan
It's a ticker garbage all year this happened to go on Dang.
- [42:03]
Melissa Lee
Yeah.
- [42:04]
Karen Feinerman
Okay, let me come up with a word that's easy where I don't care how the stocks do. Is that what you guys are saying? No.
- [42:10]
Dan Nathan
Couldn't you have gone to ChatGPT and just see if it comes up with another.
- [42:14]
Guy Adami
I love the fact that Karen continues to break the rules and is absolutely without.
- [42:19]
Dan Nathan
Couldn't you be as simple as guys without remorse?
- [42:22]
Karen Feinerman
No, I can't.
- [42:23]
Lawrence Golub
I can't.
- [42:25]
Melissa Lee
Wait to hear what Tim's action acronym. Yes. Because band was 50%. Was the gain better than bicep or bicep?
- [42:34]
Guy Adami
The acronym being early in the case of a couple of my other acronyms on stuff like Alibaba and you know. Anyway, let's. Let's get into Timbo. That's right. What is Timbo is a word. Well, what. Not a word. You can make an argument. That's. That was my nickname growing up or it's a. It's a West African surname that means strong. Anyway, the bottom line is Target. This is a company change of character. But it's classic how I like to pick them bombed out names That I think actually have turned the corner. We know management change. We know there's actually different segments that they're moving into. I like it. ID VO International. This is my etf. International's outperformed. It's already done it again this year. I think it will continue to be a place investors want to be however you choose to invest there. M is Melco. This is, this is of course Macao. This is of course gaming. And I don't think I'm rolling the dice on this. I think this is a case where this one gross gaming revenues have underperformed over the last couple of months. The stock has pulled back 35% in a blink. I think we're starting to see China normalize. B I could have been like Karen actually I. Biogen could have been biotech but instead I chose Biogen and I chose it because they've got five, at least five to six drugs in phase two or three in their pipeline that could be major catalysts in 26 including the Kembi. I think this is going to be a big performer. It's already had a big move off the bottom. Oracle also fits the name of. Look, I don't love Oracle here. I just think this thing's so beaten up, I think it's a world class company. I don't even know if they're going to get to any of those contracts right now. Valuation, they're not in the price. It's Timbo folks. And it's here.
- [44:12]
Karen Feinerman
Did you toy with Best Buy for bimbo or is that ever on the.
- [44:15]
Guy Adami
I mean look, there's. What we haven't said is that the rules could change at any point. This could be bimbo. I mean by the end of the year it could be. There's all kinds of things it could turn into. Yes, all year. Dan. Yes.
- [44:29]
Tim Seymour
I have a haiku to take us out since Karen mentioned haiku. Karen's acronym. Heads exploding everywhere. FM rule breaker.
- [44:40]
Melissa Lee
Nice.
- [44:41]
Tim Seymour
That's a haiku.
- [44:42]
Melissa Lee
That's a beautiful haiku.
- [44:43]
Tim Seymour
We do haiku.
- [44:44]
Guy Adami
I don't even know what haiku it is.
- [44:46]
Tim Seymour
575.
- [44:47]
Melissa Lee
All right, coming up.
- [44:48]
Guy Adami
6, 6, 7. I knew 6, 7, 6 7.
- [44:51]
Melissa Lee
The group hitting multi year lows. Are our traders dialing in for a rebound or is it time to hang up on this trade? Fast money's back in two. Welcome back to Fast Money. Telecom stocks in the red today and hitting some multi year lows at and T at its lowest in nearly a year. T mobile trading at lows not seen since August of 2024 and Verizon also falling 2% today. Dan, I believe you brought this up on our call. You were the only trader actually who.
- [45:28]
Dan Nathan
Dialed into our carrot was busy coming up with an abomination of an acronym.
- [45:35]
Karen Feinerman
These things write themselves.
- [45:36]
Dan Nathan
I know. You know one of the things about T Mobile, I got to go with the landman here. You know, Billy Bob Thornton has been all over these commercial commercials now expected to have 15% earnings growth, 7% sales growth this year. Better margin structure than that of Verizon and AT&T. And if you think about how much the stock is down from those all time high, it just start to look interesting here. I mean it just seems like baby at the bathwater in all of these.
- [45:57]
Guy Adami
Wireless names, the telecom stocks in June of last year, even mid summer, we were saying, oh my gosh, are these names? I mean a lot of these names were actually well, well into multi year highs. T Mobile has been doing this for many years. So. I agree. I mean I think that's the highest quality name with the best growth prospects. I sold out AT&T whatever fall of last year. I don't see myself coming back. I don't know why you'd want to own it here.
- [46:24]
Tim Seymour
I'm looking at T Mobile always going to trade at a premium to its peers without question, but it should. And to your earlier point, it sold off significantly over the last few months. I mean they report on the 4th of February. I think this is a name like over the next couple of weeks you're looking for a spot to get long into earnings.
- [46:39]
Melissa Lee
Up next, final trades, Final trade time. Timbo.
- [46:57]
Guy Adami
I should ask somebody, Guy. What's the M in Timbo?
- [47:00]
Tim Seymour
Milk?
- [47:01]
Dan Nathan
Melco.
- [47:01]
Lawrence Golub
It's my final trade.
- [47:02]
Guy Adami
Thank you, Guy.
- [47:03]
Lawrence Golub
Thank you, Karen.
- [47:04]
Karen Feinerman
Yes. So JP Morgan, I thought this really was overdone. So I like JP Morgan here better than yesterday with this news.
- [47:12]
Melissa Lee
Sam?
- [47:13]
Dan Nathan
Yeah, I'm a guy. It's not in your junk, Guy, but T Mobile getting kind of interesting here.
- [47:18]
Melissa Lee
A lot in his junk though There's.
- [47:19]
Lawrence Golub
Well, Guy.
- [47:20]
Tim Seymour
No, that's true. True words have never been spoken on this show.
- [47:23]
Lawrence Golub
Yeah, a lot going on.
- [47:27]
Tim Seymour
Have you seen before McMurray and melt? You should take a look at it.
- [47:31]
Melissa Lee
All right, thank you for watching Fast Money. See you back here tomorrow at 5. Mad Money Jim Cramer starts right now.
- [47:38]
Narrator/Commercial Voice
All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer USAA knows dynamic.
- [48:11]
Guy Adami
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Bill Murray
And sidekicks or auto and home insurance. With usaa, you can bundle your auto.
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