AI & Metals Fever Breaking?... And Top Tech Picks For The New Year 12/29/25

22:21And with Discover, you can. Get this. Discover automatically matches all the cash back you've earned at the end of your first year. Seriously, all of it. And we trust you to make smart decisions. After all, you listen to this show. See terms at discover.com slash credit card. All right, welcome back to Fast Money. Dollar General hitting more than 50 two-week highs today. Dead in the day a little bit down, but the stock has been rocking. It's up more than 80 % this year. Dollar General, Guy, Dom, is on track for its best yearly performance since it went public back in 2009. You yourself flagging strength in the stock.

23:03Dan Nathan:Why? What are you looking at? Well, technically, and we can go back to 2015, 16, 17, we traded down to the 68 level recently. Those were the same lows we made a decade or so ago, and we held. That was really important. We actually flagged that earlier this year. Then it started to get on its horse. Then you got an earnings beat. Then you have analysts starting to come around and, hey, wait a second. Maybe the stock is too cheap, and maybe they shouldn't be in the penalty box along with Target. And now you're seeing what's happening. The average price target, according to FactSet, believe it or not, is exactly where it closed today.

23:33Dan Nathan:So what I think you're going to start seeing over the next couple weeks is analysts start to chase on the upside. So I don't think the move is over. I think there's significant upside left in these names. And plus their product mix. They sell 80 % of their products are staples. So you have essentials. and their cheap essentials. And in this day and age where tariffs made everything else more expensive, they really usher a lot more consumers in. When you look at these stocks, you look at Dollar Gen and Dollar Tree. Dollar Tree had that. Both rocking, by the way. You don't want to leave out Dollar Tree.

24:01It's up 31 % in three months. Yeah, but when you look at it on a year, this one has grossly outperformed. Dollar Gen is up 81%. The other one's up 65%. But one's a general, one's a tree. But they've both killed it. But when you look at what the past is for Dollar Tree, they took over or bought family dollar 10, 12 years ago. That seems like a mishap for them. They've had store closures. They don't have the same product mix as Dollar Gen. I would pick Dollar Gen still. Well, I think this has been a beneficiary of the K-shaped kind of recovery, right? And we were worried about economic growth. We got a GDP number that knocked the cover off the ball, a la Sammy Sosa, 10 years ago.

24:47Good reference. But I'm really wondering, if we do indeed thread the needle and have this soft landing, Goldilocks scenario, will the momentum behind this name continue? That would be the one thing that concerns me here. Yeah. So I think basically in the short term, they've both done well. But to your point, for the year, one's Barry Bonds, one's Sammy Sosa. So ultimately, only one can win. Right. And that one is going to be bonds. Well, I think you want to broaden this thing out a little bit from these two companies, right?

25:16Melissa Lee:And so we've been talking about Walmart and the trade down that we've seen over the last few years or so. And obviously, that's a period where inflation, while it is becoming more muted, on a cumulative basis, is still very high, right? And so if you look over the last month or so, we saw Kohl's have that huge beat and raise. Stock gapped up in one day, I think 40 % or something like that. That was Thanksgiving week. And you've seen this across some other names like this that you might associate with a mid to lower end consumer. Now, the flip side of that is Costco can't get out of its own way.

25:47Melissa Lee:And Costco has been making 52 week lows as Walmart has been making 52 week highs. If you just look at it over the last month or so, at some point, I suspect you're going to see a little bit of convergence in that. But to Bono's point about this GDP number and the unemployment number, they're kind of seem to be at odds with each other. The higher unemployment goes, though, I suspect the more that you see demand for these sorts of, you know, the I guess the items that are sold at these stores. And that should obviously buoy the stocks. We're not going to do it now. And Karen's not here. But Target, Target has been another hot stock the last couple of months.

26:20It's up 10 percent. All right. That's a sound of a rapidly moving deal. I mean, good for Target. Maybe not in the Adami household. It's still down 27 percent year to date. Sorry. There's a lot more fast money left. There is a lot more fast money to come. Here's what's coming up next. The wheels keep on spinning for GM. The stock outpacing competitors this year, even lapping Tesla. But can the drive higher continue? Plus, a big year for big tech. But who will carry the group in the new year? A top tech analyst lays out the names he's standing behind. And the one-time darling that didn't make the cut.

26:56You're watching Fast Money, live from the NASDAQ market site in Times Square. We're back right after this.

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28:26After all, you listen to this show. See terms at discover.com slash credit card. I'm going to love this segment because we get to talk about cars and trucks. General Motors, that stock put on a tear this year. It's up 56%. GM is on track for its best year since coming out of bankruptcy in 2009. Cash for clunkers, anybody? GM is now trading at all-time highs. It is handily outperforming its rivals like Ford, Toyota, and even Tesla. The question now, though, is if you own it, Steve Grasso, what do you do? I mean, they sell an awful lot of cars. They sell an awful lot of trucks. They sell an awful lot of SUVs.

29:07The Trump administration— $100 ,000 Tahoes for everybody. Exactly. They are expensive. But the Trump administration relaxed fuel standards, relaxed emission standards, stopped the EV mandates. So I think the market is just truly balancing out the headwind that they had for the last couple of years and turning it into a tailwind. They chose ICE over EVs. I think the trade probably should maybe stall, if you will, a little bit. But I think ultimately it goes higher.

29:36Dan Nathan:Sorry, go ahead. Stall? Yeah, you saw that, right? You caught it. But Brian's immersed in something else. He's locked in. I'm not going to acknowledge that. We mentioned a few weeks ago that you're probably familiar with. That would be BorgWarner BWA. Yes, it's an auto parts company. It's also the namesake of the Indianapolis 500 Winners Trophy. Which, as I just said, you're familiar with it. Throw up an eight - or nine-year chart of this sucker, and you'll see this 48 level was huge resistance in 2017. We traded up there again, I think, in 2022. Here we are sort of knocking on the door, and I think BWA is the name downstream that if we break through 48, it's got a lot of runway to the upside.

30:15Dan Nathan:You know, BorgWarner does. That's the same. Are you bullish on all the automakers? I said BWA. I said we mentioned it the last few weeks ago, and you said it's not only that, it's the recipient trophy in an Indianapolis 500. But I'm asking a new question, which is are you bullish on all the auto parts companies? Specifically BWA. Why? Just because this is one I happen to look at. Genuine parts is one I think people talk at. Look at BWA is the one I've been focused on recently. The one thing I would add is that GM, not that I care what analysts have to say, but I do care, and GM is at its analyst price target.

30:49Melissa Lee:So either Wall Street has to move or not. Wall Street will move because they always chase a little bit here. One of the things I think is interesting that we got rid of these EV credits, right, these tax credits at the end of Q3. And if you look at how Tesla has traded since then, if you look at how Rivian has traded since then, they've traded very well. And on the Rivian front, you know, they introduced this AI trip. They've underpriced, you know, Tesla's relates to self-driving or at least their kind of, I don't know, super-survise self-driving, whatever you want. They price it at$2 ,500 versus Tesla at$10 ,000.

31:22Melissa Lee:So it seems to be that, you know, the auto business maybe is something that for at least these EV companies where you see a transition to autonomy, you know, this is something that maybe these stocks are trading on. I think Rivian is a clear example of that. And that's a fascinating point. I mean, Rivian, we don't talk a lot about it. It's over 20 bucks a share. It was sitting around 12 to 14 forever. It's really broken out. Are you surprised by that, given the change in the tax credit? They miss their deliveries, you know, year on year. And they lose a lot of money. They have a lot of cash. They have some big shareholders not going to let it go down.

31:53Melissa Lee:They have good cars. And I think that, you know, we've been talking about full self-driving for a while. Elon has shifted the conversation more towards autonomous ride share. But maybe, you know, Rivian's got something. They're operating off of a very small base as far as cars that they're making and delivering. But they make good cars. All right. Coming up, technology in the red today. Some of the biggest names seeing some losses. But listen, light week, low volume. Guess what's happening? Dan Ives is going to be here. No. I can see him just on. He's here in person in a, I think it's a peach colored jacket, mango, McLaren, papaya, whatever you want.

32:29He's going to give you his top tech picks for next year. Guy Domi can't control himself. We're back right after this.

32:40All right, welcome back to Fast Money, everybody. Stocks closing a little lower to start the shortened holiday week. The Dow fell 250 points. The S &P 500 down about three-tenths of a percent. The Nasdaq down about half a percent. But keep in mind, low volume, no Fed speakers. New Year's on Thursday. Go figure. All right. Oil, though, a little higher today. Settled up more than two percent, but oil still down nearly 20 percent this year on pace for one of its worst years in years. In fact, worst since 2018. So worst in about seven years. Lululemon also on the tape responding to founder Chip Wilson's proxy fight and plans to nominate three independent directors to Lululemon's board.

33:20Lululemon saying it will evaluate the nominations as by the way it's legally obligated to do. Meantime, a batch of technology stocks under pressure as we wind down the year. Oracle, amongst the bigger decliner, shutting about 30 % over the past two months. Meta, Broadcom, NVIDIA even kind of stuck in a little bit of a holding pattern the last couple of days, though. And, Dan, you flagged some of this weakness for us.

33:47Melissa Lee:I mean, there's a way to look at this, and you broaden it out, that it's maybe bullish for the market. You know, if you look at Apple, Amazon, Meta, Microsoft, Tesla, they're all underperforming the S &P 500 year-to-date, right? And then if you look at some of these other names, Mac was talking about this on the prior program. You know, you've seen storage. You've seen memory. Some of these things have kind of joined the party. But maybe that's kind of late stage if you think about the enthusiasm in and around the trade. Maybe we've gotten to a point where there is some skepticism about the ability to continue this CapEx at the pace, despite all of these companies that just guided that CapEx higher.

34:21Melissa Lee:So, again, you know, to me, I think it could be viewed as a bullish thing that you're seeing a broadening out away from some of these names that have been huge, huge contributors to the growth of the S &P 500, not just on earnings, but also performance. All right, in the meantime, Wedbush Securities today, out with its top tech names to own into next year. Among them, Microsoft, Apple, Tesla, Palantir, CrowdStrike. One name that you're not seeing on that list, NVIDIA. Dan Ives behind the call. He is the global head of technology research, And I have to issue the biggest correction in the history of my career, which is now that you're in the light, that jacket is not McLaren papaya.

35:01It is, I would dare say, peach. Look, I mean, I'll take both sides. Again, you never. That vital correction now aside, why is NVIDIA not on your tech names to own next year, Dan? Yeah, well, it's still, I mean, still in our lives, AI30, a top tech team. But ultimately, to me, in terms of the five that stick out, it's really about how do you play the AI revolution on the hyperscaler? How do you play it on the consumer in terms of Apple? How do you play it on enterprise with names like Palantir, CrowdTrack, CyberScore? Brian, I view it as like NVIDIA. There's only one godfather of AI. Jensen will see him next week at CES.

35:39But the derivatives, the second, third, fourth, just starting, which is why we're so bullish in tech.

35:44Dan Nathan:You're in the Hall of Fame. Regardless of color, although Oscar Piastri just emailed me and mentioned that he actually thinks the color is a McLaren papaya. There you go. With that said, what is Palantir, what do their revenues need to be? They're going to do$6.5 billion of revenue next year to justify a half a trillion dollar valuation, in your opinion. Yeah. Look, I mean, to me, and we've talked about it a bunch, it's that it's ultimately it's the it's the commercial business that I believe could ultimately be two, three billion. When I see it playing out, I mean, I think when you actually do the trajectory here, I think numbers where you see for Palantir in 2026, I think they ultimately double over the next three to four years.

36:29And it speaks to the point, super expensive stock today, but I just view it, I think it's a trillion dollar valuation in the next two or three years as the AI revolution plays out. So everyone knows you for these marquee names. And when you go into CES, what I always look at are a portfolio of names that are going to shock people, something that shows up. If you search anything with CES, you'll see robotics come up. What are the names you meet with everyone, both private and public companies? What companies are going to, A, be there and have impressed you already? Yeah, I think when it comes to robotics, I think maybe like an off-the-radar name that we're bullish, Serve, like Serve AI.

37:10When you look what they're doing on robotics on the delivery side, what I view is actually true autonomous playing out. They'll be there front and center. And look, Steve, to me it's really like the autonomous is going to be front and center here. It starts with what Jensen's going to lay out. But this speaks to autonomous robotics. Robotics is going to be key to what I view as one of the and that's one of the core names.

37:32Melissa Lee:All right, Dan, talk to us about RPOs. It's not the run pass option. This is remaining purchase obligations here. Not something that I think a lot of folks were talking about too much until this summer when we saw, you know, that huge open AI contract with Oracle. And a lot of investors were really excited. And, you know, as an analyst, though, you see this big number, right? you see a$500 billion purchase obligation. How do you think about that? It's not in your numbers, right? But it helps kind of formulate how you're thinking about future revenue. To me, the market called BS on this with Oracle.

38:04Melissa Lee:And how do you think about it? Is this something we're going to see? Maybe some of these contracts not come to fruition. Look, and I think we sit here a year from now. I think actually one of the names that's going to stick out is sort of the renaissance that's going to happen in Oracle. Because to me, when I look at what's happening, where they play from the stack play, where they play in terms of AI revolution, I think investors are wrong to call out that this RPO, what I've ultimately realized, a reacceleration of growth, that's going to go from 18 % to 30 % to 45%. I think 80 % and 90 % of that gets done.

38:41So to me, would I take out 5 % debt if I had 100 % chance to ultimately do what they could do? Yeah. And I think that's what they're doing. And I think that's why Oracle, to me, right here, it's a 78-hour upside, 15-hour downside risk-reward. All right. The risk-reward certainly skewed to the upside. Dan Ives, always love seeing you. Great to be here. That's a beautiful peach-colored jacket. Dan, thank you. Bottom one. Well, listen, I think Dan has always been on the front and center in terms of seeing what people can't see. The thesis that's not necessarily within the numbers as you see them to date.

39:19And I think when it comes to robotics and AI, and now we're kind of seeing the transition to inference as kind of signaled by NVIDIA's purchase of Grok. Or, sorry, licensing of Grok. Let me make sure I don't use the wrong word here. I think he's kind of stayed on the forefront there. I think the case for Oracle is a little bit tougher for me to get my head around. But I can see a scenario in which you look up six months, a year from now, and you say, my goodness, that really would have been an awesome opportunity for me to kind of pick up this stock after it completely roundtripped. And then it's trading to a discount to where it had established itself prior to the debt concern.

39:54So, listen, I think he's been on top of it. I have long kind of pushed back. I think a lot of us have against the Tesla narrative. But that has proven to be right. And the fact that it's now being valued as a robotics company, a self-driving company. And we talked about GM earlier, but Tesla is completely decoupled from what it is as a car company. So I think he's been on top of this. Good stuff. Yeah, I think the Oracle debate is probably going to be one of the big stories heading into the new year as well. Coming up, pending home sales made a big jump in November, but home building stocks continue to go down.

40:30Why? Talk about it coming up.

40:37All right, got some new signs of a thaw in the housing market. Pending home sales jumping to their highest level in nearly three years in November. Let's get more now on the housing market with Diana Olick in Washington. Diana. Well, Brian, pending home sales in November, as you said, came in much better than expected, up over 3 percent from October and over 2 percent from a year ago. The best showing, in fact, of this year. Now, these pending sales are based on signed contracts, so it's an indicator of future sales. Homebuilder stocks, though, are getting nothing from today's better than expected report on those pending sales.

41:11But you can see the homebuilding ETF, ITB, is down on the day following the broader markets. Big names like Lenar, Pulte, and DR Horton all off around 1 % on the day. The builders are much more sensitive to mortgage rate moves, which we did not get today, and to the broader economy right now. Also, a win for the existing homes market, while it does show more buyer demand, does not necessarily translate to new homes, which are more expensive. It also shows the existing market now getting more competitive again. The builders had actually been benefiting from slower resales because they didn't have that competition.

41:45Brian? Diana, look in D.C. And by the way, check out Diana's newsletter, Property Play. Diana, thank you very much. To Diana's point, Steve, some of these stocks have been just awful the last couple of months. They had a bunch of buy downs, right, for the mortgage rates. You need mortgage rates to come substantially lower. Most people have a mortgage rate. I bet you your mortgage rate, if you have one, big guy, I think the mortgage rate is probably around 3.5. That would be my guess, right? Lower? All right, sorry. So you need mortgage rates to come below 5.5. I talked about it every day, but I'm the guy that forgot to do something because I was too busy talking about it.

42:22My mortgage rate's like 14%. It's impossible. You bought your house during the Carter administration? No, no, no. So you need a mortgage rate below 5.5%. We still have a ways to go there. We've seen existing home sales lag, new home sales, and now you're starting to see that level out. I would still be a buyer of the home builders here. I think rates are coming down. They will benefit. Well, we've cut rates three times in a year, and yet mortgage rates have done what, Guy Domi? They're basically the same place they were a year ago. That's the police coming to get you for no refinances. That's the mortgage rate police.

42:59Dan Nathan:I'll say, you know, what a lot of people may not realize, all the four names we talk about, DHI, Pulte, Toll Brothers, Lennar, they all topped out in November of 2024, and they've been trading lower to sideways ever since. Paul Pichardo, Lennar, if you want to see one that's completely underperformed. And I think, listen, we can debate whether or not interest rates are going up or down mortgage rates. I don't think it's about that. I think it's about the unemployment rate, and that's definitely going higher. You don't think it's about that? You don't think if mortgage rates fell a percent, those stocks aren't going to take off?

43:25Dan Nathan:No. I think the unemployment rate's a bigger deal right now. I mean, people will say that, first of all, I don't think that's going to happen in terms of mortgage rates. Let me be crystal clear. I think if that were to happen, maybe get a knee-jerk bounce until people realize, wait a second, maybe there's something else going on here. And if the unemployment rate continues to tick higher, homebuilders are going to continue to tick lower. All right. Good discussion there. We have another one coming up after the break. We're going to talk about Netflix. Why can't it catch a bid the last couple of months?

43:52We're going to talk about it. You've seen Stranger Things. I have. A lot of people are hating on it, and I'm not one of those. We're back right after this.

44:05So you're counting crows for Netflix because they're having a long December. Nice. The streamer is sliding more than 8%. It's announcing it wanted to buy pieces of Warner Brothers Discovery earlier this month for the year. Netflix up only, but by about 5 % bottle. And you mentioned this round trip for the stock on our midday call. Why? Yeah, well, because I think a lot of the attention right now is being spent on the hyperscalers. I guess Netflix is within the Mac seven, but that AI trade. And I think the rotation that we're seeing out of technology and out of high beta is more than just that.

44:40And so I think as long as you continue to see this momentum where you're kind of seeing money flowing into that industrial complex, Netflix is kind of somewhat emblematic of that rotation. I think, listen, this is a very fundamentally sound company. I just think it's at this point where it's now a mature compounder. And until we see some type of reacceleration in either margin or free cash flow, there's going to be some re-rating here. And I do think this is likely going to be an opportunity to get it. But that's what's going on with Netflix, in my opinion.

45:08Melissa Lee:Yeah, you can make the argument long before this bid that, you know, Netflix had something fundamental going on. Spotify had been trading the exact same way. Maybe it had something to do with the union economics. Maybe it had something to do with the saturation here in the U.S. because both these charts, if you overlay them, they look almost identical. And Spotify didn't even make an$80 billion bid for another company that might even highlight maybe some of those weaknesses we're talking about fundamentally. So to me, I think if Netflix does not get Warner, I think you buy it with two hands. And I think Spotify is getting pretty cheap here, too.

45:38All right. Look at them both. Go. All right. Up next, it is your Final Trades.

45:52Exactly one minute for Final Trades. Kick it off, Steve Grasso. There was a name that Dan Ives mentioned. It was Serve Robotics. It's been under pressure this year. It's down 27 % year to date. He mentioned it. They are presenting at CES, Serve Robotics. I know sometimes this company has this tendency, SoftBank, to top-tick the market, but I do think you can get some directional bias from them that is actually quite accurate. If you're looking at the AI infrastructure play, look at Verti, V-R-T.

46:22Melissa Lee:It's also worth noting, SoftBank is down nearly 3 % since it sold its entire NVIDIA stake a couple months ago. Interesting. So that's not your final pick? No.

46:32Dan Nathan:Spotify and Netflix are starting to look interesting here. Jason Coleman will be performing Wednesday evening, but he was also spinning some chaperone before the Pink Pony Club. ExxonMobil, Brian. XOM going up even as oil goes down. Thanks for watching Fast Money. We'll see you tomorrow. Mad Money starts right now.

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