AI and Software Stocks Struggle… And the Best Buys in Biotech 6/22/26

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22:20Gambling problem? Call 1-800-GAMBLER or 1-800-MY-RESET. All right, a lot of breaking news tonight. We've got some more happening right now out of D.C. So let's go to Eamon Javers with the details, Eamon.

22:32Melissa Lee:Yeah, Brian, what we've got is a new statement here from the central bank governor of Iran, who is more or less directly contradicting something we heard from President Trump here at the White House earlier this afternoon and also from Vice President Vance in Switzerland, in the presser earlier today. What the central bank governor of Iran is saying is that the agreements discussed over the weekend do not include an obligation of the Iranian side to purchase what they're calling U.S. agricultural inputs. Now, the central bank governor goes on to say that if the price is right and if there's no other obstacle, then they might go ahead and purchase American agricultural products, but they're not obliged to do that under the agreement that's being hashed out in Switzerland.

23:15Melissa Lee:Now, that's a little bit at odds with what President Trump said in a gaggle with reporters here in the Oval Office earlier this afternoon. He emphasized the value of having the Iranians purchase products from American farmers as a result of this peace agreement that he's hammering out in Switzerland. And we saw Vice President Vance earlier today suggest that Jared Kushner had floated an idea with the Qataris, that the U.S. would actually have approval over how the Iranians spent any development money. No indication that's been agreed to either, but he's also suggested that could result in the purchase of a lot of American agricultural products.

23:51Melissa Lee:So I think what's going on here, Brian, is both sides are sort of spinning this heavily toward their direction. The Iranians saying, hey, we didn't agree to anything. We're not locked in. And the president highlighting a potential silver lining here as he sees it for this peace deal, which is that American farmers could have a new customer in the Iranians. Back over to you. All right. Eamon Jabbers at the White House with that news. Eamon, thank you very much. All right. So as we mentioned before, right at the top of the show, there was a big deal in the energy and AI space today. Chevron partnering with Microsoft to fuel a massive new data center in far west Texas.

24:25Data center project is named Project Kilby. It's expected to consume or use about 2.67 gigawatts of electricity. Should start receiving power around 2028. Earlier today, I sat down with Chevron's new energies president, Jeff Gustafson, to talk about the build out. It's a dedicated behind the meter power plant. So not grid connected to start. So no competition with consumers in the area. We signed a long term agreement, as you noted, 20 years, a 20 year power purchase agreement with first power expected in 2028. So a really big day for us. A win win for both Chevron and Microsoft. Chevron shares did end the day higher a little bit, up about eight tenths of one percent.

25:10We already noticed, guys, Microsoft down about three percent. But Guy Damm, you briefly referenced Chevron at the top of the show. It's the first of its kind. It's a 20-year natural gas supply deal. Big deal.

25:22Melissa Lee:And again, it speaks to the importance of the energy sector in the world that we live in. And people have discarded it less than 4 % of the S &P 500, I think, in terms of weighting, and maybe deservedly so. But people, I still think, are underweight the space. And, you know, these stocks have pulled back, rightly so, maybe on the back of the underlying commodity. But the pullbacks have been shallow. Pulp and Marathon Petroleum, for example, MPC, you look at it, the move from, I think, 275 to where it's currently trading is a blip in comparison to what it's done. So I think you state long oil services, names like Marathon, Valero, even the big cap integrated names like Exxon and Chevron.

25:58Well, a lot of these are trading on kind of every every back and forth headline, Tim, around Iran and the Strait of Horowitz. Well, the nice thing about buying Chevron here is you've taken out more than the oil, the war premium, and you're back to kind of early February levels. I mean, the market was kind of sniffing out in the oil space, as we know. The integrators were starting to get a rally really from the beginning of the year. And so maybe you haven't taken it all out. But let's be clear. I mean, Chevron is one of the few that can actually deliver on this. And the real focus here is on LNG, and it really is on the Permian.

26:28And I think that's a dynamic for investors to continue to look at. I think LNG will continue to be a lot more strategic. I also think that the utilities, I own Constellation. I think Constellation is very well positioned in LNG. also, but in that gas. And I think that's part of the confluence of these two trades. I think it is the energy producers, but it is also those power utilities that are positioned to actually be an additional supply scheme. So I would be buying Chevron, not because of this news, but this is just reinforcing your thesis. Yeah. And by the way, in the rest of that interview, which is up on CNBC.com, Gustafson was telling us, listen, this might be the start of more deals like this.

27:06And sometimes natural gas prices in the Permian are negative. You have to pay someone to take your natural gas. And so even as natural gas prices that we show, the future market falls. I would pay Brian to take my natural gas. Guy, let's not go there. Let's just not go there. It's happened before. Yes, it did. Yes, it did. But we'll see if Chevron can make more deals like this. Yes, Brian. Around all kinds of natural gas. Coming up, a streaming giant in free fall, the drop in shares of Netflix. Where does this end? Talk about that and more. Fast Money Live at the NASDAQ Market Site right here in Times Square.

27:47We're back right after this.

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29:19That's Venture Global. That's unstoppable energy.

29:26All right, welcome back to Fast Money. Now, overall, stocks began the week pretty mixed. The Dow was actually up at 148 points. He has to be down a bit, about four-tenths of 1%. But as we've talked about, if you're just joining us, big tech was the story. The Nasdaq dropping more than 1%. Inside the market, we've got to talk about Netflix. Netflix down again today. Stock down almost 6%. It's down 15 % already in June. And it's on pace for its worst month since April of 2022. Of course, that was after the big COVID-related spike. Netflix falling more than 41 % in the past year and now closing at its lowest level since October of 2024.

30:11Courtney, what do we do? So I think this is a company where we used to look at this and people say, well, it's untouchable. Like consumers are never going to cut Netflix out of their budget. But I think that conversation is really changing. I mean, they have enough competition now that people are starting to push back on their price increases. And it is a mature business. They've really reached most of the U.S. audience here. A lot of, like, the higher incomes abroad, too. And at a certain point, they're not going to be able to increase their prices forever. So I don't think this is the same kind of growth story it was in the past.

30:37So I don't think this is something you want to be jumping into. I don't think it's going to go down forever here, but I don't think it's going to have those kind of gains that we used to be. It feels like more than just subscriber churn, or maybe that's what it is. I mean, I don't know when the last time everybody sort of talked about a Netflix show, you know, after since Stranger Things. When's the last time everybody in the collective squid game, Stranger Things? Where's that collective consciousness? I wonder if that's what the stock trades on. I don't know. Well, they're going to live sports.

31:06I mean, they are finding other ways to get into the get into different content. You're also saying they're trying to get, you know, advertising revenue. They're trying to shift the model here to keep those eyeballs. But, yeah, it's becoming a game of how do we keep them as opposed to we're innovating, we're ahead of the game. It's a chasing game at this point.

31:22Melissa Lee:The organic growth. Listen, I thought the whole way down from last fall until the lows that we saw, I guess, in February, I thought there were periods of time where it made sense. That was clearly not the case. But then when the Paramount Warner Brothers thing got sorted out, the stock rallied, and it should have rallied, and I thought the rally would continue. We're now lower than we were, I think, back in February at the trough, which is shocking. And now what the market, I think, is saying is, you know what? The organic growth days are over. And now they need to sort of buy growth. And they're going to overpay.

31:51Melissa Lee:And I think that's part of the concern, along with the fact that Reed Hastings seemingly out of nowhere stepped down. So I get it. But I still think the stock is way too cheap. Yeah, I think you'll probably see a Spotify merger. You know, you've got a$300 billion market cap. You've got a$100 billion market cap on the Spotify. You kind of put those together. They buy Spotify. Yeah, I mean, it looks like a merger. But, like, this is a company, you know, Netflix has 50 % gross margins. and you look at Spotify at 33 % and you say to yourself, these are both double-digit growers. They've got good balance sheets here.

32:18Melissa Lee:And you take out a lot, a lot of costs. So to me, I think if you see pressure on, yeah, Tim. No, I don't want to cut you off. I think this would have been a lot easier like five years ago. Now, what does that even mean? I just got a little. I mean, that is not fair. You looked at me when you said that. It's a provocative thought. The question is, I'm not sure a merger with Spotify is going to help the stock. I mean, I think people would be concerned about that. But I hear you. It actually makes some sense. No, I think it would be a behemoth. I really do. If you think about it from a subscriber situation, you could actually really do a bundle and you could take out a lot of costs.

32:51Melissa Lee:And it would make some sense if you think about Spotify pushing into podcasts. Netflix is doing that. Unscripted is really a big part of it. You know, video is becoming a huge part for Spotify. They go together. But Spotify is not cheap. And my guess is they'd be probably overpaying on some kind of a merger. I just think that, look, the hours per sub numbers were not good. The operating margin dynamic is something that you need to see. And they've been very conservative on this over the last couple of years, and they usually tend to be. I think there's some feeling. Jeffries has a note out that talks about also how these bans on social media for under 16s is something that's Netflix positive.

33:28I think it's a lot of little things. I don't actually think there is a big thing here. I think, and again, as we always say, valuation is not a reason to go buy a company. And my guess is if Carter is here or Katie or one of these people that talks charts all the time, it's not a chart people want to go out and buy. But it is a company I would like to go out and buy. And I, you know, I would probably start adding to a position here. Well, Carter is here. OK. He's just not talking about Netflix or Spotify. Well, you know, maybe. Maybe. But that is a nice easy slide segue into what we call in the industry a tease.

34:02Love that. Which is a promotion of what's coming up after the break. And that will be Carter Worth, the chart master, looking at biotech. Not Netflix. Squid Game in the commercial break. We'll return. Tune in to find out. Hopefully it's your time.

34:26All right, welcome back to Fast Money, everybody. AbbVie shares up 8%. The company announcing it is going to buy a company called Apogee Therapeutics for about$10.9 billion. We'll round that up to$11. That gave the stock, by the way, its best day since 2020. A lot of the news, I think, came out after the market was closed. The biotech M &A race is starting to speed up. And guess what? The chart master seeing more upside for the sector. Carter Brexton, worth hearing how to break down his call on biotech. Carter. You bet. I mean, obviously, many ways to look at this. It's been a great area of the market year to date, of course, past one year.

35:02But it's still an area that's playing catch-up to itself and to the market on a longer-term basis. Let's go to some charts and try to figure it out together. First chart, basically a two-year chart. Talk about an orderly uptrend. I mean, it is north by northeast, higher, higher, ever higher, gently higher, 45 degrees, 45 degrees. You see the trend line. Next iteration, it has responded to this trend line to the penny, to the penny, to the penny. What's not to like? and one could say, where's the lagging part? It looks great. If we look at this same chart and look at it longer term, the same annotations, this tells the tale.

35:40Biotech peaked in February of 2021, some five plus years ago. And so it's really still playing catch up with itself. And then, of course, to the market. So next chart, the price objective would be, of course, that former high. A good day today, good absolute and relative. And I think there's more to come. Final is a relative performance chart. So this is looking at the XBI, the ETF that captures the theme of biotech, relative performance to the SPX. And of course, you see that peak in 2021. And we've been down and to the right ever since. Since that peak, the S &P is up 90, 92 percent. Health care as a sector is up 28, 29.

36:24Biotech's down 18. But it's bottoming. That relative performance chart has all the elements of a bearish to bullish reversal. So we like it absolute as a catch-up, and we like it relative to the S &P. Like it bearish to bullish reversal. Guy, I mean, to Carter's point, biotech's been, until recently, kind of just completely ignored.

36:46Melissa Lee:Totally ignored. And those five very distinct bottoms on that chart, the ETF that he speaks of, I think it's 150 stocks, so you can sort of figure out the weighting of each of them are in the index. Now, you can do that, and I think you're going to be right. You can get granular their names. We talk about Karen's GPCR has had a couple of decent days in a row. And I will continue to say there's going to be more M &A in the space as we get to the second half of the year. So you want to be long biotech in one way, shape, or form. All right. Coming up, luxury homes, luxury taxes with the CEO Sotheby's International Realty Season Store.

37:18in New York City and other markets. In fact, what a market he calls undervalued, and it's one you may not be thinking about. Philip White will join us right after this.

37:32All right, welcome back. Despite some negative talk, it appears the sky may be the limit for luxury real estate, even here in the Big Apple. Well, we're going to have what they call a pied -à-terre tax getting rolled out on Wednesday. Sotheby's International Realty says the luxury market is strong and may get even stronger. Philip White joining us now on set. Philip, good to have you back on. Thank you so much. I mean, listen, we're CNBC, so there's a lot of wealthy people that are on this network, that watch this network, that are your clients probably. Some people I know are predicting doom.

38:04You are not. No. How come? Well, we outperformed the market by 3x last year. You know, luxury just continues to do well. A lot of it is the wealthy, you know, buyer is insulated from interest rates. And, you know, the stock market has, you know, the S &P is up 80 percent from 23 to 25. I mean, that's just fueling this market. And it's across the board. It's not even just in the United States, but it's international as well. I wonder if the goal is to get people to establish their residency here. I understand we have a New York City tax. Taxes are high in the state. And I get that. You had a tear tax is hit for people that have second homes here, third homes, fourth homes, whatever it may be.

38:46If this is your primary home, maybe the hit is less. You think people, I know it sounds counterintuitive, Philip. You think people could put their residency here? I think it's going to play out a bit. I have heard of that. I've heard of people doing that. Okay. So it's not totally insane. This guy, Domi, was giving me a look. No, I was not, Brian. Usually when he gives me a look, that means I'm home, right? But I've only heard of a few instances. So it's not across the board. It's not been a big impact to our business at this point.

39:16Melissa Lee:What is the existential risk is if there is one, because people were worried about the new mayor was going to collapse real estate. And obviously none of these things happen. And I think what appears to be happening is people say, you know what, I'm not going to wait for prices go down because they don't go down. But there has to be something out there that will scare people. Yeah, I mean, I think you're right. I mean, I do think, like you said, I mean, I think New York City is undervalued. I mean, you know, and what's flipping a little bit, what's interesting, like last week, there were 22 sales.

39:48Twelve were co-ops over four million dollars. Twelve were co-ops and ten were condominiums. It's usually the opposite of that. So I don't know if that's. How many of those were cash, Philip? I mean, most of them, you know, I mean, 80 percent, 80 percent of four million cash. Where's the money coming from? It's coming from here. It's coming from the stock market. It's coming from selling another property. And it's coming from transfer of wealth. There is a huge transfer of wealth, and that's from one intergenerational wealth transfer, and it's tax-free. So what is that demo doing? Where do they want to be?

40:25Where are the folks, those that have inherited this? Maybe they're in their 40s. And what's different about this buyer, either location-wise or in terms of really what they're looking for? I mean, we're seeing them look for, you know, like wellness kind of things. They're looking for longevity there. You know, so they're not they're looking for the long term. So it's not just an in and out thing. So they have a long term mindset and at which is different than what we view than what we're used to. OK, I teased a market outside New York City that you think looks pretty good. And somebody told me what it was.

41:05It was in Texas, but it wasn't Dallas and it wasn't Houston. San Antonio? I mean, San Antonio is a great market. So is Austin. I mean, they, you know, have had some pleasure. Austin, I would expect, right? All the tech money that's there, Oracle. San Antonio. Until recently, I guess, Tim. But San Antonio, why? I mean, you know, you have a great lifestyle there. And I just think, you know, people are attracted to that. The prices are not as high as those other markets you mentioned. so it's more affordable, which could be a driver. And Texas is an attractive state with respect to state income tax.

41:43What's amazing is that everybody's been predicting doom and gloom for New York City for a long time, and I get it, the mayor and people have their beef with them. I suppose, man, this city just... You can't count it out. This is New York. It's the greatest city on earth. You just can't count it out. It's the greatest city on earth, respectfully to all other cities. I've been all over the world. This is an awesome city. I mean, it's the most resilient city in the world. But we've been through a lot. Yes, exactly. You know, I like how he's got the optimism. We have time for more questions. Sure.

42:11Well, I just don't know. I don't want to because I'd love to hear about the international buyer who historically was the marginal buyer in essentially places like New York. Where are they? Where are the Chinese? Where are the Eastern Europeans? What's going on? I mean, we do have a big international network and that really has helped us certainly with, you know, some of the higher end condominium sales. You know, we handled the sale of 111 57th Street. It's almost sold out. We saw international buyers there. Not everybody is an international buyer, but we saw them there. We have a new project at 260 2 Fifth Avenue, which is a state-of-the-art building.

42:45We're seeing international buyers there. And we're focusing on international buyers because we think that is the profile of the buyer for that. They're not going to be scared off by those PI-edit-to-re-tax? No. If you're that rich, I don't think you're going to. I mean, you know, it's it's it's, you know, a six year thing. So it's not permanent. Right. At least at least at this point, it's not. You know, it could be Garden State Parkway and Turnpike were supposed to be free once they got paid off. Yeah. OK, good luck with that. 70 years later, they're still charging. Philip White, it's really great to have you on, though.

43:20Thank you so much. I like the bullish view, the optimistic view. I appreciate it. Thank you very much. All right. Switching gears from real estate, semiconductor Cerebros. Results are on deck how options traders are sliding into the semiconductor stock ahead of its first public company earnings.

43:44All right. Welcome back. Cerebris. Cerebris. Reporting earnings for the first time tomorrow after going public last month. Shares of Cerebris are down from their post-IPO highs, and options traders are sliding into the Sunlight stock ahead of the results for more on Cerebris. It's pretty alphoretic. However, apparently I've been mispronouncing the company's name from day one, so you forgive me for just wanting to highlight that it's pronounced Cerebris.

44:13Melissa Lee:I just looked it up before they hit to make sure, Brian. Implied volatility in Cerebris earnings is very high. options are predicting a 13 % after earnings swing for the stock. For perspective, that's an even bigger move than what's currently priced into Micron earnings Wednesday. Options trading has been muted in Cerebris compared to other AI plays with just under 26 ,000 contracts traded today for just shy of$30 million, with about an even number of calls and puts. But that could certainly change if the stock exceeds its implied move to the upside tomorrow. At least one bull we saw has hope, buying just over$290 ,000 of the 460 strike calls expiring mid-October, a trade that needs the stock to more than double to pay off.

44:58Melissa Lee:But that was a notable exception to overall flows. Six of the top 10 trades by volume today were puts, and the most popular contract by dollar amount and volume was the in-the-money 230 strike put that expires on Friday, Brian. Yeah, this is one, you know, usually you have companies that come out of the gate and they're going to leave a little something for that first quarter. And if you just think about how some of these semis are trading, this has a high short interest here, a small float, that sort of situation. So it shouldn't take much to get this stock going. But a lot of folks, if you look at just the price action, it looks like it's on its way back to that$185 IPO price.

45:34Melissa Lee:And I think SpaceX and the performance that that has over the next couple of days will probably have a lot to do with that to kind of test investor appetite for some of these new issues. All right. Good stuff. What's the name of the company again? Name of the company? Did you forget? Seymour. Oliver, can't wait to see you in Chicago in a couple of days, maybe forever. Oliver Rennick, thank you very much. Up next, your final trade.

45:59Tim, final trade time. Brian, great to have you. Really, we explored a lot tonight. Chevron, I think, exploring real opportunity in the Permian where they already were. I think you stay on this one. Courtney? Caterpillar, we talked about this earlier, but this really is an AI energy trade. I think it's something you want to stay in here.

46:14Melissa Lee:Yeah, keep an eye on these consumer discretionaries. It acted horrible today. McDonald's clothes at an all-time low. Not all-time, a few-year low. Okay. Did you get more handsome over the weekend? I did. That's hard to believe. That's why I asked. It really is true. Aging backwards. Benjamin Button Sullivan. Marathon Petroleum, Brian. Thank you very much. Nice tie, by the way. And, folks, thank you very much for watching Fast Money. 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 or its parent company or affiliates and may have been previously disseminated by them on television, radio, internet, or another medium.

46:48You 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 forward slash Fast Money Disclaimer. Never bet against American grit or American energy. Through innovation, Venture Global is not only building some of the largest energy facilities in the world right here in the United States, but delivering American energy at a fraction of the cost and a fraction of the time.

47:28So while others are busy talking, we're busy building. That's Venture Global. That's unstoppable energy. you