Alphabet And Tesla Report… And Tariff News Causing Global Market Moves 7/23/25

0:03Live from the Nasdaq market site in the heart of New York City's Times Square. This is fast money. Here's what's on tap tonight. A monster night of earnings from big tech to EVs to a burrito bummer. We are diving into the numbers from all of tonight's reports, bringing you all the trades, plus a deal done. The S &P and Nasdaq closing in, new records, and Japan's Nikkei soaring after the two countries reached a trade agreement. The details on the deal and what more is to come. And an electrified gain. Shares of GE Vernova surging 14 percent on the back of its earnings this morning. Is this just another sign that the AI trade is alive and well?

0:35We'll get some answers. I'm Melissa Lee. Come to you live from Studio B at the NASDAQ. On the desk tonight, Steve Grasso, Bono and Eisen, Dan Nathan, and Guy Adami. And we start off with the kickoff of big earnings, big tech earnings. Alphabet, Tesla, and IBM reporting results within the last hour, along with a slew of other names. We've got full team coverage from coast to coast. Christina Parsinev is watching IBM. Kate Rogers is all over Chipotle. Contessa Brewer digging in on Las Vegas Sands. Phil LeBose got Tesla's numbers. We start off with Mackenzie Cigalos, who's watching Alphabet shares now positive, up a percent.

1:06after an early drop. Mac, what's the latest? Hey, Melissa, Alphabet shares moving higher in the after hours after that initial drop, despite a top and bottom line beat and strong results across search, cloud and YouTube. We saw search grow 12 percent, YouTube 13 percent, and cloud surged 32 percent, which was well above expectations. Now, search remains Google's core business, but it's also most exposed in this new AI paradigm. CEO Sundar Pichai just said on the call that AI features are actually driving more search activity. Now, cloud, which is a key test of Google's massive infrastructure bet, also delivered CapEx, is being raised to$85 billion for 2025 to build data centers to power Gemini and enterprise tools as it tries to close the gap with AWS and Azure.

1:56And then YouTube ad revenue nearly hit$10 billion, just now$1 billion behind Netflix. And Pichai also highlighting strong subscription growth, with shorts now matching or even exceeding in-stream ads and revenue per watch in some countries. Back to you, Melissa. All right, Mackenzie, thank you. Keep us posted. Mackenzie Sigalos on Alphabet. As we were coming off of a massive winning streak, it was 10 straight days until today, Guy. So the setup wasn't good, but here we are at 1%. You're a fan of the Mark Twain, I'm sure. I mean, you went I went to school, a fine school at Harvard. Uncle Barry.

2:32The reports of my death greatly exaggerated. And that's probably, in this quarter, at least for Google, I think that's what he's seeing. And we knew YouTube was going to be good. I think we knew probably AI was going to be good. CapEx was probably baked in a little bit. But the fact that search was up 11.7 percent, the street was looking for 8 percent, that's going to give us some runway here. And now people will say, you know what, maybe the valuation is cheap. and maybe the reports or the rumors or the talk about the death of search, at least for now, is greatly exaggerated. You get a close above sort of 196-ish, 195, and that head and shoulders formation is thrown out the window.

3:08Yeah, just say the search thing, and this is the one where you have the overlays. It's probably one of the first real quarters or full quarters where you saw these AI overlays. And so, again, that must be helping in some way, shape, or form. You know, the issue wasn't cloud and it wasn't YouTube. It was going to be what is the degradation to the search? Are they going to cannibalize themselves? So pretty good. I mean, the cloud stuff is better than expected, 32 % year over year. It's something that reaccelerated. And that was one of the reasons why I think the stock got going a quarter or so ago.

3:36And I'll just go back to what Guy said. I mean, this is one of the only MAG7 that's trading below a market multiple. When you think about it, it's trading below, you know, where a lot of its peers are also. But the one thing is, and I think at some point, folks are going to say, what does this remedy look like by the DOJ, by the FTC, whatever is going on over there? And, you know, you can make the argument that maybe this is better if they were forced to split up. I don't think that's going to happen. I think the whole thing works better as a whole. But that's the next piece of the puzzle. And then folks are going to continue to worry about what does it look like when you have perplexity to launch a browser, when you have OpenAI launch a browser.

4:12I mean, they have, I think, 80 percent of the global browser. And I think a lot of that search revenue comes through that. Yeah, that forward P is just about 20 here. And there's no answer on the earnings call in terms of questions that could answer your question about existential threat, which is what you think. I mean, I do think I still think there's an existential threat. And even though search is up and Gemini has helped search, you don't get the clicks when you when you go through an A.I. search. You're not getting the clicks that you would normally get when you go through a Google search.

4:42So when you go on a perplexity search, for me, I just see the summaries. If you see the summary with Google, are you clicking on anything? And how does that affect revenue going forward? That's something I'm concerned with. I wouldn't be a buyer of Google. All right. I mean, I think they'll find a way to address that, frankly. You know, we've heard in previous quarters, and it was just reiterated here, that AI has led to more search. I think the next step before we get the massive rollout is that they're going to find a way to actually integrate more ad views, dollars, engagement via AI. I'd be shocked if that's not at the forefront of their minds.

5:20Add in the fact that they've, you know, essentially reassured us on CapEx. You essentially get the autonomous for free. I think there was a lot of worry about this stock. Rightfully so. I mean, I'm with Steve in terms of it is an existential threat. really, the really fact of the matter is whether or not it's a credible threat. And like today, it seems like it's not. People are going to in this environment, the market that we find ourselves in where you can make a great case on valuation. We've had that conversation now for the last week and a half. This gives the stock a pass, I think, for the foreseeable future.

5:50And all those things are correct. Like, I'm not convinced they're out of the woods yet either. But the market's going to buy first, ask questions later. Yeah, I'm not so sure, though, like when we hear reassured capbacks, that that's such a good thing. They've gone up to like$85 billion. If you think about it, Microsoft is basically taking down CapEx as a percentage of their revenue right now. If you think about this, you know, Google is expected to have$330 billion in revenue this year. They just talked about an$85 billion number. At some point, you know, you're going to have Microsoft and these guys who are early in some of these investments really start to flex a little bit.

6:20And it could be this sort of thing. And I'd love to get I know Gene's coming on in a little bit. I just think there's a really important metric. And I think it's going to flip at some point between some of those who are trying to play catch up, who are still spending on this infrastructure bill to some degree. And if they're really playing from behind, you know, like Google is right here, it might turn into a negative sort of thing. The more they have to spend to kind of stick around in this game. It's like, you know, they're pretty much a distant number three behind Azure and AWS. I'd actually like to hear on the big, beautiful bill, the way Verizon carved out how much they saved.

6:52Somebody like a Google, that must be a ton of money that they get with the new tax policy. I would like to hear that because that would give me a little bit more of a tailwind in some of these companies. I think the CEO should be breaking those out. Let's move on to Tesla. Keep you posted on the Alphabet call. Tesla missing top and bottom line estimates. Solid second straight quarter of sales decline. CNBC's Phil Abbott's got details ahead of the conference call. Stock's flat right now. Phil? Melissa, there's very little when you look just at the earnings report. There's very little that you look at and you say, hey, this is pretty good, pretty optimistic.

7:26They missed on the top and the bottom line, earning 40 cents a share. The street was expecting 43 cents a share. Revenue coming in light of expectations at 22.5 billion. And then the numbers within the numbers. Listen to this. Free cash flow year over year down 89.1 percent. Automotive revenue down 16.2 percent. Energy storage revenue down 7.5%. We've already talked about what's happened with deliveries in the first half of this year. Down 13.2%. By the way, the street's expecting deliveries to come in at 1.66 million vehicles this year. We'll see if they give us some guidance on the conference call.

8:02And if they do, if it's going to be another year of declines. Last year was a decline. Same with where they're tracking this year. One last note, cyber cab production. The target still remains for mass production in 2026, Melissa. That's about all you get from the actual earnings report from Tesla. Again, the call starts, what, 20, 25 minutes. We'll be on it, let you know if Elon has anything to say that perhaps moves the market or gives people some optimism if they're a Tesla shareholder. Yep. Phil, thank you. Phil LeBeau. From the earnings deck, they also say that they will launch the launch of the vehicles that were scheduled to launch in 25, still on track, including production of the low-cost vehicle, which could start happening in the first half, which you would think would be very positive because Tesla bulls are really looking for that.

8:49They are. I really just don't think the automotive numbers really matter, to quote Dan, a whole heck of a lot. We've just seen declining numbers quarter over quarter, now year over year. And you continue to see the stock kind of basing. You know, clearly we're up from the lows and, you know, we've rallied from that April level. But I just think that people literally, as you think about XAI, and now they're talking about whether or not there's going to be co-investment across these various companies, it just seems like the narrative really is being pushed towards AI, physical AI, autonomous and robotics.

9:22And until that story breaks, I think that's really the risk factor that you have with a company. The automotive numbers to me seem to be kind of secondary tertiary at best. When you look at the last quarter, they had record energy profits and they had Powerwall deployments and they had the supercharging network. that was rolling out. So that took away or mitigated whatever low deliveries that they had in the automotive section. When Phil started off his summary, those numbers are down. So it's very hard. I know it's up after hours. Very hard to be positive about it when everything is down. They're all putting their eggs in one basket.

9:56It's RoboTaxi. This was just an auto company. This quarter, the stocks, given where it is, should be down 15 or 20 percent. And that's not an exaggeration because free cash flow numbers were a disaster. their margins continue to go the wrong way. In terms of the auto business alone, it's a melting ice cube. Without question, there's no way to say otherwise when you look at these numbers. What people are betting on, though, is this is a loss leader and it's everything else. And they continue to get a pass on that. But at some point, they have to sort of deliver on both the robo-taxi, autonomous driving, all the other things, all their other aspirations, because the longer it goes, the worse this looks.

10:32Yeah, the EV business has to kind of fund some of these aspirations, right? So you're seeing this business. It really is very bad. And we've been talking about this. I mean, we don't even have to say the term hilariously bad. I think we've been saying that quarter after quarter for well, some of us have been. My fellow panelists might have been too over the last few quarters here. But we think about this. I mean, OK, it's the future is a twenty five thousand dollar car. Who knows if we get there? But this quarter, Q3 is going to be really important. We know those federal tax credits go away on September 30th.

10:58Let's see what sort of demand they pull forward for Q4. Let's see if there is demand for it. I think North America feels pretty saturated when it comes to EVs. We know that some of these hybrids are doing better from some of these companies in Detroit. So at the end of the day, I think Elon, you know, he has a choice to make. He has to go all in. I know he has on this robo taxi and, you know, the optimist and all this sort of stuff. And they're going to buy XAI. They're going to buy that thing. They're going to merge it all together. I know a lot of folks say they're not going to, but he's going to have to kind of continue to tell a different story than the EV story because The ZV story is done.

11:34I mean, the notion that they're going to reaccelerate this in a meaningful fashion, and you think about what's going on with China and BYD and Huawei and all these makers over there, there's really not even an awesome opportunity for them in Europe as there's more demand in these other parts of the country or other parts of the world. So it's just a tough story. I don't find it particularly investable until you get some sort of benchmarks on this robo-tax, you know, the cyber cab, and when they're going to really go into full production. Because I think we've all learned over the last 10, 15 years, You've got to take the over on when he says they're going to be able to do something.

12:03And listen, I think we can all agree. Cyber taxi, robo taxi, it's going to be great. It's going to be a great business. I just don't think it's going to be a great business in that couple of years. And what I think it keeps the story alive is that he is, along with BYD, the only profitable EV company that's out there. So if you look at the host of all the just specific EV companies alone, standalones, they are the only other profitable company. So that keeps the story going. But to Dan's point, there's a lot of things that have to really work their way through. What keeps people in the stock is that he can have a headline tomorrow that kills shorts.

12:37So that's what you always have to watch out with Tesla on the short side. All right. Let's get more on these earnings moves. Bring in Gene Munster, managing partner at Deepwater Asset Management. Gene, great to see you. Let's kick it off with Alphabet, which is pretty much at after-hour session highs, up about 3 percent here. What happens? What's happening on the call? Well, the call's been all about AI, and this would have been the quarter we would have seen a crack in that search. Keep in mind that the GPT users went from about 350 million dailies three months ago to 500 million. We've just seen this accelerating use of chat GPT, and that really kind of got the narrative going.

13:16I'm very much on board with this idea that search is under attack. And this would have been the quarter we would have seen a crack. And the crack would have been a fractional miss in the search business. Instead, what we saw was search growth actually accelerated. I mean, it was fractional, 11 %-ish versus 10 %-ish in the March quarter, year over year. And so that was a surprise. They also mentioned on the call that paid clicks were up 4 % year over year. And just a really shocking number. If we rewind back to the first part of May when Apple, any Q, was talking about this decline in search within Safari, it would be hard for me to have imagined that paid clicks are going to be up 4%.

13:55So when I put all this together, Melissa, somebody like myself who's been bearish over the last six months, I'm in the camp that this stock is probably going to move meaningfully higher over the next few days, 5%, 10 % higher, in part because we should have seen something this quarter given everything that's going on. And what the underscores is this, is Google is a habit. It is habitual for 3 billion people daily, 5 billion people monthly. I mean, it is really hard to change that behavior, even if those other products are so compelling like GPT. So does it put to rest that bear case about the existential threat to search, or does that still linger?

14:36You're going to wait for another data point or another data point. It's going to linger in part. So they gave the metrics around how much is the usage in AI mode. They're at 100 million monthly active users. So that compares to about 5 billion monthly active users for search. They haven't started the monetization. So on the call they're talking about starting to feather in some more monetization with AI mode. Undoubtedly they were doing that, but I was listening to Steve's comments. Steve, I was tracking what you were saying about the clicks and ultimately just adding monetization to AI mode doesn't necessarily mean that people are gonna click on that if they just get their answer.

15:12And so I think to answer your question, Melissa, is that there's going to be a relief rally in this. And it may go on for days. It may go on weeks. But this narrative around how does Google navigate AI isn't going to be solved until investors can actually see how they have integrated these sponsored opportunities within AI mode. Yeah. And Gene, you know, it sounds like the kind of formula for monetization for a lot of these models is going to kind of play out over the next couple of years. It's not going to be over the next couple of months or the next couple of quarters. Just curious, you know, you just mentioned that Eddie Q comment about search on Safari.

15:50This was a couple of months ago, I think. What would it mean for Google search in general if they lost that exclusivity on Safari? Obviously, we have an installed base of about one and a half or, I don't know, 1.8 billion users on iOS. Is that something you're starting to model in right now? And so what does it mean for Google if they lose that? Yeah. For Google. For Google. So they're paying about$20 billion a year for this. That means they're getting more than$20 billion from this. And so think of this as they probably are getting$30,$40 billion of kind of economic value from that arrangement from Apple.

16:23And so that's rarely talked about, like, how could Google negatively impact it? Because the general thinking is that if they get displaced, then people will just naturally come back because it's so habitual. But there would be a step down. It would be material. We're talking 15%, 20 % of kind of operating income hit. search 55 percent of revenue, 70 plus percent of earnings, it would be a material impact. Gene, I want to get your quick take on Tesla's quarter ahead of the call. We talked about earnings, earnings operating income down 42 percent year over year. It was bad. But the reason why the stock hangs in there, they have a chart in their investor deck.

16:59They don't give the exact numbers, but you can kind of eyeball it. They added about 1.2 billion miles driven by FST that compares to about 600 million in the March quarter. So basically doubled quarter over quarter in terms of those miles driven. That's all plays into the narrative about autonomy is the future. And when you're, when you show some of those data points, it's hard to, you can debate how much time investors are going to give them, but it feels like things are really moving that affordable model. They reiterated their timeframe on that, but no one really expected it to be on time. So that was a net positive.

17:33All right. Gene, thanks. We'll check in with you a little bit later on. Gene Munster, Deepwater Asset Management. Again, Tesla shares are hanging in there. They're about flat right now. Yeah, which probably makes some people trying to figure it out. I'll go back to Google real quick. I'm sort of with Gene on this one. 207, I think, ish, was the all-time high back in February. I mean, this quarter should take us there on this tape when people are looking for value plays that are seemingly making sense. You put into cash the fact that, again, ad is hanging in there. Google looks okay. Yeah, and I read one of Gene's points in terms of there likely being a relief rally, particularly as we have all of these indexes reaching all-time highs.

18:08And then you add in the fact that Alphabet has essentially lagged the other Magnificent Seven. I would expect a catch-up trade, and I like that a lot more than maybe stepping down into small caps looking for beta. Yeah, all right. This is probably going to be totally wrong here, but, you know, with Google... Unlike the other things you've said. Right. So, So, you know, and by the way, people, we're really good friends. I just want to be really clear about that. We've known each other for 15 years. We've been on the same pit now. That's why I say that. So with Google up a little bit here and Tesla flat, I think they're both implied moves about 6%.

18:38I could actually see Google selling off tomorrow and Tesla rallying a little bit. Because, listen, the Google quarter, it's good. You know, like Gene just laid it out. It was brilliant. But, like, there's not – I mean, was there enough there? You know what I mean? It's had a nice run into this. But Tesla, on the other hand, it seems to do this all the time. We knew the bad news was coming. The stuff that people are positive about, we just don't know. And that's the stuff that kind of is out there in the ether. And I can see, folks, this thing's been going sideways for a bit. I can see them going in and buying it on that.

19:06Also, the conference call, Elon Musk presumably will be on that call. And if he sounds really committed to Tesla and he's going to be the CEO who sleeps on the floor again, maybe investors will also be re-energized by that. He's got to sell that story. And to the point on Google, there's a reason why the stock did nothing the entire year and then ran up into earnings right now because there was a lot of things that were factored in. So I would be a seller of Tesla, of Google here. All right. Coming up, we'll bring you all the details from Tesla's and Alphabet's earnings calls. We'll get you the details on results from Chipotle, IBM, Las Vegas, Sands, and more.

19:40Plus, the market reaction to the latest trade deals, how to trade the moose here in the U.S. and abroad. Do not go anywhere. Fast Money is back in two.

19:55Welcome back to Fast Money. Chipotle shares sinking after hours after the burrito chain cut its same-store sales forecast as foot traffic slowed. CNBC's Kate Rogers spoke with the CEO in just the last hour. Kate. Melissa, that's right. EPS right in line for Chipotle this quarter. Revenue slightly below analyst estimates. Same-store sales came in lower than expected. They were down 4 percent. This is its second consecutive contraction for same-store sales, also the biggest since the second quarter of 2020. The company did report, though, a positive comparable sales return and transactions in June.

20:27But for the full year, as you said, it cut its guidance to about flat for full year comp sales down from low single digit growth. This is its second guidance cut in a row. Here's what CEO Scott Boltwright told us about the consumer in the quarter last hour. We saw a bit of a step down in the low income consumer in the April-May timeframe. We think that's in large part due to its really tough compares from prior year. But we've seen that rebound with our summer campaign. It did note inflation across several of its key ingredients, primarily steak and chicken, Melissa. And on the call, Boatwright and other executives talking about some things that they have planned as catalysts in the second half, including new limited-time offerings, whether they're center of the plate or sides, a campaign targeting college students, a big core demo for them, and also leaning even more into the catering business, which they said is just one to two percent of sales right now.

21:16And it could grow much more than that. Back over to you. Kate, how is their pricing? And what's what's sort of like the average check? I'm just wondering, because this is sort of a more expensive, right, quick serve option. Absolutely. And if you look at stock performance of the other more expensive for the consumer names like Sweetgreen and Kava, they are also underperforming. But Boatwright said on the call, you know, we think about value differently. And in most places in the country, you can get an entree here for about$10. So as you said, a little bit more expensive for the consumer, but the company doesn't discount in the way a lot of its fast food competitors do, right?

21:50So they're thinking about it differently. They feel this is good value proposition and said their sales trends kind of track along with consumer sentiment. So you saw it dip, you saw their sales dip, and they believe that things will get back to positive momentum in the back half of the year. I'd like to know where that$10 entree is. Not in New York or San Francisco, but yeah. Definitely not. Yeah. Kate, thank you. Kate Rogers. Thank you. All right. Not quite a blowout here. Our resident blowout expert. Well, they're good burrito blowouts. And it's like, are you a good witch or a bad witch? This is a bad burrito blowout.

22:23And it's bad because two consecutive quarters now have declines. That's not good. Margins declining. Not good. And that's a pretty significant decline. 18.2 percent versus 19.7. So now people are going to laser focus on valuation, which has always been unreasonable. 46-ish was the low back in April. That's where it needs to hold. I mean, what does this tell you about that consumer, that kind of consumer who goes to a Chipotle or a Sweetgreen or a Cava who are not going there anymore for whatever reason? Well, he obviously eats a lot of burritos. Just take a look at him. I eat a lot of salads, right?