Apple Sinks on New Tariff Threats, and Should Novo Do a Deal? 5/23/25

0:02Live from the Nasdaq MarketSite in the heart of New York City's Times Square, this is Fast Money. Here's what's on tap tonight. Fallen Apple, more terror threats, sinking shares of the iPhone maker, the stock losing$90 billion in market cap just today. Can the longtime market leader stage a comeback or are its days at the top in the rearview mirror? In Novo's next steps, the farmer company back under pressure since ousting CEO. What does it have to do to get growth growing again? We'll break that down. Plus, U.S. Steel soars on a, quote, planned partnership with Japan's Nippon Steel. Nuclear stocks seeing major gains after a new wave of executive orders.

0:37And we're counting down to NVIDIA earnings, the options action ahead of next week's big report. I'm Melissa Lee coming to you live from Studio B at the NASDAQ. On the desk tonight, Tim Seymour, Bono and Ice, and Steve Grasso and Mike Coe. We start off with another big down day for Apple. The tech giant sinking another 3 % today, bringing its losing streak to eight straight days. That is the stock's worst run since January 2022 and takes its market cap back below$3 trillion. Apple is the only MAG 7 stock down this month, the only one down in Q2, and it is the worst performer of the group so far this year, losing nearly a quarter of its value since January.

1:11The latest move lower coming after President Trump said this morning that Apple must pay tariffs of at least 25 percent on iPhones made outside the United States. And in comments this afternoon, he said rival Samsung could face similar levies. But can Apple realistically bring manufacturing back to the U.S. here? And what does it mean for investors if it can't? Tim, what do you say? Well, I think investors aren't really even focused on this issue, and they probably have to be. But we thought we were at least away from it. And, again, I say that because I think investors are more focused on the week that was also Johnny Ive, the week that was, you know, effectively we just learned about at least a ruling on the services business that may affect app store dynamics, the fact that we've been worried about gross margins, that we've been worried about the overall iPhone kind of unit demand.

2:00And that's something that I think is really overall then dropped inside of the AI story that most people feel like isn't really going Apple's way. So throw on the tariffs. And I get why the stock's under pressure. I think the dynamic here is one where we really don't know where this is going to end up. But I agree it's going to be very difficult for Apple to suddenly change where their manufacturing is, even though they just told us they're going to be 50 percent India at some point very soon. And that's something that I still think is hard to believe. But again, the core for me was not the headlines today from Apple.

2:31It's what we had before we got here today. Well, I believe Apple deserves some credit for trying to be nimble in terms of moving manufacturing away from China, kind of, you know, strategically maneuvering with regards to its supply chain, making sure that U.S., that goods were headed for the U.S. were produced out of India, and just finding a way to at least on the surface seem like they were making efforts to comply with the new regulatory framework. And I think today was a bit of a shot across the bow, but I don't know how much real, how serious to really take the threat. It's almost as if the tariff thing has been kicked up again.

3:0525 % seems to be somewhat of an arbitrary number. Like, how realistic is it for them to be expected to kind of completely uproot supply chains and then move them here? Like, what are the cost implications? And for me, my real question is, are they really trying to circumvent the 25 percent tariff or is there a situation where the tariffs actually get raised to a higher level because they say, listen, it's actually more cost effective for us to just go on ahead and pay this tariff and keep our manufacturing where it is. And I don't think 25 percent is sufficient enough for them to even explore looking at manufacturing alternatives.

3:40So for me, it just seems like it's somewhat of a way of a governmental land grab. And to me, that somewhat flies into the face of the spending bill, the tax cut bill that we're that we're seeing pass through the House. So for me, I really don't know what to make of it, because on one hand, it's like we're preaching fiscal discipline. On the other hand, we're looking at three point eight trillion and we're looking at this tariff number that seems to just be a drop in the bucket. And I really can't make heads or tails of it for now. I really think the downtrend in Apple is just continued erosion of their underperformance on the AI front and also some some opaqueness around the whole Google situation.

4:17I think it's all of these issues that you guys outlined prior to the headline today. You add to that headline today and it really underscores the issue that there is no regulatory framework. It's sort of regulatory shots that the administration chooses to fire at this point. So there's no guidance. It can be 25 percent today and could be something different tomorrow, which is what we've seen. They moved to India, and then there's something else. Also, we should note that Tim Cook was at the White House on Wednesday. So this is after they met. There does seem to be a real target on Tim Cook's back.

4:48He was highlighted in Saudi—when the president was in Saudi Arabia, Tim Cook is not here. You know, what is up with the relationship between Tim Cook and the president? It's not favorable right now. Doesn't sound favorable. And I think—you know, when I look at it on a chart, If you go back a year ago, you had the WWDC. It was 193.63 back a year ago. It bottomed out pretty recently. I think today's low was 193.46. That, to me, is a technical bounce level. It's also way lower a couple of weeks ago. And if you brought it up where DeepSeek, that headline hit, Apple was the only stock to actually trade up on the DeepSeek headline versus all the others.

5:30So those are the good things. Bad thing is what you said. The White House relationship with Tim Cook seems strenuous at best. I think you actually buy the stock here. I think you're walking into WWDC June 9th. Right. Probably going to announce something in Apple intelligence, another investment. They have to. I think for me, when I look at it on a chart, it's constructive. When I look at it with the White House, it's not constructive. But that 25 percent, you both said it, Bono and yourself, it could be 50 tomorrow or it could be gone tomorrow. So it's a moving target with the president. You could get back into his good graces.

6:15You could fall off again. But I think just the way I look at the stock, it looks like it's trying to build a base of maybe a little bit higher lows. And I'm happy where it is. You stick to me in the low 190s in Apple. What else are we going to see at this point? I think you're sort of buying negativity. Is it peak pessimism? I think so at this point. Mike Cohen, I don't know. It seems like the options market, given the volume and the direction, there might be some pessimism being built in here. Yeah, that's a good bet. I mean, we're going into a three-day weekend, so this isn't the day that you'd expect to see way, way above average options volume, particularly in a name like Apple that already trades quite a lot of volume.

6:56But it did trade two and a half times its average daily put volume today, mostly near-term, close to at-the-money put buying. The 195s and 190s that expire at the end of next week were the two most active contracts. And, of course, implied volatility has been ticking up going out across the curve, which suggests that it's going to chop around here for some time. I mean, the way I look at it, it's not like the stock is overwhelmingly cheap. We're a low single-digit top-line grower. It's supported to the downside, I think, as Steve has suggested, by basically technical factors and maybe the fact that you always continue to have that incredible cash flow as a stock buyback regime.

7:33But I think the upside is probably going to be pretty limited for the near term until you get out from under this cloud. Yeah. I mean, WWDC was a major catalyst for Apple a year ago. It's a completely different setup going into this year's WWDC. Is the setup good or bad? You can make the case for either, I think. I think the bar is low. I think the bar is extremely low. And I think Apple intelligence, one of my bullish arguments for Apple all along is I don't think we priced any AI into Apple and why, you know, Apple is absolutely going to be a part of this. And I do think the refresh cycle was was over anticipated.

8:05And it wasn't. I mean, Apple intelligence did feel a little bit more like a scramble to catch up again. This was a week when AI related hardware, you know, is that an issue for Apple in the short run? I still believe until proven otherwise,$2.7 billion in terms of an install base is something that I wouldn't want to reckon with. And I think they're going to be there. They have to pick their spot. All right. For more on Apple, let's bring in Dan Ives, Global Head of Technology Research at Wedbush. Dan, great to see you. Great to be here. You're always coming prepared, well-dressed, ready to go.

8:37We appreciate that. In terms of the Apple picture, where do you stand on this? I mean, you had a note out early on saying it's a fairy tale to move production back to the United States. What do you think the administration is after here? What can Apple do? Yeah, I mean, it's a Pinocchio story, a fairytale, the reality of actually having iPhone production in the U.S. Because in my opinion, that would take four to five years, 20 or 30 billion, even to move 15, 20 % of the supply chain. And then if you actually produced iPhones in the U.S., you'd be looking at$3 ,500 iPhones. So I view it as Apple's situation is they try to pivot around India, and that was a smart strategy.

9:13And now they're, look, backs against the wall. It was a twilight zone day today for any Apple investor, given Apple's done all the right things in terms of pivoting out of China and now saying come to the U.S., that's fairytale. Right. Secretary Besson was interviewed on Fox earlier and made some comments around this, but basically saying that, you know, it's a supply chain, particularly for semiconductors, that is a concern. And that's where they want to see Apple move their part of their supply chain back. Is there anything that Apple can do more surgically to satisfy the administration in terms of an investment on the semiconductor side in the United States?

9:52No, it's a great question. Look, Moise, just for something like myself, 25 years, I spend so much of my time in Asia, in China, Taiwan, Vietnam. The reality of doing this, it sounds great behind a microphone in the belly. But the reality is when you walk through fabs in Taiwan and you walk through what you see in China, that that's going to be here. Again, if you want$3 ,500 iPhones, we should make them in New Jersey. And I think the problem is that from when it comes to the semi-world, and I think Jensen and NVIDIA are seeing this firsthand, is that it's the IP of the supply chain. How is it built?

10:25Where are the chips? Where are the raw materials? And that's why for Apple, especially WWDC is going to be a strong event, and they are in a massive position, in my opinion, from an install-based perspective when it comes to AI. But they are right now back against the wall that they've been put into because they're in the eye of the storm in terms of this tariff trade war. And when you look at the president and say it's not just about Apple, it's any other phone company, does that make you feel a little bit better that maybe there's a quasi-bottom put into Apple? And you just, to pick up where you left off, WWDC, do you see any outliers or what do you think they're capable of announcing?

11:03I mean, it's like me and you, Greg, we're stuck at New York Airport for six hours together. I mean, yeah, we're together, but it's still best. I can only imagine what it would be like. I mean, it could be. It could go either way. It could go either way. But to your point, the reality is, look, WWDC, that's going to be another key event in terms of that AI strategy. They play them from clearly behind the eight ball. But this is an opportunity for them to actually show where they could ultimately get to when it comes to AI. But the problem is that it's clouded because of ultimately what we're seeing here.

11:37Okay, so let's say that 25 percent is the number, and that is going to be the number. And Apple says, you know, it doesn't make sense for us to move production back. We'll pay 25 percent on the iPhones that we sell in the United States made overseas. How – when you think about that price increase passed on to the consumer, where is demand destruction? What is that point where it's too expensive, it's going to be a headwind? They haven't raised their price on the iPhone in years. And now they're at this point where they are going to raise their prices potentially because of all these great AI features that they're going to unveil.

12:10But then there also has to be another price increase theoretically with the tariffs. Yeah. And I think if everything's equal, they're not raising prices on iPhone 17. But then it comes down to they're not going to eat it. They're not eating at 25 percent. And if you pass this to the consumer, I mean, you have what could be 3%, 5%, 7 % demand destruction. And part of the issue there is that for Apple, they're just in the situation. What do they do? Which side do they go? And I think the reality now, it comes down to how they navigate this. Is this a game of high stakes poker in terms of negotiations with Trump?

12:43Do they say something in the next five years, we'll commit to X percent iPhone production by 2027, just to sort of play that game? But what they're going to invest in, it's AI. It's service. I mean, iPhone production in the U.S., to me, it's just not feasible. So, Dan, I thought, by the way, I thought like Searsucker and Linen, Fuchsia, corduroy jackets weren't before Memorial Day. I mean, it's a big move for you out here. You're out. You're out in a couple more days. I mean, it's open season. But it is. Exactly. You look great. So before today's announcements, what were your biggest issues with Apple?

13:21Again, let's go back to Johnny Ive this week. Let's go back to App Store concerns. Let's talk about some of the regulatory stuff. Let's talk about Google revenues. What has you most? What's your bear case in here for an Apple Bowl? Look, I think to me, first off, like Cook, what he's been able to do, Hall of Fame performance in terms of navigating from China to get to India, you're in 50, 60 percent. I mean, that's Herculean to get there. So in terms of like AI clearly behind, but I believe WWDC is going to be a step in the right direction. It's about that developer community. It's about the install base.

13:52China's been a headwind, but now you're starting to see what I believe could be growth as you go into the next few quarters. So, like, you don't have so much to be excited about in the near term, but that's not the story. The story is the consumer AI revolution comes through Cupertino. The problem now is in terms of this tariff, they need to navigate this situation because, like, what you're asking, the demand destruction, what does that ultimately translate into? But then also they don't have an AI partner in China. I mean, they thought they had an AI partner in China, but that's going to be under scrutiny.

14:20And so there might be no AI partner in China. So they're really, you know, the U.S. market is sort of in jeopardy in terms of three, five, seven percent demand destruction. And then in China, they can fall further behind because they cannot offer AI features. When Alibaba, obviously that being such an important partner for them that they need in China, because it comes down, if you look at, even despite what we've seen in the U.S., as AI is introduced, you did see significant demand increase anywhere that that's been introduced in terms of Apple intelligence. But look, Cook, 10 % politician, 90 % CEO.

14:55So the point is, every time back against the wall, if there's someone I want flying the plane in this turbulence, it's Tim Cook. All right. Dan, great to see you. It's hard to miss him. It's true. He's a old man. He always looks good. He gets away with it like anybody. Dan, good to thank you. How are you feeling about Apple now? You know, I have a hard time not referencing the 8i diffusion rule. It just felt like it was just yesterday where all the chip makers, we were concerned about NVIDIA. Were they going to lose 13%, 20 % in terms of, you know, the Chinese market, the Taiwanese market, where they were looking to circumvent export controls.

15:33And it seems like that whole sentiment has been flipped overnight. And so I do think there's a bit of a whimsical nature here. And so it's hard for me. I'm with you, Steve. I think that the sentiment is so negative. And to Tim's point, there is no AI priced in. What else could happen? I don't think the tariff story is really going to drive my investing decision because I don't think it changes anything when it comes to their manufacturing or supply chain. Well, Apple wasn't the only target of the president's terror threats today. He also proposed higher levies on the European Union. CNBC's Eamon Javers has got the latest on this.

16:08Eamon. Hey there, Melissa. Yeah, the president brought reporters into the Oval Office earlier this afternoon, and he was asked in that Oval Office session how he could get to a deal so quickly with the European Union, given what he put in his social media post earlier today. Here's how he responded to that. I'm not looking for a deal. I mean, we've set the deal. It's at 50 percent. But again, there is no tariff if they build their plant here. Now, if somebody comes in and wants to build a plant here, I can talk to them about a little bit of a delay. But, you know, while they're building their plant, which is something I think that would be appropriate.

16:45We're going to see what happens. But right now it's going on on June 1st. And that's the way it is. And we now have our first response from the European Union officials. after that 11 a.m. conference call with Jameson Greer. The European Union official saying, spoke with Jameson Greer and Howard Lutnick. The EU is fully engaged, committed to securing a deal that works for both. EU commission remains ready to work in good faith. EU-U.S. trade is unmatched and must be guided by mutual respect, not threats. We stand ready to defend our interests. So a bit of a prickly statement there, Melissa, I think you have to say, from the EU.

17:27responding to the president. They don't like that kind of rhetoric that they're hearing. They don't like what they see as threats. And they're saying they're ready to defend their interests. So maybe this relationship is sort of at a standoff point as we go into the long weekend here on the U.S. side. And one other thing, Melissa, I heard you guys talking about Apple. I asked the president what makes him so confident that Apple can actually manufacture iPhones in the United States at a price that consumers will pay. He said he just believes that computers and technology, make it possible to do that manufacturing here in the U.S.

18:00at a competitive price. That's, you know, you've got all the analysts around the table to tell you whether they think that's true or not. But that is something that the president of the United States has as just a core belief. And that's sort of underlying this whole dispute with Tim Cook, Melissa. All right. Eamon, thank you. Eamon Javers. Mike Coe, in response to this heightened, you know, trade tension with the EU, you saw some activity in the options market in Germany, I believe. Yeah, it was the EWG. That's the ETF that tracks the German market. That one traded over three times average daily put volume.

18:31And it's targeting the date, essentially, that Trump is talking about. He said June 1st is the day they go into effect. And it was the June puts, 41s and 39s that were most active in that one. So, I mean, and it makes a lot of sense, right? If you're uncertain, we've gotten a lot of choppiness and volatility out of these kinds of announcements, and they can change on a dime. Tough to short into it, but to buy some puts, just in case it actually happens, I could see why they would do that. Well, it makes a lot of sense to take out protection or to stay in the trade, as Mike's pointing out. I mean, you know, EWG, especially because it's currency implied, too.

19:04This is a day, by the way, the dollar is 90 basis points weaker. And it looks like, you know, dollar could weaken up again. These kinds of headlines are exactly what moved the currency lower and actually moved the German markets higher. So if you think about it and doesn't surprise me that the Europeans are a little focused on tone and a little bit more on manners and things like that. I mean, you know, get a deal done. But if you don't get a deal done again, I think Europe is is behaving as if they have other options here. And I would not run too far away from Germany or the European trade. All right.

19:34Coming up, U.S. steel soaring after President Trump greenlights a deal of sorts with Nifon steel. What it means for U.S. manufacturing and jobs next. Plus, the president also juicing uranium stocks thanks to his latest executive orders, how he hopes to expand the nation's nuclear power grid and what it means for investors in the space. More fast money in two.

19:59Welcome back to Fast Money. U.S. Steel soaring over 20 percent late in the session after President Trump announced his support for a long-embattled partnership between the company and Japan's Nippon Steel, saying the American industrial will remain in the United States. The president writing on Truth Social that the move will create at least 70 ,000 jobs and add$14 billion to the economy, the majority of the investment set to occur over the next 14 months. Grasso, you have been a believer that this deal would go through. Yeah, the president had to do something. This was definitely a consensus view, whether you're a Democrat or whether you're a Republican.

20:36President Biden was the same way. He didn't want to let the deal go through. President Trump didn't want to let the deal go through. But I knew that price of$55, which was the original price for the Nippon deal, they had to do something to get it back there because you felt as if the shareholders and the workers were sold out. At this point, with a trading of 54 or so in straight to 52, but I'm going to hold on a little bit longer. But this is the top for me. I don't think there's no this is more of a ceiling than a floor for the name. I don't see how realistically short term U.S. steel trades higher.

21:16I'm long it from$30. I don't see it trading at$60 or$65. $55 was the deal price. I'm going to exit as close to$55 as I can. Mike, what do you think? Well, yeah, I mean, and that's what the ARBs are doing, too. So there was a lot of activity in it, but the activity was actually selling out of the$50 line. That was open interest that was opened ahead of this announcement. So, you know, the activity usually is that you're going to have a couple of the ARBs in there, and they will play it for the last couple percentage points. What they'll typically do is own the stock and then they'll sell some upside calls at the deal price up and around 55 bucks because that's going to be the lid on it.

21:54I mean, there's not going to be another buyer coming in in this environment, I don't think. Yeah. So therefore, I don't know why you're trading for the extra three bucks. I mean, it's not like there's a feeding frenzy around these assets. I mean, I do think that. And again, we talked about how Cliff's resource not in a position to even be at the table. So when you're left with the core steel business that's getting enhancements, by the way, they had 22 ,053 employees at the end of 2024. I'm not sure how this leads to 70 ,000 jobs, but let's see. I just I just wonder how much more there is in this asset.

22:24So great trade. And in fact, I see, you know, the delta between here and a deal price. You know, you've had a good run. And I think U.S. Steel is was valuable. I think we've all said we thought that the company without this deal was worth owning. And I just don't think the steel industry is so exciting here, even with those improvements. Coming up, could a big acquisition heal an ailing farm? A stock is skinny on what obesity drugmaker Novo Nordis needs to get shares growing again. But first, the president signing not one, not two, but four executive orders aimed at restarting the nation's nuclear energy industry.

22:57The biggest winners next. You're watching Fast Money live from the Nasdaq Market Side in Times Square. Back right after this.