Apple’s Sweet Gains… And Eli Lilly Drops After Reporting 8/7/25

0:04Live from the Nasdaq market site in the heart of New York City's Times Square. This is Fast of the century as disappointing data on its obesity pill overshadows strong earnings. What's a trade on the stock now and what does it mean for competitor Novo Nordisk? And a slew of after hours movers from payments to social platforms to casinos and more. We've got the details behind all of tonight's after the Bell earnings. I'm Melissa Lee. Come to you live from Studio B at the NASDAQ. On the desk tonight, Tim Seymour, Courtney Garcia, Karen Feinerman and Dan Nathan. We'll get to President Trump's calls for a CEO change at Intel in just a few minutes, But we start off with another sizable move in shares of Apple.

0:53The iPhone maker gaining another 3 % today after its 5 % jump yesterday. The stock has now added$250 billion in market cap in just two days. That is bigger than a whole IBM. The move coming after CEO Tim Cook appeared in the Oval Office with Trump yesterday to announce that Apple is investing an additional$100 billion to bring manufacturing back to the U.S. Is the recent momentum in Apple a sign that the long struggling stock is getting re-rated? Timothy, I will start off with you because you brought up this notion that maybe Apple is moving out of the slump that it's been in because of this lift from President Trump.

1:32Although you used my full given name, so I feel like I'm in trouble. But yeah, I think there's a chance here. I think it's less about the headlines, the pictures in the White House, the chumminess. I think Tim Cook has done a fantastic tactical job on his relationship with the White House as one of the companies that's probably doing more manufacturing outside of our borders. But I do think going back to the quarter we just had, the dynamic here is you had 10 percent revenue growth. The street was at four, 13 and a half percent iPhone sales, well ahead of where the street was. Gross margins that are going higher, especially in Europe and in Asia.

2:09It's a story where the services revenue, I think, is very much a part of where this company, you can't say re-rating because it's already re-rated. But I think the more important, maybe I said that this morning, I think that the point is that the rating is something that at least relative to what other mega cap tech stocks is deserved and that we haven't priced in AI. That's my view. We have not priced in an installed base that will be served up AI through an Apple handset. That's something that the market has not rewarded them for. They shouldn't be rewarded. But this was a great quarter. And that's what's going on here.

2:45At least maybe we can remove the discount given because of the overhang of tariffs, right? I don't think so. I mean, I really I respect Tim's view on this. I know he's long. I just couldn't disagree more with everything that he just said. First things first. Yes, it was a good quarter. So I'm going to agree on that point. But it was only a good quarter because you saw this big pull forward. You saw in China, which we accelerated a little bit because the iPhone worked into a subsidy, like a consumer sort of subsidy that the government is put in place here. So you saw this behavior by consumers that is not likely to exist in the back half of the year.

3:21The reasons why is OK, fine. They had an exemption and exemption in the first administration, the first tariff situation here. But when you think about that margin improvement, if you like services here, you better hope that that remedy as it relates to Google, that they don't actually have to pull away that$20 billion that Google pays Apple for exclusive search on Safari. That is pure margin. That is the thing that makes their services business so interesting. Services has not been growing it the way it was a few years ago. And when you think about AI and what's discounted or what's not discounted, that's a huge part of a reacceleration or a hope thereof for the services business going forward.

4:00And they got nothing there. They got zero. And I actually believe now, even if they were to make an acquisition, something like a perplexity, I just don't think it would be that important for what they're doing. So if you're relying on a super cycle upgrade thing, it's not happening this year. You know what I mean? So you're really going to have to push out those expectations to 2026. And the last point I'll just make is that this stock is still below where it was on April 2nd. So what has it done? Has it re-rated? Has it really kind of taken off some of the risks that exist here because of tariffs?

4:29I just don't believe so. So I get, you know, have a ball. It just rallied 8 % in two days. But I just don't think it's rallied on anything that's going to carry it forward into year end. I think it's re-rated a little bit in that one of the things that was really weighing on it seems to have lifted. So I think that is relevant. And I think Tim Cook sort of once again, I think, has done a masterful job after really being under a lot of pressure. Also, this is the kind of thing, you know, we talked about giant numbers being thrown out. Whether or not that actually ever happens, I don't know. But if you can get out of this current situation that's weighing on you just by agreeing to that, maybe they do, maybe they don't.

5:06The idea, though, of making iPhones in the U.S. seems either highly unlikely or very expensive or provides no jobs because it's all robots. Right. I don't know if that's that solves what Trump's looking to do with on shoring. Right. So but that doesn't matter for the moment. I think Cook has done, again, a masterful job of paving the way for Apple to do its thing. I mean, it's an additional$100 billion, right, which Steve Kovach made the point this morning that may have been already allocated towards partners. Anyhow, they would have spent that money anyhow. He gave them a hunk of gold with a glass thing on it and bam, stocks up 8%.

5:48I mean, that seems like a bargain. Yeah, which I do think this is going to be a short-term move. I think that the downside here was that these tariffs were going to affect them. But I do think the AI story isn't something we can ignore with Apple. I mean, realistically, I don't know what it is that's going to create this super cycle that Dan brings up that they just keep pushing out. Everybody expected that was going to be spring of this year and they keep pushing it out. They're just getting delayed into the future. And that's if it happens, right? You need some sort of exciting phone for this super cycle.

6:13So if that doesn't happen, what's going to bring it higher? Can I ask you, though, what if it's not a super cycle and it's just a cycle? What if we know that a lot of the iPhones out there in circulation are very old, like my iPhone X, that will need upgrades? Because there is, I don't, I forgot what the percentage is. I think it's 25 % or older than 10 years or something like that. I'm exaggerating. Well, I think we've heard the same argument with PCs, right, that there was going to be this PC refresh. But I think these are just lasting longer. People are okay with the technology when it's an incremental increase each time.

6:40So I think really the biggest benefit for them or a long-term impact is going to be looking overseas. So like looking at India specifically is going to be, I think, one of their biggest places that they can increase their market share. And I think that's probably a bigger opportunity than their AI story, which just isn't here yet. I think the PC point is a good one. long Dell. Dell is suffering from this, I don't know, still on the horizon, but it's been on the horizon for a couple of years now, PC upgrade cycle that hasn't happened. So that's an interesting point. I hope Dell gets it together, but it's been elusive.

7:13Yeah. Tim, and how are you feeling if that super cycle doesn't happen and it's just a regular old iPhone upgrade cycle that we're facing because there is no AI catalyst? Does that make you still bullish on the stock? There's no super cycle price into this stock. Why are we saying super cycle? Who's priced a super cycle in? This stock's done nothing in three years. That's acknowledged. In fact, that's the disappointment and maybe the frustration for people watching the show or people on the desk. The bottom line is there's nothing priced in. So if you're telling me there's a pull forward on handsets, I can buy that.

7:46If you're telling me that Google's suddenly not able to pay them that money, that's probably somewhat in the price. But there's no question it's a bigger issue for Google as we get down the road. So if we're selling Google off, you know, that's another story. But there's no question to me, AI will the conduit for most people to experience their AI, whether it's search or other things, will be on an iPhone. And at some point, this iPhone will be souped up. It doesn't matter, though, because that's not in the price. The point is that this is a company that's chugging along and in a market that might have other risks around it.

8:18Apple tends to be very defensive. If we remove China risk, which I know we're not doing, but China risks have gotten better. And that's really part of why the stock is rallying. All right. Let's get to the other bit of D.C. drum out there today. President Trump calling on Intel CEO Lip Boutan to resign immediately, saying he's highly conflicted due to his ties to Chinese companies. His truth social post comes a day after Republican Senator Tom Cotton questioned Tan's investments and referenced a criminal case involving his old firm, Cadence Design. Shares of Intel falling about 3 percent today are down nearly 12 percent this quarter.

8:52Let's bring in Doug Clinton, CEO and founder of Intelligent Alpha. Doug, great to have you with us. There's a couple of ways of looking at this. You know, in terms of Lip Boutin, we just came off of this whole segment about how Tim Cook had to go to Washington and appease President Trump. If Intel wants the backing of the federal government, because part of the bull thesis on Intel is that it's the national semiconductor company. It's not going to be the national semiconductor company and possibly getting loans, et cetera, money from the federal government if the president does not like the CEO.

9:26So what should Intel do? I think they're in a hard spot. And I'm actually surprised, Melissa, the stock wasn't down more than it was today. I think part of that is because the market knows now we've been dealing with these tariff questions for several months. And the question is, how serious is Trump? He might change his mind tomorrow on some of these issues. But I think the real challenge for Intel is they've committed to make large investments in America. They have a$28 billion fab project in Ohio that's been paused, delayed five years now. And I think that has to be something that's on the mind of the president, on the mind of the administration, is how do we get Intel some forward momentum?

10:06I mean, the company, the stock, they're both in the same place. They have no momentum because I think they've had a lot of challenges operationally. Maybe they need a new CEO and maybe that's Trump's angle, but certainly this uncertainty is not going to be helpful for the stock or the company right now. Doug, it's Karen. Thanks for being on. What's the difference between delayed five years and never going to happen? It sounds sort of like the same thing. What should they be doing now? In fact, Karen, it may never happen because I know there's more recent reports that if they can't find demand for the new node that they're working, the node process there, which is 14A, they may delay the plant indefinitely.

10:45And so I think that speaks to the fundamental challenges that Intel is having. And the reality is this, TSMC, Samsung, they just fundamentally right now are better partners for any chip designer who needs to fab chips at great scale. Intel just has not figured out how to deliver a competitive product. I don't really know if changing the CEO again this year would make a difference on that. Or maybe changing the CEO again will make the turnaround even worse, make it more difficult. I mean, it takes time for a CEO to come in and get familiar. And Liputan has been in there for a bit now. And you're basically throwing that sort of foundation away and starting anew.

11:27I mean, do you think that the Intel turnaround is delayed or maybe even put off indefinitely if they are required to get rid of the CEO and find a new one? I think if you're an investor in Intel, which at Intelligent Alpha, we use AI to pick stocks. Our AI models happen not to like Intel. But I think if you are an investor in Intel, what you're probably looking for is one of two things. Either we hear more about a potential breakup because there are still valuable assets there. They have the chip design business. The x86 processor is still not dead. They do have the foundry business, which has lost a lot of money.

12:03But I think there could still be value in those assets. If we get more momentum on this idea of a breakup, that could be good for the stock. The other thing is, you know, maybe Trump's angle here is some sort of a nationalization play saying, you know, Intel is actually a national security asset. We'll invest here. We'll give them favorable treatment, whatever that might look like. And you could have an Apple scenario if you get an announcement like that. All right. Doug, thank you so much for joining us. Appreciate it. Thank you. Doug Clinton, what do you think of the Intel situation, Court? I think this is very similar to Apple, in which case the headlines you're getting from Washington are kind of hiding the bigger issues, right?

12:40With Apple, it's the AI story that I think is getting buried here. With Intel, it's the fact that their foundry, which is like one of the largest long-term opportunities for them, seems to be falling by the wayside. So I think regardless of the headlines or should the CEO come or go, until they get that figured out, I don't know where the stock is going to go from here. It seems pretty anti-capitalist here. And, you know, the other thing is if you're going to nationalize a company. For the federal government to come into a private company and say who should be CEO. We know that they like to pick winners and losers, but I just don't think this is a good environment where, you know, you basically say you want to compete with, let's say, you know, a foundry over in Taiwan, that sort of thing.

13:14And you're talking about pushing out the management. You're talking about maybe nationalizing that sort of thing. You need talent to do that, too, right? So if you have a nationalized sort of tech company like that, you're not likely to be able to compete one way or another. And, you know, part of this thing is it's like we don't manufacture that well anymore. I mean, that's one of the reasons why Taiwan Semiconductor makes 90 percent of the high end GPUs that go into the world. So this would take a long time to your point about pushing out a foundry five years. It's not easy stuff to do. Right.

13:41And not. The other thing is, is like this technology changes a lot and it changes quickly and you need to be nimble, that sort of thing. So the other thing I'll just say is like it seems really hypocritical. Right. If you're talking about ties to China and that sort of thing. Well, Jensen Wang has ties to China. I mean, Jensen Wang sells a lot. This is NVIDIA, obviously, sells a lot of chips into China. They just got, and you could say, well, if Tim Apple played the, I'm sorry, if Tim Cook played the president pretty well, well, no one's done it better than Jensen Wang, right? And they're selling billions and billions of dollars of chips into China that are going to make it into their defense and intelligence apparatus.

14:15And I do not believe that he has the national interest of the United States, but he definitely has the fiduciary responsibility to his shareholders. And that's one of the reasons why he's gone to Mar-a-Lago. He's gone to the White House and he's done these sorts of deals to get the export bans reversed. Okay. Meantime, we've got to get some other news out of the White House today. President Trump appointing an interim replacement for Fed Governor Adriana Krugler, current CEA chair Stephen Myron. That news crossing just before the market closed today. CNBC's Steve Leisman joins us. Steve, what do you make of this move by the president?

14:50I mean, I think it's the part of a process where President Trump will have four of seven board of governor seats on the Federal Reserve, which is the four of seven permanent voters there over time by the time Fed Chair Powell leaves in May. And the question becomes, you know, where is the center of the board after all of this is done? It's a little hard to game out right now, but you can think of this like the decades of Supreme Court nominees, some of whom go over there and they basically toe the line of the political person who appointed them to office, and other times they break away. So the Fed is a strong institution and it has its mandate from Congress.

15:33The question becomes, I guess, the concern is whether or not you have a Federal Reserve governor who's part of a process where the allegiance is to the executive or the administration and not to the purpose or the goal of the Federal Reserve, which is the dual mandate of low inflation and low unemployment. So it's unclear at this point. It looks like it's a temporary posting, a temporary nomination, and maybe they'll come back and replace him. Maybe he'll stay. But he's given himself a little bit of time, Melissa, to not have to deal with the Fed chair issue maybe until January. Yeah, it just sounds like he probably won't make it for the September meeting, Myron, in terms of the process to get him in, but certainly for meetings subsequent to that this year.

16:20Is that the expectation? Yeah, it's more of a political question. I think it would be tough for the Senate to confirm, Mr. Myron, before September, before the September meeting, which is, I think, in the middle of the month, September 17th, but certainly for October. And then it just becomes a question of what they're doing. By then, though, you know, if this tariff inflation ends up being not such a big deal, and if the jobs situation is more serious or obviously something that should motivate the Fed, then they'll be cutting and there'll be no question. I would like to also point out before we get too excited or I get too excited about it being a political appointment, that's exactly the position that Fed Chair Ben Bernanke came from, was CEA chair.

17:02So this is normal for them to spend a little bit of time in the White House. Greenspan spent time in the White House before becoming Fed chair. So this is normal. And then it becomes a question of how they operate and where the center of the board is and how they operate. Hey, Steve, you're a student of economic history. Let's just say we have a situation where the dual mandate goes haywire. Right. Let's just say that inflation is a bit stickier and it's because of the trade war. But we do have weakening jobs data. And you could also say because of the trade war. Right. We're losing manufacturing jobs.

17:31What is the Fed to do? If you look back in history and you have this sort of stagflationary environment, if they start cutting rates, doesn't that make things that much more difficult? Yes, it certainly does. And it's interesting that the weakness in the jobs report from Friday does not make the inflation problem go away. Remember, inflation is stuck core PCE at 2.8 percent. So that's not going to go away anytime soon. and the Fed is going to face this dilemma. It sort of already does. What's hope now is that the Fed is able to use some of its credibility to battle cut rates and address potential weakness in the economy and keep inflation expectation anchored because the belief is the Fed will come back and address it and keep relatively tight.

18:20Remember, it's obviously a debate how tight the Fed is, but it doesn't have to go to neutral right away. It has a little bit to give. It could give a quarter, see how prices react, come back later every other meeting or sometime. I think in general, Powell wants to do more than one cut at a time. And that's the way I think the market would price it in or has already priced it in. But there's nothing that says they have to keep going if this data come in and shows your problem. Remember what the Fed has told us, that they're going to address the one that's furthest away from where their forecast says it should be.

18:55So if jobs end up being a big problem, they're going to address it. If inflation ends up being a bigger problem, they'll address that. Right. Steve, thank you. Good to see you, Steve Leisman. Pleasure. And at the same time, of course, this morning, we got jobless claims number. We got a productivity number, which came in stronger than expected. Tim, what do you make of all of this in light of these developments over at the Fed? The data has been somewhat conflicted, but the hard data hasn't been great. And the services economy data with price stickiness are the things that make the stubbornness of inflation make the Fed's job very easy.

19:33The fact that we're talking about the politics of the Fed and four governors that have been at least leaned to the administration does mean that the Fed has become more political. I recognize we've had this process in the past, but I do think it's a case where if we're questioning the independence of the Fed, we are questioning there is some question about the independence of the Fed going forward. That has not ever really been an issue in my lifetime in markets. So I'm disturbed by that. Having said all of that, look at that 10-year. Seems to be very anchored somewhere between 415 and 435. I mean, it's been a very sideways slog with a lot of uncertainty, with the exception of that, call it, bond put that the market had in April.

20:17I just want to say about the productivity increase, if it's persistent real, I think that is a very good thing for those concerned about inflation. Right. If companies can be more productive, you can keep a little prices. Coming up, a lot of after hours action to bring you Block, Pinterest, WinResorts and more all on the move. The numbers from the quarter's next, plus trouble in the enterprise trade, why software stocks are selling off, and whether the group can turn things around. Don't go anywhere. Fast Money's back in two.

20:52Welcome back to Fast Money and Earnings Alert on Block. Spiking after hours, the payments company missing top and bottom line estimates, but boosting full year guidance. Its conference calls underway. CNBC's Mackenzie Segal is following the action. Hey, Mac. Hey, Mel. So Block shares popping as much as 11 percent in the after hours, though, it is pairing those gains now. But it shows that investors are clearly willing to forgive that Q2 miss on earnings thanks to the company's outlook for the back half of the year. Block raising its guidance for full year gross profit, now projecting 14 percent year over year growth.

21:25And then cash up. That was a weak point last quarter. It saw its gross profit jump to one point five billion in Q2. I've been listening in on that call. Just now we heard from CEO Jack Dorsey. He said that the company can double down and pull the thread on what resonates with people, adding that he's super excited and super bullish on shipping faster, making both Cash App and Square that much better and more usable. And this is really what a lot of analysts were looking at going into the print, Mel. All right, Mac, thanks. Mackenzie Cigalos. I was sort of surprised, you know, that they're going to raise their full year when they miss on the quarter?

22:00It's like, trust me, I promise you it's coming later on, which investors don't generally enjoy. Don't generally like. So I'm hopeful that they must feel confident that they're going to be able to do that. So, I mean, it was a nice pop, although it's come back a little. The call started at 5. I definitely want to hear what they had to say on the call. But also, it's coming from a pretty low multiple. And, you know, the stocks had a nice run recently, but the last couple of years have been very difficult. Not expensive. Not expensive. I mean, they're supposed to see a reacceleration in earnings and really get back to where they were in 2023.

22:34I mean, as far as EPS and, you know, the cash app coming off of really like massive deceleration and they're talking about 10 percent growth. I mean, that's fine, but they're still missing earnings. Right. And so if you're looking out and saying we're going to get back to those 2023 levels as far as earnings are concerned, it's trading at 20 times. That's fine. Like, have a ball. I mean, right now it feels like there's probably better places to be in the fintech space. Yep. Another earnings alert here. Pinterest shares plunging in extended trading. The company beating on sales but missing on EPS.

23:02CNBC's Julia Borson's got the details. Hey, Julia. That's right. Revenue of$998 million ahead of estimates of$975 million, but the stock dropping on adjusted EPS of 33 cents per share. That's two cents short of estimates. While monthly active users were$3.5 million ahead of estimates. The company is guiding to third quarter revenue in a range ahead of the consensus estimates. CEO Bill Reddy saying that Gen Z has grown to over half of Pinterest's user base, that their AI-powered performance platform is helping them, and they're becoming a personalized shopping destination, all of which makes them well-positioned to further capture market share.

23:43Now, as for the macro environment, Bill Reddy is saying that the ad market is a bit more constructive than last quarter with less tariff impact than anticipated. They say that that strength is expected to continue into Q3, but they did note that the tariff related uncertainty varies by advertiser. Melissa? OK, Julia, thanks. Julia Borson, 11 percent decline right now. Courtney, what do you think of pins? Yeah, and I think when you're looking at the advertisers here, you're clearly saying they're not as big of a player as like a meta. So I think these advertisers are having to choose where they're coming here.