Berkshire’s Signals A Housing Market Bottom… And A Market Rally Expiration 6/1/26

23:07The beat was massive. So that's the biggest earnings per share surprise since 2018, with the upside coming almost entirely from servers. On guidance, HPE raising its full year EPS earnings per share to roughly$3.35 to$3.45. That's up from$2.30 between a range of$2.30 and$2.50. So they also bumped up their revenue growth to roughly 29 % to 33%. So these are substantial increases to their guide. I also spoke with CEO Antonio Neri, who told me traditional server bookings are up triple digits, the biggest backlog the company has ever seen. AI demand, of course, is accelerating too, but it's specifically accelerating on-premise demand because of security reasons.

23:49Companies want that close. And on the supply side, he was a little more direct, saying memory stays constrained, costs elevated well into 2027, and no price relief in sight. Niri also flagged networking as the core to the company's thesis. And of course, the numbers are backing that up. Keep in mind, they acquired Juniper. A big portion of that networking came from Juniper. Gross margins came in just a little bit above 36 % versus a 34 % estimate. And so that shows that the Juniper integration is working and working ahead of schedule. HPE also introducing 2027 targets tonight, six months early.

24:23And with Dell and Lenovo posting their own blowout numbers in the same just two-week span, the market is maybe making the case that this move is bigger than just one company and why shares are up 36 percent. All right, Christina, thank you. Christina parts Nevelis. Meantime, we do want to talk about NVIDIA bouncing 6 percent today, adding 320 billion to its market cap, a gain of roughly the size of a Goldman Sachs. The jump coming after CEO Jensen Huang revealed a move into PCs, telling Computex 2026 Today and Taipei that NVIDIA chips that will serve as the main processor for laptops and more.

24:55The announcement putting pressure on incumbent PC processor stocks, Qualcomm tumbling almost 9 percent, Intel, Apple and AMD also lower. Let's first deal with HPE. This is a staggering move, maybe historic move at this point. Dell shares in the after-hour session higher again, up 3.5 % on top of being up 10 % in the regular session. On top of being up 30 % on Friday. Right. So what do you make of all this sort of one-upsmanship? I mean, they're all up on the exact same news multiple times. So, I mean, you know, the magnitude of the beat for both Dell and HPE. I mean, if you didn't know what the stock did, and it's ASCO, and you think phase three trial.

25:39It cures cancer, right? Yes, absolutely. Up 33. I mean, that would make sense. This is just a frenzy. But we talked about it on Friday. The language that Dell used about how significant and how rapid this change is and how gigantic they seem to be. I mean, it's just, you know, release the hounds, you know. It's people going nuts. But I'm still wrong. Amazing quarter. I mean, you could have put all you wanted at$22 in March. It's now June 1st. Analysts obviously didn't see it coming. We talked about this with Dell last week. There are 22 analysts that cover the stock. The average price target I will round up is$31.

26:16Now, I'm not saying that I saw it coming because I did not. But it's an extraordinary quarter. But to Karen's point, built on similar news I've been hearing seemingly over and over again. And the same news that I think supports Cisco, which I'm long. So, I mean, I hear servers. I hear networking. And when I hear HP guide to a 30 % fiscal year forecast, like, that's nice. That's great. But the implication has to also be, again, I'm sorry, but we are a baseball show here. Early innings in terms of the enterprise. Right, Guy? Well, it's June. So if you're like six or seven games under 500 on June 1st, like how do you feel about your season?

26:51You feel like you've got a lot of time left, Guy, and nobody wins anything. We don't have a lot of time now. Yeah. So what I find what I find it interesting is to see where the puck is going, where NVIDIA is up 20 percent year to date. Karen's already talked about Dell up 270 % year to date. And when you look at a Cisco that is outperforming at NVIDIA, investors are looking for a different spot to go. They're exhausting every other space within tech. And NVIDIA, although it's still sexy, is not outperforming. So there's something wrong with it, you're saying? No, I'm saying it's broadening out, and they keep trying to pick as many levers as they can.

27:28But I think at this point, probably better money is to be made in other spaces. I actually bought some NVIDIA today. You did? I did. I think, you know, the NVIDIA, not sexy. The GPU story is less sexy now. The CPU is really, you know, that's much sexier. So if they're going to be in the CPU business as well, I think the stock should be higher if we're in this environment that we're in right now. There's a lot more Fast Money to come. Here's what's coming up next. Rolling the dice on a casino deal. the billionaire making a play for MGM, and whether the buy could mean a jackpot for the media mogul.

28:08Plus, is the clock ticking on the market rally? Why one strategist sees the record climb about to expire, and where he's still seeing opportunity before the good times run out? You're watching Fast Money, live from the Nasdaq market side in Times Square. We're back right after this.

28:32A History of the United States in 100 Objects is a brand new podcast from 99 % Invisible and BBC Studios. Each week, we're looking at a different object from across American history with a unique story to tell about who we've been, what we've built, and what we've allowed ourselves to forget. Some of these objects are well known, many are not, but all of them carry the story of how we got to this moment. Find a history of the United States and 100 objects on the 99 % Invisible Feed, wherever you get your podcasts.

29:25www.iXL.com slash marketupdatepodcast or find Schwab Market Update wherever you get your podcasts. If you're a parent and want to help set up your child for success, then iXL is right for your family. As an effective and affordable online learning program, iXL covers math, language arts, science, and social studies using interactive practice problems for kids from pre-K to 12th grade. Listeners can get an exclusive 20 % off IXL membership when they sign up today at IXL.com slash 20. Visit IXL.com slash 20 to get the most effective learning program out there at the best price. Welcome back to Fast Money.

30:06MGM Resorts surging 16 % today after Barry Diller's People offered to buy the casino giant for roughly$48 a share in cash, valuing the company at$18 billion. People already owns 26.1 % stake in MGM, and Diller sits on the board. He said he would accuse himself from board actions on the proposed deal. The move was MGM's best stay since last February and sent the shares to their highest close since the financial crisis. He said, basically, the company is undervalued in its current form. It could never be fully valued. This comes on the heel of Caesars news we had last week. Now this, and he's probably right, by the way, he still has got some tread left on the tire.

30:44But it goes back, in my opinion, Wynn. Now, people say, obviously, the Macau exposure they have is not a good thing. I think that's going to turn in their favor. And I think at 106, wherever it's closed, I think Wynn is the place you want to be. So I always liked Barry Diller as an arb. He always was colorful and funny, although not following this one. I mean, they have a very, very big leg up. It's going to be really hard for someone else to come in and bid more, given they already own 25 or so percent of the company. Also, normally, casino deals can take a long time since they're already such a big holder and do have forward representation, maybe less.

31:19But I passed on this one. Coming up is a rally on its last legs. Why one top strategist sees the market's record climb coming to an end and where he thinks the opportunities are right now. More on that when Fast Money returns.

31:41Welcome back to Fast Money. Stocks kicking off the week with more all-time highs. The Dow, S &P and Nasdaq all climbing modestly but closing at records with the tech-heavy Nasdaq leading the gains up nearly half a percent. The moves even as oil prices spike on the latest developments out of the Middle East. WTI jumping five and a half percent, settling above$92 a barrel. Our next guest sees parallels between the record market gains in 1999 with a major caveat. Chris Harvey is head of equity and portfolio strategy at CIBC Capital Markets. Chris, great to see you. Great to see you, too. All right.

32:11So you want to ride the momentum, but you recognize the risks. Yeah. And so we're just having our eyes wide open, right? If we go back to 1998, this thing continued. You're seeing similar things. You're seeing big story IPOs come out. But the market continues to run for another 12, 18 months. And we look at the fundamentals today versus back then. They're so much better today than they were back then. We were talking about clicks and eyeballs. Here we're talking about upward EPS revisions and a whole new secular story. And so I think this is pretty robust. I don't think the market's going to let you back in.

32:42But we have our eyes open. There is risk building out there. And there's just time for a little bit of volatility. So, Chris, and the IPO calendar, I know you also believe is part of this catalyst. There's a whole lot of technical dynamics, too. I mean, you've got ETFs that are front running, preparing for this. You've got arguably$3 trillion companies, one that may be close to two. How isn't that some heaviness, though? Doesn't that concern you that there could ultimately that could be a gut check for what people are willing to pay for AI? So think about what you were talking about before, M &A.

33:13The M &A activity is much stronger than I ever thought. So now I had a company that just got bought. I have to redeploy that. I go and I do an IPO or I get involved in an IPO. More than likely, I'm going to make some money. I have to redeploy that. And so risk seeking is going to beget risk seeking. And if you look at what SpaceX is going to issue, it's 3%, 3-ish percent. Okay, that's not a ton. And if it's 30 percent, they really need or you would expect them to have a pretty good IPO, which is going to open the door for other things. You put it on a note, market won't let you back in. I know what you mean.

33:44The sell offs are such that people are like, I'm not going to let this happen because I've seen it before. Does the Vixit less than 17 in this environment make any sense to you? Here's something that you want to keep your eye on. The credit markets strong like bull, right? IG credit spreads. People at home don't watch this. They don't see this. but we're back to multi-decade lows. That's fueling a lot of what we're seeing. That's fueling the M &A activity. That's fueling the CapEx spend. I think Google was just talking about doing more CapEx, and they're going to hit the equity markets, they're going to hit the credit markets, and that's just going to continue things.

34:19So we're not too worried about VIX where it is right here, right now. Chris, when you're answering these questions, when you're looking for, as I said before, they don't ring the bell at the top. What are you looking for as far as CapEx spend? rolling over. Is that the linchpin? So when Tim asked you about what they're willing to pay for AI, what's the metric that you're looking at for when the market, because the market's always ahead. So what's the metric? So we're looking to see how, we're looking at the credit markets, we're looking to the equity markets, more so in the credit markets than the equity.

34:51We're looking to see how those new issues trade. When they stop trading well, right, or we need to reprice them or they get downsized, okay, then it's a different story. But until that occurs, it's still game on. So do you think the Iran story is irrelevant at this point? The market just doesn't care whatever the outcome is? I don't think it's irrelevant, but I think what the market is now saying is we're going to get some sort of deal. We're going to get volatility, but we're going to look through that. In addition to that, if you do get a deal, what that's going to allow the Fed, people are talking about the Fed raising rates.

35:26If you get a deal, right now we have a price hike. We have hikes priced in, right? You get a deal, you can say, we're going to look through this supply shock. That rates are too high, not for Wall Street, but for Main Street, and they're too restrictive. And so we think there's still a lot of room for this bull market. And we think that the situation in Iran is something that the market's just discounting at this point in time. Chris, nice to see you. Good to see you, too. Chris Harvey, CIBC. Is that the right thing to look through the supply shock? That's what, well, Steve makes that point all the time.

35:58I'm not convinced of it yet because I think it's going to be around for a while, but I hear you. But in terms of stocks, the IPO calendar, things not trading particularly well, understanding this is a fly on the rear end of what OpenAI and SpaceX are going to be. But Cerebus, which came out a week and a half or so ago, I mean, the stock I think was priced at$175 ,000, traded up to$380 ,000. Look at where it's trading now. So you can make the argument that that hasn't been trading particularly well. I think Chris makes a great point in terms of free flow to some of these IPOs. I mean, it's not going to be just because it's a trillion dollar market cap or something like that doesn't necessarily mean there'll be that much stock.

36:30The index and the passive money is going to soak up a lot of this. So interesting time. Coming up, two big movers in the biotech space. Excuse me. The unprecedented unprecedented new drug data boosting revolution medicines and why Summit Therapeutics is moving in a very different direction. The co-CEO will join us to detail what is next for the company when Fast Money returns.

37:00welcome back to fast money oncology drug maker revolution medicines rising four percent and closing out records the company reporting over the weekend that its experimental pill for pancreatic cancer nearly doubled survival compared with chemotherapy angelica peoples is at asco's annual meeting in chicago with all the details and angelica i mean the mood in the room completely changed when they unveiled this data. That's right, Mel. I mean, everybody knew what to expect. We saw the top line results and we saw that this drug did double overall survival. So there weren't any surprises, but that didn't stop the emotion in the room.

37:34They pulled up that slide with the overall survival chart and people stopped and started applauding. Some people were in tears. And it was a moment where even the presenter said, you know, I didn't budget this into my time. I didn't really expect this. And, you know, people I talked to said they've seen some standing ovations, but they've never seen something quite like this. And so that's because this has been such a hard area, right? You haven't seen progress in pancreatic cancer. And it is a type of cancer that's so aggressive. People are diagnosed and then unfortunately they rapidly decline.

38:01So this is a drug that extended survival and also helped people feel better. And this could just be the first one. We have more drugs from Revolution Medicines in the pipeline and also other companies who are pursuing this. So what's next for Revolution Medicines? Well, CEO Mark Goldsmith told us that they are working as fast as possible to get this drug in front of the FDA, and they said that they are working on all the final data analyses that they need. They do have one of those vouchers, the Commissioner's National Priority Review voucher, that entitles them to a one - to two-month review.

38:31So it could come quick, and what's next for them in terms of the rest of their pipeline? This could be something that works in lung, colorectal. So again, there's more work to do there, but this could be a really big breakthrough. Melissa, back over to you. Stay right there, Angelica. We do want to talk about Summit therapeutics as well. Its lung cancer drug is another closely watched experimental treatment at ASCO this year. The stock is down over 10 percent today, even after its Chinese partner, Akeso, said the drug slashed the risk of death by 34 percent among patients in China. Angelica is now joined exclusively by Summit's co-CEO, Dr.

39:04Mackie Zagane. Angelica, take it away. Mackie, thank you for joining us today. I mean, it has been just so much debate going into this, And then yesterday with those results, you know, your drug extended survival. It did what it needed to do. But then there was a discussant who came out and had a lot of questions. So what was going through your mind in that discussion? Okay. First of all, that is the first drug that is statistically and clinically benefit for a patient compared to PD-1 plus chemo. That is bottom line. So in all therapeutic area right now. And for sure, when you saw yesterday, it was a lot of controversy about this drug coming from China.

39:44At the end of the day, when you are a patient, it doesn't matter where the molecule is coming from. If it's China, it's South Africa, or wherever it is, as long as you can extend the life of a patient, that is count. But it's for sure, it's a lot of controversy. When me and Bobby started this company in 2020, and in 2022, we get this molecule from China, nobody wanted to invest even in this company. And we got this molecule from Ekeso, our partner in China, and even nobody knew about the biospecific. What is a PD-1 VEGF? A lot of critics at this moment, they were there. Now, three years later, we are over 150 clinical trials going on if the IST program sponsored trials combined with Ekeso.

40:29And we have right now, I can say four phase three trials that we read out either as a monotherapy against Pembro is for sure that shows that we show that is as well is we can duplicate China data. So we are in multiple therapeutic area. If it's a lung cancer, if it's a colon cancer, and we are really proud to what we are doing. But as you say, it's a controversy and you cannot change the opinion of people. And then later on, if you really look at it after us, all of the big pharma, if you see Pfizer yesterday, two days ago, They showed 10 billion with collaboration with InnoVent or Lilly. All of them, they were right now in China and getting the molecule from China by specific of Merck is from China.

41:11Pfizer is from China. So I do not understand very well why. Well, I think part of it, what I heard yesterday was, you know, it wasn't so much that it was in China, you know, and the quality of the data. It was the questions about who is actually studied and whether that will translate. And you do have, like you said, this global trial that is ongoing. You know, you had this interim PFS that didn't hit. And now I think altogether people are wondering, like, what can we expect to see? Will we see that benefit in China? Will we see that again in global populations? So what should people be thinking about that?

41:38First of all, I would correct a little bit because the people say we didn't hit. But that is not exactly the point. It was an IDMC, and IDMC say continue. What that means? Safety, continue. If we were not better than Pembroke or at this moment of time not better than control arm, they would stop it. They didn't. They just say continue. We just put the bar high that at this moment of time we can go to the FDA and we can communicate with the FDA based on the data that we had in China to bring the drug sooner in the hand of patients. So number one, that is very very important point. And second, we started our actually I can say the HARMONY data which is on the EGFR study.

42:20We did HARMONY A, was an ECHESO study, HARMONY is our study. If you really look at it, we duplicate the China data. You know, I mean, on the PFS side and we get even OS and we are right now in communications with FDA on these specific trials. So it's not really, I can say at this moment of time, it's not that we didn't hit, but we are going to present our interim analysis for OS as well as final analysis for PFS by the end of the year. So it's a question of time. And you're already in front of the FDA with not the day that was presented yesterday, but how are those conversations going with the FDA?

42:56And do you feel like they have enough to approve the drug? You know what? I give a lot of credit to the FDA. At the moment that we started in 2023, it was a lot of, I can say, different discussion between big pharma with China partners. And when we get there, FDA really give us a real chance to continue one of our trials, which is two-thirds was patients coming from China, one-third patients coming from Europe and U.S. And they allow us to pursue these trials. And we proved these trials. I mean, if you look at it on the PFS, we did it. On the OS, yes, the reason we didn't get significant OS at the June timeline was because this trial was four months took us to enroll first patients because nobody believed in this molecule of PD-1 and VGF inhibitor.

43:51And then later on, as soon as the data came, we accelerate the data, we accelerate the enrollment. And I can say right now we are in a good communications with FDA and we will see how everything will go. But the most important part is this drug is benefit patients. You know, the safety profile, the tolerability of the drug is important and we will see how everything will go. You know, as long as you are not a cancer patient, you cannot feel cancer patient. I had my cancer. I know what I'm talking. At the end of the day, every drug, every drug has a merit as long as they can extend the life of patient.

44:29Even for one day, one month, we have to do everything for our patients. And that is my philosophy in life. Two percent chance is not zero percent. Well, we have to leave it there. But thank you so much. Miki Zongane from Summit Therapeutics. Mel, send it back over to you. All right, Angelica, thank you. And our thanks, of course, to the co-CEO of Summit Therapeutics. Specifically, what analysts are concerned about is that the study was done in young men in China who smoked and that this may not represent the results that they'll see in the global population. But as the doctor had said, they are conducting the global study right now.

45:03So we'll soon find out whether or not they are replicated, the results in China versus the global population. Waiting for the results on non-Asian, absolutely. And, you know, if you read through some of the writings that I've over the last couple days, or today specifically, A lot of people saying, look, this is not a home run, but it's probably a solid double. So I get the stock sold off. I understand the binary aspect of these things. D.E. Shaw just added to their summit position. I think you go with them. Coming up, never say never. The Bitcoin reversal from strategy and what it means for the company's long-held crypto stance.

45:32More Fast Money in two.

45:42Welcome back to Fast Money. Strategy shares down nearly 6 % after the Bitcoin treasury company said it is selling$2.5 million worth of the crypto. Its first sale in more than three years and only its second sale ever. Bitcoin prices down 2.7%. Excuse me. Now down 18 % this year. Oh, you know, look at the proxies. They're down. Grasso, what do you mean? Make of this move. There's nothing. You could talk your way around it that he never, never said he wasn't going to sell it or he would like not to sell it. or Bitcoin, Maxinista, he's always going to have it, always going to be buying it. You could talk around it.

46:18It's not a good thing when you see strategy making sales. For whatever the host of reasons could be, it's not a great thing. I'm much longer Ethereum than I am Bitcoin, but I think for the complex, crypto is Bitcoin, and I don't like the headline. I mean, this is always the bear case, right? That crypto would hit a severe winter and they would have to sell. I mean, they did telegraph that they were going to sell. So it's not entirely a surprise. It's just they still did it. Yeah, and it does get back to average costs, and it gets back to us with the accounting treatment of what you're selling.

46:54And, you know, not great news. Up next, final trades.

47:07Final trade, Tim. Like that, HBQ. Buy Cisco, then. Karen. So if Google trades down a lot on this offering of various securities, I would be a buyer. Let's see. Big week for quantum inflection. Key. Keep it in the casinos. Melms win. All right. Thanks for watching Fast. Mad Money starts right now.

47:41inducement 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. This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith lansford for this information-packed daily market preview delivered in 10 minutes or less including projected stock updates monetary policy decisions and key results and statistics that may impact your trading download the latest episode and subscribe at schwab.com slash market update podcast or find schwab market update wherever you get your podcasts