Big Year For Banks… And What’s In Store For AI & VC In 2026 12/30/25

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0:43Meeting you where you are and helping you get closer to where you want to be. So no matter where you're starting from, you can move forward with confidence. The key to being rich is knowing what counts. Let's find your rich. Edward Jones, member SIPC. Live from the NASDAQ market site right here in the heart of New York City's Times Square. I mean, right here. This is Fast Money. Here's what's on tap tonight. A big year for big banks. Some names seeing their best gains in decades. But can the trade notch more gains in the new year? We'll discuss and debate. Plus, the China wildcard. Tension between Beijing and Taiwan heating up.

1:23What it could mean for the markets both overseas, here at home, and your money. All that plus, Meta making a move to up its AI game. Boeing shares Steve Grasso hitting two-month highs after signing a big new contract. The fueled up trade, the energy stock that's hitting a new 52-week high that Guy Adame just absolutely loves. He gave us a nibble of it last night. Hi, everybody. I am Brian Sullivan in for Melissa Lee coming to you live from the NASDAQ Studio B right here. And on your desk tonight, the aforementioned Steve Grasso, Karen Feinerman, Dan Nathan, and Guy Adami. All right. We start tonight with those milestone moves in many of the big banks this year.

2:10Think we're kidding? Look at this. Morgan Stanley stock up more than 40 % this year. That's its best year in four years. Goldman Sachs doing even better with gains last seen during the depths of the financial crisis. Citigroup, though, the biggest winner of all, 60-plus percent gains. That stock's best performance since the turn of the century, and I mean 2000, not 1900. All these handily outperforming the broad indexes this year, even some of the biggest AI trades. The question is, with the big banks, Guy Adami, great year. I know you've been on them. I know you have been. Good calls. What's going to happen next year?

2:53First of all, Karen's been on top of it, and Tim has, who's in absentia, I believe is in Europe right now. Terms of the banks, some we've gotten rights, a lot of them I've gotten wrong. But Citibank is the one that continues to stick out to me. And we can talk about what a great job Jane Frazier has done. There's this getting themselves out of bad businesses, focusing on what's working, the restructuring of the bank. But if J.P. Morgan, we've done this math problem, is worth three times tangible book-ish, I think it's fair to say that Citi should be half of that. And half of that gets you about$148 stock.

3:28And, you know, we've been pretty consistent on this. That's where I think it's going. And although Citi's had a huge run off the lows that we saw earlier in the year, I think there's still a lot of room to the upside here in Citi. The interesting thing, Karen, about Citigroup is that Jane Frazier has done a great job. And one of the things she's done is to get bigger in terms of the stock valuation by getting smaller, shrinking the company. She this is not a winner take all strategy. She I feel like she's being very targeted, very smart about just ditching businesses that she doesn't need, doesn't want.

4:01Right. Well, also, she's been really good about trying to get them integrated to be one bank after just a series of acquisitions over decades that were never put together. and I mean, she's created a culture there where I think, you know, building the asset wealth management business, but it is a great time for banks overall. It doesn't get any better than this. The economy is growing. Regulation is heading their way. Credit quality is great. Capital markets are really good and looking to be just as good next year. Then you have the asset wealth management business. All of that's great. And then you have AI making banks.

4:37They're a great candidate for what's a business that could be so much more efficient than it is. If you could cut out 2 % of expenses, you can increase your margins because the margins are so thin in banks. That's a fantastic setup. That's why they're up this much. But just because it's the year's ending, I'm not going to sell my banks and look for something new. So you still own it. You're keeping it. Citi is the C in my carb trade. Yep. That I get a lot of guff for. Why? That would be a word Guy would use. Well, you know, his anagrams and, you know, carved and energy is an OIH. It's very odd.

5:12As the energy guy, I fully endorse. The OIH. The OIH, the carved, the XOM, whatever. We'll get to XOM in a bit, Guy Domi. Just settle down. I'm fine. 148 on Citigroup. Would you agree with Guy's take? Yeah. I mean, you have the economy. You have DREG. You have a host of things that are going right. Investment banking fees are up 50 percent, probably across the board. Is it something that I want to buy now? Probably not. I think you've got to let these things breathe. I think you go into a new year. There's the CapEx spend. There's IPO markets. There's M &A. There's tax cuts. There's immediate expensing.

5:53You could name all the things that are tailwinds. What are the headwinds? If the economy slows. If unemployment rate moves higher, then you're going to have less loan demand. So I think there's a host of things that could happen. Even if rates come down, there's a sweet spot for net interest margins where if rates come down precipitously, those margins will get squeezed. So I think you have time to wait on the banks. Yeah, I just think at least the investment banks, Morgan, Goldman, I think they price a lot in right now. I mean, you're going to continue to hear capital markets. You're going to continue to hear about the IPO.

6:28I mean, while the IPO market was up a lot this year, I mean, it's coming off a very small base. And next year, it's really dependent on these massive names, right? And I suspect, you know, this is the time of year you kind of make some big proclamations or whatever. I suspect that one of these big names in the AI space that a lot of folks are hoping that goes public next year actually blows up. And it goes the opposite way. And we see a lot of reverberations, whether it be the banks that are lending to these folks. You just can't, you know, VCs have some, whoa. That's a bit, what you just said.

6:59This is what Dan Nathan does. You just kind of put the ball in the tee for you. Drop the bomb in there. I assume you're talking about the tussle-headed guy's company out in San Francisco. Well, listen. A couple hundred billion in valuation. No, if OpenAI can't raise$100 billion and soon, and, you know, let's say they top the debt markets, I mean, I don't know. The mildest slowdown there, and when I say blow up, I mean, it's not going to zero or anything like that. But if the wheels are not greased over there, then there's a whole host of other things that are not working, not just in technology, but also in our economy.

7:33When you think about the contribution of CapEx to our GDP, and there's a whole host of other things that we've been talking about as it relates to what are the major components of GDP. Well, if you think about, let's just say we have unemployment that is going to 5%, maybe because of efficiencies from AI. There's a whole host of things going on. There's an article in the Wall Street Journal that say, you know, CEOs are planning for 2026, and hiring is not one of those plans. They're not firing people just yet, but they're certainly not hiring people. Letting people roll off. So my point is, if you go to 5%, the economy slows, right?

8:05There's a whole host of things that could happen here, and a lot of it's dependent on what's going on with AI. I want to get back to that because I want to be – and we're here for your opinions, not mine, but I've been pretty clear on the Twitter machine and others that I think if, to your point, I'm agreeing with you that if OpenAI stumbles, the market's in trouble. But is there a direct correlation between OpenAI and these big financials, the big banks, because of lending, because of IPOs? It's getting to a point. I mean, J.P. Morgan, I think Jamie Dimon said it the other day. They're getting ready to write$10 billion checks for this sort of stuff.

8:33And so this is not the sort of lending that generally goes on. But when you think the VCs that have subsidized this, where do they get their money? From sovereign wealth, from insurance companies, from pension funds, right? All that sort of stuff. There's a lot of folks that are going to be on the hook. It's really made its way. Is that me? It's made its way into the banking system. This is very financialized, which was not the case during the dot-com. It actually resembles a lot more about what went on in the aughts into the housing crisis. So I find myself agreeing with Dan, which is, you know, an uncomfortable place to be.

9:04Right. But I do think that if we see that stumble, that it will have reverberations in banks everywhere. Not just banks, but so many parts of the business, like something like, you know, a GE Vernova, which has been fantastic. Well, that's you've got to think, all right, if the lending, if that's not happening, open AI, then all of the data center build has got to slow. And, you know, you've got to think there's so many sort of collateral damage. Things tied up in OpenAI. And by the way, it's a private company. It's a secretive company. It's$1 billion. Here's San Francisco. Nobody knows what's going on.

9:36Well, and, you know, people are concerned about private credit. And that's been a big source of funding for data centers. All of these data centers next year don't get funded off the balance sheets of these major hyperskills. They get done in these SPVs that are, like, done in conjunction with the private credit guys that the banks are lending into. OK, so it's gone to a different place than where it was two years ago. And I think that's what's most important to just kind of understand what is the other side of this? Because tech folks out there and a lot of bankers are really excited about all this stuff.

10:08But a lot of things have to go right for this to work. No, I think that's a fair. Listen, there's a relatively good probability of some sort of blow up going on in whatever lending markets or credit markets at some point next year. in the back of what Dan is talking about, without question. I think the good news is many of these larger banks, I think, are very well insulated against that, is my sense. So it's the smaller banks that are probably going to lose, which only makes the bigger banks do better, I think, in the long run. I think, and I would just add on to this, because would you say it's the time of year when you make big proclamations?

10:41Why not? I'm going to make one, which is that if that company, OpenAI, were to stumble at all, I think the markets, writ large go down 10, 15 percent. I mean, listen, the markets go down on average 10 percent at some point anyway. OK, 20. Yeah. But by the way, they don't even have to stumble. They're sucking up between SpaceX and OpenAI. They've sucked up a lot of the capital within the market. I do think it's a zero-sum game. I think that potentially has changed the environment. So you get a lot of these after-flow IPOs. But if any of us, you're in those meetings where you're trying to get money, whether it's$100 million or$500 million, no one wants to give those checks.

11:22They want to be on SpaceX. They want to be on OpenAI. Billions. We're talking about$100 billion. But no, no, no. That's my point is they've sucked it up. So they don't even have to stumble. They've sucked up all the oxygen in the room. And it's very anticlimactic if these deals get done and it leaves a host of others that don't. There's also just a lot of companies that are tied to that. Remoras, if you will, on the back of a shark. Oh, nice. Remoras. It's a fish. What is that? Symbiotic. All right, meantime. Symbiotic as opposed to a lamprey. Quality fish, by the way. Meantime, China showing its military might, firing rockets toward Taiwan, sending assault ships and bombers to the region for the second day in a row.

12:03The country seeming to send a message to any nation that looks to block Beijing from claiming control of the region. So could geopolitical unrest in China be maybe the big wild card for the global market? For more, let's welcome in our managing director, Shahzad Qazi, joining us now on set. Shahzad, thank you very much for coming back. You just heard this sort of semi-scary conversation about open-air and what were to happen. I think China is probably the other massive variable. We had a good year this year. Are you expecting a good year for Chinese equities, anything related to China in 26? I think the uncertainty will certainly carry on.

12:43I think equities did a lot better than we would have predicted at the beginning of the year. considering the trade war predominantly. Now, next year, the economy, again, will be reliant on Beijing stepping in to perhaps provide stimulus on the consumer side, continuing to provide stimulus to stabilize the property market if they can get there. So lots of open questions about economic growth. I think geopolitics, in the first few months of the year, you can rest easy because of the Xi-Trump summit. But after that, once again, we may be back, in a place where instability continues to just go back up.

13:20Yeah, and you've got more saber-rattling, in some cases, literal saber-rattling around the Taiwan issue. Let's hope and pray nothing happens. If something were to happen, I know you got your December data report. I want to get to that in a second. But if something were to happen militarily, what would happen to China's markets? What would happen to the U.S. markets? Well, look, I mean, that would be catastrophic, I think, for markets across the world. I mean, certainly here and certainly in China. I think a lot of the question for folks is, what will the administration here do? Because I don't think everybody is convinced, and they shouldn't be, that the current occupiers of the White House, the current president and his team really firmly believe that we have to go as far as needed, all the way to protect and defend Taiwan.

14:06I think there's a big question mark on there. All right, let's go to the December flash data report for the China Beige Book. What are you seeing? There's so many questions around the Chinese economy because it just seems to be in a constant state of stimulus. Look, the consensus narrative has been very, very negative on China. The idea that the Chinese economy is slowing down. What we've been saying month after month is that actually, if you look at it, the economy is doing just fine compared to a year ago. It's growing over, you know, compared to a year ago. At the end of the year, there was, in December, a bit of a slowdown.

14:39It's nothing alarming. You know, I think China released extremely positive data in the earlier part of the year when they were under pressure because of the tariffs. When the political threat and pressure was gone, they were much more comfortable releasing the negative news. And that's what's happened here. So when you give us a cheat sheet, because I find this very interesting, but you're the expert on it. So when you look for things, right, we know about the property market. We know about stimulus. What are the canaries in the coal mine that you look for that will let us know that China could be on the precipice of something bigger?

15:13Because all this other stuff, dancing around it, whether it's 8 percent growth, now 5 percent growth, they're going to 4 percent growth. We can factor that in. We can trade around that. But what's the cataclysmic stuff, if anything, that you look for? The big one has to be consumer spending. Chinese consumers are going to be very, very cautious unless policy changes and unless they do structural reforms to eventually move towards a consumption-driven economy. So are we going to get another year where they do some trade-in subsidies and this and that to boost the GDP? Or are we going to get a year where you see Beijing say we are finally going to start working towards actual structural changes to the economy?

15:49I am not very, very positive at all on the latter. I think they love the fact that they export a powerhouse. They love relying on the manufacturing sector, getting the world, keeping the world reliant on them. I think that's what they're going to continue doing. Currency-wise, where do we get concerned here? It was, I think, August of 2014, if I'm not mistaken. We want devaluation. Things did not work out well in our markets here. We're 11 years later. What should we be looking for? They are not trying to devalue. There is no reason to be doing that. On the other side, they remain very concerned about the currency strengthening too much.

16:23It's extremely managed, as everybody knows. But the reality is they want to chart this course where they can remain very competitive in terms of their exports without unnecessarily needing to, you know, any kind of yuan devaluation leads to capital outflows and such. Something to watch under seven. So Shazad Qazi, China Beige Book. Shazad, thank you very much. Karen, you got a hot take on China? Well, I am long, some China. So Alibaba, one that Guy and I share. I mean, it's had a huge run, and we know their market has had, I don't know, up, what, 28 % this year or something? I don't know, in that range.

16:56But off such a low base, off, you know, such a sort of downbeat expectation that I'm staying long. Just Alibaba or China generally? Well, I have FXI as well, K-Web. So the whole smattering. Green shares, K-Web, the FXI, big China ETF. All right, Karen, thank you. By the way, we've got a news – speaking of China, we've got a news alert right now on Nike, which does a huge amount of business in China. A filing showed that CEO Elliot Hill bought about 16 ,000 shares of Nike. Somebody quickly do the math on what that is. Remember, last week we got news that Tim Cook and former Intel CEO Bob Swan also bought shares worth about$3.5 million combined.

17:37So you had Karen Tim Cook, Bob Swan, and now you got the CEOs, newish, but coming back to the company, stepping in. $16 ,000 is actually not that much. $1 million. That's why I was trying to do the math. I did the math. At first I thought it was$16 million. No, it's not. What's the number? It's$1 million and change. Exactly a million. Oh, it probably was a million dollars. Probably or is. Yeah. Think about it. $16 ,000 is an odd number. You probably said, here's a million bucks. How many shares can I buy? So there's the headline. I don't know that that's a vote of confidence. To be honest. The news alert just crossed.

18:13It's better than selling it. Let's see. But if you bought 16 shares of Nike, that would be a different issue. True. It's better than selling 16 ,000. How about this? It layers on to the news that Tim Cook, who didn't have to buy anything, came in with his own cash. Right. And bought more than that. 2.6 million, I believe. And Bob Swan. I don't know how much Bob Swan bought. Well, he would have bought about 500 ,000 because according to Guy Domi's math, Tim Cook bought 3 million. So I'm just trying to do basic math here on live national television. Yeah, I mean, OK, he should. He should buy that much.

18:49If he doesn't want to buy it at that price, I mean, why should we? But I have long. That's a sad thing to feel. Look, it's not a bad thing, obviously, but it could be better. I think the Karen's point when Jamie Dimon, I think it was 2018. Was it February? I forget exactly when it was. The market was getting crushed on a Friday and news came out that Jamie Dimon had bought a half a million shares of JP Morgan stock. And I think the stock was trading about$50-something at the time. It never looked back. That, to me, is sort of a line in the sand. He might as well bought a couple pair of Nikes. You got to.

19:24Nobody else is. First off, I love all of you. But you got to. Somebody buys a million dollars of the stock. We don't know. We don't know what it is. His accountant probably told him to do it. We don't know what the real true ramification. We have no clue. I mean, it's not like he's sitting there putzing around saying, I have a million bucks. Elliot, I think you should buy a million shares of Nike. There's a rounding arrow with some type of wealth. I hope one day everybody watching and listening, for them, a million dollars is a rounding error. That's my holiday wish. That's like a Sianna the Godfather out there.

19:57How much money does he make this? We'll look it up in the commercial break. Coming up, Boeing. Boeing flying high. It landed a major supply contract. The stock at two-month highs. We'll ask Steve Grasso how much higher Boeing might be able to fly. Plus, Guy Dami's newly favorite stock, ExxonMobil, hitting a fresh 50 two-week high. Insiders buying millions. Guy poo-poos it, but he loves the stock. We'll talk more about it. I made the last part up. You're watching Fast Money. We're back right after this. The world of business is constantly evolving, and Comcast Business keeps you totally in step.

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21:51See terms at discover.com slash credit card. We're going to give a little love here to Mr. Steve. Thank you. And Karen. Boeing shares getting a bit of a boost today, up half a percent. Eh, that's the Elliott Hill news. After the U.S., we figured out, by the way, that's one 27th of Elliott Hill's potential compensation this year. Anyway, the Air Force awarded Boeing over$8 billion to build fighter jets for Israel's Air Force. The deal comes, or covers, rather, 25 new F-15A aircraft, with Israel allowed to order another 25 at a later time. The build is expected to run through the end of 2035. But here's the thing, Steve, and then we'll go to Karen.

22:33Boeing shares up more than 15 % this month. A lot of money's been made, but you wonder, do you sell now because you feel like you made the money in a company that's had its problems? That's probably a rounding error for Boeing, that contract, by the way, still. But I think I bought the stock slightly below. I bought it at 197 and change. Below 200 hours, I was looking for upside of 250, 275. For me, it's about free cash flow return, consistent profitability, and 737s, triple sevens, 787, pumping those planes back out, minus the headwinds. Airbus now has the headwinds of its own. It's a duopoly.

23:14So I think you're going to get much more upside to Boeing. I'll probably get out of the name around 250, 275 or start scaling from that. Again, we're going back to remedial math here. That's about a 20 % upside from where we are right now. 25%, 25%, 35 % upside is what I was looking for on the trade. It definitely took a hit with the market originally when I bought it, traded down to 180. So I had to have a little bit of tenacity with this trade. But I do believe for all the things that I mentioned and this administration, peace through strength, there's going to be a lot more contracts that are funneling through Boeing.

23:51Agree with Steve. I think the defense, things are better there. Things are clearly better in the commercial part of their business. And we're just starting to see cash flow. They're just talking about 2026 becoming cash flow positive. So I think that there is still, I agree, a lot of upside here. I'm not inclined to sell at all. If I owned none, I would probably buy some right here. You know, we talked about it last week. How about aerospace? Like 86 % gain this year. They supply parts to Boeing and others. So if you look at that stock and you think, well, if that stock's doing so well, the orders are coming from somewhere.