Biotech Breaks Out… And AI Impact On The Real Estate Industry 11/11/25

0:02Live from the Nasdaq market side in the heart of New York City's Times Square this is Fast money. Here's what's on tap tonight. A biotech boom. Healthcare stocks quietly rallying this year. The IBB ETF trading at more than four-year highs. What is behind the surge and which stocks hold the most potential here? We'll debate that. And an office hurricane. That's what one top investor says is coming for the commercial real estate market, where he is seeing signs for concern and how to play the space right now. Plus, Apple playing catch up with the rest of the Max 7, an energized trade in the oil patch, and an auto stock to buy ASAP.

0:35What the chart Master says you should be adding to your portfolio immediately. I'm Melissa Lee. Coming to you live from the studio, be at the NASDAQ. On the desk tonight, Tim Seymour, Karen Finerman, Dan Nathan, and Guy Adami. We start off with the latest shot in the arm for the biotech trade. Oh, boy. I heard this. I mean, why not? Shot in the arm. The group continuing its charge higher with the iShares biotech ETF of almost 3 % for its best day since May 12th. It's now trading at levels not seen since the fall of 2021. And don't look now, but the longtime laggard is actually keeping pace with mega cap tech this year.

1:07Both the IBB and the MAG-7 are roughly up 25 percent since January. All this coming in a big year for biopharma at M &A. Fifteen deals worth a billion dollars or more have been struck so far in 2025 as big pharma looks to replenish their pipeline. So can biotech keep the momentum going and how should investors approach the space right now? I don't know if a lot of people are aware about this performance of the sector versus the MAG-7 neck and neck. Well, if they'd be watching CNBC's Fast Money, they'd be aware. And Tim's the guy that gets the Band-Aid on his arm after he gets an inoculation, right, with a little smiley face.

1:44I don't even know what an inoculation is, but obviously if you're talking about Band-Aids, it's something you do all the time. Anyhow, no, yes, this group can continue. Look at Gilead, all-time high. Even Merck, big day for Merck. Bristol-Myers getting off the mat. We mentioned structure last night. All names ex-Eli Lilly, which is in a class by itself, are starting to find some momentum. And I think the momentum will continue, especially in 26 when I think there's going to be huge M &A around the space. Yeah, I mean, historical valuations compared to itself when it comes to biotech or health care or insurers, historic lows compared to five years.

2:18I mean, it's all value right now. Right, it is. And I mean, even though it's been a nice move, there's still a big way to go. And, you know, there was so much to sort of hate about it. And right now they seem to be out of the bad graces, I guess, and the good graces of the Trump administration. And this rotation kind of looking for where is their value. I mean, Alford Borla yesterday was very excited about his business. I mean, there's a lot of momentum that still could come into this space. Right. Right. Even though it looks like it's moved a lot, I think if you look at, you know, names with single digit multiples or low double digit multiples, still with decent yields.

3:01And still, I know some of we have loss of exclusivity, a lot of issues around the whole space. But still, there's a lot of value there, even if you discount for that. Right. I mean, the forward P.E. now for health care as a group is something like 18, a little less than 18. The average five year historical is north of 20. So there's a lot. There's a gap. It's like 24, I think. So there's a gap there in terms of valuation. And there's certainly underinvestment. I mean, the rotation that needs to still happen into this space, I think, is substantial, especially when you consider that this is typically anywhere from 10 to 13 to 14 to 15 percent of an allocation in a traditional portfolio.

3:38And in many cases underweight, with the exception of Lilly. Lilly, which basically did nothing for 12 months until it went up 55 percent in the last three months to make all time highs. not something people are expecting. While we've talked about Novo definitely almost hitting three-year lows during this time, so it does show where Lilly, and we talked about this yesterday, so we don't need to talk about the pipeline today. We can certainly talk about where investors are looking for growth, and growth that may be part of that 493 conversation from yesterday, which is there are other parts of the economy that are also benefiting from at least the margin story and at least some of the efficiencies that could be coming here.

4:16I think this is much to do with rotation and that the Trump administration is kind of implicitly, not explicitly, implicitly said pressures off. UnitedHealthcare, although this has been a volatile ride, also I think the worst is over there. That to me is value territory. That to me is a company that even with the Medicare Advantage concerns, I think we've gotten some sense of what we know at 26 is going to look like. And at this point, that is a valuation I could buy. So I don't think this is just biotech. I think this is health care. I think this is pharma. And they're not all the same. I mean, health care had one of its biggest inflows in October for years.

4:49I mean, in terms of the rotation, Jared Holes of Mizuho said this is one of the largest rotation days that he has seen. And so you piece together what we've seen in terms of the question marks around the AI trade, question marks around CapEx and valuations there. What are we getting for that money? And you then take a look at the extreme discounted valuations of health care, and it all sort of makes sense. And you mentioned the 17 valuation. You back out Eli Lilly, which is trading 31 times, and that's probably a 12 or 13 valuation. And again, maybe Lilly deserves that. I'm not going to argue whether or not it's deserved it.

5:21But when you have Merck, high single digits in terms of multiple, Bristol-Myers, the same type of thing. Some of these biotechs, same type of thing. Just value alone, they make sense. And then you put on top of that the potential for M &A in the space, and I think they're on a hair trigger. You know, it's interesting, Tim. You mentioned UNH and the valuation there. And I know that this was what Carter used to call it, UNH, that chart. It's a grand chart of all time. And then it went down 70 percent in the last year. And that's not a call on his call. He's been right for a very long time from the technicals.

5:53But, you know, to your point about valuation, I mean, the stocks had a big run off those August lows. And when you think about how it just sold off a bit, does it have to do with the fact that these ACA subsidies are not going to get extended, that sort of thing? And I don't think that's great for them. I think they're going to lose a lot of customers, right? If these subsidies or these premiums go up dramatically. So that's one. You guys all make a really, I don't know anything about pharma, but you guys all make a really good case of why you've seen this rotation and why you're going to see a sort of environment where it's going to be good for M &A and the valuation and regulation, all that sort of stuff.

6:24But UNH does not seem like one that's interesting to me here. Warren Buffett thinks it's interesting. Well. I mean, he's got like 40 years on me. At least. I mean, there's a lot of value. investors in that space now, just the UNH in particular, actually. I mean, to have Warren Buffett and then also David Tepper. That's one that I miss. Good for you, Timmy. I mean, I think you're right. I think it's sort of, it's bottomed out. They seem to be able to, you know, put guidance out there and meet it, which was something that last year they were unable to do multiple times. So the valuation's not stretched here either.

7:02So I agree. I mean, there's a lot in the whole space across the board, big tech, big cap pharma, I think is sort of the most interesting. And there's so there's liquidity. So we're talking about M &A. We're talking about less government. And even though there's still a lot of uncertainty out of HHS and certainly negotiated contracts for Medicare, the technical details that people know well, especially the sector specialists, but the generals had kind of forgotten about, which is that a lot of these negotiations aren't really going to affect these companies in the short term, that a lot of these patent cliffs are looking at past 2030 or that we've priced them in now.

7:37So I just think it gets back to a case on a day when the S &P was largely flat up 20 bips, sentiment's decent. You know, we've certainly bounced nicely off the 50. We'll have our market chat. But the outperformance of the XLV to the S &P today and where it sits on a one-year chart, this is a breakout. I mean, this is a breakout that we've talked about at different stages over the last three months because we've had these days. But this is the day that it actually feels like there's more to do, especially when these are some, talk about putting capacity to work. There's a lot of room to put a lot of money into big cap pharma, biotech, healthcare, and then even out the curve of those M &A targets.

8:13Karen, you brought up Viking Day. It's a name I'm long. It's not necessarily a name that - He brought it up. Oh, sorry, Gaia brought it up. I look like Karen. I know all the time people are like, are you Gaia Domi? And I'm like, no, I'm not. I'm Stephanie Link. Anyway, yes, you're lucky enough to look like Karen. And it's a case where I think there are those targets. And if there's a feeding frenzy over MetSera, or maybe there's not, but it shows you that even in GOP land, where now the price story for the two leaders doesn't look so great, what it does mean is it establishes a broader playing field, even for those takeout names.

8:43I'm long Viking, full disclosure. And establishes a valuation benchmark for some of the other takeout candidates potentially out there, like a structured or Viking, which we've talked about many times on this show. In terms of what has been, I mean, what has been priced in could be so much. I mean, you saw the blueprint in a way for Lilly and Novo Nordisk in terms of pricing for Medicare and Medicaid. It wasn't as bad as expected. Take a look at the stock since then. I mean, that has been a cloud that has since lifted on them because it wasn't as bad as feared. Yeah, and I'm surprised it took this, when I say this long, we heard from the administration a few weeks ago or a month or so ago, and it seemed like you got the all clear sign at that point.

9:23Then they sort of meandered for a while. Now they're doing what they should have done, I think, on the back of that announcement. So I do think the bullseye is off their back. Valuations are compelling. Yeah, pipelines are challenged for some of these companies, but it's discounted in terms of the valuation in these stocks already. So I'm with Tim on this. And by the way, XLV, I think it was August of last year, 158 or so. I mean, we're dangerously close to taking out that prior all-time high. So you're talking about not being as bad as feared, but I think it was much better because, yes, the price is lower, But if you think about how broad the market can be now, how many tens of millions of people will be treated for obesity.

10:03Right. That is it. I mean, that makes sense for the government to do. And I think they'll do it in scale. Yep. For more on where biopharma goes from here, let's bring in Lyric partner, senior managing director David Reisinger, who this week upgraded Eli Lilly. David, great. Great to have you with us. Let's take Lilly out of the equation for a moment and focus on sort of the value areas of your sector. Are you seeing generalists come in? I mean, how do you interpret this move higher? Yes. Well, first of all, thank you so much for having me. It's an honor to be here. What we're seeing is definitely money flows into the sector, and that's driven by market rotation.

10:41And indeed, I think that many generalists have been caught underweight health care and wondering why they were so underweight health care. They're increasing their positions across biopharma. You know, what we've seen is obviously companies that have the strongest growth prospects are attracting capital, but also other stocks with lower valuations as well. So where do you see the most interest? I mean, you mentioned lower valuation. So like Merck, Bristol Myers versus biotech, which could be interpreted as the targets. Do you focus on the acquirers or the acquires? Yeah, great question. So we try to focus on the companies that we think have the best prospects, the best risk-reward opportunities for investors.

11:31That does include both large caps and mid-cap companies. And since you brought it up, we have seen a number of M &A transactions this year. We expect more. The large companies remain hungry. They need to continue to enhance their revenue prospects. We obviously saw Merck by Verona earlier this year, J &J by Intracellular. And we do think that Smidkamp Biotech can continue to perform well after having a rough go of it over the past five years. David, Tim, thanks. Most misunderstood name out there. I mean, there are a few to me that are either companies that we are not believing their story, despite what they tell us over and over again.

12:14And Pfizer, to me, is one of those names. Or is it a J &J that's had a great run, but people still are worried about some kind of a talc overhang? Pick a bulge bracket name that you think is misunderstood that you're bullish on, please. Yeah, absolutely. So I guess that would be more in the value side of the equation. So one that comes to mind is Bristol-Myers. So that company has a low valuation. We're looking for two developments in the near term. The first is the Kobenzi Alzheimer's disease psychosis trial readout. We're hoping that that can succeed in coming months, but that's a binary event.

12:51And then in addition, we're watching a competitor's novel blood thinner readout that's from Bayer in Germany. If their novel blood thinner succeeds in a secondary stroke prevention trial in the next few months, that will definitely benefit Bristol shares because they're developing Milvexian, which has mega blockbuster potential as a novel blood thinner. David, it's Karen. Thanks for being on. So we know there's a rotation away from AI. But when we talk about AI for the pharmaceutical space, is the promise really there? Do you think that the drugs can be developed that much quicker and that much more efficiently, cheaper?

13:30Is that part of what this rotation is about? I don't think the rotation is about AI for pharma. The issue is that the complexity of human biology and disease is such that the experts can't even agree on what causes Alzheimer's and what mechanisms of drugs would appropriately treat Alzheimer's. So certainly, AI is beneficial and will continue to make the industry more efficient. And there'll be a lot more to come longer term. But, you know, it's not a quick fix for innovation in the sector. How can we think of sort of the biotech targets, David, in terms of the areas that they target, the therapies that target certain diseases, and or the advancement of the experimental drug, phase three, for instance, versus a phase one or phase two level drug?

14:29Sure. Well, we've certainly seen transactions and everything from cardiometabolic, you know, for example, Pfizer-Metzeria to inflammation and immunology. We're seeing more interest in neuroscience. So it's across, you know, mega therapeutic categories that we've seen transaction activity. And we expect that to persist. Certainly, the biggest of companies need big needle movers. And they obviously do many transactions each year involving emerging companies. But we think that a number of large companies need to fill big patent holes and are interested in larger scale transactions that can have a greater impact on their long-term revenue prospects.

15:18David, great to speak with you. Thank you so much for joining us tonight. Thank you again for having me. David Reisinger of Lilly again. He's the one who upgraded Lilly, which had a nice day today, along with Novo. Novo, the better performer in today's session. Yeah, again, I think, first of all, David really got granular on some stuff that's really separating those from those that are not performing here. And I think the story, again, around Lilly is that this is a broader portfolio of drugs. We've almost kind of moved past it. Remember when we were rallying this on the Alzheimer's dynamic? So I think if I look at, you know, the Merck's, the Pfizer's, the Bristol's, and even the Novo's, those are the names that are the most fascinating to me because those are all names that are down 12 to 15 percent this year.

15:59And you can make a fundamental argument that none of these companies are broken. You look at Bristol. First of all, last night we said Lyric is the accident of space. They are. Second, Bristol, he's right. Just valuation alone. And just look at the last quarter, some of the things that they said. This could easily be a$60 stock. Meantime, let's get to Apple here. Setting a record close today. The tech stock popping more than 2 % for its first close above$275. The iPhone maker got off to a slow start this year, while Meta got out of the gate gangbusters. But Apple's steady climb higher coupled with Meta's post-earnings pullback now has it outperforming so far this year.

16:32Dan, what do you make of Apple's move here? I think it has a lot to do with rotation, right? So as we've seen a bit of trepidation, we've seen the way Microsoft sold off, Meta sold off. Obviously, Amazon and Google did pretty well after their earnings. And I think Apple's results were just good enough. I don't think they were exceptional or anything like that. And I think a lot of folks, after a year and a half, contemplating what Apple intelligence meant, what it means for an upgrade cycle, I think they've gotten comfortable with the fact that no one's really got great AI on a cell phone right there.

17:01So they've done what they needed to do. It seems like folks are very happy with their high-end phones. It's just amazing to me that they keep upgrading to$1 ,500 phones. Think about that. You buy a laptop for$1 ,300 and you keep it around for, I don't know, five years or something like that. So the notion that this has become a utility and one that people are willing to pay for, I think, says a lot to it. And then ultimately, late 26, when you finally have something that's AI, that's dragging folks in who have not upgraded, I think it's going to be a good thing. So I think it's just running ahead of all that.

17:33So earlier in there, I think there was a penalty on it for not having a big AI spend, right? Now there's a premium to it for not having a big AI spend. That's a pretty big pendulum swing. Yeah, that changes the landscape, certainly. Again, but I think the reason that Apple intelligence is nothing, was nothing, and is still nothing is why you want to own it, because it's just not in there. I mean, people are refreshed. We know demand on this I-17 is better than expected. It probably will be. and it's maybe less about I-17. It's just where we are in the cycle of replace or whatnot. You can't tell me the way the world works today, and I realize tomorrow is a very different story than today, but that people aren't going to be served up AI on their phones and that Apple won't be there to do it and that therefore they'll be able to dictate very aggressive deals, whether it's with the Googles or other people that serve it up.

18:24They haven't even gone out to the developer community to really make their presence known. That's why I just feel this name's going higher. Apple intelligence may not be in there, but it's already a 33 times forward P.E. So how much more can be in it when you put it in when it's already trading? It was 33 times P.E. five years ago. It was growing more quickly then, wasn't it? It was. And there was a point in time when it was growing gangbusters. It was trading 13 times forward earnings. And that's when it was a growth stock. Charlie Bilello, I believe I pronounced it. Why did you pronounce it like that?

18:59I want to make sure I do it properly. Emphasize. Okay. You know, otherwise. You could have just said Charlie Bolello. Well, you did it a lot nicer. Anyway, what were you going to make a point of? He made a point of saying price to sales is trading close to 10. Historically, it trades 5.7. Earnings trading 33 times next year. Last 10 years, it's been trading about 24. So his point today was your point that a lot of this is already priced in. We've got a news alert on the FAA. Transportation Secretary Sean Duffy just gave me an update on flight cancellations. in the last hour. Our Phil of O. has the latest.

19:31Phil. And Melissa, to the main question, which is what happens if the government shutdown ends? How quickly will flights be restored? Here's what the transportation secretary said just a few minutes ago out at O 'Hare Airport. It depends on air traffic controller staffing. The good news is there were fewer staffing issues today than yesterday and fewer yesterday than on Sunday, trending in the right direction. Current cancellation plans, They, however, do remain in place. And Secretary Duffy has a blunt warning about the cancellation rate if the government shutdown continues. Oh, I think it's going to be more than 10 percent.

20:08And I think we might find airlines that have to make decisions. Do they keep flying? If this doesn't open, you might have airlines that say, we're going to we're going to ground our planes. We're not going to fly anymore. That's how serious this is. Now, let's be clear here. None of the airlines have said, look, we're going to ground all of our planes at this point. And I think it would be highly unlikely at this point to say that they are planning on doing that. But at this point, they are planning to cancel 8 percent of their flights on Thursday, Melissa, even if the House votes to reopen the government and the president says, yes, let's do it tomorrow night.

20:42It's going to take some time, so it won't be immediate. But that is the state of things right now. Is most of the time because the planes aren't in the right place? A little bit of that. And also, you don't know for sure that you're going to get the air traffic controller staffing that you expect on Thursday morning. In a perfect world, everybody reports to work and they go back to staffing that existed before the shutdown. But you don't know that for sure until we actually get to Thursday morning, if the House votes to reopen the government tomorrow. Phil, thank you. Phil LeBeau. There's another important Thursday out there a couple of weeks away.

21:17A couple of weeks away. Thanksgiving. Oh, gobble, gobble. Well, hopefully it gets resolved before that, because otherwise gobble, gobble might be ruined for many families across the country. We're saved for some. Just generally saying that, that's all. Sure. You might know some people. Airlines, do we look through this? Yes, you do. I mean, it's first of all, week over week. You just saw those numbers we posted up small on the week. If anything, things are getting better for them. All right. Coming up, all the headlines from AMD's Investor Day, the trillion-dollar semiconductor promise, and whether the company can deliver on its next-gen AI chips.

21:56That's next. Plus, strength in the energy trade. Crew taking a leg higher, bringing the XLE along with it. The names or traders are watching ahead. Don't go anywhere. Fast Money is back in two.

22:12Welcome back to Fast Money. AMD hosting its first financial analyst day in three years. CEO Lisa Su saying the chip company's revenue could grow more than 30 percent over the next few years. The stock down more than two and a half percent today, but has nearly doubled this year. The event wrapping in just the last hour. CNBC's Christina Parts Nevelas has highlights and joins us on set. I would actually say the last few minutes. They went really long. It was upstairs. I was up to start at 1 p.m. and the Q &A just ended. But the one trillion dollars, that's a big number I'll start with. That is the new total addressable market forecast for AMD by 2030.

22:43A big leap from the 500 billion dollar forecast earlier this year. But that number includes not just AI chips, but also traditional processors, CPUs, networking, high bandwidth memory. She just added, which some investors view maybe as just too over inclusive, I should say. Sue projected overall revenue, like you said, will grow at about 35 percent annually over just the next three to five years. The AI data center business is expected to grow even faster at roughly 80 percent per year, reaching what they say is, quote, tens of billions of dollars in sales by 2027. Sue also said AMD sees a clear path to over 50 percent server market share.

23:20That's why you did see Intel's shares fall on the news right when she said that. On the product side, AMD does plan to offer a full rack scale solution. So not just the chips, the entire rack, much like NVIDIA does in an open ecosystem. Sue really took a shot at NVIDIA, emphasizing that AMD's competitor operates a closed system while AMD is open. Sue also pushed back on the AI bubble concerns in the Q &A just moments ago, noting hyperscalers raising their spending are, quote, extremely well-funded with strong balance sheets and are seeing real value from their AI investments. On OpenAI specifically, because we know they have a deal, Sue defended their aggressive forecast pointing to user-based growth at OpenAI and adding, I wouldn't bet against that.

24:02CEO Lisa Sue will be on Squawk Box tomorrow morning at 810 Eastern. Won't want to miss that. Christina, thank you. Christina Parts of Nebulus. The move in AMD comes amid broader weakness in the chip sector today. Micron, Land Research, Marvell Technology, all seeing outsized losses. NVIDIA down 3 % after SoftBank said it sold its entire$5.8 billion stake in the company. So what do you mean? I don't know where you want to trade here, if it's AMD and the disappointment surrounding what was forecasted. It's a great story, valuation problem. Although people say given their earnings growth, maybe they'll grow into the valuation.