Broadcom, Oracle Lead Tech Lower, and Pot Stocks Light Up 12/12/25

0:01Live from the Nasdaq market side in the heart of New York City's Times Square. This is Fast Salutations for Lululemon. Shares of the athleisure company jumping after announcing a CEO switch, but can the stock keep stretching higher into the new year? We'll debate that. Plus, pot stocks light up on a major rescheduling development, a burrito blowout for Chipotle, what the CEO had to say about the consumer, and is housing about to turn a corner on what the top economist at one real estate broker sees for home sales in the new year? I'm Melissa Lee. Coming to you live from the studio, be at the NASDAQ.

0:45On the desk tonight, Steve Grasso, Courtney Garcia, Bono and Eisen, and Julie Beal. We start off with another move lower today in Oracle. Shares dropping another 4.5 % today after a report the company will delay some data centers for OpenAI until 2028. The stock was coming off a nearly 11 % post earnings drop yesterday, closed out its worst week since 2018. For more on the latest struggles for the stock, let's bring in Seema Modi. Seema. Today, shares of Oracle sharply lower on that story that claims some of the data centers it is developing for OpenAI would be delayed from 2027 to 2028. And then an Oracle spokesperson snapping back, saying it is fully aligned with OpenAI, disputing that story, adding that the site selection and delivery timelines were established in close coordination with OpenAI and that there had been no delays to any sites required to meet its contractual commitments.

1:36Those comments easing concerns, yes, but the stock remained lower today as questions linger around debt financing with Oracle's latest 10Q revealing a sharp uptick in data center leases. All right, so D.A. Davidson analysts writing that these numbers would suggest Oracle is, quote, strapped for capital. Separately, Melissa, I spoke to a credit investor who said Oracle's leases will expedite the company's push into the debt market. Remember, on the Q2 earnings call, the company did acknowledge that a debt raise would be less than the$100 billion analyst estimate, but did not clarify by how much.

2:09That's showing up in Oracle's bonds. The 10-year now above 4%, 5 % last time I checked. And even the five-year credit default swap that we've been watching is higher today, Melissa. All right, Seema, thank you. Seema Modi with developments under Oracle. By the way, it wasn't just Oracle under pressure today. Shares of Broadcom, which have been up nearly 4 % after posted earnings last night, and the day down more than 11%. Several analysts saying they expect the chipmaker to take a margin hit from costly AI buildout. So here we have two major pieces of the AI trade. not giving us a bullish narrative going into 2026.

2:46What do you make of this? Yeah, I mean, this really feels like, I like to say, AI fatigue. The AI spend fatigue is out there. And Meta really is the barometer for this. Years ago, remember when they were spending a ton on the Metaverse? Then they stopped spending a ton and the stock rent. So now they spent a ton on AI and now they're not spending a ton and they're throttling back. I think the market is saying, show me something for the money, right? So when you look at AVGL, when you look at Broadcom, I always – I hate the symbol. I think it's BRCM in my head. All the time. So when you look at the custom chips, and those are lower margins, this is what they do.

3:26So they do have the kicker with the VMware of software. So that's why I like the stock. I would actually be a buyer on this type of weakness. But when you look at the other ones, they don't have a kicker. And I think that fatigue is real. I mean, for the Oracle story in particular, because this has to do with OpenAI data centers specifically, and there are questions also about OpenAI and how it gets its money, then you have what Seema had mentioned, which is how the bonds are trading for Oracle, which are now trading at a higher price for the September issued bonds, the$18 billion of bonds. The premium has widened, so investors are demanding to be paid more in order to lend Oracle this money.

4:01So that's gone up. CDS, the cost of insurance on the bonds, that's gone up. There is a question about every piece of the financing puzzle in the case of the Oracle OpenAI. Yes, and I'm glad you made that distinction because I agree. So I'm with Steve in terms of I do think that there is a spinning fatigue. It's essentially, you know, investors are essentially saying, listen, we need to see where the revenue or profitability is going for there so that we can kind of like bootstrap and infer what is going to be the actually upswing from the spin. But again, I do think these are two distinct stories.

4:31I think in Oracle's case, they really haven't been able to button down exactly what the debt raise is going to need to be and essentially how long and how much they're going to be willing to spend. Now, whether or not margins start to compress, I mean, we already know that they're kind of in a lower margin business. That is part of their value proposition that they're able to provide servers and technology and software on this entire bundle for a lower price point. So I think the concerns there are real. I think OpenAI kind of opened the door for this whole concern when they mentioned the whole Fed backstop.

5:06But at the same time, I will say that you are seeing some positive things. You saw the Disney deal. So, again, I don't really get – I'm always concerned as an investor, right? Clearly, you always need to be a little bit skeptical. You should be a little bit paranoid. But at the same time, I'm not ringing the alarm bells. On the Broadcom side, the truth of the matter is that you are eventually going to talk about – will NVIDIA's day in the sun eventually come to an end? It will eventually come to an end. And that will likely happen when there's more money being spent on inference than learning, than training.

5:40And so I think the concern there is that, like, all of their current customers, the hyperscalers, are eventually going to get their own custom chips. Well, when they do do that, Broadcom is going to be the beneficiary. So for me, I think it's actually a way for you to broaden your exposure away from NVIDIA. I just think right now, to Steve's point, the fatigue has set in, And you're seeing Broadcom pulled down with that. They did have slightly weaker non-AI and software numbers. But the truth of the matter is that I think these are very distinct stories and should not be lumped in together. Yeah, I do agree with that thought process that some of these are company specific.

6:14So I think when you look at Broadcom, I mean, that was trading near 40 times forward earning. So it's pretty much priced to perfection. And I think that's one of the biggest problems here is if they're not going to meet a very high bar, you're going to see some profit taking there. But I don't think they have as many structural issues as you're necessarily seeing with Oracle. Like that's where people are really starting to question, can they actually really perform based on the amount of debt that has to come into this company? So I think when you look at those credit default swaps five years out and you kind of hit the nail on the head with this, that's up 50 percent in just the last month.

6:45So just in the last couple of weeks, I mean, people are demanding so much more on insurance on that company because they're not sure if they are going to actually be able to pay out on that. And especially because OpenAI is a majority of their remaining performance obligations, that is a company that's not going to be profitable for several years in the future. So I think that's a bigger concern to me than what you're seeing in Broadcom. I mean, I think a major distinction also is to get to Courtney's point specifically on the bonds and the debt is can Oracle maintain its investment grade rate?

7:12I mean, it's on thin ice right now in terms of investment grade rating, but that's going to be a question in 2026. Will they be able to keep that rating? Because they don't. It's going to cost even more to pay for all of this. There's not that fear for Broadcom. Yes, the AI revenue forecast, Julie, was not as bullish as analysts had hoped for, but it's not a question of being knocked down to a junk rating. Yeah, I think that's pretty critical. It's pretty do or die right now for Oracle. And I think, you know, part of me, were I an investor in Oracle, I would say, gosh, it would be a shame if these deals with OpenAI didn't work out.

7:45And it's like, probably it would be beneficial for them because it looks like the returns on them aren't going to be great. They are going to require a lot of CapEx, you're in an asset that's clearly depreciating. And so it's this relationship that I think has actually proved to be really painful for them. Broadcom, it's a very different story in terms of a much more diversified customer base, a much better position, their capital structure is much cleaner. They don't have these kinds of same concerns where they're really wedded to the new guy on the street that we still don't know exactly where all of this trillions of dollars of capital is going to come from.

8:19So what does this mean for the broader markets? If this major part of the markets, if there are doubts, there are question marks on them? So when you look at Broadcom, Broadcom is still up 55 % year to date. NVIDIA is up 30 % year to date. And after all this, Oracle is still up 14 % year to date. For me, my whole thesis has been when NVIDIA starts losing that momentum, it'll go somewhere else. As long as it goes somewhere else, we're okay. Where is it going now? Because everything is going to be down. Right now, at this moment, for this trade. Everything is going to be down. I think the fluff has to come out of the market.

8:55But we have seen a lot of the other names, whether it's the smaller cap names, sort of take on a little bit financial, smaller cap names. I don't think that's sustainable, but I do think other technology will start carrying the burden. Okay. Julie, just quickly on small caps, because what a run it's had so far. I mean, hitting record highs this week. What's your take on how that group is valued? This is your bailiwick. Yeah, the thing is, is that we look at them like a monolith, but they're really not. And the parts of the Russell that have really worked the best are the most speculative, you know, quantum computing companies that don't even have revenue and a lot of biotech that's been very swayed by having interest rates coming down.

9:38That's not the part of the market that I want a ton of exposure to. And if you think about the Russell 2000, 40 % of it doesn't even have earnings. So I think it's interesting to see this move in low quality rally, right? It's affected a lot of small cap managers. Very few of them have been able to beat their benchmark this year because the rally has been so low quality and clearly retail driven. But I think over time, earnings is kind of what matters. I don't think that's changed. All right. For more on Tech's rough week. Let's bring in Fast Money friend, Gene Munster, managing partner at Deepwater Asset Management.

10:12Gene, it's always great to get your thoughts. I want to start off with Oracle. And I just curious, how do you think this Oracle story progresses in 2026? And is there, even though we know that Broadcom is a very different company, that NVIDIA is a very different company in terms of customers, in terms of the balance sheet, et cetera, et cetera, is there the risk of contagion from Oracle to the other AI players in 2026? In 2026, I think there's less. I think kind of what we've gone through in the last week, I think, helps minimize that. I'm glad we've been through this episode in some respects.

10:44As far as what kind of the bigger outlook for Oracle in 2026 is, I think it's going to be an underperformer relative to the rest of the large cap AI. And the biggest reason is that even though they've got these impressive growth targets, the reality is they're probably going to fall somewhere a little bit below. And my sense is it's probably going to be capacity is going to be the kind of the governing factor. And when you have big growth rate targets out there, even if you still have amazing growth, but it falls below what their bar that they said, it's just really hard to improve a multiple.

11:18And so I think they've in some ways, I mean, they had to disclose their backlog, but that beautiful backlog from three months ago and then it improved again by another 63 billion this week. I mean, it's kind of created a hard comp essentially for what they're going to do next year. So that's where I'm at relative to Oracle. But what I think really you're speaking to is this bigger dynamic around what's going on. I think Steve talked about it here. Is this the facts? The facts are this week was a really good week for AI fundamentally. It sounds that that comment seems out of touch with reality.

11:52And I think the question comes down to this fatigue that Steve talked about. I think at what point, what's the event, events that are going to cause that fatigue to be reversed and people to be more open to hearing about the good improvements and fundamentals? What do you think that event is, Gene? So my sense is that, I mean, I would love, like, if I could get one thing for the holidays, it would be for the AI trade to be down another 10%. If you look kind of across the board, depending upon the small and large, it's off 10, 20 %-ish. But I think just a really good, almost like a thrashing, we need that at this point, just so investors feel like there's some form of a bottom end.

12:36So I think that would be one. If we don't get that, and my sense is we probably don't get that because as we move to the end of the year, the conversation is going to turn back. This market is still a positive market. There's still optimism around AI. The conversation is going to shift back to what to expect, what we're going to hear on the December earnings, kind of. So what's going to happen at the end of January? And my sense is investors are going to want to be positively positioned. So unfortunately, I'm not going to get what I'm wishing for is a flush in AI here. So as far as, you know, getting that fatigue to improve, it's not going to happen just based on the December results.

13:12But I think as the fundamentals continue to prove themselves out, and they will. We're still early in AI. It's still going to be more transformative than most people think. As that reality sets in, I think that these stocks are going to respond appropriately in the first half of the year. But it's got to be coming down to actual prints, probably a combo of the December and March quarters. So Gene, do we ever get another deep seek moment where it is a commoditized business, right? Where in the U.S., it seems like we're wasting a lot of billions. This is, you know, a depreciating asset, basically.

13:46Do we ever see that again? Well, on the commodity part, just one kind of distinction when I think about the commodity, the biggest piece on commodity is token pricing. There's the hardware piece, which depreciates over five, six years, something like that. You can debate commodity, best chips do help performance. But when I think about the risk of like commoditizing this whole AI story, it's about the race to the bottom. When Sam Altman talks about a 10x annual decline in pricing for the foreseeable years, how do you kind of get that to grow? And I think actually I'm in a little bit of a different camp.

14:21I think this Jevons paradox that I think Sundar had talked about earlier in the year, this idea that as pricing comes down, usage will increase. Google experienced this back with search and mobile. And so my sense is that actually not all, I just want to start there, is I don't think all token pricing is going to be down 10x. I think the good tokens are going to be still priced well enough that we're going to see growth. Sam Waltman this week still standing by that they're going to double revenue for the next few years. If that happens, I think that's going to be just a really favorable sign that this is not totally commoditized.

14:58Gene, great to see you. Have a great weekend. Thank you. You too. management. If we are going to go through some tumult in this AI trade, Courtney, how do you view the players in terms of safety? Which are the quote-unquote safest, the most defensible names within this group? Well, I think you need to look at the names that have the cash flow really to support all of the spending that they're doing right now. So I think that's where Oracle is a really good example, where they really don't have that. So I think you're going to want to look at some of the bigger players there. This is also a reason you want to broaden out.

15:30I mean, you're seeing that even today or this week, the RSP, which is the equal weighted S &P 500, has actually hit some all new highs this week. And so I think whether the AI trade is getting expensive, maybe there is some pain here. Maybe there's that 10 percent pullback that Gene talks about, which, you know, ultimately probably is a buying opportunity. I don't think it's anything to be concerned about. But you're going to see some money go into other areas of the market. I think this is a really good reminder of why you want to be doing that. Okay. Forced to stay within the AI trade, Steve, is there a swing trade that exists for you?

15:56A flyer here. Would it be Oracle? Could it be Oracle? I'm tempted to say Oracle, but I really like Broadcom here with the damage that's been done the last day or so. If you look at the chart, though, Micron's chart looks pretty good if you're talking about memory. And also Intel. Let's not forget about them. It's up 88 % year to date. So no one thought about Intel, and it would be odd for that to be a safety play. All right. Meantime, we've got a news alert here on Live Nation. Julia Borson's got the details. Julia. Hey, Melissa, legal blow to Live Nation. A federal judge ruling that a lawsuit filed against the company and its subsidiary, Ticketmaster, can be certified as a class action suit.

16:38The plaintiffs met the criteria to expand their lawsuit seeking 15 years of alleged damages tied to the purchase of more than 400 million tickets into a class action suit. Now, this class covers consumers who bought tickets directly from Ticketmaster or a Live Nation affiliate for events and major venues since 2010. We've just reached out to Live Nation for a comment and have not heard back yet. Back over to you. All right, Julia, thank you. Julia Borsten. Coming up, Lululemon shares lumbering. Let's say lumbering. It's limbering. We're talking yoga. Limbering up after a C-suite shakeup. We'll debate whether this move higher is worth stretching for.

17:13That's next. Plus, pot stocks well in the green on rescheduling hopes. And our resident cannabis expert, Tim Seymour, says this time it could be for real. Why he thinks the space is massively undervalued right after this. This is Fast Money with Melissa Lee right here on CNBC.

17:36Welcome back to Fast Money. Lululemon shares stretching more than 9 % higher after the athleisure brand announced yesterday that CEO Calvin McDonald is stepping down. He will stay in the role until January 31st and serve as a senior advisor through the end of March. The stock having its best day since last December was the best performer in the S &P today, but shares still down more than 46 percent this year. A change, though, could bring a turnaround, a true turnaround. Julie, do you buy that? Well, first of all, I mean, how hurtful is it that, you know, stock rallies 10 percent when you get announced to leave?

18:09I would be a little heartbroken by that. But I think that genuinely it's going to take a lot. This is a big ship. It's not a small one to move around. and I think that the problems are multi-layered. The biggest problem that they have is completely out of their control and that's that this category they used to just have by themselves and now there's so much good quality competition with brands that are able to reach people on Instagram very inexpensively and no one is really gonna be able to fix that part of it. So getting it to be much more competitive is gonna be challenging. I think there are real opportunities for them in terms of their brand innovation and things that they can do but maybe it's a reflection of we need to concentrate on what we really can win, where we can be different, because right now it is noisy.

18:55Yeah, I agree. I think it's going to be a challenge, but I'm going to try to focus my efforts on finding what the constructive kind of storyline is for the stock. I think that if you really look at where this has been historically, the re-rating on this name has been nothing short of incredible. This trades at a market discount multiple. Their TAM is still quite large. I agree. There is fierce competition, and they're able to reach viewers in a much more cost-efficient way. But there's no reason that Lulu can't copy that playbook. There's no reason that they can't pursue some type of brand partnership.

19:32And I do think that there is some new blood being breathed into the company here. So I do think that I can see the case for somewhat of an optimistic story. The new entrants have done nothing more than show that the bar to being able to disrupt this sub-market is quite low. So I think they're going to have to kind of take on a new innovators, a new entrance type of aggressive approach, an innovative approach. And there's nothing to suggest that they can't do that. So I don't think it's mission impossible here. I just do think they're going to have to do some deep soul searching in terms of what their true brand identity is and how they're going to reset that end customer.

20:08You mentioned trying to find the constructive path. Maybe the constructive path is just being in Nike, which reports next week or something else on or you name it. There's a whole list of companies in this space. Yeah. And I think that's the reality. I mean, I think Julie hit this on the head is with their competition. We always mentioned Viore and Aloe is like their big competition, but it's so much more than that now. Like it's just becoming so like every company on Instagram is taking market share from them. And I think that's really going to continue to be a problem. So people are optimistic today that with the new CEO, who we actually don't know who it is yet.

20:41We just know this current CEO is coming away. They hopefully can't have a turnaround story. But I think it's still a high bar to reach. So I think when you have like your Nikes, you have your on clouds, you have these companies who aren't having quite as intensive competition issues. I would say those are probably the better areas to be in. Yeah, I think it's too fragmented for everything that everyone has said. The marketplace is too fragmented. If you want to go to successful companies, it's Tapestry, it's Ralph Lauren. These are companies that have made a name for themselves. When you look at Nike, Nike's still down 10 percent.

21:10They still can't figure out their CEO leadership there. They keep hiring from within. There's a lot more fast money to come. Here's what's coming up next. Pot stocks lighting up on a potential game-changing move out of Washington. A resident cannabis stock connoisseur weighs in on why this time may just be different. How to play this industry for the green next. Plus, do big time valuations mean big time danger for markets in 2026, where top opportunities and dangerous vulnerabilities could be lying next year? You're watching Fast Money live from the Nasdaq market side in Times Square. We're back right after this.

21:54Welcome back to Fast Money. Cannabis stocks on fire on hopes. High hopes. High hopes. President Trump will soon sign an executive order. Reclassifying pot is much less regulated. Schedule three drug. Truly jumping almost 67 percent. Green thumb and till ray also jumping. Let's bring in fast money trader Tim Seymour. He's behind, of course, the Amplify Seymour cannabis ETF, which surged nearly 55 percent today. It's best day on record. Such a good day that Tim comes to us in a hoodie. In a hoodie. We're talking calculus. Why wouldn't we? I mean, the rescheduling, that has been something that investors are hoping for.

22:32It seems like you get a whiff of it, the socks go up. You say this is for real this time. Why? A whiff. No pun intended. So I think it is real. I think it's always been real. I think even at the end of the Biden administration, the idea of rescheduling was out there. Remember, this doesn't require a congressional follow through. It doesn't require legislation. This is an administrative order. Trump's been very clear all along. The question was, could we get this in front of Trump and could it be something that has enough of a priority? It's very clear that the industry has engaged Washington in a way that I think is much more sensible, been much more focused.

23:05I think there's no question that top CEOs have been in Mar-a-Lago, have been in D.C., have been working with the president's team. I think there's no question that RFK Jr. and the HHS and even Dr. Oz have weighed in on this. And important people around the president have said schedule three from schedule one makes a ton of sense. And I don't think this is even that controversial, even in a world of bipartisan dynamics. In fact, I think that the call Wednesday night that is spoken about in the Washington Post article that was out last night between President Trump and Speaker Johnson is one that just.