Fast Money 8/31/26

22:15The App Store goes back to Eddie Q, who ran it before Schiller took over 11 years ago, while oversight of Apple events again moves under communications and PR. Now, this appears to be Apple using the CEO transition as a chance to reset the leadership team in one fell swoop. You can make a lot of changes around a new CEO without investors necessarily reading every departure is a sign that something is wrong inside the business. Now, at the same time, Apple isn't exactly pushing the old guard out the door. Schiller becomes an Apple fellow. Cook stays on as executive chairman. And of course, we've seen other longtime executives like the CFO and COO move into these transitional roles rather than leave outright.

22:55So Ternus takes Takes over tomorrow, yes, with a fresh leadership bench in place, but with plenty of institutional knowledge and some pretty substantial training wheels still in the building. Frank? Mack, thank you very much. I'm Mackenzie Sigalis with the very latest on Apple. Again, Giannis Ternis takes over tomorrow. Guy, what do you make all these kind of moves? We're seeing people kind of shift into different spots, leaving the company, et cetera. What is this, the biggest, I guess, CEO, that size of company since, what, Amazon, I guess, or something like that? I mean, so I guess it is significant.

23:24But as McKenzie just said, I mean, a lot of these things are well telegraphed. So I don't put a big deal into it. I think Apple can survive in a regime change. The problem I have and will continue to have is that at current levels, it's trading like 32 times next year's numbers, which is expensive. People say they got to get AI right. I don't think they do. But the market's going to start to, I think, be concerned that they're not there yet. You know, when you go back and look at Tim Cook, when he took over the company, you know, He was really at just the precipice of you, if you will, of just everything was in front of him.

23:54You know, when you think about it and you think about where the revenue was, you think about how they were expanding globally and you think about what their installed base was. And but really the biggest trick that Tim Cook pulled was financial engineering. I mean, they have given back a trillion dollars through buybacks and dividends since he took over. Steve Jobs was not in favor of buybacks. But when you think about just the innovation over the last 15 years on a product front, they have not been leading the way, the way that, you know, a lot of folks would think based on the stock and its performance.

24:22And then that brings me to where the new CEO takes over right now. I mean, this is kind of a really important spot. You could make that argument going back, you know, 30 some years when, you know, Tim or excuse me, when Steve Jobs came back to the company. I mean, they are not leading an AI. And if you believe that AI is the future of technology, or at least the way a lot of folks, whether it be consumers or enterprises, interact with technology, they're not really there. And so they have to put some stuff up over the next couple of years or so. And that is the challenge right now. And we're going to get a good look at that next week.

24:56But I don't think that's going to be on the CEO. I mean, I think that's the roadmap that's been put in place over the last few years. but he's going to have the opportunity to take this company in a direction that I think a lot of investors have probably been waiting for from an innovation standpoint. You know, to your point, Turnus, and as a hardware guy, I was actually talking to Dan Ives from Yorkville and Ives, about to say his old firm, and he said this is a clearing of the deck that allows Turnus to bring in some AI native executives, people from a new way of thinking, maybe just some fresh blood just to kind of enliven the company.

25:23Is that the way you see it, or is it concerning to see this kind of shuffle at the top deck? Yeah, I think that it's the right guy for the right time. I mean, I say that early, but it is important to get hardware right, to get product right. And that does seem to be the big question weighing on Apple these days and then what that looks like in an AI world. So I do think it's the right transition at the right time that potentially gives this company the restart that maybe it needs for the new era. Tim? I think it's hardware as a service. We've known that. They've been rewarded for, you know, remember, software as a service was destroyed.

25:54Hardware as a service was actually resilient. I don't know what it's going to ultimately lead, but I'm sure Apple is going to be in a position to serve up AI on their platform at their terms. And, Guy, you can walk into that app store and actually for the first time and maybe find the products you need. The point being that Apple is sharing in the AI revolution. They're doing it their way, much in the way the services revenue has become a Fortune 500 company on its own. I just, you know, I know these headlines are nice, but the reality is I think of Apple much like I think about the Pentagon or U.S.

26:28government. I don't think we really do know what's going on. If we do know, I don't want to know. I'm sure Apple's been planning for this day. Apple's not trying to be an AI juggernaut. They're not trying to make acquisitions. And I like it. And I like it even because I think they're going to be able to navigate China unless there's a major change. And I think that's the part that's underappreciated. All right. Again, the Ternus era begins tomorrow. All right. Coming up, Bitcoin's big month. the token soaring in August and taking CryptoLink stocks right along for the ride. Where do we go from here?

26:54That's next. Plus, President Trump announcing new measures to cut prescription drug prices. Why the administration is looking beyond big pharma and the biotech players getting involved now. You're watching Fast Money Live from the Nasdaq market site in Times Square. We're back right after this.

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29:00And welcome back to Fast Money. Strategy co-founder and executive chairman Michael Saylor tweeting this morning that the company bought$370 million in bitcoins after a 10-week pause. Strategy shares climbing over 42 % this past month. But even with that big rebound, MSTR is still down over 12 % so far this year. Bitcoin, by the way, up over 25 % in the last 30 days. Dan? Yeah, you know, when you pull up that chart and you look at that move, you know, we were banging around holding that 60 ,000 level. A lot of folks thought that it was going to be something that maybe we're on our way back to 40 ,000.

29:32We've seen these sorts of moves in Bitcoin a lot over the last 10 years or so. But when you see this sort of move, you know, what was it, 65 ,000 right up to 80 ,000? Now it's consolidating there. I guess, like, what I would ask is if this was a stock and we've seen a lot of stocks kind of hockey stick like this after earnings over the last, you know, month or two. I'd say, what are the fundamentals? Like, what's going on there? And, you know, we've been hearing about wallet growth and all this sort of stuff. I just, you know, I don't buy it. I mean, I see the stablecoin demand and why folks kind of think that is, you know, kind of the next stage with tokenization and that sort of thing.

30:03But to me, this is just really a trading vehicle. you can look at what MicroStrategy has done, and we all get their strategy. So hopefully they bought a ton of that stuff when it was down below$70 ,000. I think it makes its life a lot easier because I think there's instances where they end up having to sell Bitcoin in which to kind of finance some of that debt that finances the purchase of Bitcoin. So to me, it just doesn't make a whole heck of a lot of sense. But I get why folks are going to believe in it. They're diamond hands. They're going to stick with this guy. Michael Seller tweeted, they now have 845 ,000 Bitcoin, zero leverage on the balance sheet.

30:34I'll take him at his word. But in order to be bullish, I think of Bitcoin here. You had the administration news. You had the thing with Besson a week and a half, two weeks ago. That was a tailwind. The headwind now comes in the form of a Fed that apparently is going to hike in September. A lot of people think that. I am not one of them. But a hawkish Fed is not bullish for Bitcoin. So I think buyer beware at 80 ,000. All right. Tim, you got a quick word? Well, I think the dollar is going lower at some point. And therefore, that is certainly an ingredient for a Bitcoin rally. It's not the only ingredient, but all those reasons that we're concerned about with deficits and the reasons why people are buying gold, some piece of that is a Bitcoin rally.

31:12All right. Looking at Bitcoin right now, trading at about, what,$78 ,600 and a little bit of change. Coming up, biotech executives making their way to the White House today as the president reveals new drug pricing affordability measures. All the details and the companies at play when Fast Money returns.

31:30Missed a moment of fast? Catch us anytime on the go. Follow the Fast Money podcast. We're back right after this.

31:42And welcome back to Fast Money. Stocks broadly lower in August. Final trading day. The Dow shedding 370 points. The S &P down a third of one percent. The Nasdaq also fractionally lower, while the Nasdaq 100 managed just to eke out a game. CrowdStrike surging almost 6 % to hit all-time highs. The company announcing a series of partnerships, broadening the reach of its Falcon cybersecurity platform, deal rising 4 % after Baird upgraded the stock to an outperform. Analysts expecting better corn and soybean fundamentals to help drive a recovery in ag equipment. The firm's$800 price target implies a 22 % upside from today's close.

32:18Meanwhile, Amazon falling 2.5%. The FTC suing the company, alleging it misled advertisers about its pricing and auction systems. Finally, Eli Lilly down a percent and a half. The company announcing plans to buy privately held immunology drugmaker Merida Biosciences and a$2.9 billion cash deal. Sticking with health care, President Trump announcing that he reached deals with nine drug makers to voluntarily sell their medications for less. These are midsize companies, including Estella's Pharma, Teva Pharmaceutical, Bridge Bio and B1 Medicines. It's the latest string of deals under Trump's most favored nation policy, which pushes drug makers and links drug maker prices in the U.S.

32:58to the cheaper prices that are being paid abroad. Joining us now for much more is Mizzouho's Jared Holes. He's the firm's health care sector specialist. Jared, thanks for joining us. Thank you. Appreciate it. All right. So first off, what does this mean for drug pricing? Is this this a plan by the president, the most favored nation strategy? Is this actually working to reduce prices? I think so. We've seen the first efforts were last year with large cap pharma participating. A dozen and a half companies signed a deal. This is the first time where this is sort of the second tier in terms of market cap are participating.

33:27It's going to drive down pricing of Medicaid drugs. I'm not really sure it does much else to solve the pricing issue that everyone talks about. Medicare is going to be exempt. This might get the companies out of pricing pressure going forward with respect to other markets. But in the Medicaid-specific market, it should help. OK. What does this mean for stocks that obviously sell and make drugs that are sold into the Medicare market and for investors of those stocks? The idea here is that the prices are lower. I would think that means that revenues are lower and profits are lower as well. Well, I think from a fundamental standpoint, there probably there probably will be some pricing degradation over the very near term.

34:04But when you look at the companies that you mentioned earlier, Bridge Bio, B1, these are companies that don't have that much Medicaid exposure. So you could argue that the headline risk is there, but it's now we're sort of past it. We can all move forward knowing that the pricing situation for these companies in particular won't be as bad over the medium to long term. So I think when you look at it from a stock perspective, it's obviously been very, very helpful for large cap pharma. I would think it would be positive for these guys, too. It could potentially be positive for these names as well.

34:33I want to look at both sides of the coin of the president's policies. near shoring. If you look anywhere, you can see billions of dollars being spent by large drug makers to bring their facilities back to the U.S. And at the same time, potentially, they could face some pricing pressure. If you're an investor of these names, do you see short-term turbulence? Do you see long-term gain? Kind of lay out the playbook. Well, I think the most profound or unique situation for the manufacturing being brought back to the U.S. is in the life sciences names with respect to capital equipment, companies that manufacture and or deliver these drugs to patients.

35:07That, to me, is the biggest beneficiary. When you look at how it's impacting large cap pharma companies in particular, I think a lot of it is just to form some sort of agreement with the government and allowing them to sort of ink these pricing deals and move forward. I'm sorry, go ahead. Yeah, go ahead. I was going to pivot and say, Eli Lilly, back again, playing with the big stack, making acquisitions. I think somebody just put a$100 price target on Structure, GPCR. I've got to believe Vikings in the mix. A lot of companies out there in sort of that price point that make a lot of sense in the back end of the year.

35:41Yeah, I think Lilly's done, I don't want to say like 10 deals this year already. Now, none of them, you could argue none of them have been so material. This is a$3 billion transaction they did today, private company. Market cap is north of a trillion. So you could see Dave Ricks do another couple of these before the year is out. They haven't done anything that I think the street is like super excited about, but they're on the offensive. They could do a deal of these a week. Structure Viking are in the mix. The thing with Lilly, no one is really talking about any competitive threat other than Novo Nordisk out there.

36:12There's a bunch of these that are becoming more viable as time goes on. We'll see if any of them are ready for prime time. Jared, second quarter earnings overall were characterized by incredible dispersion between individual stocks. I think health care had a lot of that, too. So if I'm looking at the XLV versus real outlier moves, are there any places that, you know, this is a case where are there any things that have seen that kind of skew that look particularly interesting, just even relative to peers, relative to the space you're covering? And what or what are what are people talking about?

36:44Well, I think the one area of health care that really hasn't done exceptionally well for the for the better part of the year. And you could really throw earnings on top of that would be medical devices. The Tronic reports tomorrow that stock is trading 14, 15 times earnings, growing mid-single digits. So names like that, Boston Scientific's got cut in half this year. Intuitive is closer to the lows than the highs. I think a lot of people are worried about capital equipment spending and competition. But that medical device subsector has been by far the worst this year. I think we're probably to the point where sentiment is pretty washed out.

37:17I would look at those names not saying you need to buy them tomorrow. No, that's exactly what I was asking. What is underperformed? Because a lot of that, a lot of the sector gets pulled up with the XLV yet hasn't really performed. Yeah. Pharma's trading at highs. You've got diagnostics and tools trading at highs. Biotech's been a rocket ship pretty much all year. This med device sector is really the only one that hasn't participated. Wow. A lot of action going on in the health care sector. A lot of action. Any reason why we're seeing so much acceleration in the second half of the year? Just in terms of price action or?

37:47Price action, yeah. I think a lot of it was just based on tech momentum slowing down in July and August. I mean, coming into June, I think health care was underperforming the market by 17, 18 percent. It caught up and then some as of a couple of weeks ago. Now it's a laggard by two to three percent again. But I think a lot of that is just you've got so much money tied up in so few stocks. Whenever there is a little bit of a pause in the action there and some market breadth, health care is going to get some love, defensive bid. I think we've seen it happen. And my worry is that it already happened in the August time frame.

38:19And that we're sitting here for the next few months and it kind of just treads water. Yeah, kind of a tale of two halves. Jared Holtz, great to see you. Thank you very much. Thanks. Marta, I want to swing it over to you. Your take. Well, I mean, that defensive bid is a pretty appealing part of health care. In my mind, when I think about the U.S. economy, one thing that always comes back to me is just how dependent and how integrated it is to AI. So you have something like health care that can be a beneficiary of AI, but not necessarily something that depends upon AI. And I guess I think it earns a place in people's portfolios.

38:48And we talk a lot about short-term performance, but longer-term, health care has gone nowhere. All right. A lot to look at. Jared's saying maybe all the gains have already happened. We'll have to wait and see. All right. Coming up here on Fast Money, Alphabet searching for its footing. The stock now on its longest monthly losing streak in 11 years, while the search giant just can't seem to get out of its own way. Fast Money back right after this break.

39:16Welcome back to Fast Money. Check out shares of Alphabet. Worst day in three weeks, notching its longest monthly losing streak since 2015. A couple of bearish notes potentially weighing on the stock today. Morgan Stanley asking if investors need to brace for more regulation for children online, while Bernstein says Meta's digital ad business, it may. It may have already surpassed Google search. Dan. Yeah, it's interesting. Axios just reporting right now. OpenAI just hit a billion dollars in ad revenue. This is something obviously it's very new for them, but they're looking to find every which way they can to add revenue as they approach an IPO probably early next year.

39:50They're targeting about two and a half billion dollars. Now, you can say that's a rounding error, right? And it is for the most part. But this is the sort of competitor with this installed base that they have right now. It's going to be an ad supported product. You're not going to have a lot of folks paying 20 bucks a year for this on the consumer front. And then obviously this is all about enterprise. But if you can build a solid consumer ad business, then it puts you in the game with Meta and with Alphabet. And I think that could be something that starts to weigh on Alphabet just a little bit as we get closer to the IPO of OpenAI, because they're going to be talking a lot about this.

40:23Marta? Yeah, it does seem like it's a business under siege at the moment. And I think that that question of kind of where does the digital ad dollar go is a good one. But I think one thing I've observed just with this whole AI hyperscaler question is it's a rotating leader leaderboard. And I don't think you want to, I don't know, call the marathon at mile five. I think you know that this is a long term play and we have to give it time. And we've seen these this change before. And so I wouldn't count them out at this point. Tim. Yeah, the regulatory stuff is proven to actually have some teeth. And we see where Meta has suffered.

40:57But that ad business, I think it was 26 percent growth. I mean, it's extraordinary. And their core business is very much intact. And Gemini is, as far as I'm concerned, holding serve against the other three. So I look at the chart. I say somewhere around 320. That's probably where I think you have really good support. I think I look at the valuation and relative to some of the peers, it's now trading at a decent level. I would agree with Marta. I don't you know, I don't know that anything's really changed for Google here. I do think the regs are complicated, but I think YouTube is the most underappreciated media asset out there.

41:34Tim Briggs up 320. That was a low I think we saw in July, if I'm not mistaken. You go back to January, that was sort of ish, the prior all-time high. So past resistance becomes support. That's the level. But, you know, you're getting a premier franchise at less than a market multiple, even with the CapEx spends that's taking earnings down. I think you got it by Google here. All right. Do you think there's anything to the idea that they announced an$80 billion share sale right around the time the stock slid? Do you think there's any connection there? We're talking a lot about regulation, but also they just dumped a lot of stock on the market.

42:03The time we talked about it, I know when I was on the show, and I think Dan and Tim were as well, I dismissed it because$80 billion is really sort of a rounding error. With that said, you're right to point it out because that sort of marked the short-term top. So I guess in retrospect, it was a bigger deal. I think it's a great point. Let's give credit where it's due. No, but I mean, that also defined a difference in how we're valuing this company in terms of free cash flow and also equity dilution. You now know is on the table, and that's by far the biggest deal of all of them. But they're also raising a lot of debt.

42:34Don't hold back on the props. I think the debt issuance was also a big issue, and it was also going through the entire MAG-7. We do have to go. All right, coming up. Great job, Frank. Checking out hotel stocks. The chart master joins us next on the Troubling Technicals. He sees in the group. more props for me and more Fast Money coming up in two.

42:56Welcome back to Fast Money. Hotel stocks, they've been underperforming as of late. The group's seen some gains since the start of the year. But according to a new note from the chart master, he does not like this area of consumer discretionary. Carter Braxton Worth, what do the charts say? Well, they're not saying great things. But before we look at them, what we know is, of course, over the past one, two months, the consumer discretionary sector is flat. S &P is up 3%, yet the individual major hotels are down 6%, 8%, 10%. Each chart is identical. The first is Marriott. This is the definition of a bullish to bearish reversal.

43:32It's breaking trend. And we'll go through quite quickly. Take a look at the next and you'll see the exact same circumstance. It's Hyatt. It too is breaking below its 150-day moving average. Again, down some 70%, look at Hilton and keep on rolling. We've got two more, but the point is, it's a very similar circumstance no matter how you slice it. The final chart will come up here as well. So what does a basket of these stocks look like? We've got an equal weight five-stock basket. And so it's 150A is flat as of now, but we can also put in an actual trend line, and final chart, we're breaking trend.

44:12Now, think about not included here is Carnival Cruise, terrible, and that cruise ships in general, Norwegian and so forth, not good. Underperforming their sector, the sector is underperforming the market, stay away. Carter Braxton Worth, thank you very much. Marta, I want to come to you with some quick thoughts on consumer discretion. I mean, consumer discretion, actually, if you're looking at the sector on a valuation basis, This actually doesn't look that expensive. So that's one of the appealing parts of it. Of course, you've got, you know, hyperscalers in there, big tech in there kind of throwing off the averages.

44:46I guess I look at consumer discretionary the way I look at lots of parts of the market. I don't necessarily think it's a screaming buy here or a screaming sell. I think it's, you know, kind of treading water, which I would expect for the remainder of the year. Tim? Travel leisure outside of airlines I don't need to own here. Expedia has gone through the roof, though. So, all right, coming up next, we got your final trade. Stay with Fast Money. We'll be right back.

45:20Welcome back to Fast Money. We are following some breaking news. The Wall Street Journal just reporting that U.S. Army Secretary Dan Driscoll has submitted his resignation. His departure comes as the war in Iran continues with no path towards peace or resolution. and a number of internal conflicts within the Pentagon over the ouster of several senior Army officials. Driscoll is expected to leave the Pentagon in coming days. All right, now we want to turn back to the trades and the final trades in this case. Let's go around the horn on this one. Marta, you can pick us up. OK, software selectively.

45:52Tim. I mean, Frank, such great work on that Google analysis that I asked on my final trade. I mean, but I do think the stock should be valued a bit differently. Having said that, again, I'm following Frank. Thank you, Frank. Thank you, Marta, for being here. Dan. Yeah, Dell, after the close tomorrow, this one's going to be really easy. Interesting, actually. We've been hearing about memory prices and what they've been doing to margins. Dell, this is a company that's seen margins come down a few points over the last couple of years. I suspect it to be weighing on their margins this time. I wonder if the Mets are going to have enough players to fill the roster tonight.

46:24Why do we have to do that? Well, we'll see how it plays out. Nice. APA Corp, Frank. All right, we're going to leave it there. Thanks for watching Fast Money Mad Money with Jim Cramer. It starts right now.

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