Highlights From Apple’s Worldwide Developers’ Conference… And A Warner Bros. Discovery Spinoff 6/9/25

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. Apple in focus. Investors unimpressed by the tech giant's latest AI reveal. But is this a case of under promise over deliver? We'll debate what's next for the company and whether it can turn around what's been a pretty lackluster year. And Tesla troubles last week's feud between CEO Elon Musk and President Trump, prompting downgrades from Wall Street. What's at stake for the company now? And can it shift back into high gear? Plus, Boeing shares take off and hit nearly 18-month highs.

0:31The chart master says to sell Microsoft's self-rally to records and why shareholders aren't loving Warner Brothers breakup news. We'll get insights from longtime media insider Michael Burns. I'm Melissa Lee coming to you live from Studio B at the NASDAQ. On the desk tonight, Carter Worth, Dan Nathan, Guy Adami, and Tim Seymour. We start off with another big letdown for Apple. Shares of the iPhone maker falling as its worldwide developers conference kicked off this afternoon. CEO Tim Cook announcing in his keynote that developers can now integrate Apple intelligence into their apps. He also revealed an operating system redesign, real-time AI translation, and integration of chat GPT with Apple's AI-powered image generation app.

1:10While the SOC closed off its lows of the day, it was still down over a percent. CNBC's Steve Kovac is at Apple's campus in Cupertino to wrap this all up. Steve. Yeah, Melissa, not a lot of artificial intelligence in this event, and that was because the bar was quite low after last year's announcements. Remember, it was this event, Melissa, a year ago where Apple showed off Apple intelligence. And then as the rollout went out through the rest of the year and beyond, did it really impress people? And then, of course, we got the big news with the Siri delay this spring, which really put pressure on Apple.

1:45And especially today, there was just a lack of confidence in what they could show that would actually come to fruition. So they played it very safe. And like those features you rattled off there. Nothing groundbreaking and nothing that we haven't heard from so many other competitors in the AI space. I will note, though, the big one that you mentioned about developers and Apple giving developers access to their AI models on the phone. That's going to be a big sell for Apple here. This event actually goes on all week, and they have to convince those developers, hey, we have the best AI model that you can use that can play with your apps you're already developing on the iPhone, and here's what you can do with it that you can't do with OpenAI or so many other different LLMs out there.

2:28So that is the big takeaway from here is without some kind of big AI thing, what do we talk about next? And that means getting developers to stick on the platform because remember, Melissa, if they lose them, that puts the services business at risk and it puts their overall AI narrative at risk as well. So we're looking to see what the reception is like for that. But as you just showed off, outside of some minor AI features, This was like kind of a normal WWDC with a redesign. They call it liquid glass. And that is the new design scheme that's going to be across all of Apple devices. It's going to be a free upgrade.

3:03And yes, it looks great. It looks nice. It'll be a fresh new upgrade for your phone. But investors wanted to hear about AI, Melissa, and they didn't really get a lot today. All right. Steve, thank you. Steve Kovac. Thanks. The bar was very low going into this event. So how do you interpret a decline of 1.2%, Guy? The bar was extraordinarily high last event. This time last year, we came out after the show. We were not impressed. Gene Munster was. And on the next couple of days, he was right to be. You're right to point out the bar was, I think, very low this time. But I don't even think they got over that low bar.

3:38Now, at$200, wherever it's trading, what's the trade here? It feels as if the stock has been trending lower. It has not nearly the bounce that some of these other mega cap names did. And I don't think today did anything to help it. Yeah, I guess the focus is developers, right? And so Steve just mentioned that. And so they don't even have the press really there anymore. They don't have all the fans there. There's nothing there. There's no there there. And I think that's probably the big problem here. When you think about the excitement that usually goes into these events is they'll show you the new iOS.

4:07They'll kind of surprise you with a couple things. And that will drive an upgrade cycle in the fall when they finally release the phones with the new software. And, you know, they haven't grown iPhone units in the last couple of years because they haven't had a reason to have people come out and do it. And so at the end of the day, I think they should probably be done doing these really cringy videos. Like I watched the whole thing and they're just odd. They take place in this metaverse sort of situation. And, you know, it doesn't give you a lot of confidence that this is a company that's innovating.

4:38And, you know, the comparison here is OpenAI. They are shipping a lot of product. They are shipping, you know, innovative product. And you look around and you say to yourself, if they had an operating system, they're going to have a browser soon. You might replace the whole kit and caboodle with what they're doing because they are Apple 20 years ago right now. So, you know, to me, I think it's disappointing. And to Guy's point, the stock closed unchanged last year or down a little bit the day of WWDC. And it rallied 10 percent in the next two days. So I got that wrong. I got the product right, but I got the price action.

5:10Would that happen this time? I don't know why it would, because the excitement there is that they announced that they were going to partner with OpenAI and that that would drive an upgrade cycle in the fall. That's what almost every analyst came out saying the next couple of days. So, but I mean, I mean, the chart, we can talk about that. But as they sit around there in the inner sanctum of Apple with all of their resources, all of their IQ and all of their manpower, what's their plan? I mean, they must be aware that they're missing things. Yes. Do they have a plan? Are they trying to cope with these misses like AI and so forth?

5:39or are they just saying, oh, well, we'll see what happens? I don't know because to me, it's just, of course, I don't know the difference between Apple's chart and Goodyear tire. It's a bad chart. A bad chart is a bad chart. We know that of all the factors that have ever been studied in markets, relative strength and momentum work more than anything else. This is poor relative strength. It is poor momentum. Its relative performance to the sector peaked almost three years ago, and it's not getting better. Good day for the market. Again, Apple down. If they do have a plan in the inner sanctum of Apple, they have to do a better job at at least messaging what this plan is, Tim Seymour.

6:12I mean, you as a shareholder, how do you view this event in terms of it not bearing a catalyst? Maybe you didn't think that there would be a catalyst in the first place, and you still believe that Apple is worth owning here, despite the premium, despite a chart that looks as bad as Goodyear tire, according to the chart master. Wow. Wow. I think I would preach some patience, but Carter's pointed out three years of patience, I guess. And the stock also keeps failing at the 20. It's grinding lower. But I don't think there's been any penetration of AI apps. I think more engagement with developers.

6:48I think some of the ecosystem around Apple and some of that low double digit growth on services, which I think the company is going to continue to print at a high margin, is part of why I'm less concerned than others. It doesn't mean I'm not also frustrated. And Carter asked the right question. I mean, what's going on over there? But what we do know is that engaging more developers and having more opportunities for people to use AI apps on the iPhone, and that's how they're going to engage for many people in AI. So to assume that suddenly there's going to be another mechanism to distribute AI to them, I think is crazy.

7:25I'm not worried about Johnny Ive coming out with a brooch or a pin or something guy's going to wear. I mean, I think it's something that it's actually that's a little bit of a head fake as to what Apple's problems really are. I like a good broach. You do. You've been known to sport a broach once in a while. He says that in a derogatory way. Meanwhile, I mean, I don't know why he would say this. Nothing wrong with it. Nothing wrong. But in terms of being the device to distribute AI, I mean, do we need a device to distribute AI if you can? I mean, you are a user of these alternative chat sort of large language models.

7:57Yeah, it comes together with, like, Vision Pro and the vision that they have for spatial computing, right? So there's a lot of things that will come together. And going back to the developers and what the importance of services, you know, for Apple is like the developers are going to stick around. They're going to be excited to do this. This is a great channel for them. There's a billion and a half iOS devices worldwide. Right. And so if you ever get a reason to upgrade these phones and you might have hardware, you know, I was talking to Gene Munster earlier today. And Gene said it's not just the lack of AI product that they have right now.

8:26It's also the overhang of the tariff trade situation, too. So that is going to be a really interesting litmus test if there is some sort of deal over the next few months. If the stock can rally off of that, if it can't, then you're going to know it's that investors feel like they are behind the eight ball as far as innovation regarding AI. How much of this do you think is tariffs versus just lack of AI, lack of innovation? I think the tariff thing is I think them being in the sort of the crosshairs of the U.S.-China relations is absolutely a big deal. I think that's a part of it, the way that Apple has bounced in a less than meaningful way as opposed to some of these other names.

9:02I mean, for example, look what Microsoft has done over this same period of time since April. It's pretty extraordinary compared to Apple. But again, it comes down. Listen, I get the install base. I get that services now is north of 25 percent of overall revenue. I think they're rewarded for that. I also know that this is a company that has about 9 percent or so EPS growth. And I'm probably being a little bit generous. And you're talking about maybe five and a half percent revenue growth with a company that's had flattening margins over the last few years. So a great company, inexpensive company.

9:32I wonder also, Tim, and we've talked about this before in terms of Apple in China, how much Apple's business is impaired, maybe not permanently, but for a while, because it doesn't have AI. It doesn't have that partnership. And the tariff war, the trade war, is impairing its ability, impeding its ability to sign a partnership with any Chinese company over there. I think that's fair. And I think we struggled with the China Apple story as opposed to the AI Apple story appropriately. I'm not ready to to call this an AI white flag. I think the China dynamics, I think China's best days. I mean, Apple's best days in China may be behind it.

10:12But I think I said this on Friday and then I said, but I think their best days in the AI are in front of us. And you said they better be because there are no AI days. But I you know, China is is is complicated. It's certainly a loss for Apple, and maybe that's why it shouldn't be trading at 35 times. But I think the AI story we're focused on today is not the place that we should be punishing a stock that really hasn't rallied at all from it in the first place. You know, if Apple can't rally when they finally ship a product and they have a new piece of hardware and they're talking about that, then the story is pretty much done, in my opinion.

10:45Then it really becomes a consumer staple. The last 10 years, they've had two hits. It's been AirPods and it's been Watch, and those things are very iterative now, too. All right. Well, stocks ending the day near the flatline, but the S &P and Nasdaq both crawled back toward records. Both indices now 3 percent or less from all-time highs. The Dow, meantime, shed just one point to kick off the week. This is U.S. and Chinese officials meet in London to talk trade. Megan Casella joins us now with the very latest developments. Megan. Hey, Melissa. So it was six or seven hours of trade talks in London this afternoon between the U.S.

11:16and China, wrapping up just after 3 p.m. Eastern with no news, except that they are set to start meeting again tomorrow morning around 10 a.m. Eastern time, about 4 a.m. I'm sorry, about 4 a.m. Eastern time, 10 a.m. London time. So no news there. This came after Kevin Hassett told CNBC earlier today that he expected a short meeting with a strong handshake. Obviously not what happened, but we will have to see what comes tomorrow. And even still, the White House putting out a strong face on this the president saying he had gotten only good reports from the team in london take a listen i think we're doing very well they're over there now i'm only getting good reports it's a little early but they'll be calling in soon in fact probably when i get back i'll have my first call from them we want to open up china and if we don't open up china maybe we won't do anything but we want to open up china it'll be a great thing for china great thing for the rest of the world Now, the president went on to sort of sidestep a question about whether he had authorized his Treasury secretary to ease up on export controls as part of these talks to get China, in turn, to allow for the flow of some rare earth minerals.

12:24That's really been the crux of these conversations this week. And Melissa, the president said only we'll see when he was asked about that after the Wall Street Journal reported on it earlier today. So no confirmation from the White House. But I was told by industry sources to pay close attention to the fact that Commerce Secretary Howard Lutnick is in London as part of these talks this time after he wasn't part of the Geneva talks. Lutnick, of course, oversees the export control file. So for that to be a part of the conversation, Lutnick does need to be in that room. So no handshake yet, no news yet, but we know they're meeting again tomorrow morning, Melissa, and we'll have to see what comes next.

12:59All right, Megan, thank you. Megan Casella at the White House. So ongoing here, but good progress in terms of the meeting continues tomorrow. So That's always a good thing with the S &P above 6 ,000 at this point. Yeah, agreed. And it was, I think it was Tuesday night into Wednesday of last week. And when President Trump said, I like President Xi of China, always have, always will, then in all caps. But he is very tough and extremely hard to make a deal with the 217 in the morning. And we talked about it on the next day. And what I thought, and I'm not saying I'm correct, but I thought it's a classic under-promise over-delivery.

13:28You're going to go out and say how difficult it is to make a deal. And then a week or two later, you come back with a deal. And the market will obviously love that regardless of what the deal is. And it feels as though we're on the precipice of that. But it's$6 ,000 as the S &P priced that in. I don't think Kevin Hass is going to be talking about rare earths being shipped in volume and export controls being lightened unless something is kind of in the works already. OK, let's be clear. Prior to April 2nd, China was exporting rare earth materials to us. OK, we put 145 percent reciprocal tariffs on them.

13:59OK, I don't know if they're reciprocal. They jammed them on there. They started putting export curbs on that. So if they start flowing again, well, there we were back at April 1st. There's no trade deal, right? There's not opening up China right here. The bigger problem is that 90 % of rare earth materials come from China. Those are things that we use in a whole host of really important stuff. And so they have to figure out who's got the leverage here. In that regard, the Chinese have the leverage. And so there's going to be a situation. It's going to take a long time to figure out. I just think that administration people are going to come out.

14:32They're going to say, we've got to win here, and they're going to start exporting rare earth materials to us. Well, they were doing that on April 1st. Okay, well, let's just play this game still. This is where we are. Let's say they resume exporting rare earths, Tim, tomorrow. They have some big handshake. It's a success. It's a wonderful deal, et cetera. Regardless of, you know, it's actually the same place where we were on April 1st. What does the market do? Well, the market's grinding higher. Let's call it what it is. And the VIX is grinding lower. And there's nothing you have to look past than the semiconductor index, the SMH, whatever you're looking at.

15:10It's up 21.5 % against the S &P from the lows of April 4th, but also has decidedly outperformed in the last week during this period where, you know, no news. I think we're supposed to be tougher on China. I mean, I agree with Dan's assessment of that, like, this was already happening. What's the big deal? China should be very happy with how they have negotiated at this point. So I'd like to see us be significantly harder on China. But in the meantime, markets are going to grow, grind higher. Oh, and by the way, look at Alibaba or K-Web are starting to catch wind again. And again, I think that gets back to fundamentals in a couple of those names, Alibaba specifically.

15:48Well, Tim makes a good point. I mean, if you were to look at the performance of the Hang Seng or the Shanghai Composite, since the whole tariff brouhaha. Obviously, both of those are outperforming the S &P. But to your question, what does the market do in the event of some big handshake? I think it's as good a bet as any that it's, you know, sell the news. Coming up, Tesla's next turn with the EV maker trying to recover from June drop and gearing up for the robo-taxi rollout. But will the Musk-Trump feud pump the brakes on the comeback? That is next. Plus, a Mickey D's downgrade. Why analysts aren't biting into the stock.

16:23and if their recent chicken changes are enough to keep customers coming to the drive-thru. Don't go anywhere. Fast Money is back in two.

16:34This is Fast Money with Melissa Lee right here on CNBC.

16:48Welcome back to Fast Money. Tesla shares shrugging off a pair of downgrades to kick off the week, jumping 4.5%. Analysts have been raising concerns over CEO Elon Musk's growing feud with President Trump. But our next guest says the war of words is far from the only obstacle facing this company. Former Ford CEO and CNBC contributor Mark Fields joins us here on set at the NASDAQ. Mark, welcome. It's great to see you in person. Thank you. For a long time, you've been a Tesla doubter. But now is the nail in the coffin, in your view? No, absolutely not. Listen, from a short-term perspective, they face a lot of challenges.

17:23They face, you know, declining sales. Part of that has to do with the fact that there's more competition now. You know, five years ago, they didn't have a lot of competition. You see declining sales. You see declining margins. China is a big problem for them. It's a big market for them. And, you know, there's a lot of domestic manufacturers there. So, you know, they have a number of issues. plus you know on top of wrapped all around the issues with Musk being involved with the Trump administration that being said they have a lot of advantages right there there they have a cost position better than the rest of the industry they have positive margins which is better than the rest of the industry and you know they're launching the robo taxi business which if they get that right with just what they're using cameras they can have a big cost advantage versus somebody like Waymo.

18:12And then there's robotics. So that's the way I would characterize it. Right. For a long time, we've talked about, you know, in the bear case for Tesla, growing competition. And we are at the point now where that is nipping away at the edges. Can the big three, can other automakers actually capitalize on Tesla's woes? Or is it so dispersed, those market share losses of Tesla amongst the competitors, that it's not really a win for anybody else? Well, it is a win when they're gaining share. I mean, if you look at Tesla's market share of the industry three years ago, they had 80, 85 percent of the market.

18:48Now they have below 50 percent. So that's a positive for the established automakers. The issue is going to be going forward is with tariffs that is going to worsen the margins for the established OEMs. And in particular, if they sell less, a less amount of EVs, they have to meet fuel economy requirements. And if they don't meet those, they have to buy emissions credits. And guess who they buy them from? They buy them from Tesla. So in effect, they help subsidize the Tesla business. But net net, they're gaining, but they have to get back to they have to get to profitability to have profitable growth.

19:25Forty years ago, Ford was a ten and a half dollar stock. It's a ten and a half dollar stock today. Understanding it's had some ups and downs along the way. What's the road? What's the path forward for a Ford automaker in this environment? Because they're seemingly sort of mired in no man's land? Well, you know, that's, you know, Ford, as well as the other established automakers, are making a lot of investments in technology in their vehicles, right, almost to make their computer on wheels. The market has never given them any credit for that. When I ran Ford, we talked about the investments we were making in autonomous vehicles, in EVs, in compute power on the vehicle.

20:02But the market tends to view established automakers as metal benders. Also, they have a reputation for destroying capital over the years. You can just see that with their over enthusiasm on EVs. They have a lot of stranded capital right now because customers didn't come as much as their product programs and capacity did. So I think the path forward for folks like Ford in particular, they have great product. They have high appeal product, trucks, SUVs, making sure they double down on that. That provides a great profit stream. Their parts and service business, and they can use that as they're doing right now to invest in EVs.

20:40They have a, from what I hear, they have a Skunk Works in California working on some innovative product. Their product appeal is really, really good. And I think that's the key for any auto banker is having fresh product. And that's one of Tesla's issues right now. Their product is aging. All right. There hasn't been a major refresh until just recently. In terms of, granted, you are a Ford shareholder, I presume. Yes, I am. Okay. Do you think Ford is the best auto stock? Well, of course I do. No, no, no. But I asked you that because we've had Bill Simon of Walmart on, and he has said that he prefers Target.

21:17So this is an open question. I mean, just because you own it doesn't mean that it is the best stock from here the next five years, next 10 years. Yeah, there's, you know, there's lots of puts and takes. I mean, listen, if you look at Ford and you look at the situation around tariffs, their advantage is we've always had the approach at Ford to have the majority of our production here in the U.S. And so Ford has about 80 % of their production for the domestic market here in the U.S. GM, Chrysler, they're in the probably 40 to 45 % range that they have to import into the U.S. So when you look at that in and of itself, that's a big competitive advantage.

21:55But listen, you know, GM is making a lot of investments in EVs, which if the market does take off, they have a full product lineup. You look at automakers like Hyundai Kia, which have great design, also a good full lineup of EVs that they're introducing in the marketplace. It's going to come down to execution. It's going to come down to cost position and product appeal from my standpoint. All right, Mark, great to see you. Thanks for coming by. Thanks. Mark Fields. Tim, what's your take? Well, I think if we get to a place where we really understand where tariffs sit, and I still don't think we're at their final resting spot, but$7 ,500 a vehicle on GM is not where I think we're going to be.

22:36I think that stock's, you know, it's in purgatory until we get out of it. And the question I think for auto investors more broadly, you know, independent of EV exposure and whatnot is, are we in the beginning or late cycle? And, you know, you look, you had this, the SARS number that most recent SARS number had some pull forward to it around tariffs. I don't really know where we are. I do know that GM, left up to their own devices, has never been more profitable. And the frustration I have was that the market doesn't reward that. And I think this is for some of the reasons that Mark just talked about.