Market Resilience Despite Surge In Yields… And Options Action Ahead Of Micron Results 9/25/26

23:48I don't think we're going to agree. I don't think either side is going to give any ground on AI supremacy. I don't think China wants to give up any leverage in terms of rare earth. I do think ag is a place to cooperate, and I think we can agree to disagree. Taiwan is a big deal and something that I'm sure wasn't even talked about. Coming up, Copilot playing catch up on Claude. How Microsoft is switching its AI strategy to take on the competition that's next. Plus, Moderna seeing even more gains this week, now of nearly 600 percent this year. What the CEO is saying about the company's future ahead.

24:23Don't go anywhere. Fast when he's back in two.

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26:12Welcome back to Fast Money. Shares of Microsoft leaping almost 4 % today after the software giant announced. a shift in its co-pilot AI strategy to take on competition. CNBC's Mackenzie Cigales has got the details. Mac. Hey, Mel. So Microsoft is overhauling its flagship co-pilot app, combining coding, AI agents, and Office work into one product as it tries to challenge Anthropic and OpenAI. Now, until this point, Microsoft has kept its GitHub coding tool separate from its Office Assistant, which uses AI agents to automate tasks. This redesigned app combines both with a new feature called Autopilot that lets employees build AI agents that communicate through Teams and Outlook.

26:53Microsoft is also changing its pricing model. Now, it's moving away from a flat monthly subscription toward usage-based pricing. Businesses will still pay$30 per user each month for Copilot, but then pay extra based on how much they use its advanced AI features, potentially driving those costs much higher. There's a lot at stake here. Microsoft has more than 450 million commercial office seats, but fewer than 7 % have paid licenses for its AI add-on. Microsoft's own co-pilot executive acknowledging to CNBC earlier today that adding coding is an example of the company playing catch-up as competition intensifies from OpenAI, Anthropic, and even Meta's new Muse app.

27:35Also keep in mind, while Microsoft develops its own AI models, it is still relying on tech from OpenAI and Anthropic companies that it's also competing against in the enterprise. Mel? I'm going to ask you about a little nitty-gritty thing in your hit, Matt, because it just caught my attention. You said create AI agents that will communicate to each other via Teams and Outlook. So these agents are actually going to use those apps to communicate with each other? And this is something that Satya Nadella had been teasing back in June, essentially the super app that would compete in a similar way to Anthropic and OpenAI that have been bundling a lot of these offerings together.

28:10So my understanding of how this works, and we'll get a sense of whether in practice this is efficient once enterprises actually start deploying this, because to this point, I mean, less than 7 percent of that 450 million enterprise user base actually opting into these AI features. So I don't think this has been pressure tested to this point. So we'll have to see how that actually works out. That caught my attention, too, Mel. It's fascinating. Mac, thanks. Mackenzie Cigalos. Bono, and are we going to look back? Is this going to be that Muse moment? Muse is to Meta as co-pilot, revamp, AI agent is to Microsoft.

28:44I'm not sure if we're talking about the price action of the stock. I mean, Meta's run the last five or seven days is pretty incredible post-release of that. And I think it was because they were a dark horse candidate that we didn't really think were even in the race. But definitely in the early innings, they were not a perceived player. I do think this is intelligent by Microsoft, essentially wrapping all of this behind this co-pilot and code platform where you can use these other features within, as opposed to having some standalone, another, I don't know, icon on your desktop, so to speak. I think adoption ultimately is going to be the bar to get over.

29:21I mean, you've got to get people to kind of use this. And I'm not sure if this is somewhat of a look through in terms of the competition that is coming down the road in terms of pricing around inference. That seems to be a bit of a subtlety that they are playing on as well. Yeah. Mike, your thoughts? Yeah, I mean, well, first of all, that was quite funny thinking about agents of the same AI communicating with each other over a legacy messaging platform. That would be pretty amusing. Maybe they'll send each other snail mail next. That would certainly be something. Look, I mean, Microsoft has a very sticky position.

30:00And in order to maintain that, they are obviously going to have to continue to innovate in this space. And they seem to be doing that. I think that's the good news. The bad news is, just as a big user of them, I can say that so far it's been pretty clunky and not always pleasant. So that's a little bit of a challenge. As far as meta is concerned, I think the Muse thing, certainly the hardware side of that, is particularly intriguing because normally we think of them as sort of on other hardware platforms. And this kind of challenges the Apple and, you know, Droid device duopoly. So I think in the Meta situation, this is potentially, I think one person described it as a potential iPod moment.

30:41I don't know if it is that or not, but it is pretty intriguing that they're making another venture into hardware. Meta or Microsoft? Well, interesting.

30:51Guy Adami:Meta has done what Microsoft did. So Microsoft in June 25th, and here we are three months later, it surged some 40 % and then it's been dead flat. That's the nature of sequencing. After a big move, you consolidate. And just now it's starting to move up and out of the range in which it's been consolidated. Whereas Meta has just had that kind of move. And I would expect the same kind of consolidation that Microsoft has had for the last month and a half. So here and now I like Microsoft better than Meta. There's a lot more fast money to come. Here's what's coming up next. A medical marvel. Moderna shares locking in another big week.

31:27What the CEO is saying about AI's role in drug development and the major risk he's flagging. Plus, some old school OA coming your way. A check on the charts and options ahead of Micron's earnings report next week. And how to position in the name after the major run it's seen this year. You're watching Fast Money, live from the NASDAQ market site in Times Square. We're back right after this.

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33:42Welcome back to Fast Money. Chart of the week goes to Moderna. Shares of the biotech company hit their highest level since January 2023. Today, now up a whopping 574 % this year. CEO Stefan Bancel said at a Bernstein conference this week that Moderna is more than just a COVID vaccine company, but did warn of the potential for bad actors to use AI to create a respiratory virus. That's frightening. Moderna peaked at nearly 500 bucks a share at the height of the pandemic, down 60 % since, But it has come back, Tim. And a cancer vaccine sounds pretty promising. Yeah, the melanoma news, I think, was the first move.

34:22But judging by or taking those comments a little bit further, my sense is that there's more of a generalist audience now than there's been in a while. And leaving aside when everybody knew who Moderna was in COVID and then quickly dropped it because that's all it was. the sense here is that there is exposure and that they could have six or seven drugs by 2028 that include rare disease oncology including all their flu stuff so i i there's a story here that my guess is there's a lot more support a lot more interest for the stock and what they're showing in terms of some of these trials is supporting that but the melanoma news was was i thought really what woke people up to to what this that other stuff has been going on for a long time Those are the parts of the pipeline.

35:09Yep. Coming up, Carter Braxton Wirth and Mike Coe are bringing us the technical take and the options action on Micron as the semi-giant gears up for earnings next week. Can that stock's massive move higher continue when Fast Money returns?

35:27Welcome back to Fast Money. Shares of Micron on a tear this year are nearly quadrupling in 2026 as the growing AI data center buildout fuels demand for memory chips. So with results on deck next week and with both Mike and Carter joining us tonight, we thought it'd be perfect opportunity to lay out some old school options action. Let's kick it off with the technical take, as we always do. Carter.

35:48Guy Adami:Here we go. Well, not for the faint of heart, you're talking about a stock that went from 300 to 1200, then lost about 45 percent of its value and is sitting right here. Let's put some lines on it. So second iteration. One way to depict the current circumstances is this, which is converging trend lines. We're working into the apex of the formation, and what resolves it is fundamentals. You get something like earnings, and that's what's coming. Another iteration, just to make it clear how precise this is, the upward sloping trend line, we have bounced off it to the penny, to the penny, to the penny, and here we are, the downward sloping.

36:24Guy Adami:And we rallied to the penny and have been backing and filling in stuck. Something has to give. last chart. This is a judgment, of course, line, meaning I think it's up and out. I'd play for around 1 ,200. And from there, over to Mike. Mike. Yeah, so let's talk about those fundamentals very quickly. First of all, they're expected to do about 73 and a half bucks in adjusted EPS for the fiscal year that just ended. That's what they're going to be reporting. And that would put the stock at about 14.7 times trailing earnings. It's trading at less than seven times forward anticipated earnings. So I think if the market gets what they're hoping for, there is reason to believe that the stock can hold in here or even go higher.

37:06And as we look at the options market right now, it's implying a move of about 6%. That's below average. Maybe not surprising, given we're talking about a$1.2 trillion company. I think you take advantage of that slightly discounted options premium and look out to November. I was looking at the 1100, $1 ,350 call spread. Buying those$1 ,100, those were going to cost about$97, and then selling the$1 ,350 for around$31.25. So you're risking about 6 % of the current stock price, and you get some upside participation, and you also give yourself some time, in fact, all the way through the midterms in addition to just earnings.

37:38So this, I think, is a way that you can define the risk. Don't have to worry about those kind of 40 % drawdowns that Carter was just talking about. Bonwin, do you like this trade? I do. If you look at what your max loss is versus your max gain, you're in there between two and a half to three times, which is a pretty good risk reward. I like situations where you can risk one to win three. I think it's well laid out by Mike. Tim, I just spoke to an analyst in the last hour, and he was raising his estimates because he found that ASPs in the August quarter, and he's expecting the November quarter, are actually still rising.

38:13Well, first of all, it's a privilege to be in the middle of an options action episode. And I tend to agree. I think part of longer term visibility for Micron has been part of the story on the rebound. I would also just point to a couple other charts, but notably Korea. I mean, the KOSPI has slowly been itching higher. It's now back above the 50, has been very under control. And along with semis, I mean, that's your support for Micron on some level as well. All right. Coming up, yields spiking this week, but stocks are still hovering near record highs. How investors are feeling about the latest market moves and their top concerns heading into the fourth quarter.

38:49Fast Money is back in two.

38:56Welcome back to Fast Money. Investopedia's latest read on investor sentiment is in. And with geopolitical conflict, inflation, and potential AI bubbles, investors are moving cautiously. Joining us here on set is Caleb Silver, chief business editor of People, Inc., and editor-in-chief of Investopedia. Caleb, always good to see you. And this is a change just since the last reading. People are demonstrably more cautious. Yeah, individual investors have been more reticent than institutional investors, who are as bullish as they've been in a long time. But they're pulling back even more. Individuals have been through a lot, a little house of horrors.

39:27It's not even October yet. But just think about everything we've been through from the end of the last quarter. And they're kind of remaining invested. No major changes. But when they do put new money to work, it's mostly towards ETFs and money market funds doing some trading on the outside, but not a lot of risk going on. It seems like their biggest concerns are all interrelated, right? Iran, war, inflation, oil prices, sort of like a mixture. It's all connected. And they're worried that inflation could potentially cause a recession. Not everyone's worried about that, but a growing number are worried about that.

39:58And that optimism, that's waned about 20 percentage points just since the end of June. And that is because of everything that's gone on with the rising yields, rising oil prices, inflation. We've been through a little mini rate hike here. They've been through a lot. And they're wondering, is the worst over yet? Because there's a lot of concern still that we haven't seen the worst. What was interesting to me, I mean, all of it's interesting, but in terms of how many investors think that the AI stocks are overvalued. And it does seem like more than in the past. Yeah, more think that it's overvalued, yet those are the ones we own in our portfolios.

40:32And we may think things are in a bubble and we may fear that it might be overpriced or overvalued. It doesn't mean we're trading out of them wholeheartedly. A lot of people have positions in these stocks going back several years sitting on very big gains. And that's a taxable problem for them on the one hand. On the other hand, they're wondering with some of the other sectors that have rallied, like oil, is that sector looking overvalued right now, too? So it's not one thing. It's the other. That said, remaining in there, not wholesaling out to cash, but when they are, again, putting new money to work, they're looking for options.

40:59Guy Adami:Within the ETFs, obviously, you're studying patterns, essentially, how behavior shows up in terms of movement and so forth. Is there something that's really an outlier at this particular moment? Like there's a lot of particular interest or however you want to measure it in a particular space within the ETF universe? Yeah. Look at oil. Look at the refiners. Look at sort of the mid-range refiners there. I was looking at some of the top funds that they're buying, AMLP, the Midstream Energy ETF. That's taken over a billion dollars in inflows. That's not$80 billion, but still, for an oil ETF, that's a lot.

41:30USO continues to get a lot of attention as well. They were all in on the semi-trade with DRAM and others a few months back. They pulled way out of that. Though, when they are nibbling, they are nibbling at individual stocks still in the semi-sector. I imagine this survey was in the field prior to the recent surge in rates. Oh, it was in the field all this week. All this week. So they felt that. They felt the rate hike from last week. All the things that have boiled up, this really, we closed on Wednesday night. So you're looking at data that is like 36 hours old. So the extra$10 ,000 question, do you think CDs rose?

42:01CDs are definitely higher, but you also have a lot more interest in individual stocks because some of the big names have traded off. So if they put new money to work, it's either going to be in ETFs or individual stocks. But then the next choices are all about saving money, high-yield savings. They're thinking about CDs in some cases and even paying down debt. So higher rates get your attention one way or the other.

42:19Guy Adami:Anything on TLT, just because we were all making the case that, hey, maybe treasuries versus some of these high-yielding sort of going nowhere consumer stable stocks, anything coming up in Shai or TLT? Not TLT, but the shorter term, the shorter duration bond funds have definitely seen a lot of attention and a lot of inflows. They're paying attention to that. I don't see individual investors making those moves a lot on their own, but definitely through their wealth advisors and their financial advisors. Those have been big ticker names on the ETF front. We hit what they're buying lately. What are they selling?

42:48This list is interesting, what they are selling lately. Yeah, selling Palantir, sold some Microsoft, although Microsoft people have been sitting on some big gains for a very long time. ServiceNow was on that list. Salesforce was on that list. Oracle was on that list. Interesting on the buy side, didn't see Moderna, which is a stock that you pointed out earlier, or a couple of the other high flyers like SanDisk or even Dell. Caleb, always great to see you. Thank you. Thank you, Caleb Silver. Coming up, a super host sell-off, shares of Airbnb under pressure the last few weeks, but could the stock be ready to rebound?

43:18But the Chartmaster sees in the technicals when Fast Money returns.

43:26Welcome back to Fast Money. Airbnb shares up today but still down 17 % over the last month. The Chartmaster says the stock could be a buy, though, at these levels. Carter, what do you see?

43:35Guy Adami:Yeah, so an interesting circumstance here, and we do have some charts, but conceptually it is this. This is a stock that had a tremendous move on its earnings, and you'll see that in some of the charts that populate here. Up in a course of two weeks, almost 25%. And it has given all of that back. And so that leaves us back at the point before good news was released, but we have the information associated with the good news. And so in principle, if you can use this word, it's cheaper, meaning the denominator moved up in response to that earnings beat, and the stock now is back to where it was before the earnings beat.

44:15Guy Adami:Next iteration, we can just kind of move through them at a normal pace here. We are into a level of support. So you see the up and the down. Next chart, it's all the same duration. We are down to a well-defined uptrend line. In effect, since those lows, another way to draw it, if one wants, would be as follows. Again, the breakout level, we're back to it. So support, importantly, is not a plywood board or a concrete floor. You sink into support. We are now into support. And surely it can go a little bit lower. But any weakness from here and here, I would be buying final chart. You'll see that from its lows, a well-defined series of higher lows and higher highs.

44:54Guy Adami:Buy it, sell it. We're buyers. OK, Bonwin, are you? Yeah, I think so. I'm not sure I have the same level of conviction, but I haven't done the same level of homework as Carter. But on the fundamental side, I will say that you have a situation where you have an asset-light business with a robust free cash flow and not an exorbitant debt load. All those things would be something that would lead me to look further into the story. And so, yes, I would say I'm a cautious buyer. Michael. I'm a pretty enthusiastic buyer, actually. We were talking about yields earlier, and Bono just alluded to this. I mean, this thing's looking at probably 7 % pre-cash flow yield, ex-cash, and a very strong balance sheet.

45:35So, I mean, as I look at it, this is the kind of thing you hope for if you're into funny mentals rather than the charts. But it sounds like the charts line up with that as well. Yeah. Tim, what do you think of Airbnb? I think that the whole MUSE dynamic that is what took it down. And so I am of the view. And what we hear from people, the analyst community seems to also be trying out these agents and saying this is actually helping the online, the OTAs, essentially. So I think it's an opportunity as well, especially with that good news from earnings in there. I just think the market has overreacted to a lot of names like this yet again.

46:12Just quickly, Carter, does this look idiosyncratic relative to hotel stocks?

46:18Guy Adami:Well, yes, of course, hotel stocks have all been sort of slumping. If you look at Hyatt, Hilton, Marriott, and others, the strength was idiosyncratic. It was based on its results. And the giveback, also extraordinary and idiosyncratic. Up next, final trades.

46:37Final trade time, Timbo. I like Carter's consolidation at Microsoft. And I actually think the fundamentals and the drivers around Copilot are there. The trend is there. I would buy Microsoft. Bono in. I'm not willing to chase Moderna where it currently is after the run, but I do like its dancing partner. So, Mark. Mike Coe. It's big for the market, and of course it's big for Micron. This is the earnings that we're paying attention to next week. You want to use options, though, to make that bet. Carter Braxton Worth.

47:08Guy Adami:You know, Salesforce, it has pulled back after earnings, and I think it's time to embrace it after the good earnings. Thanks for watching Fast Money. Have a great weekend. Mad Money starts right now. Thank you.

47:51consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Fast Money Disclaimer, please visit cnbc.com forward slash Fast Money Disclaimer. Hey, Chicagoland, the Wayfair store is in your neighborhood at Edens Plaza and Wilmette. Finally, you can feel the fabric, sit on the sectionals, and even open the refrigerators. Plus, our in-store designers will help you bring it all together with free one-on-one design support for any project on any budget. Yep, we said free. Oh, and did we mention the cafe?

48:22So what are you waiting for? Come see all that's in store. Visit the Wayfair store today at Edens Plaza and Wilmette.