Markets Wrap Up Strong October… And Netflix Eyes Warner Bros. Assets 10/31/25

0:01Live from the Nasdaq market side in the heart of New York City's Times Square. This is Fast and a potential bid for Warner Brothers assets, what a deal could look like and what it means for the media space. Plus, Chevron shares get energized after earnings. Can crypto come back after a down week? And we're biting into the options on McDonald's ahead of earnings, what to expect from the burger chain and what it'll say about consumer appetite. I'm Melissa Lee coming to you live from the studio of the NASDAQ. On the desk tonight, Tim Seymour, Karen Feinerman, Steve Grasso and Mike Coe. We start off with a not so spooky month for markets.

0:46It is Halloween, boo. October trading in the books. And the traditionally rough month for stocks has been anything but the major indices all notching solid gains. The Dow, S &P 500, and Russell 2000 all up for a sixth month in a row. That is the Dow's longest winning streak since 2017. And the NASDAQ, which led the pack in October, gained for seven straight, also its best run in four years. This week's big tech reports helped boost the NASDAQ, but it wasn't big gains for everyone. Amazon surging after AWS cloud growth blew past expectations. Shares were up 9 % this week. Meanwhile, Meta dropped after saying AI CapEx would be much higher than expected.

1:24Those shares down 12 % since Monday. So after these big moves, which if either of these names are a buy? Sounds like a would you rather. I just said yes, which. You said which if either. Oh, it's a new game. Which if either. That was catchy. Well, Amazon over Meta, certainly based upon what we heard and the way the market's treating Meta, I think long term, I'd still rather be in Meta. I think the price action in Meta we've talked about was kind of sideways to disappointed coming into this. What I think you should be rewarding in the trade that really I think we settle into after this week is that the AI CapEx trade is alive.

2:04Just be careful how you're spending it. And it's a case where I do think we've already started to see nuances to how you invest in this current environment. But I don't think I heard anything this week. And I think Google's numbers this week really make them the clear big winner. And they were kind of the big winner coming into the week. And it still is the most sensible on valuation. So if you want my stock pick on the week, it's Google. I don't think you run from meta. In fact, I think there's been a lot of concern about this spend that we heard about in these numbers for some time. The stock reflects that.

2:35Does the numbers or the guidance about 2026 make you think twice about Meta? The guidance about notably, and I don't even know exactly what it is, but I know that it's huge and bigger than I would like it to be. Does it make me think? Well, I can tell you what I did, which would reflect how I feel. So I had some collars on in Meta. I took some of them off today when the stock was down maybe eight or nine. So that was premature to take that. So it's effectively buying, right, by selling collar. you're buying. And I don't know if we've seen the sentiment change enough. I'm not sure. You know, there's a lot of price targets out there that are higher and, you know, they feel like, all right, well, the revenue, the quarter was actually quite good, which it was, but overshadowed by this giant spend.

3:22Then there's the, you know, the sort of scars left from the metaverse. And I don't know if Zuckerberg cares where the stock is trading in the short I don't think so. And I'm not sure what got him out of the metaverse, whether it was the pressure on the stock or whether it was, wow, I don't know if the metaverse is the promise that I thought it was. Hopefully that. What? Hopefully that. Hopefully that. Yeah. The latter. Sorry. Right. But there's not much there. Yes. So I would think then that the stock price wouldn't. He's going to do what he's going to do. the AI spend because he thinks the promise is there, unless that comes up to not be said.

4:02He could pull that spend back, right? I mean, it's not carved in stone at this point. Sure. And it's not even a number. So he was rewarded. Back a couple years ago, he was slammed because of the rapid spend in the metaverse. Now he was rewarded for it now, and now he's slammed again. He was rewarded for the year of efficiency in a huge way. Right, for pulling it back. And then he was rewarded because he was spending with his peers for AI spend. And it was working. And worked. And it was working. Yes. But now, if he decides to throttle that, I think this gives him a unique spot. He has what AWS used to have in Amazon.

4:44They could throttle that up or down whenever they wanted. Now he could throttle this up or down whenever he sees fit to it. But the 3.5 billion users still on Facebook. No one on this panel is on Facebook, I don't think. I've never been on Facebook. That is something. What's the user base on Apple? I've never been on Facebook either, but it's over 3.5 billion. That user base is always worth something. They're only second to Google and ad spend. You've got to buy Meta in a whatch if either. I thought you were just talking about Apple. and I would just say that this week told us things about old companies that are old stories and that was good news.

5:25In other words, should we be surprised that demand for the holiday quarter, December quarter and for the following quarter for Apple is going to be strong? No, but we got a reaffirmation of that and it seems as if people are kind of surprised and the analyst community will now come around and upgrade the stock. Same thing with Google. I mean, Google search was suddenly rewarded as being much better than we had thought it was when I never thought it wasn't there. So that was what was fascinating about this week. Right, right. Mike, I want to go to you. I mean, were the winners in your view in terms of what we learned from earnings?

5:57Did you did you like what came out of Alphabet and Apple the most, as Tim seems to be? Or is Amazon with the biggest percent gain on the week? Is that the winner? Well, I mean, I liked Amazon going into the numbers. so I'm even happier coming out of them, to be sure. I mean, one of the things I would say is that just looking at this whole complex, I mean, meta looks cheap, but let's remember in the metaverse sort of, you know, issues that we had. It got much cheaper than it is right now, but it's trading at less than 20 times forward earnings and growing the top line at about 17%. Amazon, to me, I'm perplexed, I have to say, by the level that it trades at even now.

6:36I mean, it rallied, but it looks cheap relative to growth as far as I'm concerned. They're in all the right spots, and you've got comps for various pieces of their business. I know that Karen has some things to say about Amazon relative to Walmart. Alphabet, obviously, it was in my acronym at the beginning of the year, a little bit painful early. Once we got rid of that overhang with respect to the potential that they might have to divest Chrome, I think putting that behind us, this one also still looks attractive to me. So I still kind of like them all. The one thing I would say is that Apple, the valuation there's a little bit harder for me to get behind.

7:12But at the very least, we are seeing that the top line is actually accelerating now, something it hasn't done for the last couple of years. So I'll call that one reasonably priced. All the others, I think, are cheap. Let's get to that self, would you rather, that you wanted to do, Karen, and that would be Amazon versus Walmart. Because this is a very interesting exercise in terms of looking at the forward P.E. and what you're getting for it. So it was interesting to think about if you have the Amazon business, which we know we have a big part of retail advertising, but also you have AWS. And if you think about the forward multiple here, I'm not sure if these are exactly right, but they are about the same, Amazon and Walmart.

7:49And if you think about the AWS margins, how significantly larger they are than the rest of the business and how Amazon doesn't have that. And yet here they are trading at the same thing. If you believe in AI, if you believe in the growth of AWS, which I do, it makes me think, you know what? Should I have any Walmart at the same multiple or should I, would you rather, and go from Walmart into Amazon? And you and I were talking a little bit before the show about I would be inclined, I think, to have certainly the next dollar, Amazon over Walmart for sure. And maybe even the current dollar out of Walmart into Amazon.

8:33But you were thinking the other one. I was thinking a little bit more on the defensive side of things in terms of, you know, if if if people are stocks are getting dinged for overspending or perceived overspending CapEx on AI, if there is ever perceived, you know, AI downturn or anything like that, then Walmart is the more defensive ballast in one's portfolio and will execute well. Yes, but I think if you back out the same multiple that Walmart gets from Amazon, then you're left with a much cheaper multiple for AWS than what I think it would be on a standalone. Okay, but if you take a look at the forward PE of Amazon and say going back to Alphabet, different businesses, but Alphabet's a lot cheaper.

9:20It is a lot cheaper. Alphabet's a lot cheaper. Again, post-DOJ, you have a dynamic where we now also see the acceleration in the search business. We see the sum of the parts. I do think that this was a week where the street paid attention to multiples. And so it's not like Meta's expensive. But when Meta goes from 26 percent growth and then guides down 400 basis points or so for the fourth quarter on really tough comps, I think it starts to feed into, well, it's not that cheap if we're growing actually, you know, less than we were growing last year. So I think that's part of why Amazon and yes, we can do it.

9:59You're right, Mel, because relative to Walmart, depends what market we have. There's no question. I'm going to want to own Walmart in a world where we're seeing a lot of volatility and concern about the consumer, even though you would make an argument it's a consumer, a pure consumer play. And plus, Walmart has the ability to get into digital, to get into technology that it hasn't already. So if they start to scratch that surface, that multiple probably goes up what you're willing to pay for Walmart as opposed to AWS at this point. Well, for more on what we've learned from this week's earnings, let's bring in Gene Munster, managing partner of Deepwater Asset Management, who's helped us dissect these earnings as they cross the wires this whole week.

10:38Gene, great to see you again. What's sort of the headline here and how do you apply that headline to how you view the markets, stocks as we enter the next month? Well, this week wasn't just about the MAG7 or the earnings. We also had on Tuesday GTC and Jensen's keynote. And I think that that plays into the bottom line takeaway was relative to the infrastructure side. what we saw Jensen's comments he effectively raised Nvidia's outlook versus the street by about 15 % at least for the next five quarters and then we got confirmation of that on Wednesday and Thursday and so I think that that's a big takeaway I think kind of the hidden winner this week was Nvidia it's the stock didn't really act like that because I think investors still struggle with a five trillion dollar market cap they struggle with the concept that hardware eventually blows up and it's just a mind bender to think that we're still early in this capex build-out so that's why you don't see the appreciation but clearly Nvidia was the from my perspective kind of the winner this week and I think that's probably a big takeaway I think something else that we take away too is just the strength of these big companies whether it's with Apple seeing the resurgence in iPhone from the upgrade from four years ago those customers coming back we see the habitual behavior around Google search and them being able to angle more questions into better search growth.

12:08And then we see those daily active user numbers from Meta. Steve was talking about them. And just to frame that in, I mean, they grew daily active users at 7.6 % in the September quarter. That is a sequential acceleration for each of the past five quarters. It was 4 % growth five quarters ago. So there is something that I take away from this week, which is just this reminder that that these companies have moats, flywheels that are continuing to get strong and will serve them well in the future. There's also the reaction to Meta's CapEx spend and forecast for 2026 though, Gene. And are we at a point where investors are questioning what they're getting for those dollars spent on AI?

12:54Or is it just, I mean, is it idiosyncratic to Meta? Or are we starting to get to that point where people are thinking, what is the ROI here? We talked earlier in the week is this concept of the flipping of the script for META. If you're curious, the day that the year of innovation started on February 1st, 2023, or almost three years, but META has at that point, when they started talking about that, we saw accelerating revenue and expenses growing at a slower pace. And I think that that change of the narrative I think really stung investors and the stock is working through it now. But I think there's a piece that gets missed in this, in the whole equation.

13:36We talked about the daily users, but there's also these companies. This is such a massive transition that's going on. It's hard to come up with the adjectives to describe how the world is changing right now. The leadership piece is critical. This was the big knock against Google earlier in the year that they didn't have the chops to really navigate through this. there wasn't that sense of urgency. And I think if you look at the MAG-7, the CEO that is probably has the most urgency is probably the two, Musk and Zuckerberg. And so Zuck has been making this massive investment into talent. And talent matters in this race.

14:13And Lama's been a big disappointment. But those whiz kids that have joined Meta since the beginning of the summer, and it's not all happy days there. There's definitely friction. But I think that history would say that with a good leader in place, or at least an intense leader in place, that they're going to deliver something in the quarters to come that are going to cause that narrative to shift back to faster revenue growth versus expenses. Gene, just to piggyback that, though, you've seen the data that AI spend is 92 % of the growth in GDP for the first half of 2025. How can that be sustainable?

14:50It's 4 % of GDP now. Well, I guess the question on the sustainability is that how can it be sustainable next year, next two years? It can be because of this intense race that's going on. Eventually, there is going to be this leveling off and eventually the absolute dollars will probably decline. My guess is we're several years away from that. But, I mean, the law of large numbers will catch up to that. But I think it kind of sending a mixed message here. I think that the clear message from my perspective is these numbers are mind bending. And I think that they're going to continue to move higher.

15:27If you look at what on September 9th, Susan Lee from the CFO of Meta said at the Goldman conference is that she basically gave some expectations that they're going to be growing CapEx close to 40 % for the next three or four years. So, you know, Steve, I think we're going to hit a wall at some point. It will slow down at some point, maybe not hit a wall, slow down. But I don't think it's close. I think we're going to be having the same conversation six months from now. Gene, always great to speak with you. Thanks for your help all this week. Appreciate it, Gene Munster, Deepwater Asset Management.

16:00Gene mentioned NVIDIA at the very top. NVIDIA was actually a big winner on the week, despite not having earnings, up 8.7%. And so it gets you thinking in terms of who wins in the AI trade, and it could be a combination of them. But would you rather invest in the company spending the dollars to build out AI infrastructure or the company that will receive that those dollars to build the infrastructure? I think that's sort of the question of NVIDIA versus a hyperscaler, NVIDIA versus a meta. Right. So so as Gene referenced, Tuesday was the Super Bowl of AI. And we also learned that Hopper and Blackwell are possibly for 26 shipments are going to be significantly higher than the street already had.

16:36But what we've learned about NVIDIA over the last six to nine months is that this is an AI infrastructure company and that they're also reinvesting in those folks that will be essentially investing in them or at least major clients. I know we're skeptical about the circular nature of that, but I kind of like it. In other words, I see where it's much like if you tell a young professional and someone says, well, you know, what career should I get into? who say, I don't know, I see things changing in a big way. And, you know, right now this looks really interesting, but you never know where tomorrow brings.

17:06Well, there's no question that they have their core business. And we've also proved that the software and the platform around it was part of that moat. But the reality is AI is taking on different forms and spaces. What I think we've learned this week is that NVIDIA ultimately on valuation, given their growth, it might as well have been an earnings week. We got a growth update that the analyst community had to upgrade the stock. And they're a close second behind Google on this week. Yeah. Mike, your thoughts? Yeah. I mean, this is another one that we seem to sometimes get the idea of a valuable business and valuation a little bit conflated.

17:43Five trillion is a very hard number for anybody to get their arms around. But the fact is that if you take a look at the multiple that this thing is trading at and you wonder how this is supported. Well, it's supported by a lot of other very profitable businesses that are buying their products. in scale. And there's no reason to believe that that's just going to end after a single year. These things also age out over time, and they're going to be developing new technology. So I think this has got a couple more years to run. And I think the entire space is something you have to stay invested in.

18:12What are you doing with your NVIDIA position here with the$5 trillion mark behind it? I haven't done anything. I've recently put on collars, so I have that. So your question is an excellent one. I don't know which, so I'm going to be in both. I'm going to be the hyperscalers and, you know, and Meta and NVIDIA. Coming up, Snap Benefits in focus as the government shutdown drags on the impact it could have on consumers and the companies that cater to them. Plus, Chevron jumping on the back of this morning's strong earnings report, how to play the energy space right after this.

18:50This is Fast Money with Melissa Lee, right here on CNBC.

18:59Welcome back to Fast Money. Super Majors Chevron and Exxon reporting quarterly earnings before the market opened today. Chevron jumping nearly 3 % after beating top and bottom line estimates and reporting a record daily production of 4.1 million barrels for the quarter. Exxon also beating EPS estimates but missing on revenue. Shares were flat today, though the stock is up 6 % this year. Low oil prices, low oil prices, low oil. That was a big problem here. It's a big problem, but the large integrated names are so diversified that oil is only one aspect, even though it's the most important aspect, you would think.

19:32But they're so efficient now that they could actually make money. I think the break-evens are between$30 and$40 for these two. And Chevron's deal with Hess closes in November. So there's a lot of positive tailwinds. Remember with this administration, they signed 4 ,400 new permits for drilling this year so far. Are you in Chevron? I'm in Chevron. I'm in Exxon. They're smaller positions, but I kind of feel like you want to own energy here. I'm sure I probably said that a year ago, and it wasn't a great year, but I'll say it more from the contrarian perspective. We know it's been a tough run for energy.

20:07Oil prices have been on a kind of downward trend for a couple of years. I do think you've got a dynamic where there's a bit of a floor under prices here. I think OPEC knows it. I think the U.S. knows it. And back to Exxon, I mean, they're especially chemicals business. I mean, there's upstream, there's kind of downstream, and then there's the chemicals business. And that was a beat, and that's a higher margin business. Steve said they break even on a$5 billion buyback and div payments of another$4.4 billion, better than most. I like it. So both of them, record production, right? But they do talk about being more and more efficient.

20:43So as an OIH owner, kind of prefer they be a little less efficient to actually use more servicing, have more servicing revenue for those guys. But I am with Tim. With Tim, I like the space. I also think there's a floor here, but I also was with Tim last year. Thank you. Great to have you. It's really been nice to be with you. Pfizer and this. A lot to join you guys. Yeah. Right. Mike Coe, where are you within the energy space? Not in the integrated. I mean, to me, I think they're fairly valued, but they're not a very exciting sort of growth story. And, you know, if you're going to start picking stocks, you might as well pick ones that you think might potentially outperform, you know, the broader indices.

21:29And I think the AI trade is where that's at. I will say, though, that the oil service index space, names like Halliburton, do look like they've sort of bottomed out and might be turning around. And those are a little bit cheaper than the integrated names. So Slumberzay, Halliburton, names like that might be a way I'd prefer to play it, but I'm not in either of them at the moment. Come join us, Mike. So enticing. There's a lot more fast money to come. Here's what's coming up next. Should we be rolling out the red carpet for another streaming shakeup? Inside the latest reports of a Netflix deal for Warner Brothers assets.

22:03Next. But first, the impact of the government shutdown widening with SNAP benefits expiring tomorrow. What it means for an already stretched consumer this holiday season. You're watching Fast Money live from the NASDAQ market side in Times Square. We're back right after this. Welcome back to Fast Money. The government shut down in day 31 and a federal judge today blocked the Trump administration from stopping payouts of SNAP food assistance just hours before they were set to be suspended because of the federal funding lapse. Emily Wilkins joins us from Washington with the latest on this. Emily.

22:41hey melissa yeah as you said federal judge in rhode island they said the trump administration now needs to use a contingency fund there to cover snap benefits meanwhile another judge in massachusetts also this afternoon they asked for more information before a final decision is made but said that those pushing for the government to pay out benefits would likely be successful that's 42 million americans impacted as you just saw right there and just before the rulings were handed down. Trump was actually asked about whether the White House could find an alternative funding for the program. Trump said it's up to Democrats to end the government shutdown.

23:16And then he added this. I'm president. I want to help everybody. I want to help Democrats and Republicans. But when you're talking about SNAP, if you look, it's largely Democrats. They're hurting their own people. Trump has found funding to avoid most of the more painful aspects of the shutdown. Things like pay for military members. In fact, servicemen and women were just paid today after the White House managed to find funds from several different areas. Federal workers, however, they've now gone a full month without pay, and there doesn't seem to be any end in sight for that. The shutdown does seem likely to go into next week.

23:53If it lasts until Wednesday, it will be the longest government shutdown in history. Melissa? Emily, thank you. Emily Wilkins from Washington. How do we start thinking about the impact on consumer behavior if we haven't already seen it before? I mean, impact of GDP, impact of spending patterns, et cetera. Karen, how are you? This is the longest shutdown. It will be. Right. Next week. So we're, you know, wondering about for a Walmart or the family dollar stores. Is that good or bad? Right. For some, it's bad. Right. If you have if you if you have. You rely on if you rely on your bills. Yeah. Right.

24:28Right. But you can also see a trade down effect that might help either of those. You wonder for who gets hurt by it. I'm wondering if it's somebody like a target. Right. I just feel like we've we've been so inured to feel as if the shutdown means nothing and means nothing for the economy, because historically it has meant nothing. As this drags on, some of the dynamics around the labor market are when layered into the other dynamics we've been dealing with. Right now, I'm not willing to say this is a macroeconomic headwind. You know, when you look back, and I'm not belittling anyone who struggles to get food or any of the other stuff around it, but when you look back, the last one, what was it, 18 to 19 or 17, 18?

25:14I think it was 17, 18. That was 35 days. When you look back on the charts, you really don't see a lot of effect after. It hurts while you're in it. It hurts everyone while you're in it, but it really kind of ripples through. Everyone gets back to work. People get their paychecks. So I'm hoping that this is the case with this one. So I don't want to really make investment decisions around what the effects are, because by the time I make that investment decision, the effects are going to be a long time over. Right. Mike? Well, you know, the time frame that Steve is referencing, I think the SNAP benefits ran something in the neighborhood of$4.5 billion a month.