Meta And Microsoft Move On Earnings… And Ethereum’s Massive 10 Year Run 7/30/25

0:02Live from the Nasdaq market site in the heart of New York City's Times Square. This is Fast is coming soon, taking a bite out of the markets rally. What he said and how markets should read into the action. And 10 years strong, Ethereum marking the milestone today as a crypto continues to rally. We talk with the co-founder, Joe Lubin, about what is next. I'm Melissa Lee. Coming to you live from Studio B at the Nasdaq. On the desk tonight, Karen Feynerman, Dan Nathan, Guy Adami, and Michael Cantopoulos, Deputy Chief Investment Officer at Richard Bernstein Advisors. And we start off with what that monster night of earnings, Microsoft, Meta, Qualcomm, and more reporting results in just the last hour.

0:50We've got full team coverage breaking down all the numbers. Julia Borson's watching Meta. Christina Parts and Nebulas got the details on Qualcomm. Phil LeBeau is driving into Ford. But we start off with Steve Kovac, who's dialed into Microsoft, which joins NVIDIA in the$4 trillion club with its after hours move here. Steve. Blockbuster report, Mel, just beats across the board on all the metrics that we paid so much attention to. And Microsoft disclosed Azure cloud revenue for the very first time. We'll get to that in a second. But first, revenue beating expectation and is up 18 percent year over year to 76.4 billion dollars.

1:25EPS was a beat as well. And Azure growth smashing expectations up 39 percent. Street wanted to see it up 34.4 percent. And Azure for the first time, like I said, full year 2025 fiscal year sales, more than 75 billion dollars. Microsoft saying that's up 34 percent from fiscal year 2024. This is the first time Microsoft has disclosed that, and it seems like that's going to be a new annual cadence for that big Azure number. As for CapEx for the quarter that just passed, a bit over$24 billion. But on the call, we're going to get our first look at CapEx expectations for fiscal year 2026, at least for the current quarter.

2:05If you want, we can multiply that by four and get a little bit of an idea what the next fiscal year of CapEx spending looks like for artificial intelligence. Plus, we'll get some standard guidance. Call kicks off at 530. I'll be back when we get those numbers, Mel. Steve, thanks. Steve Kovach beats across the board here. Stocks up 7%. Guy, what do you make of this? Justifiable. I mean, the revenue, the as-the-revenue growth, 39 % is staggering, and 45 % now operating margin. It's good for them. And it's probably a justified move, at least for now. And we'll wait and see what they have to say on the call.

2:34But, again, even with this type of growth, even with these kinds of numbers, I mean, it's not a cheap stock. I don't think it. It has not been. And all-time high based on this move right here. Let's hear what they have to say. But I think if you've enjoyed this move in Microsoft, and it's been incredible since April, this is the quarter that you've been waiting for, I think, to take this money off the table. Yeah, so incredible versus April at the lows. The stock's up 50%. That's not including this gap right here. When you go back to early May when they reported that Q3 result, the stock did have a beat.

3:03And when you think about the Azure beat, a couple percent of a 31 % that was last quarter. Now you're talking about more than a 10 % beat off of the expectations here. It is pretty astounding. The fact that they're breaking out that Azure number now tells you that they are ready to kind of get at least the leverage on a lot of those investments that they've been making. But I think it's important to know that if you look at the revenue for this quarter and the capex that they spent, I think it was about 24, 25. It's still 31 % of their revenue, right? And so it either speaks to the fact that they continue to build in a way that they're looking out to the future or they continue to feel like they're capacity constrained, which I guess, and you've been making this argument, I should tell you, they're both good scenarios right now.

3:44And unless you see some sort of broader slowdown, which I would have expected you see some sort of digestion at some point, because right now, and I know we're going to talk about Meta, but there's a handful of companies that are really monetizing AI right now. And they happen to be Microsoft and Meta. But to Guy's point, two consecutive now looks like 8 % gaps after earnings. This one's different than last quarter because last quarter the stock was down 15 % from those recent highs. Now the stock is literally going into this print up 50 % off those lows. Right. So, I mean, the underlying business, well, the more historic, you know, productivity business process, that was also good.

4:19This highlight, there was so much better. It's sort of a bigger beat. And for all the points you've been saying, you know, we saw Google Cloud, also very nice growth. Microsoft here, very nice growth. We're going to see Amazon tomorrow, I would suspect. Same thing. I mean, this is really exciting. This is to the extent that there was this narrative earlier in the year that AI has, you know, not peaked, but it's already pricing in so much more growth. That was, I guess, as you would say, Mark Twain guy. Yes. The rumors of my demise greatly exaggerated. This is not slowing. This is an acceleration.

4:59And we'll hear exactly, as Dan quoting me, and you and I talk about this all the time, delayed. Is it demand? Right? Demand is still there, but supply is not adequate. We'll see. But, I mean, there's a lot to like here. And your point about it being already on an uptrend going into this and yet jumping over the bar. Can I just be really clear? You've never wavered on this trade. Not a bit. I mean that. In two years. You know what I mean? So it's easy to try to poke holes in it, which maybe I have done a little bit. But here you are. Look at this thing. A couple times. You know, it's over$4 trillion.

5:32It is literally a monster. And Guy's been saying this for, I think, three or four years. This is probably one of the, what, top two, three most important companies in the world. And they're doing it. But I mean, listen, you know, the fact that I'm like, yeah, have a ball. It tells you maybe it's over. I don't know. Yes, I agree with that. And we will get to the details of Meta, but investors wanted to see justification of the spend. Investors wanted to see confirmation of the story. And here we have it. And feasibly, Michael, this is confirmation of the big cap tech trade here, the MAG7 trade going strong.

6:02I mean, it's certainly hard to push against that given what we've seen today, given what we saw last week. To me, it suggests that things are actually still pretty good. from a macro environment, right? I mean, these companies are cyclical companies. They used to be asset light. They're not anymore. Now they're asset heavy, right? So this AI spend better payout because if it doesn't, it's a big issue. But listen, for now, I think the story is clearly intact and, you know, it's hard to bet against them. But if growth slows, if inflation is higher than expected, if rates continue to go up, they are long duration assets.

6:36As Guy mentioned, they're richly valued. dude, you know, I would be a little bit nervous. Let's get to the details on Meta now. That stock is also surging after reporting top and bottom line beats. Conference call kicking off at the top of the hour. Julia Borson joins us with the details. Julia. Melissa, Mark Zuckerberg just kicked off the earnings call on the heels of that across-the-board beat. Zuckerberg saying they've begun to see glimpses of their AI systems improving themselves and also superintelligence, saying that their goal is to bring superintelligence to the masses, to everyone. The company did guide to higher third quarter revenue than expected and also raise the lower end of its CapEx range for the year.

7:16CapEx is expected to be a key area of interest on this call as we look for more color on the company's guidance that expense growth will increase in 2026 on infrastructure and employee costs. We're also listening for some color on the ad market, what's driving that reacceleration of growth for Meta, and also what their perspective is on the overall macro environment. I'm sure we'll also hear from Zuckerberg more about his focus on building superintelligence and when it'll start to pay off for the company's bottom line. We'll likely hear him say that this quarter's results show that the business is strong enough to support his AI ambitions.

7:54Melissa? All right, Julia, thank you. Keep us posted. Similar circumstance to Microsoft in terms of the positioning of the stock going into this quarter. It's up 31 % or so since reporting the last quarter. But in recent weeks, it's sort of leveled off. So there's a little question in terms of the valuation here and how far it's come. Yeah, well, this report, though, is staggeringly good, right? I mean, there's so many metrics to really like. Family of apps, daily active users, how does that keep growing, right? I think it's average revenue per person. Also a very nice beat. There's so many things to like here.

8:32I really would caution you to wait for the call. We've seen things happen on the call that can move the stock very dramatically. It's been capex the last few quarters, but let's wait to hear what it is. But on every metric, though, this is really a pretty stunning quarter. Usually, though, when we hear capex, it's negative that it's going up. But this time, it could actually be positive, no? I feel like they've already been talking about it going up, up, up. And we know the giant spend on hiring, right? And at some point, we want to see efficiency. But, I mean, there is a lot to love in this. Advertising is doing great.

9:06I mean, I want to hear the call, though. Well, we've tried to point out, and I think now it's bearing fruit. This is now, I think, the fourth quarter where AI is helping them on the margin line. I mean, 43 % operating margins. I think the street was at 38%. And we've been consistent in saying this is one of the few companies, at least a few large companies we talk about, Walmart being another, that's being able to lever AI in a way that goes right to the bottom line. So I'm with Karen in terms of wait for the call, but I'm also sort of in your camp. You know, the first time we heard CapEx from Facebook scared the you-know-what out of the market.

9:37The last few times, they're not only giving them a pass, but I think they're rewarding them for it. So there's a lot to like here. Of course, the only problem is, I mean, this is a pretty huge gap off of where we close. We'll see how it plays out. Yeah. You know, one of the things you just mentioned, the compensation packages. So they've been having some huge wins taking some folks for maybe tens, if not hundreds of millions of dollars in pay packages across like a wide swath of, you know, call them aqua hires also over the last few months or so. You could say, well, is that playing catch up? Is that a bit of desperation?

10:05We know that there's some performance issues with Lama relative to some of the other LLMs. And this kind of report demonstrates that they can do both. You know what I mean? They can continue to maintain capbacks. They can continue to hire at the pace in which they are. And I think the other thing is, we talked about this a couple months ago, they kind of quietly rolled out these free AI tools to their advertisers, right? And so they may be part of a beta program eventually, but it's like, okay, get these tools in the advertiser's hands. Take out some middlemen in the process. Get them hooked on the tools.

10:36The models are all going to be commoditized. Llama is open source anyway, right? And so maybe that's some of the benefit that they're getting in the near term from an AI revenue standpoint. Seeing what Meta and Microsoft have reported, how do you feel about Google's report now? I feel, okay, I like the Google report. The big question mark there is what are the remedies going to be from all the antitrust? That's not a business line. Right. One metric that I did want to point out, average impression growth, 11 versus expectations of 6.9. Wow. I mean, that is gigantic. Average price per ad change, 9 versus 7.58 expected.

11:16I mean, those are huge numbers. Real quick, I'm glad you said that because it puts in a – the Google recorder that I thought was excellent, I don't want to say it pales in comparison to this, but it's nowhere near these two. So I don't have it in front of me. I bet you Google's lower. If I had a bet, I bet you it's lower in the after hours. It is a little bit lower because I did check on that because I was curious. I was curious. You're in my head. But even excluding the investigations, do you think, I mean. No, I thought it was still. Let's say there's no investigations, there's no remedies. Yeah, get it.

11:50Look, I think the Google quarter was still good. I mean, I think it assuages the concerns of a lot of people just in terms of the search front. But I don't, I think, again, given the context of what we just saw over the last hour, it's not nearly as good as I thought. Well, it's still the fear of search. It didn't happen this quarter, right? It actually went the other way to people's great surprise. But remember, Google is so much cheaper than Meta. Right. Meantime, major markets taking a leg lower midday after Fed Chair Jerome Powell said no decision had been made on a September rate cut, though they did end off their worst levels of the session.

12:22Bond yields in the dollar moved higher. Our Steve Leisman is in Washington with all the details from today's Fed meeting. Steve, inflation is still a concern here. Yeah, the Fed is still above target. The big takeaway is Fed Chair Jay Powell and the fuller Federal Market Committee making clear that a September rate cut is not a done deal. I asked the Fed chair whether the central bank now has more clarity on the outlook since the president has struck several trade deals. The likely, you know, effective effective level of tariffs is is not moving around that much at this point. But at the same time, there are many, many uncertainties left to resolve.

12:59So, yes, we are learning more and more. It doesn't feel like we're very close to the end of that process. And that's that's not for us to judge. but it feels like there's much more to come. Importantly, that sentiment was echoed by the Fuller Committee, which said in the policy statement that uncertainty remains elevated. The result, a fairly sizable move downwards in the probabilities for rate cuts this year. September, now at 50 percent, was 68 before the power presser. 67 percent now, so that first cut now seen in October. But take a look, not a second cut this year. December, well, even odds on that, 50 percent probability down from 67.

13:37January now, the odds on bets. So really only one cut fully priced in for this year. Two governors did dissent. First time this happened since 1993. Powell said he respected the governor's arguments for a quarter point cut now, but showed no sign of embracing them. Melissa, if Powell and the Fed wanted to signal to the markets that a rate cut was coming in September, they know how to do that and do that very well. They didn't do it. Yep. Michael has a question for you. Yeah, Steve. Dave, you know, I don't know. Maybe I'm reading into things a little bit too much here. But to me, it seemed like Chair Powell almost hinted that, you know, he would be open to hike rates at some point.

14:15I mean, he was pretty definitive in saying that tariffs will lead to inflation, that the base case should be a one off increase inflation. But they had every tool in the toolbox ready to go in case it was more than a one time inflation bump as if he was prepping the market a little bit. What do you think about that? I don't I didn't hear it that way. He did say that, hey, one sign of us not being all that hawkish is that we are not raising rates in the face of this inflation. I would add to sort of counter your point of view that Powell said the base case is that this ends up being a one time price increase.

14:51So that's the key. But remember, the Fed has to make that so. It is not going to seem like, oh, tariffs increase prices and yada, yada, yada. There was no other inflation. No, it's Fed policy that will be central to the reason why. And it could be Fed policy in terms of what they're saying and Fed policy in terms of what they're doing or not doing, which is cutting rates to make sure the tariff inflation doesn't become broader inflation. Steve, it's Karen. Thanks for being here. The GDP print this morning at 3 percent. Did that seem to maybe give him some cover that, you know, the economy is doing just fine and maybe we really don't need to cut?

15:32Maybe a little political cover, but Karen, I think that Powell and the economists at the Fed are pretty wise to what's going on here, which is that growth is softening. And when I see that number this morning, which average growth over the two quarters being one and a quarter percent, that final sales to domestic producers is is down in a relatively anemic place. all that does for me is heighten the dilemma for the Fed, which is it does have weaker growth, weaker growth that could cause it to to cut rates. But it has this inflation problem, both being above target already and more inflation to come.

16:09Goldman Sachs saying a report this morning that about only half of the of the effective tariff rate is seen in the economy. They think it's going to a 14 percentage point increase. They've only seen seven of it so far. So there is more to come. And that's one of the things staying in the Fed's hand right now. All right. Steve, thank you. Steve Leisman joining us from Washington. Guys, so what do you think? I mean, we just had, we just went through two reports. Gangbusters. Stocks up. Two of the biggest companies in the world, effectively. And then we have this. What matters more? GDP report. In terms of.

16:47Strong economy. So, you know, what's the rush? I'm sort of with Michael on this one. So what's the takeaway? What's important? Well, I think at the crux of all this, earnings are still, as they used to say, the mother's milk of this entire thing. You need earnings and earnings growth, and we're getting it from the big names. We're also getting valuations that are extended. But this, to me, of all the takeaways from the Fed, I think he was asked about housing, and he basically said, you're just not building enough homes. The Fed does not set mortgage rates. Right. Or do they control the long end of the curve?

17:16Well, and that's something we've been saying. So for all the people out there that are trying to browbeat them into submission, they have nothing to do with that problem. And that will remain a problem regardless of what the Federal Reserve does. All right. I want to throw this in, too, because this speaks to the inflationary impact of tariffs, potentially. Copper prices dropping after President Trump announced a 50 percent tariff on imports, which will go into effect Friday. The move, which came after prices settled for the day, will be the biggest drop since 1989. Miners like Freeport-McMoran, Southern Copper also falling on the news.

17:47This is 50 percent on all copper imports, semi-finished copper. Of course, this goes into all sorts of construction, et cetera. So we don't know what the full impact of any of these things are. And we don't know. You know, we know that China is under discussion. EU has a framework. Japan has a framework. We don't know what else is coming. Copper came. Brazil came, too, by the way. Yeah, there's just still so much uncertainty out there. If you look at the trade deals that have been negotiated with our partners, It's very light on details, very, very light on details. I think there's tremendous uncertainty still.

18:21The one certainty is you can't have your cake and eat it too, right? At the end of the day, someone has to pay for tariffs, whether it's corporate margins have to go down or inflation has to go up or some combination of the two. And in that world, the Fed just can't cut rates. The Fed just can't cut rates. And then you've got, obviously, an ultimatum out with Russia right now. That's affecting oil prices. I mean, there's just way too much uncertainty, And it's the uncertainty that's going to cause the Fed to stay on hold for now. Is your odds, is the Michael Katopoulos odds of a rate cut this year?

18:51What do you see? Much less than 50 percent. And I think what's ultimately going to happen, I think Chair Powell set the stage for it today, is monetary policy works as much through markets as it does through policy. And I think he is going to talk away cuts. I mean, we already got the September cut basically priced out now. And I think he's going to continue that, especially if we see inflationary pressure. and we'll probably have higher rates because of that. Right. So I'm not so good at math. I think I'm on here because of the pretty face, you know. No doubt. The money maker and all that sort of stuff.

19:23But all right, let's just do some math. So 50 % of our copper comes from outside the U.S. It's about$18 billion worth last year, 50 % tariff. Somebody's got to eat that$9 billion, right? And it's going to work its way. So that's just one metal. Like we have lumber. We have steel. I mean, the list goes on and on. And so, you know, I thought it was interesting that this, the Brazilian, this all happened Fed Day. I think the president was trying to flex a little bit. He was trying to say, OK, we got this date. It came into today. He said we're sticking with August 1st. These came out in and around all this, you know, the Fed stuff.

19:55And again, I think that guys said this the other night that they probably feel, at least from the stock market, the kind of the bond market is very stable. They got some room to play with a little bit. So but at the end of the day, if you're going to start doing this stuff, it will work itself into the economy because a lot of companies, they thought they had a little clarity, and now they have much less clarity. Coming up, more on tonight's big tech earnings with Microsoft's conference call kicking off in just a few minutes. The details from that and all the opt-hours action from Qualcomm, Ford, Robinhood, and more next.

20:24Plus, the next move in crypto as Ethereum hits the decade mark, the mind-blowing run it's had in the last 10 years, and where co-founder Joe Lubin says it is heading next. Do not go anywhere. Fast Money is back in two.

20:47Welcome back to Fast Money and Earnings Alert on Qualcomm, the stock taking a hit despite beating top and bottom line estimates. CNBC's Christina Parts Nebelis has got all the details. Christina. Well, Mel, Qualcomm's diversification strategy is showing up in the numbers, but it wasn't enough to impress investors, which you alluded to with the stock drop. The biggest maker of smartphone chips beat expectations thanks to strength in automotive and the Internet of Things, which includes smart Ray-Ban glasses. Smartphone sales were a bit soft compared to estimates. Management warming a seasonally weaker quarter with no flagship launches added to that.

21:17Qualcomm did add a new data point. Sales from non-Apple customers rose 15 % year over year as the company continues to wind down its relationship with Apple. Right now the call is going on and they're getting a lot of questions about Apple, so perhaps that has to do with the stock drop. Also on the call, Qualcomm said it was planning to expand into data centers and sell versions of its chips that can be used for deploying AI. This is new. Qualcomm CEO said that Qualcomm was already in discussions with a major cloud company, which essentially is a hyperscaler to supply AI chips. He didn't say who.

21:48He said that Qualcomm could start to see revenues in fiscal 2028. I also spoke with the CEO and CFO earlier, just maybe about an hour ago, and they confirmed they didn't see any demand pull forward due to tariff concerns. And they also said China remains a strong market, which they say was reflected in their upbeat guidance. Guys. All right, Christina, thanks. Christina parts. Another stock's down five point seven percent. Is there value here? Yes. I think. Well, I would have said that 15, 20 dollars ago. Just. But is there value? Absolutely. I mean, are they late to the get in the wrong games?

22:21Probably. But it's amazing how people are willing to pay up for growth in a major way. And if you're not on that side of the ledger, valuations don't matter. They're just going to sort of kick you to the curb. But Qualcomm here in the after hours probably trading 13 times-ish next year's numbers. I don't know. It looks okay to me, Mel. Kind of surprising that they had some strength in the automotive market, which is not what we heard from a lot of other trip makers like the NXPI or Texan. Yeah, and, you know, listen, they're a bit more diversified when you think about, well, not towards the handset market.