Micron Earnings Results… And Are Fed Rate-Hikes on the Horizon? 6/24/26

0:01Live from the Nasdaq market site in the heart of New York City Times Square. This is Fast Money. Here's what's on tap tonight. Memory restored. Micron moving sharply higher as revenue quadruples in the quarter. We'll go inside the numbers, get all the details from the conference call coming up. Plus, mispricing rate hike odds. Why Wall Street might be getting it wrong on the Fed's next move. Later on, homebuilders hit the nail on the head. BABA continues its June swoon. And gold losing some of its shine, where the chart master sees the metal heading after dipping below 4K. I'm Carl Quintana in for Melissa Lee, coming to you live from Studio B at the NASDAQ.

0:34On the desk tonight, Carter Worth, Dan Nathan, Guy Adami, Tony Wong of T. Rowe Price. Interesting market day, guys. Good to be with you all. Hold on. Don't do the royalty thing. No, OK, I won't do it. But we know, I know, right? Mount Rushmore, Carl's on top of it. Yeah, it was a fascinating day today. You know, you thought the market, the S &P was higher, gave up its gains late. What does that speak to? Does it speak to some of the technical damage it's been over the last couple of weeks? I think it does. And then you have Mike Ron in the after hours. And maybe that'll change the narrative tomorrow.

1:05But I still think some damage has been done that we're going to be talking about over the next couple of weeks. Let's begin with that big move in Micron. Shares are surging after hours as the company handily beats on the top and the bottom line. Comes as chips and the broader tech space have struggled this week. NASDAQ really unable to hold those early gains, posting a third straight day of losses, now down 4 % for the week. All of that, though, could change tomorrow as we watch Micron up here 14 after the bell. Let's get to Christina Partzinevolos and walk us through the quarter. Hey, KP. Hi, Carl.

1:36Well, the call is still underway, so I was just listening, and management dropped a number that really moved the stock after ours. 16 strategic customer agreements now signed, with actually 14 of them locking in roughly$100 billion in minimum guaranteed revenue just over the life of the contracts. And so these run on average about five years through 2030. And once they're all in place, Micron expects about half or more of total company revenue to be under these long-term deals. And that's the long-term strategic agreements we've been watching for and analysts really wanted to hear about. But now you actually have real numbers attached to them.

2:11On the CapEx front, fiscal 2027 spending is now guided above$40 billion, more than half of that increase going into construction, of course, as Micron pulls forward cleanroom capacity to keep up with demand. And then on the supply side, we know the demand backdrop. Everybody wants these memory chips. The company says DRAM and NAND should stay tight beyond 2027, even later than they previously signaled. So that is a strength for the long term. Put this all together. This is Micron trying to convince Wall Street that this isn't just another pricing spike. It's a structural shift with contracts now backing up the story, which could really provide a foundation for the AI trade in the coming days, guys.

2:53Christina, thanks for that. Christina Parts of Nevolos. Tony, is this an all clear in some ways for semis? Well, I definitely think the results are really strong. I mean, like really great gross margins, you know, these strategic agreements like suggest that there is something structural going on. I mean, customers have never like done anything like this. So I do think it's like pretty supportive of the bull case. Of course, you're always wondering about the cyclical aspects of it and like where is the demand destruction. But, you know, I think you do need HBM and DRAM for AI and it's becoming like more important.

3:21And HBM specifically is super hard to make. So it really rewards suppliers that can do it and have the technical prowess. Yeah, I mean, one of the issues, though, is that it takes like a couple of years minimum to kind of make these fabs, right, that are going to create this HBM, which you just said, Tony, is like not easy to make. And when you think about these long term contracts that K-Parts just spoke to, I mean, you can break these things. I mean, especially if there is a scenario where the demand pulls back. And so, you know, we've seen this in almost every tech cycle with a company like Micron.

3:50You know, they're slow to react to demand. They build out capacity. And by the time they actually get the capacity online, then you have a pricing situation. We've already seen this from the Koreans that they are going to compete to some degree on price. So if you get excited about the fact that this company just put up an 80 percent gross margin, I mean, that's as good as it gets. It's not going to get any better from here. And so, you know, if you're buying the stock at twelve hundred bucks, whereas trading a couple days ago, you know, up 14 percent or something like that. I just think it's a tough way to kind of chase this trade right now because it really is one of the last bastions, if you will, of the excitement in and around the AI infrastructure built.

4:28Just look at the way the hyperscalers, which are their biggest customers, have been trading over the last couple of months. Yeah. What, MAG7's underperforming S &P by, what, 10 points or something for the year? Yeah. Something like that? Which is, you know, if you had told me that in the beginning of the year and said, OK, guy, you know, what's going on with the broader market? I'd say we're in a lot of trouble here, yet here we are basically at an all-time high. the last week or so notwithstanding. The quarter's remarkable, and I'm someone that's been a skeptic, a skeptic through the lens of history.

4:53And history is a highly cyclical, highly commoditized company that you don't buy when it's cheap, you buy it when it's expensive. Obviously, they've changed the narrative, and it looks like it's here to stay for a period of time. 81 % operating margins are extraordinary, and the growth is as well. The question you have to ask yourself is when the music stops, what kind of moat is around the business, and how long will it last and how long will this cycle last? Because when you see any glimpse or hint of a slowdown, it changes dramatically. And if you want proof positive, go back to March and look how quickly the stock went from then an all-time high of 450, if you remember, down about 320 over the course of a couple of weeks.

5:32It seems like a blip now, given where we are. It was a big deal then. I know it was because you guys were talking about it. Carter, to Dan's point about gross margins, I mean, there is some discussion tonight about how these numbers kind of make NVIDIA margins look like little brother margins. I guess NVIDIA is practically a value. But, I mean, you guys are covering the main subject, which is cyclicality. I mean, for instance, this stock has had six instances where it's dropped more than 50%. In 2024-25, Micron dropped 61%. We know in the dot-com boom, it lost 98 % of its value. And here for fun is a headline within the past three years.

6:10quote, micron sets 10 % job cuts due to supply-demand imbalance, memory chip glut, profitability expect to remain challenged, larger than expected, court of loss, substantial, worse supply-demand imbalance in a decade, collapsing memory. This is all in the last three years. It's micron. It's cyclical. Everybody knows this. Hard to know when the cycle changes, but if that's now what we were hearing three years ago, it's the equal and opposite moment. Just as things get loved, then they get hated. You know, take measures. Reduce exposure to this theme. What's our general view, Dan, on just the Qs in general, which I think are obviously going to be up after hours, but like the volatility, the inability to catch this dip over the last few sessions?

6:56I mean, something if you just look at the Sox also, I mean, the volatility bans have been widened dramatically, right? And they've been hanging around at these all-time highs. And when you think about the QQQ, I mean, this is, in my opinion, this is one of the best ETFs. I love it that the top 10 names make up 50%. I'm not being sarcastic about that because you don't have the idiosyncratic risk as a micron moves up into those top 5%. Is that keeping it kind of bid here? Yeah, no doubt about it. But we've also seen, to your point, some of the other large names in this ETF or in the index in particular, the NDX, they've gone sideways.

7:29They're underperforming, as you just mentioned. So I just think there's the opportunity to kind of see rotation within the NDX or the QQQ. And, you know, to me, it's also one of these things that, yes, we will have a pullback in this entire theme. And we're going to see stocks. Hey, Microsoft's down 30 percent from its all time highs last year. And if you don't think these stocks can get cut in half to what, you know, Carter just said, like you're just not looking at history properly. So the QQQ, it might be an opportunity as a perfect hedge right now, in my opinion. I just talked about that concentration.

7:59It goes both ways. Yeah. Buy the cues. Is that the lesson? Well, look, I think that, you know, there's a fascinating conversation because every semiconductor playbook that you have historically say sell the stocks here. That's why it trades at five times right now. So I think there's a lot of skepticism. And I think you have to look at, like, what the driver of the driver is, which is what? Agentic AI and the consumption on the demand. And so demand is really inflecting. I think you see it in a lot of the data. And then meanwhile, supply is really constrained. Like, so I think you have, you know, some cards to play that are, like, suggesting of the bull case.

8:28But, of course, you always have to, like, be aware of the down cycle. I also want to come back around later to what Mike Run said tonight about humanoid robots and the amount of memory those take relative to an L2 vehicle, let's say. But we got some breaking news out of the White House tonight. Let's get Damon Jarry's with that. Hey, Damon. Yeah, that's right. We just heard from President Trump here in the Oval Office. A short availability with reporters in which he was sharply critical of the big oil companies. He singled out Exxon, Chevron, BP, Shell and others. and he said they are responsible for the gas prices at the pump not coming down fast enough for Americans.

9:02He said he thinks gas at the pump should be about$2.25 a gallon. He said that despite the progress he's made in negotiating an end to the war in Iran and the flow of oil resuming from the Strait of Hormuz, he's been frustrated with what he sees as a slow-moving gas industry in lowering prices at the pump for American voters. So he continued to hammer that theme. He also said that he's going to not sign this housing bill. This is a threat that he made earlier today. Not sign it until the Senate takes up the SAVE Act, which is an electioneering bill that he wants to see passed up on Capitol Hill.

9:38The problem with that is that the housing bill passed with pretty large bipartisan support. The SAVE bill doesn't have the votes to pass. The president is demanding that the Senate take up the bill he favors or he's going to hold back the bill that they favor. He said, ultimately, nothing in the housing bill is all that relevant. The key to housing is interest rates. He wants interest rates to come down. And one other note, guys, we're seeing now some of the defense industry CEOs arriving here at the White House just within the past half hour or so for a meeting that we think is about to get underway here behind closed doors at the White House between the president and the defense sector.

10:17The president has been sharply critical of the defense sector in recent weeks. He has said that they're not moving fast enough to produce munitions. The White House maintains that there is no lack of supply of military munitions after the war in Iran. But nonetheless, they would like to see the speed and the quantity of munition production increase. That's what the president is likely to say to the defense sector here behind closed doors any minute now, guys. Back over to you. Long day for the president. And as you said, Damon, defense, oil and gas and housing, all with some policy crosswinds today.

10:50Thanks. Eamon Javers. Big banks passing the latest Fed stress test today in just minutes after a host of the biggies announced some div hikes and others. Leslie Pickers got some details. Hi, Leslie. Hey, Carl. Yeah, Morgan Stanley raising its dividend by 15 percent to$1.15 per share. Goldman Sachs intends to boost its dividend by 11 percent to$5 per share. and J.P. Morgan bumping its dividend up by 10 % to$1.65 per share and authorizing a new$50 billion buyback program beginning July 1. The dividend hikes are subject to each board's approval in the third quarter. And to your point, CQ, these announcements come after the Fed's stress test, which found that all 32 banks remained above their minimum requirements against the hypothetical recessionary scenario.

11:35The firms absorbed more than$708 billion in total losses and capital declined only about 1.6 percentage points in aggregate. You could see that relative to history there. However, this year's results won't impact the bank's required capital levels because in February, the Fed voted to maintain the current requirements at each bank until 2027 when the new rules, these reformed rules, can be calculated based on public feedback. The test itself was pretty similar to the one from last year. This year's included a hypothetical global recession with an unemployment rate peaking at 10 percent and a 39 percent and 30 percent decline in commercial real estate and housing prices, respectively, Carl.

12:17Leslie, thanks so much. Let's trade some of those. Guy, you impressed with the way financials have shaved some year-to-date losses? Yeah, I am. We've been if you watch this show, Citibank's been a name we've been talking about. You know, we made the math problem. One hundred fifty dollar stock. It basically has traded over the last couple of days. Is J.P. Morgan at an all-time high? This is sort of, if you think about what J.P. Morgan just said,$50 billion stock buyback. Jamie Dimon has made the point on a number of times how expensive he thought his own stock was. But like the market, you know, we get that it's expensive.

12:45We also understand we've got to be in the game. And that's what you see anecdotal with this. Yeah, the banks have traded well. I think they're as well capitalized as probably they've been in 25 or 30 years. The question comes down to, you know, what environment are we about to find ourselves in? And I don't know the answer. I thought it was a slowing environment. I thought it was a higher unemployment environment. That does not appear to be the case right now. Carter, favorites on your front regarding financials. And I mean, we're going into some of these earnings in a few weeks. Will this be a classic moving into those prints hot?

13:15Yeah. Well, one thing, the post-market reaction in some of these names is not particularly encouraging. But here's the main thing. It's Goldman and Morgan Stanley that have really taken off in a big way, the sort of two leading investment bank and brokerage. And J.P. Morgan right now is treating it a 15-year relative low to each stock. I like J.P. Morgan. I would do that as a pair. J.P. Morgan long, Goldman, and Morgan Stanley short. Yeah, Carter had a nice call yesterday from a technical perspective, you know, take some profits, take measures in the Goldman and the Morgan. I just find it fascinating that Morgan Stanley and Goldman Sachs, for that matter, Morgan was up 50 % at its highs just a couple days ago from its March lows.

13:56When you think about that, in an investment bank like this, if you're getting that geeked up about being a co-lead on the SpaceX IPO, they compressed fees. I mean, it was absolutely amazing. I mean, it was almost a rounding error that a lot of these banks made in their revenues for Q2. And so I just don't get it. I mean, the chances of getting both Anthropic and OpenAI in Q3, to me, aren't particularly high. So if you're buying these stocks up here on this massive, massive run in the last few months, I just don't think that makes a whole heck of a lot of sense here. Yeah, Goldman holding$1 ,000 pretty easily here.

14:30Let's get to Bitcoin today, breaking below$60K, as you may know, hitting the lowest level since October of 2024. It's the third time this year the crypto has traded under the$60 ,000 mark. Crypto link stocks falling in kind. Strategy now down over 9%, roughly 80 % off the all-time highs it hit in the fall of 2024. for Robinhood, Coinbase, and Mara Holdings also sharply lower. You got some thoughts on what's happening if they're trying to press strategy in particular on this front? Yeah, I mean, I've been watching Bitcoin and crypto, and it's just been interesting because I think that in terms of risk assets, a lot of capital is just flowing into the AI trade, right, infrastructure, and this is on the opposite side.

15:05And I think, you know, I think on, you know, strategy, there probably are some bears out there that are confused by, you know, micro strategies that could kind of highly buy or sell Bitcoin, you know. So I'm just kind of on the sidelines here. But to me, there's clear fundamental strength elsewhere. Yeah. You know, one of the things that has been lurking here as the price has acted so poorly, we had tons and tons of catalysts over the last couple of years. New administration was going to be regulatory. It's going to be ETFs. It was going to be a whole host of other things in the background, though, you have these treasury strategies.

15:34They just haven't proven to add any value to, you know, the underlying asset. Right. And the underlying utility of this blockchain in general, if you're talking about Bitcoin. I mean, Web3 never materialized. DeFi is not really materializing. If you have a view that, you know, some of these blockchains that have just gotten cut in half in the last few months are going to be the backbone of this DeFi boom, well, it's not happening, right? And so at the end of the day, I look at these treasury companies that are meant to do something that I don't think they're meaning to do because all of these companies have basically seen the value of the asset that they're buying with leverage cut in half.

16:10And I don't know how you get, how do you get whole in that once again? The enthusiasts will say we've seen moves like this a number of times before peak the trough. And that is factually true. I think it's a different backdrop now. I think this hawkish Fed is doing nothing to help the price of Bitcoin. And what I've said for a while, we had Anthony Scaramucci on a week and a half or so ago. I made the point that I think the market is shooting against micro strategy or strategy now in terms of what their holdings are and the average price. He countered saying that they were positioned for that.

16:39But it's clear the market is up to something else right now. And just technically, and Carter's brought this up, it does not trade well. It appears as though low 50 ,000s are in the cards here. Yeah, and Carter, I'm sure, I mean, we're putting up strategy here, but the preferreds got a lot of eyeballs today in their intraday action. Yeah, I mean, it's a testament to relative strength, right? The good relative strength in semis, it was the same in precious metals until it isn't, or oil until it isn't. And this is relative strength momentum to the downside. Respect it. Stay away. Thanks, guys. It's coming up, a homebuilder's strong foundation as KB Home surges after results.

17:16We'll get details from that quarter and the impact on the sector after the president cancels the signing of that landmark housing bill. And there's the China tech wreck. If there's any bounce in store for BABA as K-Web hits some fresh 52-week lows, don't go anywhere. Fast Money is back in two.

17:34You're watching Fast Money here on CNBC. We'll be right back. Welcome back to Fast Money. The housing sector surging today despite the president's canceling of that bipartisan housing bill signing, which was meant to improve affordability. Just in the last hour saying interest rates need to come down. Builders all rallying as the expectation is the bill will become law within 10 days. KB was the best performer of the group after beating on earnings this week. While home improvement names like William Sonoma, Depot and Lowe's all popped today as well. KB, Carter, it's about a three-month high. They really didn't give up any gains after the president canceled that signing.

18:13No, and as you say, derivative names, Mohawk, you know, people in the carpet business and paint and all sorts of things. It's very thematic. What is interesting is that this housing-related theme was exhibiting particularly good price action over the past three, four sessions before this pop, meaning as the market was pulling in no weakness at all in any of these names. And now some news related strength sort of confirming, if you will, the positive behavior over the prior, again, four or five sessions. New homes, though, were a disappointment. We talked to TriPoint this morning on Squawk on the Street.

18:52They didn't think this bill was going to be a panacea for supply. No, and it's and it will not or it won't. And the housing numbers were bad. But, you know, sometimes bad news is good news. And it's funny. The president obviously wants lower rates, which I understand. Somewhat counterintuitively, this hawkish Fed might be providing him with exactly what he needs, because if you look, tenure yields have actually sort of backed off since Kevin Warsh has been talking tough. And I think that could potentially continue. So I say leave well enough alone on the Fed front. I'll say this quickly about Home Depot.

19:22Stockton made its all time high in the fall of 2024. Think about that in a market at all time high. Carter will look at this and say, we're about to break a downtrend that's been in place since the fall of 2025. And you had one of the biggest single day moves to the upside today on decent volume. So Home Depot might be very interesting here. Yeah. You know, on the 30-year fixed, you know, it hasn't come in a whole heck of a lot. I think we had about a 7 % number, maybe about a year ago, and it kind of banged around up there. But we are at like 6.58 % right now. So if you're talking about getting a little relief on affordability on a day that saw the tenure, as Guy just mentioned, come in 10 basis points.

19:56I mean, that's a big move. I mean, you know, and I would have thought that that would have given a little gusto. You know, you had that crude oil move, which is massive. And I got to tell you, mea culpa, I thought yesterday on the show, I just thought that crude probably has a floor in the mid-70s. And to take that premium out, man, oof, that was kind of nasty today. So we crude and, you know, the tenure coming in 10 basis points and then having a lot of these sort of cyclical spots like the home builders move like this, I would have expected the S &P to be acting a lot better. Yeah, given what yields did today.

20:26That is interesting. We've got some more news on the banks. Leslie Picker's been watching it all afternoon. Hey, Leslie. Hey, Carl. Yeah, we got a first look at a statement from Bank of America Chair and CEO Brian Moynihan before it's released more broadly. The firm will say that they remain committed to delivering for our shareholders and will make their next quarterly common stock dividend announcement following the July board meeting. They have basically increased the dividend every July over the last 10 years. So kind of based on that cadence, they plan to make any kind of announcement at that time as opposed to post the Fed stress test results, which, of course, as we've been talking about, maintained current capital levels.

21:10So there wasn't too much in the way of surprises there. So Bank of America opting to follow kind of their normal cadence to make those dividend announcements in July. Send it back to you. Really quick, Leslie, are we arguing tonight that JPM has the most aggressive news on capital returns? I think that's right with the buyback plan of$50 billion. I mean, in terms of percentage, based on the ones that we've been studying, BNY had the biggest hike for its dividend of 19%. But in terms of absolute buybacks,$50 billion, pretty significant. Morgan Stanley's of$20 billion for reauthorization there, also significant.

21:47So more what we've seen on the dividend side, hiking dividends than actual buyback programs. But J.P. Morgan and Morgan Stanley, kind of the outliers there. Leslie, thanks. When we come back, more trouble for China tech. Alibaba pacing for its worst month in more than three years. How our traders are positioning in the mainland moves still ahead. You're watching Fast Money live from the Nasdaq market site in Times Square right back after this.

22:19Welcome back to Fast Money. Alibaba dropping nearly 3 percent today after Anthropik said in a letter to Congress, the company illicitly accessed its clawed AI model using thousands of fraudulent accounts. This adds to pressure on the China tech giant, which is now on a seven-day losing streak on pace for a seventh straight losing week as well. The broader China tech trade also feeling the pinch. K-Web ETF trading at more than a two-year low. Tony, what is going on here? I know you guys are all watching this one. Yeah, yeah. Well, I think that distilling the model has become a really important point because if you don't have the GPU compute or the AI infrastructure, you're trying to copy like 80 % of the value of these frontier models with 10 % of the cost.