In short
Fast Money episode focuses on a Wall Street “re-rating” driven by AI-linked stocks, especially Micron, plus a few other market movers. Micron: Shares jump nearly 20% and top $1T market cap after UBS triples its price target to over $1,600, citing better visibility into long-term agreement opportunities and more durable demand. The panel debates whether this is structural AI demand or a supply/demand cycle; they note memory has historically been cyclical/commoditized and warn valuations may assume no correction.
Notable examples
UBS’s free-cash-flow estimate (about $400B from 2027–2029), comparisons to Nvidia-like multiples, and concerns about new fabs increasing supply by 2027–2028.
Guest
Morningstar senior analyst William Kerwin (sell rating; $455 target) argues it’s a strong upcycle but still a cycle; he watches fab ramp-ups and sequential price deceleration. Other segments: Delta record close despite cancellations (pilot availability up); health insurers slide (Elevance, Molina, UnitedHealth); Knicks reach NBA Finals and potential MSG split; Salesforce earnings and AgentForce.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOMicron's Market Surge
1:42 to 4:30
Discussion on Micron's stock performance and the impact of AI on the chip market.
“Micron soaring nearly 20 % to top a trillion dollars in market value for the first time ever, leading both the S &P and NASDAQ 100.”
Evaluating Memory Stock Dynamics
4:30 to 8:13
Analysis of the cyclical nature of memory stocks and market expectations.
“It's going to spur a whole new, you know, app developer sort of cycle here and preserve that iPhone moat.”
Expert Insight on Micron's Future
8:13 to 13:12
Interview with William Kerwin discussing the future of Micron and the memory industry.
“That's what we're pricing in at this point in time.”
Looking Ahead in the Memory Cycle
13:12 to 14:03
William Kerwin outlines key indicators to watch for in the memory market cycle.
“He's got a$455 price target and the loan sell rating on the stock, according to FactSet.”
Analyzing Micron's Market Dynamics
14:03 to 17:06
Discussion on the demand-supply ratio affecting Micron's stock performance.
“To us, we see this as a particularly strong and particularly durable upcycle, but a cycle all the same.”
Long-Term Contracts and Market Cycles
17:06 to 19:30
Exploration of the implications of long-term contracts on Micron's demand and cyclicality.
“The fact that you have multiple players that can offer fungible chips and that are not coordinating how they build out supply.”
Concerns Over Stock Valuation
19:30 to 21:12
Debate on the valuation of tech stocks like Intel amidst changing market frameworks.
“I think that's an interesting take on the contracts.”
Updates on the Iran War and Economic Effects
21:12 to 22:55
Coverage of the Iran war situation and its implications for the market.
“Brent crude rising more than 3 percent as Iran vows to retaliate against U.S.”
Delta's Resilience Amidst Challenges
24:21 to 24:44
Discussion on Delta Airlines' performance amidst industry challenges.
“A bouquet from 1-800-Flowers says, you're my everything.”
Delta's Resilience Amidst Challenges
24:48 to 27:32
Discussion on Delta Airlines' performance amidst industry challenges.
“Shares of Delta surging more than 4 % to set a record close today as Memorial Weekend kicked off the unofficial start of summer travel season.”
Show all 21 chapters
Market Opportunities Amidst Stock Records
27:32 to 28:04
Analysis of investment opportunities in high-performing stocks.
“Under the weather, health insurance stocks deep in the red today.”
Market Opportunities Amidst Stock Records
28:34 to 29:01
Analysis of investment opportunities in high-performing stocks.
“That means any prospective driver goes through a multi-step screening process, checking for any impaired driving or criminal offenses.”
Market Overview and Health Sector Discussion
29:35 to 31:06
The hosts analyze the market, focusing on health insurers and United Health's performance.
“I mean, health insurers, Elevance Health United, Molina Healthcare looking a little under the weather today.”
Investment Opportunities and Market Strategies
31:06 to 34:19
A private wealth manager shares insights on current investment strategies and opportunities in various sectors.
“The Nasdaq and S &P setting new records to start the holiday shortened week, both on four day winning streaks.”
Real Assets and Commodities in Portfolios
34:19 to 36:24
Discussion on the importance of real assets and commodities in current investment strategies.
“I mean, we're talking on a day where Micron is up 20 % and is a trillion-dollar company.”
AI's Impact on Business and Investment
36:24 to 38:29
The conversation explores how AI is integrating into various sectors and affecting investment strategies.
“Well, when we when we think about real assets, we're thinking about some of the things inside the market, certainly outside the market as well.”
Energy and Market Dynamics Discussion
38:29 to 39:53
The hosts analyze the energy market dynamics and discuss related investment opportunities.
“AI is really changing the way business is getting completed and the efficiency of it versus the actual output.”
NBA Finals and MSG Implications
39:53 to 42:01
The hosts discuss the implications of the Knicks' success on MSG's business and potential valuation changes.
“How the nearly 30-year Finals drought could supercharge a split when Fast Money returns.”
Valuations and Ownership of Sports Teams
42:01 to 44:10
Explore the factors influencing the value of sports franchises and their ownership dynamics.
“I don't think there's any particular rush from the Dolan side to sell either of these teams.”
Salesforce's Upcoming Earnings Report
44:11 to 46:00
Discussion about Salesforce's expected fiscal Q1 earnings and its impact on the software sector.
“Investors awaiting Salesforce results after the bell tomorrow.”
Final Trades and Audience Engagement
46:01 to 46:48
Hosts share their final trade recommendations while engaging with the audience.
“I tell you what, like a deer through the woods, UNH, it will be back.”
Transcript
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0:31Karen Finerman:Never bet against American grit or American energy. Through innovation, Venture Global is not only building some of the largest energy facilities in the world right here in the United States, but delivering American energy at a fraction of the cost and a fraction of the time. So while others are busy talking, we're busy building. That's Venture Global. That's unstoppable energy.
1:02Tim Seymour:Live from the Nasdaq MarketSite in the heart of New York City's Times Square, this is Fast Money. Here's what's on tap tonight. Good memory. Shares of Micron, another chipmaker soaring again today. And they're not the only AI-related names well in the green. Is this a sign that the whole space is getting rereaded? And is it too late to get in on this rally? We'll debate that. Plus, shares of Delta Airlines take off. What is weighing on UnitedHealth stock? We're counting down to Salesforce earnings. and the Knicks notched their spot in the NBA Finals for the first time this century. What it could mean for New York, ticket prices, and the future of the home court, Madison Square Garden.
1:35Tim Seymour:I'm Melissa Lee. Come to you live from Studio B at the NASDAQ. On the desk tonight, Tim Seymour, Karen Feinerman, Dan Nathan, and Guy Adami. We start off with a re-rating game seemingly playing out, continuing to play out on Wall Street. Micron soaring nearly 20 % to top a trillion dollars in market value for the first time ever, leading both the S &P and NASDAQ 100. That move coming after UBS tripled its price target on the stock to more than$1 ,600 as analysts get more bullish on the company's long-term agreement opportunities. Other chipmakers also catching a bid in a big way. In fact, 17 stocks in the iShares Semi ETF notching all-time highs today.
2:13Tim Seymour:Some of the biggest winners include OnSemi, AMD, Marvell and Applied Materials. But it's not just Semi surging. Check out Dell rising over 3 % after Mellius Research upped its price target to 380. saying that it's an AI stock that deserves a higher multiple given strong execution. And Apple hitting fresh records intraday, but closing fractionally lower to snap a four-day winning streak. The move coming ahead of its closely-watched Worldwide Developers Conference on June 8th, in fact, where investors expect to hear more on the company's AI progress. So are these record rallies signaling a broader re-rating for the AI trade?
2:47Tim Seymour:And I should note this whole thing, NVIDIA did not move higher again today. Tim, what do you think?
2:53Karen Finerman:Well, you know, the fact that UBS has come out and put a triple on their rating should not be a reason that people suddenly say, wow. And that's not what we're doing here, I understand. And in fact, it's really just talking about a cartoonish move in Micron after weeks of cartoonish moves. So I do think that in the memory space, I get a little bit more visibility that analysts now have for medium to long term contracts, removing some of the cyclicality of pricing and that we all know hyperscalers are willing to lock in really big pricing here. So I think I actually think the more interesting part of this is the part of the Nasdaq, which includes I think Apple's move is more interesting to me, not because I'm long, but because I think this is a 25 percent move since the end of the war trade.
3:42Karen Finerman:And it's something that I think is part of what's pushing mega cap stocks stocks higher. So I look, I don't know that we're rewriting the market suddenly now. And I know there are a lot of people wondering, is there something left to do in memory? And if you listen to UBS, there certainly is. I mean, it's trading, you know, six times 27 is trading 15 times 29. And those aren't. In fact, they say it should be trading more like Nvidia, which is, we know, somewhere kind of eight or nine turns higher.
4:10Tim Seymour:Yeah. I mean, we grouped these three stocks together, not because we think the moves are similar, but the narrative is similar in that all of a sudden now people are adjusting for a new AI reality, if you want. And they are factoring that into the model. So for Apple specifically, Mellius Research also raised its price target today saying, you know, get excited because Siri is going to be amazing. It's going to spur a whole new, you know, app developer sort of cycle here and preserve that iPhone moat. So there's this notion here that all of these deserve, have a new narrative and deserve a new rating.
4:43Which, you know, hard for me to argue because the stocks have been trading that way. In terms of this, you know, the memory space, look, historically very cyclical, very commoditized. the wrong time to buy these stocks again historically is when they're at their cheapest. I think what analysts are saying now is, you know what, you've got to throw that whole cyclicality thing out the window and you've got to re-rate in terms of a valuation that might make sense in comparison to some of these companies that have these secular tailwinds. So if you think memory now has gone from commoditized, cyclical to this new paradigm, then these stocks are crazy cheap.
5:15If you think the competition is coming and there's going to be the other side of the mountain when demand starts to wane, then they're not as cheap as they look. Yeah, and, you know, if we're talking about re-rating, right, so we're talking about a fairly narrow part until Micron hit that trillion-dollar number. I mean, from a market cap perspective, these weren't, like, huge names, but they're seeing massive, massive numbers. I mean, just look at Micron. I think three, you know, fiscal years ago, they did, like,$15 billion in revenue. They're expected to do$110 billion this year. They had negative margins, like, four years ago.
5:43They're expected to have mid-70s right now. So this is clearly something that is fairly cyclical. So let's be clear, the company didn't see this coming because they didn't put extra capacity on. And so I'm not sure what has changed. Maybe you're seeing broader orders. We've seen that. I mean, NVIDIA's sales were up 85 % year over year. They're not slowing down. But when you look at the MAG-7, most of these companies are going to see earnings deceleration next year. At least that's what consensus is expecting. So when you talk about re-rating, I don't really care that a group of this, like the last sort of bastion of this trade, is starting to perform.
6:15And it's performing in a crazy, crazy way. If you're long these things, you're making a, you know, doing great. But at some point, they're going to get cut in half. And I know that's really hard because when you put, you know, a$1 ,600 price target on a stock that was$600 yesterday, it's going to$1 ,000. OK, we know this, right? Stocks that are$9 or$90 or$900, they go to, you know, that nice round number. Is it going to go to$1 ,600? Well, I remember December of 1998, Henry Blodgett, then in the internet, said Oppenheimer put a, on Amazon, he put like a$400 price target. The stock was trading at$200.
6:45Within two weeks, it was at 400. That's the sort of thing that goes on. A guy calls it animal spirits, but that's where we are with a lot of these names right now. And just understand that, you know, like I don't know if this is investing, but this is chasing. You know what I mean? And it seems like it's a great trader's market for it. So I agree with everything that's been said. So we don't know when the demand dynamic might change. To me, it's also very unclear when the supply dynamic may change. And if those two things happen at the same time, which we've seen that in a number of cyclical companies, regardless of what what the underlying product is, that won't be great.
7:20But how far out is that? I don't know. You know, Tim talked about the the sort of more long term agreements, right, where you have you know what the cash flow is for some amount of time. It looked to me like some of them were variable. The first two the first two years of them were fixed. And then there was some flexibility on the pricing on the next three years. Still huge, huge amounts of demand. And obviously a steady stream of numbers will trade much better than a bumpy stream, even if the bumpy stream is a lot more dollars over the same period. So we're seeing a little bit of that. All right, don't treat these as commodities anymore.
7:56Don't treat these as cyclical businesses, rather. Treat these as longer term locked in. I'm always a little skeptical of locked in, but I do see for the next couple of two years. But for two years, yes. After that, it's right. Where does the stock peak into two years of run, two years or four years of run?
8:14Tim Seymour:I don't know. Right. That's what we're pricing in at this point in time. Yes. Two years out.
8:20Karen Finerman:Yeah. Well, the fact that let's go back to the UBS report, because this is what people are citing for today's move, is is that they say four hundred billion dollars in free cash flow from twenty seven to twenty nine. So that's a little more than two years. In fact, that's kind of, you know, that's three years. And that's also more of a medium term dynamic where this is the true question. At what point is this a real re-rating or is this just a longer, you know, longer period driven by extreme demand and a supply disruption that we know is more intense? I think it's probably somewhere in the middle.
8:53Karen Finerman:I think it's it's there's no question to me that there is more pricing power. And I think for the for the foreseeable future, I know it's not exactly the right comparison. But if you think about what we're saying in commodity land, where there's going to be restocking and either way, when you open up the straits, commodity prices stay higher. You can't tell me that hyperscalers and actually big industrial companies aren't going to also probably overbuy and begin to make sure that they don't have a shortage. And I think some of this should be feeding into that same space. So, yeah, I believe that the valuations here are not stretched.
9:28Karen Finerman:And I believe it's right to think about valuations a bit differently. Dan mentioned that I use the term animal spirits. I've used the words individually. I've never linked them together. I just want to be clear. I thought you did. I thought you did. Your hair looks good, brother. You get hair cut? Yeah, I did. What are animal spirits? You know, when people just said frenzy, like, you ever see sharks around, like, you know, a dead whale? I mean, a lot of things happen. Have you? Have you? Have you? Oh, I have. I watched the history of Wildlife Network. Sharks around. On Friday, President Trump, and nobody wants to get.
10:00Tim Seymour:Yes, at the rally in Suffern. Micron. Boy, Micron is great. It's spending billions of whatever you said, billions of dollars. What a great company it is. On the Clay, New York site. So I don't think it's coincidence now. Again, if you want to use that term, Dan, that feeds into this absolutely. And nobody wants to get on the other side of something like that, having seen what happened with like an MP or an Intel. It's worth noting, though, over the last few days, and I'm sure you guys caught all this, you know, Uber's COO is talking about how they're pulling back their engineers or programmers from using Cloud Code, and they're blowing through their budgets.
10:33And, you know, you think that we thought pricing of tokens were coming down. Well, actually, they're going up now because of consumption. A lot of these companies are, like, just going hog wild with this sort of stuff. But Uber is pulling back now. They're saying they're not. Can I ask you a question?
10:45Karen Finerman:Is hog wild a form of animal spirits? Different. Hog wild. It kind of is. I think so.
10:52Tim Seymour:I think so. Hog being an animal and wild being some sort of a spirit. If you remember in Arkansas, high on the hogs, remember that Sports Illustrated cover with Sidney Monkley? I do. That's a neat thing, though. Dan, would you like to finish yourself? Wait, you're jumping in here? You don't jump in. What are you doing with these guys? We've got ground to cover here. Yeah, we do. I'll just say, so the Uber thing is really interesting to me. Maybe it's a one-off sort of thing. There's similar reports about Microsoft. So here's the thing. If you're not seeing tech companies adopt this technology right now or they're using too much of it and they're not seeing the productivity or the efficiency, then you're going to have a hard time seeing that among other industries, right?
11:28And so that's the sort of thing where at some point you just may have a real slow sort of pullback. It turns into a grind. It turns into a grind. And then it comes all at once. And so you talk about what, you know, we talked about Oracle. What was it? RPOs and this and that, whatever. Oracle still went down 65 % despite the supposed visibility that they had. And there's also this notion, well, it's contracted. It's going to happen one way or another. That's not true, okay? If these companies, they're not going to, they'll cut these contracts. They will break these contracts if they have to, if it means that they're going to be like, you know.
11:59Tim Seymour:Pay a penalty. It's going to be a drop compared to what was actually believed to be in the contract. Yeah. I really have a hard time, you know, just kind of putting these things together is that, okay, so a company like Micron, they're always really careful. If they put on too much capacity, that's a disaster. You see how their company, they go from negative earnings to positive earnings. What's going on here is really different. They book these revenues. They book these earnings. But to have the visibility out two years and to start pricing it on that right now, that's what happened to Oracle when the market wanted to reward them for those contracts and give it to them in market cap terms.
12:30It didn't go so well. Some of these are going to end similarly.
12:32Karen Finerman:Well, but couldn't we say that Micron, we know, is locking in into low margin business? I mean, the whole point here is these guys have tripled prices and we're locking them in for the long term. I mean, I hear where you're going. I understand that, too. But the one thing that's also different here is not only is there demand, which obviously leads to higher prices, but prices have tripled. I mean, the numbers that Samsung just put out in their first quarter were bigger than their previous nine quarters combined. And Samsung's still really cheap. So part of it is we don't even know where the price of these things are going to settle in, even when supply catches up a little bit.
13:09Tim Seymour:Let's get more on Micron and the memory trade. Let's bring in Morningstar senior analyst William Kerwin. He's got a$455 price target and the loan sell rating on the stock, according to FactSet. William, welcome to the show. When you hear about these analysts, price targets,$16.25, you know, in the thousands, what is your number one sort of gripe with the assumptions that they make to get there? What do you think is the fallacy in that narrative? Well, thank you for having me, Melissa. I think this really comes down to whether or not this is structural, long term, indefinite, kind of a permanent change in the memory industry, as you've been talking about, or whether this is just the latest iteration of a cycle.
13:54And every cycle does look a little bit different, but we come in more on the latter. We think the market is trading as if it's the former. So if you're a bull on this stock, you're saying that AI is creating this structural demand wave that's going to benefit Micron for the next decade, if not longer. To us, we see this as a particularly strong and particularly durable upcycle, but a cycle all the same. And really, we root this in being a bear on this stock for us is not being a bear on the demand side of the equation and what AI is looking like. This is all about the ratio of supply to demand.
14:33And when we look out to 2028 in a couple of years, we see a ton of supply coming online from not just Micron, but all of its peers. We see supply coming online in the West, in China as well. And we think this is all about, you know, after these prices have doubled, have tripled, have done even more. Are they going to come back down to earth eventually? And that's the way that we value Micron today. All right. So, William, ahead of that 28-29, what should you be watching to sort of that's going to be the sign that the cycle actually is in play? What's the one thing you'd be watching for? Well, you know, you're right.
15:08The question is, how high can this go, even if it is a cycle? We really look at those fabs coming online, even in the latter half of 2027, to start to see some incremental pricing movement. And if that causes just the hint of a deceleration or even a bit of a decline sequentially, even if prices stay high, that could pretend a lot more of that happening as more of those fabs come online in 28. And that could definitely spook the market.
15:35Karen Finerman:Hey, William, Tim, appreciate you kind of staying in the pocket on this one because it's not easy. And I guess my question for you is 455 probably. I don't know when you got to 455. My guess is you've had to upgrade this stock along the way because 455, I realize, is still now probably down 40 percent off of the top. But it's it wasn't a month and a half ago. So I'm just kind of curious. Was there some element, though, of your call that you you were kind of pulled up? Well, definitely. Our valuation has come up over the last two years. And I think it's no surprise that the amount of scarcity of this supply and demand, it's caught us by surprise.
16:15As you talked about earlier, it probably caught management by surprise. They had not built for this demand. But there's an amount of bullishness in our take. So we're more bullish today than we were two years ago. AI demand is a structural driver. And yet we still come in below where the market is at. And this is just a more nuanced take. We think that this has really structurally improved what Micron can look like over the course of a cycle, both at peak and at trough. We think that when it ends up somewhere at mid-cycle sometime in the long term, it's going to look a whole lot better than it would have over the last cycle.
16:52And yet we still can't justify just how high it's going today, much less a$1 ,600 price target, because we just think that implies that this is going up and to the right for the long term without any sort of correction in the interim. And we just can't justify that when we think about the commodity like nature of this technology. The fact that you have multiple players that can offer fungible chips and that are not coordinating how they build out supply. The moment you get to, you know, a percent or two of oversupply, you can really see prices crash. And that's what worries us longer term. William, it's Karen.
17:27Thanks. First of all, thanks for being the only the only one out there to have a sell rating. That's sort of a interesting place to be. So on the demand side, though, have you been you talked about the demand is bigger than you thought, but how do you see it playing out over the next few years on the demand side spreading beyond hyperscalers? Well, over the next few years, we think demand looks very strong and these expectations keep going up as well. You know, I think it's become pretty consensus that memory is a key bottleneck to the performance of these AI models. And we've talked about Micron a lot on the DRAM side, on the HBM side, but this is playing into NAND, too.
18:09And I know that the show has talked about SanDisk in the past before. And now with models like technologies like KVCache, if that's familiar, in new generation AI models using more of both of these types of memory. So we really see no end in sight for the demand side of the equation. And again, it just gets back to when we get all of this supply coming online to fulfill this demand, is it going to be too much? And that ratio is really important. And we worry about those prices coming back down to earth. But certainly the demand side, we're very positive on and we think it just continues to accelerate.
18:45Tim Seymour:Should investors view with skepticism the long term contracts that these players have in place? I think with some healthy skepticism, for sure. This is not the first time that memory companies have talked about long-term agreements. We certainly think this is the most teeth that these long-term agreements have had in terms of financial guarantees. But really, the way that I would look at it is this is a hedge to some of the cyclical downside, but it does not eliminate the cyclical downside entirely. If you get customers walking away from these contracts, yes, they may have to pay you a certain amount of money, but that is not going to be nearly as much as what they are walking away from.
19:23So we see it as a bit of a hedge. We think they are a positive. But are they eliminating cyclicality entirely? I don't think so. All right.
19:32Tim Seymour:William, great to speak with you. Thanks for your time. Thank you. William Kerwin with Morningstar. I think that's an interesting take on the contracts. We had Ben writes this on on closing bell overtime and I asked him about the contracts. He said we don't question Microsoft's RPOs. We don't question Oracle's RPOs. So why should we question these contracts? The way he phrased it in terms of eliminating the downside but not guaranteeing the upside, I think is a pretty balanced view. You were just talking about the Oracle RPOs being not an RPO. They themselves, I think, questioned them. So I don't know if it would be similar to that, but that wouldn't be shocking.
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20:12But this is not just Micron and some of these other stores. Look at Intel. And I was very wrong. When they reported on April 23rd, the stock, you know, gapped up 27 percent or something like that. And I was going to go back and I went through this analysis. I mean, peak earnings and sales were back in 2021. They had 79 billion dollars in sales at five dollars and 50 cents in earnings. And they had like, I don't know, like 57 percent gross margin this year. They're expected to have a dollar 11 in earnings. Let's be generous and call it two dollars. Let's just say they have a couple more beats this last quarter.
20:42They beat by like 15 percent or something year over year in the earnings. And then in sales, they're expected to be down, I don't know, like$20 billion from their peak and expected to have 40 percent gross margins. So how do you justify the stock up 80 percent since then? You're basically using entirely new frameworks for how these companies are going to operate, how they're going to monetize their businesses and how long these cycles are going to go. And I just don't know how you can't look at any of this and say this is really, really dangerous because it's stuff that we have not seen in 28 years.
21:11Tim Seymour:Turning at the latest developments on the Iran war. Brent crude rising more than 3 percent as Iran vows to retaliate against U.S. strikes. WTI crude meantime fell. CNBC's Eamon Javers has the latest. Eamon. Hey there, Melissa. CENTCOM is now pushing back on a media report this afternoon that the U.S. Navy had begun escorting ships through the Strait of Hormuz, saying in a statement that, in fact, U.S. forces are not currently escorting commercial shipping through the Strait of Hormuz. And that reflects the overall sense of standoff that we have today around the whole war in Iran. Despite what are described as intensive back-and-forth negotiations between the United States and Iran, there has been no diplomatic breakthrough.
21:53CENTCOM said yesterday that the U.S. had conducted what it called defensive strikes on targets in southern Iran, despite the ceasefire that remains in place. And the Iranians today threaten to retaliate for those strikes. And that means the uneasy balance of power continues. The United States military has been unable to eliminate Iran's nuclear program by force and unable to reopen the Strait of Hormuz by force as well. And the Iranians seem unwilling to concede anything at the negotiating table that they haven't conceded on the battlefield. Now, we didn't see President Trump on camera today. He remained out of view hosting meetings and attending a doctor's appointment today.
22:32And just within the past few minutes, the president has said that he'll host a cabinet meeting at the White House tomorrow instead of at Camp David, where it had originally been scheduled. That, he said, is due to weather issues. So it's not clear what exactly will be on the agenda for that meeting, Melissa. But you can expect that the topic of Iran anyway will be foremost on everybody's mind. Back over to you.
22:55Tim Seymour:Eamon, thank you. Eamon Javers. Coming up, Delta reaching new heights. Shares soaring to our record even in the face of mounting flight cancellations. how the airline is looking to bolster operations ahead of the summer travel season. Plus, health insurers taking a sick day. Elevance, Molina, UnitedHealth all getting hit to kick off the week. The headlines weighing on the group and what they need to do to get back on their feet. Don't go anywhere. Fast money's back in two.
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24:51Tim Seymour:Welcome back to Fast Money. Shares of Delta surging more than 4 % to set a record close today as Memorial Weekend kicked off the unofficial start of summer travel season. The move coming even as flight cancellations for the carrier mount. The Wall Street Journal reporting Delta is pacing ahead of the industry average this year. Pilot availability accounting for 35 % of cancellations, up from 7 % in 2024. Delta says it plans to ramp up hiring to prepare for summer demand. Sockers up 4.25%. Tim?
25:20Karen Finerman:Well, part of this is, I think, that they have shown their ability to be resilient, both in the face of higher fuel costs and they have higher margins and they're running better than anybody. I think at some point it was an interesting day because airlines had a great day, especially on this. It's another like, you know, war is over day. And so it was a great day for the airlines. But everyone else in the hospitality space got got creamed and got creamed because we had consumer confidence number that talk about delaying. So I love Delta. I'm a big fan. I'm a big bull as it comes to the airlines relative to their peers.
25:53Karen Finerman:I think it's going to be at 100 before it's at 50 bucks. I can tell you that. I believe that. So I wouldn't run too far away from the trade. But I think people do need to take heed of some of this dynamics where I think there are people that are waiting on trips, especially because they believe airfare will come down.
26:10Tim Seymour:Yeah. In terms of oil being down, rates being down, I mean, retail also didn't get a bit. And I thought that maybe even like a Walmart could get off the mat after earnings. But there's no bid today. It's back lower than the mat was yesterday or two days ago. Right. I know. You'd think. Although Delta, I got to say, I don't know if you've ever been to Delta One. Oh, it's amazing. It is amazing. And that whole resection of the plane of, you know, however many, very high premium. I mean, that's in their strategy for a while. It's really working. Those seats are all full. They're all high margin. It's working.
26:44And people are very loyal. Yeah. Greg Abel, I mean, the new Berkshire Hathaway, he just announced a couple billion dollar stock purchase. I mean, this is something Warren Buffett talked about years ago about his. I mean, they got into the airlines. They got out, I think, in 2020. It is fascinating, though, with consumer confidence where it is for a host of different reasons. I think one of them, you know, people are concerned about their jobs in an AI world. You still have the airlines straight in the way they are. It's very impressive. Expedia is where I go here. The stock's down from 300 to 220.
27:11This is a company that's supposed to grow earnings 20 percent a year for this year and next. High single-digit revenue growth, 90 % gross margin company, good balance sheet, trading at 11 times earnings, single-digit next year. And so, to me, if you think all this stuff is coming back, airlines breaking out to new all-time highs, I think this is one that probably makes a lot of sense here.
27:30Tim Seymour:There's a lot more Fast Money to come. Here's what's coming up next. Under the weather, health insurance stocks deep in the red today. What's weighing on the names, and how do you trade the stocks now? Plus, stocks keep hitting fresh records, but there may still be some opportunity in some of the priciest groups, where a top money manager is putting money to work and the sector she sees continuing to climb. You're watching Fast Money, live from the NASDAQ market side in Times Square. We're back right after this.
28:03Karen Finerman:Adventure Global. We think about what can be done, not what's usually done. Through innovation, Venture Global is not only building some of the largest energy facilities in the world right here in the United States, but delivering American energy at a fraction of the cost and a fraction of the time. So while others are busy talking, we're busy building. That's Venture Global. That's unstoppable energy. At Uber, every single driver is required to pass a thorough background check before they can start driving. That means any prospective driver goes through a multi-step screening process, checking for any impaired driving or criminal offenses.
28:45But the checks don't stop there. Every year, every Uber driver is background checked again, so the person picking you up today meets the same standards as the day they started. Hey, how's it going?
28:55Tim Seymour:Yeah, good. Thanks. Annual driver screenings from Uber. One more way Uber is putting safety at every turn. Learn more at uber.com slash safety. It's Charles Barkley here with Wayfair. And let me tell you, game day is serious business at my house. If I'm grilling, chilling, and watching hoops, my outdoor setup better be ready to play. That's what Wayfair wins. From patio seating and umbrellas to grills and grill accessories, Wayfair's got it all. And it shows up fast. I'm talking fast and easy delivery. So level up your grill game and your outdoor chill game. And head to Wayfair.com to get your outdoor space ready for the season.
29:31Tim Seymour:Wayfair, every style, every home. Welcome back to Fast Money. I mean, health insurers, Elevance Health United, Molina Healthcare looking a little under the weather today. United was the biggest drag on the Dow, cutting more than 70 points from the index. Karen, you flagged the move in this sector. Yes, I do like United Health, though. I mean, yeah, this is down a little bit today. There's fears of are we going to see some health care cutbacks from the government? But I think the worst is behind United Healthcare. And it's not a crazy multiple. And I think they're conservatively guiding these days.
30:05So I actually like it. of the group. The fits and starts, though, are pretty remarkable. We traded not recently, but that level we traded down to is the same level we traded down to in early 2020. We bounced, sold off hard, bouncing again. The headline risk here is significant. The valuation is compelling if you can get around the headline risk. But I'd rather own it here than not, I think.
30:25Karen Finerman:I do own it. And I think they're at least positioned to kind of get back to those insurance margins that are what had that be, as Carter said, one of the greatest charts of all time. God-like. God-like. Not a pair of twos. And I think the stock is priced at a pair of sixes right now. So therefore, I think. Well, but it leaves you some upside because I think it's probably more likely a pair of jacks. Oh. Which is even better. Wow. I believe so.
30:52Tim Seymour:Okay.
30:52Karen Finerman:I'm playing cards.
30:53Tim Seymour:Coming up, do not sleep on the market rally. Why a top private wealth manager still sees some great opportunities, even after the recent run-up and where she is putting money to work. Fast Money is back in two. Missed a moment of fast? Catch us anytime on the go. Follow the Fast Money podcast. We're back right after this.
31:21Tim Seymour:Welcome back to Fast Money. The Nasdaq and S &P setting new records to start the holiday shortened week, both on four day winning streaks. The Dow, meanwhile, shed more than 100 points. Eli Lilly unable to hold on to gains at the close and ending the day just in the red. The company announcing plans to acquire three vaccine makers for almost$4 billion in cash as it looks to expand into infectious diseases. And some after hours action, cloud companies Box and Zscaler, both topping earnings and revenue estimates. You see the stocks trading lower, Zscaler down by 19 percent. We do have a news alert here.
31:51Tim Seymour:We want to get to the president posting about regulation of predictions markets. Let's get back to Eamon Javers in D.C. Eamon. Hey there, Melissa. So, yeah, this just within the past couple of moments, take a look at the president's comment on social media. He says it is critically important that the CFTC's exclusive authority over prediction markets is maintained and that they will thrive. Under my leadership, we are setting rules of the road that are the gold standard for the states. We are currently the crypto, Bitcoin, etc. capital of the world. Other countries are trying diligently to replace us in that capacity.
32:23But we won't let that happen. It is a major industry and we must protect it, says the president. So the president defending his stewardship of the CFTC. This comes after the New York Times had a major investigation over the weekend that suggested in the Times' words that the CFTC had been gutted under the Trump administration. And one finding in the story over the weekend from the New York Times, they said on the prediction market side, The agency has switched from an opponent to an ally in legal battles over how the markets should be regulated. It has announced just one case in the second Trump era against an individual accused of insider trading.
33:03They also say that the CFTC, which was first set up primarily to watch for skulldudgery in markets for farm goods like pork bellies, has backed off enforcement just as its responsibilities have rapidly expanded. So the president not saying that he's specifically responding to that New York Times piece on the CFTC, but clearly felt a need to defend his stewardship of the CFTC. And you see the social media post that resulted from it.
33:30Tim Seymour:Eamon, thank you. Eamon Javers. And of course, this, as all of the major trading platforms have, prediction market offerings. Dan. Donald Trump Jr. is a strategic advisor to both Calci and Polymarket. That's all I got to say. Is this a risk, I mean, in your view, to a Robinhood, to the platforms that have prediction market components that are growth drivers?
33:52Karen Finerman:No, I don't see why they wouldn't also follow the trail of regulation. I mean, I think more regulation equals higher valuations for everybody. That's how it's worked in every other subsection.
34:04Tim Seymour:Morgan Stanley, private wealth management sees opportunities, even some of the priciest market groups. Kathy Entwistle is Managing Director, Private Wealth Advisor at the firm. Kathy, great to have you with us. Great to be here. Thank you. So you're a client-based high net worth individuals. They still like the AI trade. How are they feeling at this point? I mean, we're talking on a day where Micron is up 20 % and is a trillion-dollar company. Yeah. I mean, the market has been on a tear for sure. And certainly anyone that's been participating in the market is very happy at this moment. The question is whether you can continue to find opportunities or not.
34:37And we do think there are opportunities there. You just have to be mindful and just a little bit careful about where you're going. Also, if we do have any kind of a larger pullback, it would be a great opportunity to jump in.
34:50Tim Seymour:Okay. So where are the opportunities? Let's say outside of the tech trade, a client says, we want to diversify. We don't want to be all in on chips and, you know, meta and all that. We're putting clients in real assets right now. So we're also looking at energy, infrastructure, things like that, the digital space. So I do think that that's an area that we can look at. We're actually looking to pull back a little bit on the duration of bonds, also because of some of the recent occurrences in the interest rate market. And basically, we would just stick with U.S., emerging markets, and also start dipping toes into the small cap arena.
35:31The energy trade is actually hanging in there. We mentioned earlier SLBs at levels we saw three years ago. So they're trading well. How important, in your opinion, is the underlying commodity? Or have people realized that these energy stocks actually can go higher regardless? I think it's really important. With the market where we have the equities up as high as they are, you do want to find those opportunities. And energy is going to hold up even in inflationary environments. And I think because of what we're seeing in the inflation space and also some of the signals we're getting out of, like, the Fed futures and so forth on rates not being cut but potentially being, you know, jacked up a rate or so, it's time to consider adding some serious commodities and real assets into the portfolio.
36:16Let's leave a bit. So thanks for being here, first of all. So when you talk about real assets, is that real estate? Is it art? Is it things outside of the market? What are you referring to? Well, when we when we think about real assets, we're thinking about some of the things inside the market, certainly outside the market as well. But we like hedge funds. We like as a, you know, gold and silver and things like that. We like energy and different areas that will respond well in the kind of market that we're in.
36:45Karen Finerman:Kathy, in terms of asset allocation, have you have you changed at all in terms of I hear you talking a little bit about fixed income and some of the dynamics, even a private credit, which, you know, if it was six months ago, it seemed like it was part of an eye of the storm. Anything changed in terms of how you're viewing asset allocation? Yeah, when I look at asset allocation, I'm looking at the big picture and driving down. So the allocation piece isn't changing too much in terms of equity allocation, fixed income and alts. But what I would say is we are bringing more of the evergreen alternatives into clients' portfolios as a diversifier and a non-correlated asset, which I think makes sense in a market where we're up so high.
37:23We want to find other areas that have opportunities.
37:25Karen Finerman:Is there an example of one of those that's tradable? In other words, are these some of the ETFs like the JP Morgan? Well, it's Morgan Stanley, so we get up with Morgan Stanley ones. Of course. Well, for example, I would say you were talking about the credit. There's also private equity. There's infrastructure. There's a lot of infrastructure out there that you can buy in an evergreen structure, which is considered an alternative investment the way it's put together and created. So we like all of that. And back in the day, infrastructure was tunnels and bridges and roads, and today it's communication towers and digital and things like that.
37:57So we definitely think that with all of the data centers and all of the building that's going on and the lack of energy to fuel all of this, there is going to be a scarcity, and we want to invest in the scarcity before it becomes too expensive.
38:10Tim Seymour:Are you worried, though, that clients will be over-indexed to the AI trade because you're labeling infrastructure? I mean, that's all tied to AI on top of the market exposure, which gets you a heavy dose of AI, tied to energy, which is also, as you outlined it, AI-driven also. I think when we look at it, though, everything is becoming AI. Everybody is utilizing AI. AI is really changing the way business is getting completed and the efficiency of it versus the actual output. So I think when we look at it from that standpoint that AI is everywhere, it's not really enforcing the AI trade when the AI trade is presumably so high.
38:48Tim Seymour:Kathy, great to see you. Thanks for coming. Kathy Entwistle of Morgan Stanley, not Jacob Morgan. Commodities, metals, I agree with that. I mean, you want to be – look, crude can go sideways here, even slightly lower, and I think these energy stocks still work. The fact that OIH hangs in here despite the headlines and knockdown of the underlying commodity to me speaks volumes.
39:08Karen Finerman:It was an interesting day. Gold was down one and a half percent. Gold miners were up three and a half percent. So there is this dynamic where I think the underlying spot will have volatility. But I think copper miners are going to make fresh all time highs. They're probably 15 percent off of them. Southern Copper, Freeport. Look at Rio Tinto, BHP.
39:25Tim Seymour:We were just on the closing bell overtime. We were. That was my debut. Exactly. And you weren't nervous at all, were you? A little bit. A little bit. You get nervous on TV a little bit.
39:35Karen Finerman:I do.
39:35Tim Seymour:A little bit. We're talking about energy. Talking about energy. No, I really like the energy trade. I just think that we need more energy and more money will flow into energy equity. Coming up, the New York Knicks are heading to the NBA Finals. And the championship run could mean big things for a potential spinoff from MSG. How the nearly 30-year Finals drought could supercharge a split when Fast Money returns.
40:03Tim Seymour:Welcome back to Fast Money. The New York Knicks completed their sweep of the Cleveland Cavaliers in the NBA Eastern Conference finals last night. Now they're heading to the NBA finals for the first time in nearly 30 years. This could have big implications for ticket sales at MSG in the future of sports business. CNBC's Alex Sherman has more on this. I mean, obviously, it must be good for MSG. I mean, the timing couldn't be better in the sense that MSG is now considering the Dolan family, considering splitting this company between the Knicks and the Rangers. So there have been a series of splits over time for all of the Dolan entities.
40:41The most recent one being where the the real estate is separate from the networks, which is separate from the sports teams within the MSG universe. And of course, MSG was at one time part of a larger company in the Cablevision enterprise. enterprise. So all of these decisions have been done to theoretically maximize shareholder value. This one is very clear, which is that the Knicks and the Rangers today, the market cap of this company is about eight and a half billion dollars. But if you take a look at the private valuations of these teams, and we have Mike Ozanian at CNBC does this every year where he comes out and publicizes the valuations.
41:15The Knicks are valued at about$10 billion. The Rangers are valued at about$3.8 billion. And that's before this year's Knicks run. So you add that up, well, that's a lot more than$8.5 billion. And so the idea here is if we split off these two teams, potentially, if the Dolan family were to sell one of these teams, you would be able to crystallize the value of those teams in the run-up to that. So it's good for shareholders, theoretically, because the valuation should lift under the idea that perhaps one day, one if not both of these teams will be sold.
41:50Tim Seymour:Is it believed that the next step for MSG is to actually spin off these teams or that they will be bought? Well, I think the spin would happen first. I don't think there's any particular rush from the Dolan side to sell either of these teams. All you need to do is look at the valuations of both pretty much all the NBA teams and all the NHL teams and all the NFL teams. It's been up and to the right on all of these franchises, and that's largely driven by these big national media deals that are all locked up. So you've got the revenue coming in. There's a fair amount of certainty there that these franchises will be in good shape.
42:28But look, there's a scarcity value attached to all of these teams. So in the end, this is part of the reason why most people feel that sports teams perform better as private assets rather than public ones, because the valuations are not all that attached to the actual finances. There's only so many of these. They're trophy assets. They trade through the roof because of supply and demand reasons, and they're not all that locked up from a quarter-to-quarter basis like many publicly traded companies trade. Does it matter what the basis of NICS is in terms of tax if it were to get sold? I mean, how much would they actually keep?
43:02How much would investors keep of that? Yeah, part of the reason of doing these varieties of sort of spins and splits is, in fact, for the tax efficiencies, particularly if you were to just sell one of the teams and not both. You don't take that same large tax hit. So that is part of the motivation of doing it in this way. Because you're right, there would be a huge tax hit based on the basis that Dolan family has owned these teams for decades. Just a question for you guys. Are you all Knicks fans? Mel's a huge Knicks fan. Yes, but she talks about it all the time. Can I ask you a quick question, which is Jim Dolan has long been thought in the New York area, of course, to be one of the most hated owners in sports.
43:43If the Knicks win the championship this year, is all forgiven with Dolan? No.
43:50Karen Finerman:Well, that's a fair question. And as a Ranger fan, I mean, I think he meddled in through fire Jeff Gordon, and the team's never been the same, and Montreal's now in the conference finals. I actually think you win in New York, a lot is forgiven. And I think this team's going to win.
44:06Tim Seymour:All right. Alex, good to see you. Thanks. Alex Sherman. Coming up, a make-or-break moment for software. Investors awaiting Salesforce results after the bell tomorrow. What the industry giant could tell us about the beaten down sector. That is next. More Fast Money in two.
44:23Tim Seymour:Welcome back to Fast Money. Salesforce is scheduled to report fiscal Q1 earnings tomorrow after the bell. Investors watching whether the software company can deliver top line growth. And they'll also be looking for any updates on AgentForce. Shares of CRM are down 32 percent already this year, underperforming the broader software sector. by sitting out the recent attempt at a rally. I mean, I think there are a lot of questions here as to whether or not they are that entrenched in enterprise and what they can do for enterprise can be displaced. Yeah, we got a little of this last week. We saw Workday Report.
44:52We saw Zoom. And obviously, these are not that close comparables. But the stocks bounced on, you know, better than expected. And the sentiment is very obviously poor. But they gave back all of those over the last, all the gains over the last two days. So I wouldn't expect maybe you get a 5%, 10 % pop on a beaten raise. It's not going to be that meaningful. And, of course, Benioff's going to come out and talk agent force, probably say it 10 times at least on the call. Last quarter, they announced a$50 billion stock buyback, which was a third of the market cap. And I thought, you know what? They're putting their money where their mouth is.
45:20The stocks should rally on that. It did for about two days, and we're actually lower now than we were before. Talk about maybe they'll talk about an accelerated stock buyback, adding to it. But I think there's a chance you get a bounce here. We've been talking about the IGV for a while. I still think that goes higher.
45:34Karen Finerman:I think the software space has done a nice job of sorting out the winners and losers. I mean, look at an Adobe, for example. Look at some of these names that were formerly the Montas. And yet you look at some of the high flyers, even a CrowdStrike, which I am long. And I just there are places in software, especially around security, that I think there are no reason. There are some reasons to be concerned about the enterprise. But there's no question that the budget and the demand side of this is working. So I don't need to chase CRM here.
46:01Tim Seymour:Up next, Final Trades.
46:09Tim Seymour:Time for the final trade, Timbo.
46:11Karen Finerman:I tell you what, like a deer through the woods, UNH, it will be back. Karen. Yes. So the sleeper of the AI trade is NVIDIA. I like it. Even here at 271. Dan. Yeah, I think the sleeper of that little airline trade is Expedia. Mr. Dolan, Tim is a fan of you and the New York Knicks. Of course. Set the record straight here. Thank you. Huge fan. Huge fan. Well, no, you can be a big fan and not like the owner and then not allowed in the Madison Square Garden. Right. Let's just say, go Nix, go Dolan, let's go.
46:46Tim Seymour:Thank you. Thanks for watching Fast Money. It may start now.
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From the publisher
AI demand fueling Micron’s big jump today, powering the tech giant to fresh record highs. The major market cap milestone it just hit, and what one memory sector analyst sees in store for the chip giant. Plus health insurers feeling under the weather, The New York Knicks championship run fuel a supercharged potential spin off from MSG, and where a top money manager is still finding opportunity despite the market’s record run.
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