Netflix Reports Results… And GM In OverDrive After Earnings 10/21/25

0:02Live from the Nasdaq market site in the heart of New York City's Times Square this is Fast Here's what's on tap tonight. Netflix gets chilled. Shares dropping sharply after its latest earnings numbers. We'll dig into the details and get all the details on the streaming landscape. And GM revs up. The automaker shares at their highest since emerging from bankruptcy 15 years ago. What's behind the move and is there more room to run? Plus, gold's record rally hits a brick wall. Alphabet shares drop on a new challenge from OpenAI and Halliburton in rally mode. What had the oil services stock jumping today?

0:34I'm Melissa Lee. Coming to you live from Studio B at the NASDAQ. On the desk tonight, Steve Rasso, Karen Feinerman, Bono and Eisen, and Guy Adami. We start off with an earnings alert on Netflix. Shares sinking down about 5 % after earnings came in well below estimates, though revenues were in line with Wall Street's expectations. The conference call kicked off in just the last hour. Julia Vorson joins us with the details here. Julia. Well, Melissa, a lot of enthusiastic comments about the impact of K-pop demon hunters, but shares are falling on disappointing EPS and margins due to an ongoing dispute with Brazilian tax authorities, which the company says they do not expect to materially impact future results.

1:12Now, Netflix focusing in its letter to shareholders and on the call on healthy engagement, its highest quarterly share of viewing in the U.S. and U.K., and saying that Netflix recorded its best ad sales quarter ever, saying they're on track to double ads revenue this year. They're also bullish about AI in the face of concerns about copyright infringement and infringement on intellectual property rights, saying, quote, We believe generative AI presents a significant opportunity for us to deliver benefits to our members, creators and businesses. Going on to say we're empowering creators with a broad set of Gen AI tools to help them achieve their visions.

1:50In the letter to shareholders, noting how Happy Gilmore 2 and a series use Gen AI. They also say Gen.ai is enabling them to test more impactful ad formats and interactive ads, they say, are coming. Melissa? Julia, I'm curious. In the shareholder letter that was released about half an hour ago or so, they have a chart of Netflix's share of TV time. And in it, it says linear, which is obviously a bucket that's static and declining, and all other streaming. I'm wondering, does all other streaming include YouTube? And then what is the other, which is the smallest part of the pie? Well, I'll have to go take a look at that.

2:27But I think what Netflix is trying to do in that graphic is show that it's still early days. Their share of market share as they look at the market for the entirety of all streaming, which, yes, does include YouTube, is still relatively small. And they see so much more room left to grow. What's essential here is now that they have an ad supported tier, they're able to compete with some of these players that are free, like YouTube. And so it enables them to reach a much broader audience. And that's why they no longer report subscribers. They're focused on engagement and how engagement can drive ad revenue.

3:01So I'll have to pull up that chart, but I'll tell you it means that Netflix believes they have a lot of room to grow. And then in terms of the issue of having enough inventory for that ad supported tier, has that been resolved? Are we getting any indication as to the status of that? Well, definitely seems like this is a turning point. Greg Peters, co-CEO on the call just moments ago, said they always said when it came to ads, they would be approaching it as a crawl, walk, run. And now they think they're in the walk phase. And they're very much making a ton of progress, they say, and getting more inventory.

3:36And part of that is partnering with the likes of Amazon. They have a partnership with Amazon Ads that's going to be launching in the fourth quarter. and they have their own tools to make it easier for advertisers to buy and target ads. So they're working on it, and it sounds like they're making progress. All right, Julia, keep us posted on this call. Julia Boorstin for us on Netflix, again, down about 5%. If it was really that Brazilian tax dispute, which is not going to impact future results, I think the markets would look through that, and yet the stock is stubbornly down 5%. First of all, I thought the stock would rally after earnings.

4:10That didn't happen. But you're right. If it was just that, the market would look through it. As a matter of fact, I'm reading, if you back out the Brazilian tax, I've been to Brazil a couple times, by the way. Really? Yes. Did you have any taxes? I did not, but I don't think I'm allowed back in the country. With all that said, yeah, if they would look past and said, OK, you know what? We actually beat earnings, beat revenue. It's OK. I think this might be the problem. If you start to look at the margins, you're starting to see deterioration margins, even in the guide. If the United States is saturated, the international market, the margins are not going to be as robust.

4:41And then there's rumors out there of them potentially buying Warner Brothers Discovery, which leads to the question, at least for me, you know, maybe this growth story is slowing out. Now they need to start to grow by acquisition. I don't know if that's true, but I think that's what the market is sniffing out. $11.50, though, is a recent low a couple times. It's a huge level. So there's a lot to like here. The valuation is the problem going in. So I am long. I think that what you talked about with ad sales with Julia, I think is really central. So if they're in the walk stage, to me, that's good.

5:12They have more to go. They did talk about linear in that chart that you cited. There's linear and linear, they say, is sort of theirs for the taking. It's others for the taking, you know, taking as well. But the momentum here, I think, is tremendous. The guide, actually, the margin depression in the guide, I think, has some residual tax in it. And I don't think of them as particularly great at guiding. And so I think this is the kind of thing you really need to listen to the call, and things could change. So a lot to like here, except it is not cheap by any stretch. But I do think they're in the pole position for sure.

5:54Stay in law. Do you remember when we used to talk about infringement on AI or copyright, when that was going to be a big deal, and then we never talked about it? They seem to be dancing around it, thinking it's not going to be a big deal again. What happens if it's a huge deal? What happens if it's a big headwind for them? I mean, just think about what that could mean for Netflix. Well, when I hear them talk about AI, I think of some of it as AI will help them generate content easier, cheaper, faster, all of that. But machine learning and AI, I hear that as that's going to help us engage our viewers and show them exactly what they want to see to increase their engagement and therefore all the other things that go with it.

6:35I'm not sure to the point that you're making about copyright. Yeah, I don't think people are paying enough attention to that. I love the advertising numbers. I love that they doubled them. I don't know. It's coming from a lower base. That's number one. Number two, if you really look at momentum, they don't give out their sub numbers anymore because it's a mature company. If it's a mature company, then they're out of that, you know, out of control steam on growth side. I would rather be a seller. I think you could break a thousand. I think you get down to that 850 level in Netflix. But let me let me let me just preface this.

7:07I thought they were running out of steam originally before they broke out above the 850 level. So I think that this is just really long in the tooth. I'd rather be a seller than a buyer here. I want to hone in on this tax issue. So, yes, I think they deserve credit for their ad tier and what they've been able to do there. Steve, your point about sub-growth, I think that does point to what the overall growth picture is and where they are in terms of being a mature company. But 300 basis points of margin on the Brazilian tax issue, fine. Even if I am to put that aside, where is the incremental growth, to your point, going to come from?

7:38It's likely going to come from international, which means, one, your content spin is likely higher, and it means your content focus is likely higher, meaning that it's probably less applicable from region to region, which means whether it's AI or whether it's your traditional content generation, you're going to have to find and tailor that content to each individual region. And who's to say that there won't be continued tax issues in any of those other domiciles? So I think that's generally what's coming up and what the concern is. I can get with you in terms of saying, okay, perhaps this Brazilian tax issue is a one-off, but what if there's going to be a Canadian tax issue and an Indian tax issue?

8:14There could be a U.S. tax issue. Exactly. Let me just push back on half of what you said. I do think the U.S. is that that's the highest, best customer that you want. But I do think that they can make content cheaper outside of the U.S. And so I think that they could have some margin, you know, keep their margin there. In terms of the valuation, 47 times forward, it's priced like a growth stock. And so the question is, are you paying? Are you getting the growth that you're paying? See, that's the problem, because when it is a growth stock, nobody cares about the valuation. When things start to slow, deteriorate, margins start to deteriorate, the first thing people look at is the valuation.

8:53Karen brought it up. She's right, too. You know, I don't know if it gets to the levels that Steve talked about, but just in terms of sort of pen to paper type of thing, you look at the prior all-time high was in February of this year before we went lower in April like everything else was like 1 ,025, 1 ,030. You know, that's where it seems to be headed based on sort of the price action in the aftermarket based on basically being right here at support now. And now the people will start to focus on the valuation that you'll add your question with. It's never been cheap. It looks more expensive when things are slowing down.

9:23And just a quick, you know, as a Netflix shareholder, Karen, how would you feel about them reaching for WBD, either all of it or parts? I don't know what to make of that. So that's a question mark. I mean, they've been very good at choosing things, right? I think they've been good stewards of money. So I think we'll give them the benefit of the doubt. And their content creation has been the cheapest. So that throws in a huge wrench. If you're thinking about they're the ones that can create content the cheapest out of the whole spectrum of content providers, then they buy something like Warner Brothers.

9:59That really puts into question everything that you've bought the stock on as far as content. Sorry. We'll keep you posted on the Netflix call, which is ongoing. We meantime shares a regional bank, Western Alliance, higher in extended trading after that company's results. Last week, it had disclosed potentially fraudulent loans in its portfolio. CNBC's Hugh Sun has got more on what we're hearing tonight. Hugh. Hey, Melissa, that's right. So reading the release, you'd be hard pressed to realize that this is the bank at the heart of that one day regional bank sell off last week. So Western Alliance beat on both the top and bottom lines with EPS of$2.28 on revenue of$938 million.

10:36You know, asset quality, the bank appeared to actually improve with criticized loans and the ratio of non-performing loans falling from last quarter. Now, as a reminder, Western Alliance had exposure to both Cantor Group and First Brands, those two soured loans. There is no mention of the First Brands exposure, but the company has said that they won't face any losses on that. Now, regarding the Cantor Group, Western's CEO saying in this release that they still expect the collateral will cover any losses. However, they reserved for$30 million. And that's got to be the most interesting thing about this report.

11:07Analysts will surely want to dig into that further on the conference call tomorrow. Guys. All right, Hugh, thank you. Hugh Sun. And we thought this, along with Zions, would be the heart of a potential, you know, other regional bank crisis. And here we are. It looks better than feared. Better than feared. And this is, to me, this is sort of a knee-jerk reaction to a stock that's only gone lower for the last couple of months. Go longer term to see what I'm saying. Now, again, are we re-rating these banks based on where they've been historically? Their tangible book, I'm looking at it, I'm rounding up, it's$59.

11:36You want to give them one and a half times? Well, you can do the math. It gets us maybe to, I don't know,$90 stock-ish. Do you want to pay up, though, for that much? That's the thing. Are we in this new paradigm where people are willing to pay up? Or should these things be trading one and a quarter times priced to tangible book? That's what I think makes the most sense. I mean, are we behind the worries about credit quality, about the exposure of regional banks at this point with this earnings report? No, I don't think so. You're going to get to Guy's point, you're going to get one-offs and then they'll sell off the space and then they'll buy them back aggressively the next day.

12:10So you're going to miss out on that volatility in a good way. But for me, the money center banks is where you should be. Not that they're immune to it, but it's going to be less likely that they have an issue. What do you think? I think that this sort of panic frenzy at the moment is over. I think, right, we have, you know, two credits that had very, very big impact out of millions of credits. Right. So I think, you know, when you get to a bank and you get scared, then this is a levered institution by its DNA. People get scared and sell. I understand that. It's still well, well, well below where it was before that.

12:47And the amount of penalty on the stock for the amount of loan loss is significant. So I think this momentary panic. Now, if the economy slows, yes, that's trouble for all banks. I agree. I find safety in the model of the big money center banks. You've got a lot of other things going on. Can we talk about Capital One for a second or is that a later thing? No, no, let's do it. It looked like there's a lot to like in the credit profile there. So that's another thing people have been concerned about. And you would think Capital One would be in the weeds as much as anybody. And I think it looked pretty good.

13:20Yeah. I'm with Karen. I think the fears are as watched for the time being. The real question is, what risk are you taking on for the investment? And so, listen, I think if you want to park cash, you probably are going to park them in the money center banks. I think if you're looking for much more of a trading vehicle, a short-term type of beta play, I think the regionals offer a better opportunity to do that. But with that said, again, you have to understand that you are likely going to have to trade around this volatility and be willing to exit a position when you even get a sniff of the cockroaches that Jamie that Jamie Dimon mentioned, because whether or not it's justified or not, whether or not you can back into it into a finite quantity, you are going to get that volatility within this within this sector.

14:01Meanwhile, recently, red-hot gold pulling back in a big way today. Prices settling down nearly 6 % for their worst day since 2013, April to be specific. The precious metal hit its 49th record of the year just yesterday. And even with today's pullback, it is up 56 % this year. We're just back to, I think, last Monday, basically. The gold miner ETF down more than 9%, its worst day since 2020. So what about this hiccup? The gold mining makes sense 100 % in terms of being twice as bad as the underlying commodity. Now, we've seen that before because people are now terrified that the gold move is over.

14:34We had talked about recently, you know, the RSIs were historic levels north of 90 percent. I mean, the overbought conditions, again, were historic on a number of different metrics. So this was coming at some point. Now, I thought it was coming in the form of an equity market sell-off where all risk assets would go lower. That obviously is not the case today. So something else was going on. I'm not exactly sure. Maybe people got out of gold into Bitcoin. I will say it again. This is not over by any stretch. This is a healthy pause and a move that I think will continue over the months to come. Yeah, I agree with that.

15:06HSBC and Goldman Sachs still have a$4 ,600 to$5 ,000 price range or price target for gold in 2026. I think it will go higher. But think about where we are seasonality-wise. First of all, everything that guy said, we ran up. Probably should take a stutter step back. November, December, positive months for the equity market, pretty bullish months. Maybe, just maybe, people want to get out of that and get into equities. Maybe they want to get out of that and get it to Bitcoin, as Guy said. So there's a host of things to do with it. I think that eventually, if it holds 4 ,000, 3 ,800, you're going to rip back to 5 ,000 probably in the next year.

15:47I wouldn't get too far from gold. But the truth of the matter is, like, we talk about this being a store of value and a place where you park cash when you have loomy concerns about either the U.S. economy or general geopolitics globally. And the speculative nature that we see in all these other high growth, high beta pockets of the market found itself creeping into the gold market. And so naturally, you're going to have some pullbacks and some sideways trading. So I think Carter called the top almost to the date. I think that's great. I think you continue to monitor the technicals. But again, I don't think there's a situation where you should dip completely out of gold.

16:22But I would look at perhaps when you reengage, allocating some to copper and some to gold. Silver also. Same thing. I mean, now people and Carter had his chart showing that silver basically topped out exactly where it did historically. And then he showed it adjusted for inflation nowhere near where it was on a historical basis. But if gold moves the way it did, silver is going to move the same way and probably twice as bad, which is the move we saw at all. In retrospect, it all makes sense. I didn't think it was happening today. I don't know what the trigger was, but here we are. Coming up even more after hours action, the details out of Texas Instruments and the latest numbers from the quarter, plus a browser battle brewing.

16:58how OpenAI is gearing up to take on Google Chrome and the impact it could have on how you search the web. Do not go anywhere. Fast Money is back in tune.

17:11This is Fast Money with Melissa Lee, right here on CNBC.

17:24Welcome back to Fast Money. OpenAI announcing its new Atlas web browser powered by ChatGPT today. The platform directly competes with Google's Chrome and Perplexity's Comet. News of the launch and shares of Google parent Alphabet down nearly 5 % at its lows. Mackenzie Cigal has got more on this. Hey, Mac. Hey, Mel. So this is all about OpenAI trying to take control of how we use the Internet. Atlas is their new AI-powered browser where ChatGPT helps you interact with the web in real time. Not just answer questions, but plan trips, compare products, even draft email replies directly inside of Gmail.

17:58Now for paid users, there's agent mode, where ChatGPT actually takes actions for you, opening tabs, clicking through sites, and completing multi-step tasks. The product lead for ChatGPT Search says the real power of Atlas is in memory. It gets more helpful the more that you use it. Now, this browser strategy also translates to more behavioral data for OpenAI, what users search, click, compare, and then ultimately abandon. And that could power better models and even enterprise products. Google had this advantage with Chrome. Now OpenAI wants that edge. So Atlas, it's really all about directly challenging Google on both Chrome and search.

18:35And while perplexity hasn't made much of a dent in Google's dominance, OpenAI has massive user reach, 800 million weekly actives, in fact. And so if Atlas sticks, it threatens Google's lock-in and puts pressure on the ad model underneath it. Mel? Mac, thank you. Mackenzie Cigalos. Karen, I'm wondering what you make of it. I mean, Google's already incorporated Gemini into Chrome, so that's been out for a while. And when I saw a 5 % decline intraday, the assumption behind a 5 % drop intraday would be that what OpenAI is offering is better. I don't know that it's better. I think it's more of a dent in this, you know, fortress that it's been of search.

19:16It's Google's share to lose, basically. And so, you know, so Google, we're just talking about Netflix. If you back out YouTube as equal to Netflix, let's say, so that takes you from$3 trillion down to like$2.5 billion. You have Google Cloud in there. I'm not really sure what to have that. So$2 trillion. Change trillion. The idea that we're just talking in trillions now so easily is kind of amazing. But that's not a crazy multiple. But, you know, I'm concerned. As a longtime Google shareholder, I am concerned. I think they can absolutely compete. I think they're in a great position. But that doesn't mean that some share isn't eroded away.

19:55Valuation's always been compelling. I mean, it's not like the stock has been trading that horribly. I mean, if you look at the recent move, I mean, it's had a pretty decent move from the last quarter earnings when everybody was concerned. They sort of assuaged some of the concerns about search. They report on the 29th. I mean, I think you continue to buy weakness in Google. Yeah, I tend to agree. I think Karen makes a good point in terms of, listen, this is a looming threat. But I think the fact that they are now using this agentic feature alongside traditional search, to me, removes some of my risk about traditional search going extinct, if you will.

20:29So, again, I do think that they're going to have to do a little bit more in terms of plugging in Gemini because clearly that hasn't led to the recapture of market share that one had. But, again, I still think, and Steve and I were talking about this early, I like using the LLMs alongside traditional search. I still want to see the citations. I still actually want my hands on the data set that is being marketed to me. And until I see a real disruption to like that ad fortress that they have, I tend to be in the camp of buying dips. You said that it's theirs to lose, their market share to lose. And I agree with that.

21:05And that's why I'm just really kind of hesitant to jump in here. I think that the reason why the stock has ran is because they weren't forced to break up. So that was a huge amount of tailwind for them. You said there's competitors. There's a massive amount of competition with very, very deep pockets. And they're the wolf at the top of the hill. I know everyone hates when I use that analogy, right? That wolf at the top of the hill is never as hungry as the wolf climbing up the hill. Guy knows that saying, right? I like wolves. So for me, I think that this would be a poor time. It's a great value stock.

21:43But I don't think I'm going to get a real bang for my buck as far as a growthy stock. It's not necessarily value anymore. It's not expensive. It's not expensive. And if you back out some of the other parts, I do think the search is in the value territory. How many fronts can OpenAI battle on? I mean, we assume that this is like some mature company that's got it all sorted out. Again, we've already spoken to their need to continue to raise, their need to actually be profitable. But they can do it. Everybody's opening up their wallets to them. How much is Microsoft? Stumbling over each other to make deals.

22:15I agree. I just feel like they are spread quite thin. They're fighting on quite a few fronts. And until I see some actual follow through, I'm ask AI how long they could do it for. Well, ask open AI, ask GPT, ask Gemini. Coming up more after hours action to bring you shares of Texas Instruments on the move after reporting results and numbers in the quarter. Next, you're watching Fast Money Live from the Nasdaq market site in Times Square. Back right after this.