In short
Fast Money episode covers a volatile Wall Street day driven by Nvidia’s post-earnings reversal: shares fell 5.5% at the close despite “blowout” guidance, weighing on the whole semiconductor complex (Taiwan Semi, AMD, Broadcom, Applied Materials). Hosts debate whether this signals a turn in AI/semis or just rotation, noting software (IGV) rose on Salesforce strength despite weak fiscal 2027 guidance. They discuss options-market caution: S&P put protection skew at a 1-year high and elevated single-stock volatility. In AI infrastructure, Dell rallied on 39% revenue growth and a $43B AI backlog; CoreWeave surged but faces financing/capex risks, with management needing to add capacity by 2030. Media segment: Warner Bros. Discovery weighs Paramount Skydance’s higher bid; Netflix met a deadline but then declined to raise its offer, keeping its streaming-only strategy.
Guests
Gil Loria (DA Davidson) on Nvidia/CoreWeave returns; Mandy Hsu (SIBO derivatives) on bearish options sentiment.
Notable examples
Workday’s oversold rebound; Smucker’s Elliott-led board changes; China tech declines (Baidu, PDD, Alibaba).
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VONVIDIA's Market Impact
1:45 to 2:17
Discussion on NVIDIA's stock performance and its effects on the market.
“We start off with a volatile day on Wall Street.”
Market Trends and AI Trade
2:25 to 4:39
Analyzing market trends and the implications for the AI trade.
“So what is the action signaling about the market's direction and the AI trade more broadly, Guy?”
Software Sector Opportunities
4:41 to 8:07
Insights on investment opportunities within the software sector.
“I mean, I think it's a testament to the wisdom of price, right?”
Dell and CoreWeave Earnings Reports
8:08 to 12:46
Review of Dell and CoreWeave's earnings and future outlook.
“If you listen this morning to Squawk Box.”
Market Sentiment and Derivatives
12:46 to 14:00
Exploring shifts in market sentiment and the role of options.
“And the interest expense wipes out any profit they generate.”
Market Sentiment Shift and Options Activity
14:00 to 18:00
Explore the current shift in market sentiment and options strategies indicating caution.
“Mad, mad, mad, mad, mad, mad, mad, mad, mad.”
Cautiousness in Equity Markets
18:00 to 19:00
Discussion on the cautious approach investors are taking in the equity markets and the implications.
“And you say to yourself, well, vol is probably really low.”
Consumer Staples vs. Tech Stocks
19:00 to 21:14
An analysis of the performance of consumer staples compared to tech stocks amidst current market conditions.
“Shifting gears here to the staple space.”
Retail Recovery and China Tech Stocks
22:59 to 28:00
Insights on the performance of TJX and challenges facing Chinese tech stocks.
“Shares of TGX closing at an all-time high today after some bullish calls on Wall Street.”
Market Dynamics and Investment Strategies
28:00 to 28:40
Explore the dynamics of stock valuation in light of recent market movements.
“But to Tim's point, I don't think you run too far.”
Show all 17 chapters
NVIDIA's Earnings and Market Reaction
28:40 to 33:10
Discuss NVIDIA’s quarter and the implications for AI and tech investments.
“One top tech analyst will weigh in on all of that and much more Fast Money in two.”
CoreWeave's Future in the Tech Landscape
33:10 to 34:00
Examine CoreWeave's challenges and its relationship with major tech players.
“So the knee-jerk reaction, you just put up Microsoft.”
Media Mergers: Netflix vs. Paramount
34:00 to 37:30
Analyze the competitive landscape of media mergers involving Netflix and Paramount.
“So this is the latest in this back and forth we've seen between the Pentagon and AI giant Anthropic this week.”
Netflix's Strategic Decisions in Mergers
37:30 to 42:00
Understanding Netflix's latest move regarding its offer for Warner Bros Discovery.
“There's plenty of good reason neither of these companies should go forward.”
Warner Bros. and Paramount Merger Dynamics
42:00 to 43:37
Explore the implications of Warner Bros. and Paramount's merger and termination fees.
“So originally, it would have been Warner Brothers Discovery would be required to pay$2.8 billion to Netflix to terminate the merger.”
Netflix's Future and Streaming Competition
43:37 to 45:45
Discuss Netflix's growth trajectory post-merger and its competitive position in streaming.
“They didn't need$60 billion of debt and to be highly leveraged given those advantages.”
Market Reactions and Predictions
45:45 to 47:21
Analyze market predictions regarding Netflix, Disney, and financial implications for Paramount.
“So, Godfather, what else will they be selling off here?”
Transcript
Automatic transcript. May contain errors.0:00Melissa Lee:Say you always wanted to have a backyard oasis. Here's the thing. If you get smart with your money, you can do things like that. With Empower, you can start making the most out of your money so you can go out and live a little. Isn't that why we work so hard? To have some fun with our money? Like treating yourself to something special or spontaneously doing something extra for a loved one. So use Empower and get good at money so you can be a little bad. Join their 19 million customers today at Empower.com. Not an Empower client paid or sponsored.
0:30Karen Finerman:At Venture 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.
1:03Live from the NASDAQ Market Center in the heart of New York City's Times Square, this is Fast Money. Here's what's on tap tonight. NVIDIA's big reversal from a post-market pop to a 5.5 % loss at the close. How the stock impacted the market today and how traders should make sense of the moves. And the latest in the battle for Warner Brothers, what we know now about Netflix's pitch to the White House and how Warner views a sweetened bid for Paramount Skydance. Plus, what the movement Smucker stock says about the state of staples, why Chinese tech stocks were under pressure today, and the foundation for housing.
1:33What the chart master sees in the technicals that tells him where the stocks are heading. I'm Melissa Lee, come to you live from the studio. Be at the NASDAQ on the desk tonight. Tim Seymour, Carter Braxton Worth, Dan Nathan, and Guy Adami. We are back. Yes. Full force, full desk tonight. We start off with a volatile day on Wall Street. Major averages closing off their worst levels, but still digesting a major negative reaction to NVIDIA results. The Nasdaq down more than 2 % at its lows, closed the day down just over a percent. The S &P 500 shedding half a percent, while the Dow managed to eke out a gain of 17 points.
2:05The aforementioned NVIDIA sinking 5.5 % despite a blowout quarter in guidance raise. The results seemingly not enough to quell concerns over hyperscaler spending and the stability of the AI trade. NVIDIA shares losing almost$260 billion in market value today, roughly equal to the size of a UnitedHealth. The results weighing down other chipmakers, Taiwan Semi, AMD, Broadcom, Applied Materials, all among the biggest laggers there. On the other hand, the beaten down software sector, as measured by the IGV, managed to rise 2%, a strong quarter from Salesforce helping boost those stocks, even though the company gave weak guidance for fiscal 2027, CRM closing 4 % higher.
2:44So what is the action signaling about the market's direction and the AI trade more broadly, Guy? One day does not a trend make, as we've said a number of times. But today could be one of those days you'll come back to and say, OK, the IGV, the software ETF, traded down the April lows. We almost traded down the lows we saw back in 24. So you can understand why that could potentially be a bottom. And we've bounced. The SMH, which has been on a rocket ship, is starting to turn a little bit. We're going to learn a lot more next week with Broadcom, AVGO. However, you can start to make the case that, you know, maybe the turn is in.
3:16Now, a lot of I'm not calling that, by the way, but today's one of those.
3:19Karen Finerman:Guy, did you just call the turn? What did I just say? Oh, sorry. What did I just say? However, however, I think even Tim would agree that it's an interesting day to sort of bookmark and say, OK, let's see how this plays out over the next couple of days, because if, in fact, that was the low in the IGV, It means it probably has another significant leg higher, especially if Microsoft participates. So I bet Carter's going to agree with me. So what it does mean is that nothing changed fundamentally. What we do know is that we got on the fundamental side, we got nothing new from that call. We had everything in line.
3:54Karen Finerman:We had a great number. We had this and that. What we do know is that hedge funds and long onlys did a lot today, the same way they did a lot yesterday and have been going into this. NVIDIA, to me, if anything, has been a shorting vehicle while these guys went long memory, while they went long optical, while they did, you know, and at the same time, part of that software trade. In other words, that software short. I think it's really about reversing some of that. It's been a great trade, by the way. And NVIDIA does its job, certainly in terms of the margin and what it gives you. This gets overly technical in terms of how funds operate.
4:26Karen Finerman:But I think all this shows is the rotation. This has been the great rotation market. And I do think, and Dan's been saying this for a long time, at least a month, we've got a memory bubble here. And I do think that's a place investors should be cautious. The move in NVIDIA today doesn't get me terribly scared about NVIDIA, but it does tell me that investors need a whole lot more here. It is cheaper than it was yesterday. I mean, I think it's a testament to the wisdom of price, right? NVIDIA unchanged one month, two months, three months, four months. For the year. For the year, while semis are going higher.
4:56Why? But I'm not in the why business. I'm in the what business point of fact that it's not performing well. And what happens? Its results come out. They're fantastic. Stock goes down. Now, it's not a big move in and of itself. But it is a lesson for all of us to always, we have to relearn the lessons every day, is that certain things matter. Relative strength, relative performance is a key factor. And it is in evidence here. Now, as it relates to the semis overall, that's the big question. Forget about software for now. Are semis prospectively the ones that are extended at a top? If one believes that, there are two areas of the market.
5:27if you want to do a general bet, it's the KOSPI in South Korea, where 38 % of the index is exposed to two stocks. And it's the Taiwan semiconductor index, where one stock, you'll almost 40%. So we have ETS for that. Those are the bets if you bet against semis. Bet them short. Oh, interesting.
5:43Melissa Lee:Yeah, a lot of folks talk about this, right? Like, so the S &P has gone flat. It's gone sideways for months now. You know, we've seen some dramatic moves. You know, obviously, we've talked a lot about them in technology. I mean, software is the most interesting to me here, because if you roll your sleeves up and you do a bunch of work, there's going to be some, I think, some generational opportunities. If you think about like a workday, for instance, at its lows yesterday morning after it reported, it was down like 15 something percent. And it was down basically 50 percent on the year. Like, think about this.
6:13Melissa Lee:This company was trading at like 12 times earnings for double digit expected earnings and sales growth. You could say, well, that's the problem. We don't have a good sense. We don't have visibility on that earnings. But I would say that the valuation is a buffer for you right there. So if you can figure out the names that are actually going to be able to use the technology, right, coming off such a low price point here, you know, it's going to be like explosive sort of thing. And, you know, you had an 18 percent reversal off of the lows yesterday.
6:42Karen Finerman:On 20 million shares traded, which was about nine times normal volume. Right.
6:46Melissa Lee:And, you know, so those are some of the things. If you're a momentum player, great. I know you don't love to buy weakness, but when you think about it, a lot of hedge funds were pressing these shorts, pressing these shorts. Sooner or later, there's no one left to sell them. And the only thing you can do is buy them back. And then what happens is you start tripping over each other, all the shorts, and then longs are like, listen, maybe we're out of the woods. So, you know, I think software sets up really interesting because we really don't know about the disruption. That thing's going to play out over the next couple of years.
7:13I mean, I think it's so bad it's good is a trade that we've discussed many times, and people do do that in oversold conditions that's extreme. The bigger issue, and it has to be considered, is the weakness that we've seen over the past six, seven months, and that's accelerated over the past six, seven weeks, does that set the high for a long time for software? And that is the risk, so that you can trade it, and I think that's a good trade, for a bounce. How much bounce? Unknown. Maybe it'll be 10. Maybe it'll be 20%. But are these highs important highs? Will Cisco back and make a new high in Microsoft?
7:48That's a big stretch, and I would say not for a long time. I mean, I think that's sort of the question, because for a while, investors were conditioned to think that the AI trade was one way, and that was higher, and the rising tide would lift all boats, and we're seeing a real differentiation here. And the question is, are we turning, or are we just in a period where we're turning around? Which is fine. That happens, right? That happens with the markets. Turning around your record highs, but within sectors, a lot of volatility. If you listen this morning to Squawk Box. Who doesn't? Who doesn't?
8:14I mean, I watch. I listen, I watch. What do they say? You know Mike Wilson of Morgan Stanley fame. He was on and he talked about exactly what you and I'm not suggesting you're pirating or stealing. She watches, though, too. She's very busy. And we listen to Mike Wilson. Yeah, anyway. He was saying exactly what you're saying, that below the surface, there's this churning going on, which is why you're seeing some of the volatility. But it's actually a healthy thing. So, yeah, it looks OK. I'll add this real quick. We did the show yesterday, yesterday being Wednesday. We did. With Salesforce.com.
8:43We had a pretty robust conversation about the aforementioned CRM. And Tim actually said that$50 million stock buyback was a significant number. Huge. I don't know if he said huge, but we use other adjectives. With that said, I think, you know, we talked about the hope for them to say it would be accelerated. I don't think that came out. But I think people did back of the envelope math and said, hey, wait a second. You know, this could be potentially a short-term floor given the magnitude of that buyback.
9:11Melissa Lee:Yeah, despite all the silver lining here that I've just thrown at you guys here, there is something that's emerged over the last couple weeks or so in this earnings period. We've seen companies beat and then give squishy guidance, right? So when you continue to do that, then you're setting up for the next beat. But then if you keep putting out, like, slightly weak guidance, it's not a great scenario to be in. So, again, I think it's really important. And at some point, you're going to get some sort of sea change where the companies miss and they guide down still, or they start beating those lower expectations.
9:39Melissa Lee:You can kind of set a base to go higher. All right. We've got a couple of other data points in the AI space in the after-hours session. Dell and CoreWeave, both reporting results in just the past hour. Christina Parts and Nevelis has got those numbers. Christina. Well, let's start with Dell. Blowing past estimates, so no squishy guidance there, Dan. Sales up 39 % in the quarter driven by AI servers. Dell entering the new fiscal year with a record$43 billion in AI backlog and guiding to roughly$50 billion in AI server revenue for just the full year. The pipeline just kept growing even after absorbing roughly$34 billion in orders just this past quarter.
10:13On the call, COO Jeff Clark flagging another tailwind quote. A majority of the install base remains on 14th generation of older servers, creating a significant opportunity to monetize. And it's not just AI, of course. Traditional server demand is also outpacing supply, according to management on the call. And on top of that, Dell raising its dividend by 20 percent and adding$10 billion to its share buyback program, which is contributing to that stock jump of 10.5 percent. Core Reap, though. Let's talk about Core Reap. Earnings also out. The stock is clearly moving the opposite direction. Shares are up roughly 28 percent year to date heading into this print, so expectations were relatively elevated.
10:50Revenue backlog did grow nearly$67 billion, up from about$55.5 billion just last quarter, signaling strong demand for its NVIDIA GPU infrastructure. Please note that it rents out these services to people. Also, it provides software, too, if you don't want to build a data center on your own ground. But watch the earnings call closely. Last quarter, third-party developers actually fell behind schedule on a key data center facility for Corway. CoreWeave pushing out CapEx data center capacity is really the critical piece that fuels future growth for CoreWeave. And that's what management really needs to answer tonight, guys.
11:26All right. Christina, thank you. Christina Parts Nevelis. Dan, I know you scrutinized CoreWeave because when you hear about a backlog at CoreWeave, you probably think of the financing needs that CoreWeave has in order to fulfill that.
11:37Melissa Lee:That backlog, I mean, it came in line with what I think the whisper was. And, you know, so that was kind of an expectation. And then when I look, there's a headline coming out right now. I know the conference call is going on. They want to add five gigawatts of capacity by 2030. And we know that each gigawatt will cost at least$10 billion to do that. This is a company that continues to lose money. They're going to continue to need to raise debt. We know that situation where Blue Owl was looking to raise four and a half billion dollars for them. They couldn't get it done. This is a company that has lower than investment grade rating.
12:09Melissa Lee:NVIDIA had to come in again the second time in a year since their IPO essentially bail them out. I mean, they basically invested$2 billion in the company. And what does the company do? They turn around and buy NVIDIA chips. So, again, you know, any delays, and this company is going to have a hard time because that gives their customers the opportunity to pull out of these contracts. So the mismatch they have is they have these long-term leases and they have shorter-term contracts. That mismatch when you're losing money and you need to raise a lot of capital to fulfill those contracts, that's not a great situation right now.
12:41Melissa Lee:The slightest slowdown in demand is going to put these guys in a really tough spot. There was a report just this week that they were seeking financing of eight and a half billion dollars from Morgan Stanley and Mitsubishi. So that those needs are real. And the interest expense wipes out any profit they generate.
12:57Karen Finerman:Yeah. But I think that's kind of understood out there. I would and I'd like to tackle Dell because I just think that this is a company that also the same conversation we've been having. this has been a vehicle for investors to actually express a lot of pessimism on the cost of memory. I actually think the pull forward in some of the PC business, some of the other businesses, is actually quite bullish. So if anything, this is the kind of a place where I think the uncertainty out there is more, let's say it's less opaque than others. You can actually see at some point memory is going to give. In a normal world, okay, given the guidance that Dell gave, which is close to$13 for the full year EPS,$10 billion stock buyback against their$80 billion market cap is significant.
13:41Listen, it's not trading a market multiple, but you put a 13, 13.5 multiple on the stock, which is not unreasonable. And you're looking at a stock that, in my opinion, should be significantly higher than we are. Now, I understand hardware, trough multiple, memory risk, cost. I got it. But that guide and that stock buyback should be encouraging. What world are we in? I'm not quite sure. Mad, mad, mad, mad, mad, mad, mad, mad, mad. Do you know what year that movie was made, Banch? 76. No, no, no. It's the early 60s. Anyway. You were watching that movie, by the way. You watched that in a bar? Sebo, seeing a trend in the options market that could signal trouble ahead.
14:17Let's bring in Mandy Hsu, the firm's head of derivatives market intelligence, who thankfully bears with us in moments like those. Mandy, great to see you. Great to be here. What has changed? We've seen a very pronounced, I would say, shift in sentiment to be more on the bearish or cautious side. I would say at the index level, we've definitely seen a surge in put protection buying. So measures of skew, which looks at the cost of downside protection versus upside, that's at a one year high for S &P. So at the index level, clear demand for portfolio protection. And we're seeing it not just in terms of near term options where people are playing maybe for a tactical pullback, but also longer-term options like six-month, one-year out.
14:56That's indicating, you know, a little bit more cautious, longer-term outlook in the market. Do you have enough data, and whether it be maybe at the ETF level or subsector level, as to where they're getting the most cautious? Sure. We've seen, I would say, specifically from the retail segment, because we get this question a lot, you know, what are retail investors doing? We've seen a shift in sentiment there to be more cautious on the tech sector, as you guys can imagine with all the headlines and performance in recent weeks. Well, what's interesting, so what we've seen is a decline in bullish activity in terms of outright call buying.
15:25That has dropped to levels kind of last seen during the 2022 bear market. But we're not seeing necessarily at the single stock level retail investors rushing to buy put protection. Instead, what we're seeing recently is a pickup of call selling. So call overriding activity. So basically they're saying I think upside is limited from here. I'm willing to sell that upside call against the stock that I probably hold in my portfolio, collect that income for certain now, and then that also provides a cushion in case there's a further sell-off in the market. All right, you addressed this with the answers to those two questions, but I have to ask, you're seeing volatility in the volatility index.
16:01The VIX was below 18 at the beginning of the day, traded 20.5, closed 18.5. And today was not an abnormal day in terms of the market, but this has happened a few times over the last couple weeks where we see these spikes. To me, they're tremors waiting for something bigger to happen. Am I making too much out of it? No, I think you're right. There's definitely a lot of push and pull in the options market and in the equity market in general. And I would say where there's the more volatility is at the single stock level. Right. So there's a lot of if you look at out VIX index for single stocks, VIX EQ, that's in the 40s.
16:32So VIX in the 20s or the high teens, it's elevated, but it's not that extreme. But single stock volatility is very high. And I think that's where a lot of the action is happening, as we're seeing with these earnings reports. So you just got a spike that's a one year high. Yes, you're in the indicator. Is that a leading kind of thing? Is it concomitant or is it lagging? Meaning the fact that people are embracing fear after Microsoft has just dropped 20, 30 percent. So is this the kind of thing that usually happens just before it all reverses? Or is this a leading thing that suggests there's much more to go?
17:02I mean, that's the end of the day of all that matters, right? Yes, that's a great question. We've looked at historically whether when SKU reaches these levels, whether it's a contrarian or confirming indicator. It's a mixed record. So it really kind of depends on whether the catalyst that people are hedging for comes to pass. And I would say the kind of the catalyst that a lot of people are concerned around now is weakness in the labor market, potential shift in the macro environment. Some of the movements we're seeing in the bond market with people now pricing in more dovish, more Fed rate cuts on the back of weaker growth expectations.
17:32You know, that historically has been a catalyst for just higher levels of correlation in the equity market, higher levels of volatility and a more severe pullback in the market. So it just depends, I think, whether the catalyst ends up happening. But certainly I think there's a lot of caution out there in the options market in terms of positioning and flows. Mandy, great to see you. Thank you for coming by. Mandy Hsu of SIBO. Interesting, the cautiousness. You want to hold your positions, but you still want to collect something.
17:57Melissa Lee:Yeah, I think there's probably something about the S &P going sideways. And you say to yourself, well, vol is probably really low. But when Mandy talks about skew and the cost, you know what I mean, to insure rather than to kind of take bets. The other thing I think is really interesting, all of a sudden over the last, let's call it, year or so, there's other ways to express risk in the market that is not probably finding its way into some of the traditional indicators. And that is event contracts, right? And we're seeing that. And then the flip side of that is look at CME Group. It's trading at all-time highs.
18:21Melissa Lee:And that kind of suggests that this company, or at least people, see this as a proxy for volatility. So I think those are two really interesting things about the risk in the market.
18:30Karen Finerman:I think what's interesting is that the places that we're most worried about volatility, FX, and the bond market have actually really settled down. And if I hear this kind of pessimism on the equity side, to me, this is the most hated bull market, at least of all time, is the kind of thing that people say all the time. So I'm not going to say of all time. But this market is just off all-time highs, and people are scared to death. And we're hearing it from the retail community, maybe not scared to death. But they are not necessarily excited about the upside. I think this shapes up for an equity rally.
Read the full transcript
18:58Karen Finerman:I think the market feels like it's in a lot of pain here. All right. Shifting gears here to the staple space. Shares of JM Smucker surging nearly 9%. Smucker. That's its best day since March of 2020. The jam and jelly maker topping earnings estimates, naming two new board members following an activist campaign by Elliott Investment Management. Even with a modest pullback today, the broader consumer staples sector having a great start to the year. XLP up more than 14 percent in 2026. So is this defensive sector more attractive than tech at these levels? And we should make clear that there are parts of this defensive sector, staples, that trade more richly than tech.
19:36and have a better trajectory.
19:38Karen Finerman:Well, we had this conversation yesterday, and what I wanted to point out is that you've had it from both sides. You've had the sense that staples suddenly have a lot more tailwinds, whether it's inflation, which sometimes helps their valuations, but it's actually more under control from the gross margin perspective, but the derating of tech. I think you have to be careful here. I do think there are parts of the staples world that I really love, and we are investing. If you look at tobacco, tobacco stocks are breaking out to all-time highs. You're seeing that these are some of the most resilient companies in the world.
20:06Karen Finerman:I think you have to be careful of the staples to tech trade. You can't tell me that this isn't something that's long in the tooth over the last two months. Is it? Well, let's look at it. It's an equal and opposite move of hood, right, of Microsoft. The exact same day these started going up, those started going down. So it's a money flow thing. But at this point, they're clearly overbought. We know that the sector is influenced heavily by Walmart and Costco, right, the two big weights. But they're not traditional staples. It's really the Procter & Gamble. It's jelly. It's Campbell's soup. Jelly.
20:37Things like this, right? Soup and crackers. I would fade the move. I like jam. I know you like a cup of Folgers. You know, it's funny you say that. Coffee is the biggest part of jam smucker. That's why I say that. First couple things. Quickly, please. Well, I mean, really? We're doing that? Yes. Yeah. I didn't want to say it. No, no, come on. Now you're taking longer to say it. Elliot and them sort of conversing together. That's Smucker's valuation reasonable. And as Carter is probably looking at, Smucker's just traded down the levels we last saw in December of 2018 and held. So I think the bounce continues here.
21:12Coming up, a retail recovery. The latest numbers out of TJX and the names our traders may want to put in their shopping carts. Plus, China Tech takes a turn. What is weighing on the Internet stocks and the names getting hit the hardest? Do not go anywhere. Fast Money is back in tune.
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23:20But typically, They are conservative when it comes to Guy. The stock was higher in today's session. I know that you are a maxinista.
23:27Karen Finerman:It's obvious, right? So, I mean, so let me be humble about this. Look, this is, it's a great story. It's a great story on margin. Guy, you'll be happy to know the shrink is back to pre-COVID numbers. And this is a story that on comps, on at least same store sales comps, up 5%. You're getting this at the end of what's been an incredible run. The gross margin on the merchandise seems to be expanding. which tells you they have a lot of room and a lot of flexibility. Yeah, 30 times forward. 31, actually. And I'm glad you mentioned that because the guidance was light, but they typically sandbag. And the street, it says, you know what, we're on to your game.
24:05We're not going to – because with other companies, you probably get a pretty significant sell-off given that valuation on the back of that guide. You didn't get it, which tells you all you need to know. I think the stock continues higher. How does this chart look to you? I mean, this is just up and to the right in a very orderly fashion, but the price action is fairly muted. I would sell calls against any long position. Interesting. But 30 times, that sort of raises the question. Like, how much do you pay for these? The Bernstein analyst who we spoke to on Closing Bell Overtime was saying that this is an AI-proof business because you have to go into the store, as you know, to find the deals.
24:35They don't sell this stuff online or they have very little assortment online. You've got to really go in. You've got to go on the racks and all that stuff.
24:43Karen Finerman:If Walmart can trade at a 40 multiple, and I know it's not apples to apples here, but why can't TJ Maxx trade at 35 to 40? I mean, I think that's the story. That's what the analyst community is doing on this. And everything about their business right now says they deserve a multiple expansion. There's a lot more fast money to come. Here's what's coming up next. Connectivity issues for the China tech trade. What's hitting the Internet stocks? And is there more pain ahead for this space? Plus, the latest on the battle for Warner Brothers Discovery, how the company is digesting the new bid from Paramount, and whether Netflix could still come out on top.
25:18We'll talk with one industry exec to get his take. You're watching Fast Money, live from the NASDAQ market site in Times Square. We're back right after this.
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26:21Seriously, all of it. And we trust you to make smart decisions. After all, you listen to this show. See terms at discover.com slash credit card. Monday AI agents took over my work.
26:33Melissa Lee:And I absolutely love it. Chasing deadlines, writing status reports, updating stakeholders.
26:39Karen Finerman:Agents handle the daily grind now. They live inside Monday.com. So they see the full picture. My work, my team, the whole company. And I don't have to worry about the data. It's safe, which means I'm free to focus on the big stuff, knowing everything runs smoothly in the background.
26:54Melissa Lee:It's completely shifted the way we work. Create your own AI agent in minutes on Monday.com. Welcome back to Fast Money. China tech stocks under pressure again today. The K-Web down seeing its sixth straight day of losses, now down nearly 8 % this year. Baidu dropping 5.6 % today after missing Q4 revenue expectations. That was its worst day since October. PDD, Tencent, J.D. Baba also ending the day in the red. What's going on, Ambassador?
27:22Karen Finerman:Well, I think people are feeling less clear also on just the U.S.-China dynamic. I think that's something to do with it. I don't think it should ever be folks that you should be worried about delisting, and this is something that has haunted Baba for a long time. I guess you're really looking for some catalysts here. There haven't been any. I think there's extreme value here. There's no question these charts are broken. Alibaba, I think, I mean, was it in everybody's acronym last year? Last year. Yeah. And I don't think you should be running from this one. I am long it. We have a major position in Idevo, so I stay there.
27:53Was it being your tube? It's been. Yes, it was. And it performed extraordinarily well. Late in the year, it gave a lot back, and it's been floundering ever since. But to Tim's point, I don't think you run too far. I get all the risks associated with these names, but you just do back of the envelope math that it suggests these stocks should be a lot higher. Alibaba being one. But there are other ones as well. But this is the one that I sort of drilled down on.
28:15Melissa Lee:Yeah, after the devastation we've seen in U.S. Internet stocks, I'd much rather go there. If you just look at, let's just say, a Reddit. You know, this is not a company that's probably going to be massively disrupted anytime soon by AI. If anything, they should be a beneficiary. And I think this is something that a lot of investors just didn't have a hard time selling a lot of these names, whether it was Airbnb or, you know, Uber. I'm looking at that sort of thing. So I'd probably stay away from K-Web and do some bottom fishing here in the U.S. Coming up more on NVIDIA's big reversal post earnings and what Corweave's earnings say about the space.
28:44One top tech analyst will weigh in on all of that and much more Fast Money in two.
28:52Welcome back to Fast Money. Another check on the moves in Dell and Corweave after hours. Two names heading in very different directions in the extended trade. Our next guest says insatiable compute demand should keep the both thesis intact for this trade, even after NVIDIA's worst day since April. DA Davidson's Gil Loria joins us now with more. Gil, great to see you again. Just saw you yesterday in closing Bell Overtime. But what did you make of the price action today's session on NVIDIA off of what the entire analyst community was calling a very, very clean quarter, a great quarter and good guidance?
29:22Karen Finerman:Yeah, it was a clean quarter and they guided for the rest of the year, which they haven't done before. So and into next year. So that's why we were all happy with it. But what the market is telling us is it's back to that concern about are we going to get a good return on investment here? I think that's where investors got nervous today because they're seeing NVIDIA grow this much. But then they're seeing CoreWeave today report pretty low margins. Are they getting the return? Are the bigger hyperscalers going to continue to buy from NVIDIA? The concentration for NVIDIA has gone up. So we're back to that concern of is AI going to get good return?
30:04Karen Finerman:Is it good enough for that? We're coming off of the other type of concern that we've had last few days, which is AI is so good that it's going to run over everything and software is useless. Today, that trade reversed. So we saw those two cross currents and they netted out with a negative result to the whole semi-complex, not just NVIDIA.
30:26Melissa Lee:Hey, Gil, it seemed like a trend in this past earnings season over the last month or so is that we had these huge cyberscalers announce big increases in their capbacks. The stock got punished, right? We saw that in Amazon. We saw it in Microsoft. We saw it in Meta. You know, I'm looking at CoreWeave here, and they're guiding capbacks. I think consensus for the year was basically$26 billion. Now they're saying at least$30 billion. And this is a company like we've just talked about is having a hard time raising money here and there. How do you think about that? Is this a company that is going to have a hard time because they don't have the balance sheet?
30:58Melissa Lee:They don't have the cash flow. They are losing money. The cost of capital is much higher than some of the hyperscalers, and they have huge customer concentration. Help me think about this a little bit.
31:07Karen Finerman:Yeah, no, that is very challenging. But what's changed just over the last few weeks is NVIDIA has stepped in yet again, took an investment, and is guaranteeing a lot of the capacity for CoreWeave. And what's being reported is that Meta's ready to do the same thing, to start backing CoreWeave loans in order to reduce the interest. So CoreWeave has just made itself so central to this big data center build out that NVIDIA and Meta and to a certain extent Microsoft and OpenAI just have a vested interest in continuing the growth at CoreWeave. The longer term challenge is still, is CoreWeave going to get the good returns?
31:49Karen Finerman:But there's enough big market participants that are willing to back it and are continuing to come back again and again to back CoreWeave. That's why they can deploy all this capital and maybe even lower the cost of capital through guarantees from NVIDIA and Meta. Wow. I mean, that's like too big to fail. I mean, it's just it's at the center of this and everybody has a stake in it. I mean, is it throwing good money after bad in your view, Gil? Which I guess is really the question about CoreWeave itself. Well, I think that's the big picture question. Is the investment from Microsoft, Amazon, Google, and Meta going to create these positive returns for them?
32:31Karen Finerman:They keep telling us, especially the big companies, Microsoft, Google, and Amazon continue to assure us, don't worry about it, we're only building data centers that we've already pre-sold or that we have very high visibility that we can use those. And then in Microsoft and Meta's case, they're going to Oracle and CoreWeave for overflow. So now we just need to start seeing these returns come in at the Microsoft, Amazon, and Google level. If that continues, they will both continue to deploy their own CapEx as well as spend money on the overflow at Oracle, CoreWeave, Nebius, et cetera. All right, Gil, good to see you.
33:09Thank you. Thank you. Gloria, DA Davidson. So the knee-jerk reaction, you just put up Microsoft. The crack staff NEC is on top of this. You might as well throw Oracle up because chances are that's lower as well. I mean, can CoreWeave, is it the epicenter of this whole software problem? I don't think that it is, but given the stock action that suggests it's part of the problem.
33:31Karen Finerman:Well, it's certainly at the center of the interdependence. And again, with Microsoft and NVIDIA backing you, I mean, seemingly this should be enough to actually give this stock a little bit of room to actually find some bottom here in the after hours. We'll see. But it's clear it's sell first, ask questions later. Ditto. That's how they say it. That's the word. Right, Carter? Yeah. Let me paraphrase Carter. All right. Coming up, the next move for media as a battle between Netflix and Paramount Skydance for Warner Brothers Discovery heats up how the White House may be getting involved and what media mogul Tom Rogers sees in store for this space.
34:09He's here on set. That's when he's back in two.
34:20Just getting some news on Anthropic. Kate Rooney's got the details. Kate. Hi, Melissa. So this is the latest in this back and forth we've seen between the Pentagon and AI giant Anthropic this week. In a statement, Anthropic CEO Dario Amadei says there has been, virtually no progress on negotiations with the Pentagon. It does come ahead of a Friday, 5.01 p.m. Eastern deadline for Anthropic to let the Pentagon essentially use its AI model, Claude as it sees fit for confidential use cases or face consequences. That could include being labeled a supply chain risk from what we've been told. The statement Amadeh gave just now, we are getting this in, he says here the contract language we received overnight from the Department of War made virtually no progress on preventing Claude's use for mass surveillance of Americans or in fully autonomous weapons.
35:07New language, he says, framed as compromise was paired with the legalese that would allow those safeguards to be disregarded rather at will, despite DOW's recent public statements. These narrow safeguards, as he calls them, have been the crux of our negotiations for months. A representative from Anthropic also says this does not mean that they are, talks have ended. They say negotiations are still going on. They're trying to say here, we are not walking away from negotiations. But the gesture that the And DOW made the latest was refused here by the CEO, as you just heard. But that is the latest.
35:41Still a 5-0-1 deadline tomorrow, Mel. All right, Kate, thanks. Kate Rooney. Meantime, Warner Brothers commenting on Paramount Skydance's latest offer in just the last hour, setting a deadline for Netflix to respond. CNBC's Julie Morrison got the latest developments. Julia. Melissa, that's right. Warner Brothers Discovery's board has declared that Paramount Skydance's offer is superior to Netflix. This starts a four business day clock, which would end midnight on Wednesday for Netflix to respond with a new offer. Warner Brothers Discovery says that for now, the Netflix merger agreement remains in effect.
36:13And the board continues to recommend the Netflix transaction ahead of the WBD shareholder meeting that is set for March 20th. Now, Paramount responded, reiterating the terms of its increased offer. CEO David Ellison saying, quote, we are pleased WBD's board has unanimously affirmed the superior value of our offer, which delivers to WBD shareholders superior value, certainty and speed to closing. Now, Netflix shares were as much as one percent higher in after hours trading on chances that this deal now doesn't go through. It had sparked some investor concerns. And amid all of these questions about regulatory approval today, Netflix co-CEO Ted Sarandos was seen at the White House.
36:57That's him there. Sources telling us he was meeting with staffers, not with President Trump. No comment yet from Netflix after WBD deemed the Paramount offer superior. Back over to you. All right, Julia. Thank you, Julia Worson. For more, let's bring in CNBC contributor Tom Rogers. He's also a senior advisor to Versant Media, which is, of course, CNBC's parent company. Tom, it's always great to see you. The stock is telling us that investors You're still worried that Netflix is going to go back in. What do you think should it? It's hard for me to believe that you make a trip to the White House under these circumstances and you're not still in the game.
37:31There's plenty of good reason neither of these companies should go forward. I don't think Netflix needs$60 billion of debt with a pristine balance sheet and the kind of growth they have. And when it comes to Paramount, if they truly believe Netflix isn't going to be approved in this transaction, they could wait and have it fall apart and probably pick it up a lot cheaper. But I think they'll go forward. I think we'll have another at least one more round. And we got a real auction on our hands. If Netflix goes back in, do you get much more bearish on this? And we've already seen the stock go from 130 to where it is right now, 130 June of last year to where it is now.
38:11I'm surprised at the market reaction after market here with Netflix going up. That suggests that people think that they're going to back out. And I just don't see that at this point. So I would expect another bid from Netflix and probably some downward pressure on the stock as a result. Yeah. By the way, we should know in the after our session, the initial reaction when Julia first broke the story at four o 'clock that the other offer was superior. The stock was higher than it was sort of flat when we started, Tom. And now it's sharply higher. I just think. So it's interesting that the change in just the past couple of minutes, now people are very optimistic, maybe, that nothing's happening.
38:48Karen Finerman:Well, I mean, Tom's calling it right. The stock should be moving lower if you believe that they're now going hard at the White House to make sure they're going to pass regulatory and then do what they have to do. But I don't think that's what's trading on. We have some breaking news. Julia Borson, what is it? Well, we have breaking news exactly about this. Netflix just now announced it is declining to raise its offer for Warner Brothers. So it is responding that four day clock is irrelevant now because it has responded just now that is declining to raise its offer. They're saying the transaction we negotiated would have created shareholder value with a clear path to regulatory approval.
39:25However, we've always been disciplined in the price required to match Paramount Skydance's latest offer. The deal is no longer financially attractive. They go on to praise Warner Brothers and they say in response to this, they say Netflix's business is healthy and this year will invest approximately$20 billion in quality films and series and will expand our entertainment offering. And they say consistent with our capital allocation policy, we will also resume our share repurchase program. So this is news here. The$20 billion looks like it's probably a slight increase from what they've spent in the past, but it sounds like they are going to put this chapter behind them, unwilling to match the offer made by Paramount Skydance.
40:09Melissa? Julia, thank you. Julia Borson. Look, everybody's a winner, like a peace guy. That's higher in the after-hours session because it got what it needed. Netflix shareholders like Tim breathing a sigh of relief here. Netflix shares popping in the after-hours. A bigger spend debt-free, right, on content here, buyback, Tom? I've been wrong before. I haven't been wrong on live TV like that before. That explains why the stock is much higher, though. The market got it right.
40:37Karen Finerman:The news just wasn't out yet. None of us had seen it. So, I mean, the direction on the stock is fascinating. What's interesting is that both companies win here, and that's fascinating. This also comes on within the last 24 hours. We've gotten earnings out of Warner Brothers. We've got earnings out of Paramount. Paramount's TV business looks OK. I mean, in other words, that's the profitable part of that business. And this is a fascinating time in media. I think some of the parts really says it goes higher. The problematic part here for Paramount is now 80 percent of the EBITDA of a combined Warner Paramount is going to come from cable networks.
41:13And with Warner's earnings just announced today, their cable networks declined in EBITDA by 27 percent in the fourth quarter. And that looks like it's accelerating because it was 21 percent for the year over year, 24 to 25. That means that Paramount, with all the leverage it's going to have and declines in 80 percent of its business, has a lot of work to do. And that's a very different model, I must say, with my Versant hat on than Versant with very little debt and a lot of capacity to be able to invest in the growth of these great franchises like CNBC. Stark contrast there. Julia's got some more details here.
41:56Julia? Yeah, I just want to note, Melissa, that as part of the deal that Paramount Skydance has offered, they will be paying Netflix's termination fee. So originally, it would have been Warner Brothers Discovery would be required to pay$2.8 billion to Netflix to terminate the merger. But as part of its increased offer going from$30 to$31 per share, Paramount also said, and in addition to increasing our offer, we will also pay that$2.8 billion to Netflix. So Warner Brothers no longer has to pay that. There is another termination fee that's worth noting. It's a termination fee that Paramount Skydance would have to pay if, for regulatory reasons, their deal was not approved.
42:40That's a$7 billion termination fee that would also be on the table should this deal not go through. Except that David Ellison was at the State of the Union, right, Julia? I mean, I don't know. We have to note here that Sarandos was at the White House today. So you have to wonder what kinds of conversations Sarandos had with White House staffers that made him think maybe it wasn't worth fighting this or increasing their offer financially when they have these regulatory questions ahead. Julia, thank you. Julia Boorstin. What does Netflix's path, Tom, look ahead now that it is free from this? What does it do?
43:19Well, Netflix was on a great growth trajectory. It is far ahead of everybody else. Disney was number two. Their streaming EBITDA is over seven times what Disney's is. So they have a great growth trajectory. They didn't need$60 billion of debt and to be highly leveraged given those advantages. I really think the bigger issue for Netflix is how it's going to handle AI generated content as it gets easier and easier for cheap but professional-looking content to gain viewership traction? And how does all the long-form programming that they're known for contend against that? And the fact that they don't have to make a$80 billion-plus investment in Warner that would have been in long-form programming, how much does that free them up to really deal with what looks like the big competitive issues for traditional television ahead.
44:21So I think Netflix path is great going ahead. So now that Netflix remains pure streaming, Tom, how does that sort of translate through to the rest of the sector? Does it make Disney look weaker, for instance, now that Netflix is free and is charting its course straight ahead? I think Disney clearly was a winner during this process of other companies being bogged down and they were probably rooting this would go on for a while and bog those companies down. Now that Netflix has been unleashed from those issues, I think Disney has its own issues in terms of how well it is able to drive viewership, engagement and the advertising revenue it needs to drive that.
45:07Paramount does have some antitrust issues. What you were saying before is true, I think, in terms of U.S. regulators and how the Trump White House might be viewing this. But let's not forget about European regulators. Let's not forget about the fact that they are consolidating two movie studios into one. They are taking two news organizations down to one. They are taking two streaming services and probably bringing it down to one. And all that has competitive issues that may create issues with European regulators. So that's part of the story is not over.
45:45Karen Finerman:So, Godfather, what else will they be selling off here? In other words, it feels like maybe it's not even antitrust. David Elson's done a nice job, or Paramount's done a great job of slimming down that company, making it more profitable. We saw Asset staying as it is, what's now put up for sale? This is, by the way, footage of co-CEO Ted Sarandos leaving the White House there. This is just moments ago, so this probably coincides with the release going out. Tom? I would say that certainly they have to consider asset sales because at close they're going to have six, seven times debt leverage here.
46:25And that's not sustainable. The other way to get that down, of course, is cost synergies. And they're talking about$6 billion in cost synergies. That's a lot of people who are going to be let go. There was some notion in Hollywood that people didn't want Netflix to get bigger because it was going to cost jobs. We're going to see a lot of lost jobs as Paramount has to get its debt down here. Again, Netflix is walking away from its offer for WBD. Guy, does the stock revisit$130 at some point? 115, and I think we've been pretty consistent, albeit the stock is going lower whilst we've said it. But certainty, regardless of outcome, was going to get this stock, Netflix, back to that 115 level where it broke down significantly a few months ago.
47:12So the short answer is yes. And quickly, every year around May, people graduate from schools. Sure. Yes, they do. Yes, they do. Well, there's been a graduation here on the set, if I may. Tom Rogers has graduated from a stud to badass right before your eyes. Wow, wow, wow. That's like a promotion. A promotion, a graduation, all in one, like a turducken. Yeah, exactly. Just quickly on the charts, Carter, Netflix. Well, Netflix is a pretty good example of so bad it's good, down 44 % from its peak of about a year ago and almost 30 % below the 150-day moving average and now bouncing. Whether it's news related or not, it's asymmetrical.
47:55I would say upside is much more interesting and available than downside risk. What are your thoughts on Disney at this point?
48:01Karen Finerman:Well, I have been of the view that this process was drawing light and tension on the intrinsic value of these properties and that some of the parts Disney is still more valuable than it's trading at. I still believe that. I can't tell you. The key to Disney is this change in management and really some new direction. Netflix, let's not forget, when it was at 130, all we were talking about, it was trading at 40 times. It was no longer cheap, and it needed a catalyst. It's bizarre that this is the catalyst to get excited about the company. Tom, it is great to see you, a badass as I was. She did it.
48:38Thank you, Tom Rogers. Up next, Final Trades.
48:48Final trade time, Tim Seymour.
48:50Karen Finerman:How about oil getting up near nine-month highs on Brent? XLE, going higher. Carter Braxton Worth. About 10-year yields at 4 % and going lower. We think 3.6 by TLT. Whoa. Dan Nathan.
49:01Melissa Lee:I think Robin Hood that comes out hood is set for a bounce here. We had no final trade last night, so we didn't have the opportunity to wish Karen Feinerman a happy birthday. Happy birthday, chairwoman. BLO. Thank you for watching Fast Money. Mad Money with Jim Cramer starts right now.
49:18All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, internet, or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such.
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From the publisher
Nvidia rolling over after earnings last night, and failing to lift markets as investors sell out of tech and semi stocks. The names getting dragged down, and where one top tech analyst sees Nvidia and chip & software stocks heading next. Plus the latest numbers out of Dell and Coreweave, weakness in China tech, and the battle between Paramount Skydance and Netflix as the media companies battle for Warner Brothers Discovery.
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