In short
Podcast Summary: CNBC's "Fast Money" - Nvidia Nears Records As Stocks Rally To Their Own… And Venture Investor Bradley Tusk On Tech (10/14/24)
Episode Overview In this episode of "Fast Money," hosted by Melissa Lee, the panel discusses the impressive market performance, particularly focusing on Nvidia's record-breaking stock price and how it influences broader market trends. Venture investor Bradley Tusk also joins to share insights on technology, cryptocurrency regulation, and investment strategies as the earnings season approaches.
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Key Highlights
Market Performance
- Record Highs:
- The Dow and S&P 500 both closed at all-time highs.
- Nvidia's stock reached a record high, up 8% in the past five days, with a market cap nearing $3.4 trillion.
- Historical context is provided with a reference to the two-year anniversary of the current bull market.
- Nvidia's Role:
- Nvidia's stock performance is viewed as a barometer for the overall health of the rally, with discussions around its resilience despite previous downturns.
- Analysts highlight Nvidia's technological advancements and growing demand for its products as critical factors in its recent success.
Earnings Season Insights
- Upcoming earnings reports from major tech firms and banks are anticipated to shape market sentiment.
- Nvidia's Earnings:
- Expected to report mid to late November, with anticipation of strong guidance based on robust customer demand.
Starbucks Strategy Shift
- Starbucks CEO Announcement:
- New CEO Brian Nickel is moving away from discount offers, aiming for a premium customer experience.
- Discussions on how this shift could impact customer retention and overall company performance.
Cryptocurrency Conversations
- Bradley Tusk's Insights:
- Explains the political landscape surrounding crypto regulation, emphasizing a potential improvement with the upcoming election.
- Tusk advocates for the CFTC as the preferable regulator over the SEC for cryptocurrency.
Tech and Energy
- Google's Nuclear Deal:
- Google partners with Kairos Power to power data centers using small modular reactors (SMRs), highlighting the energy demands of AI.
- Analysts underscore the importance of energy supply in the face of growing data center needs due to the AI boom.
Financial Sector Performance
- Bank Earnings:
- Predictions for upcoming financial sector earnings, with insights into Goldman Sachs, Morgan Stanley, and Citigroup.
- Discussion about potential market reactions based on historical performance post-earnings.
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Key Themes and Discussions
Nvidia's Market Influence
- Nvidia is viewed not just as a tech company but as a pivotal player in the stock market's current health.
- The discussion revolves around its future growth potential and the high expectations leading into its earnings report.
Regulatory Environment for Tech and Crypto
- Tusk’s commentary on the regulatory landscape illustrates the significance of political shifts on investment opportunities in cryptocurrency and technology.
- The panel expresses optimism about the direction of regulations under potential new political leadership.
Starbucks' Business Strategy
- The transition from discounting to emphasizing quality and customer experience raises questions about the company's ability to retain customers and improve margins.
Energy Consumption in Tech
- The deal between Google and Kairos Power highlights the growing intersection of technology and energy, as companies seek sustainable solutions to meet increasing energy demands.
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Conclusion This episode of "Fast Money" emphasizes the interconnectedness of market performance, technological advancements, and regulatory environments. With significant developments in Nvidia, shifts in corporate strategies like Starbucks, and the energy needs of tech companies, the discussion provides valuable insights for investors as the earnings season unfolds.
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Key Takeaways
- Nvidia continues to be a market leader with growth potential, influencing broader market trends.
- Upcoming earnings reports will be crucial in determining the future direction of both tech and financial sectors.
- The evolving regulatory environment for cryptocurrency could present new opportunities for investors.
- Energy demands for tech companies are rising, necessitating innovative solutions like nuclear power.
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This summary encapsulates the essential discussions and insights from the episode, providing a clear snapshot of the financial landscape as of October 14, 2024.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Transcript
Automatic transcript. May contain errors.0:01Live from the Nasdaq market site in the heart of New York City's Times Square, this is Fast Money. Here's what's on tap tonight. A record-breaking day. The Dow and S &P hitting fresh all-time highs with NVIDIA and a host of banks closing on new highs as well. What are the charts saying about the health of this rally? We'll go inside the numbers. Plus, ditching discounts. Why new CEO Brian Nickel wants Starbucks customers to pay those grande full cafe cap prices for their coffees and snacks. Is that the right recipe for a Starbucks turnaround? We'll debate that. And later is the crypto climate tell for the election.
0:33Why Wells Fargo thinks flutter is worth a gamble. And the details behind today's SoFi surge. I'm Melissa Lee coming to you live from Studio B at the NASDAQ. On the desk tonight, Tim Seymour, Karen Feiderman, Dan Nathan and Guy Dami. A milestone day for stocks. The Dow and S &P closing at all-time highs on the two-year anniversary of the bull market. The Dow closing above 43 ,000 for the first time ever. And the NASDAQ closing in on a milestone high as well, now less than a percent away. It was also a historic day for NVIDIA. Shares closing at a record high, now up 8 % in just the last five sessions.
1:05It is the first time since June the AI giant has closed at an all-time high. NVIDIA's market cap is closing in on Apple's, the chipmaker topping$3.4 trillion, while Apple's at$3.5 trillion. So what does NVIDIA's recent strength say about the health of this rally? Maybe just the strength of NVIDIA itself. Guy. It reminds me, first of all, people should know that Mel is playing her today. And you know what? They can hear it. Well, no, but you should be acknowledged for coming in on this Columbus Day. There's no I in the word Melissa. There is not, Tim. No, but there's an I in Tim and a me in Seymour.
1:37Well, often, often. You go back to sort of the spring, early spring, and Vidya had that huge move down into, you know, April, May. We had a 30 percent down draft. And the market took it like a champ. And quite frankly, the market's taken like a champ with almost a 38 percent move from the June 20th date that you just talked about to that August 5th low from 140 to 90, almost in a straight line. So it speaks to the resilience of the broader market without question. Now, again, for Nvidia, which has at least three or four weeks prior to earnings, you get through that 140 and a half level, which is a prior high, and it's in a new trading range.
2:14I feel like Nvidia has gone up a few times on the same news about Blackwell. Remember, it was I don't know if it was last week or the prior week where he said it's just insane. And so that sort of put, you know, some fire under it. And I feel like it keeps going up on the demand is insane Blackwell news. And I mean, the bar is just getting higher and higher going into earnings. At some point, I will probably look to sell some out of the money calls, but but not quite yet. I do feel like there's a little bit more to go here. And some of the rest of the names aren't quite as back to where they were.
2:49So I think there's still some money there. But it's funny when things just go up on the same thing. Right. Well, everybody watches Jensen Huang. And when Jensen Huang popped by the side of Squawk Box, that was very bullish. That's worth like$10 or$20 billion. Obviously. Yeah. But he also talked about the moat that they have around inferencing, which had been the skeptics sort of case, the bear case around NVIDIA, that they don't have that advantage there. And the CUDA software isn't the moat that it should be. But he addressed that directly. And so people are really taking heart on that. Right.
3:18So they're talking about this chip having 30x the performance for inference. Obviously, that's a cheaper phase than kind of doing the training on these sorts of things. And a lot of these companies that built these huge clusters, they've already done the training, right? So now they have to put this in place and get the mass adoption of these products, not just obviously in the enterprise, but also the consumer. I think, you know, I was talking to Fast Money friend Gene Munster earlier today. And one of the reasons why he thinks there's another leg to this is that folks are starting to look at next fiscal year.
3:44and they're saying that 40 % or so, mid-40s, earnings and sales growth is something that they're likely to hit, possibly guide higher. But then if you look out two years, consensus is calling for 20 % earnings and sales growth, and he thinks that's the one that probably gets ratcheted up at some point. I mean, talk about expectations. If we're starting to look out two years and trying to discount where consensus is, it feels like it's getting a bit euphoric. And you say to yourself, Guy just mentioned that 35 % downdraft from the highs a couple months ago. Well, here we are. We're all the way back.
4:13You tell me this whole move has been unabated over the last month and a half ago. What's going to be the thing to really break it out and keep it going? Now, you talk about earnings. That's going to be mid to late November. We're going to have all their customers. We're going to have Taiwan Semulator this week or so. They're all going to be giving guidance, and that's really what it's going to be trading off of. But at$3.4 trillion, just shy of Apple, just above Microsoft, things really have to go well for this company that's expected to do$125 billion in sales this year, which is basically a third of Apple's.
4:41It's half of, you know, Microsoft's, that sort of thing. And they've got to maintain these margins. They're already starting to come down a little bit. Well, Taiwan Sammy gave us an update last week, and those numbers were fantastic. So if you're going to impute that upon NVIDIA, I think that's great. It's interesting we opened the show talking about the run from October of 2013, the two-year bull run. NVIDIA, first of all, during this period, and it's one of those moments I feel like in markets, Where were you when in terms of that CPI, that October 2022 CPI, when the market went straight down on the highest inflation print?
5:13And since then, the S &P is up 69 percent from that intraday low. NVIDIA is up 1180 percent from that intraday low. So split adjusted somewhere around, you know, a little under 12 bucks a share. What's going to do, Dan? I think it's a combination of actually people just feeling, one, that the risk maybe to underinvestment is as big as the risk to investment. That's part of it. Cowan has no doubt talking about the hyperscalers having some kind of a prisoner's dilemma here. So the spend continues to go on. Part of the argument is that Hopper can bridge the gap till Blackwell gets going. And everything we've heard.
5:49And again, that insane comment of Tenda is, you know, two weeks ago, Morgan Stanley did a company, management meeting where they talked about also some of that same dynamic where they have bookings out 12 months. So it's not and no one's ever questioned whether the demand was there, but it was its degrees on that. I think from a chart perspective, I think it's I think it's fascinating. I think the fact that it's worked off that June low, that semis as a group have outperformed the S &P again and are leading by about 12 percent over the S &P since September 6th. And I think that's powerful for the market as well.
6:24I think that's a really interesting point you brought up in terms of the prisoner's dilemma. Do you want to be the CEO of the big tech company that didn't spend, didn't lean into AI, knowing that that's the next big trend? At some point, it may not be next year, but at some point, and say, you know what, we're going to pull back at this point. Nope, fair enough. No, no. Well, if you are that CEO, you better hope that comes to pass right away. Exactly, for the payoff. Yes. And you're seeing it, I mean, there are two companies that you're seeing a payoff. Walmart, without question, if you look at their last quarter, they talked about it, and Facebook as well.
6:52I'm sure there'll be other companies that start to reap the rewards of those investments, but we're not necessarily seeing it yet. And I'll throw this out there just because why not? You know, as we're approaching$3.6 trillion in market cap, which we're pretty close to it in terms of NVIDIA companies, do$180 billion of revenue next year. You can do the math. I mean, it's 20 times revenue. I mean, that's historically very expensive for this sector and these semiconductor stocks. Yeah, I'll just say this about Walmart and Guy. You make that. It's a good point. There's a customer who's using this technology, and hopefully they're getting some sort of return on investment or greater productivity.
7:24But I think what you're talking about is really the build out of these data centers. Right. And so the need for all of this compute. And so to me, I actually think there's a very strong case that there's going to be an overbuild. There's going to be overcapacity. And at some point next year, you will see people pull back on these orders. And that will be the thing when you see NVIDIA have these down 30 percent moves. That's like kind of just table stakes at this point. You know what I mean? That the way this stock has moved. But you could have a down 50 percent move in this. If people start to think that maybe there's just this kind of trough of like disillusionment coming, we have really near euphoria.
7:56Just look around and think about other times where we've saw these sorts of things, like some sort of skepticism about the pace in which these buying. We've had these big sell offs. So to me, I think it could come. I think that we're probably not too far away from it. We've talked about some of the use cases and then folks are just not telling you that there's this return on investment. But the more we hear about the likes of Walmart reaping the rewards of them being an AI, doesn't that support the case for the build-out? And if we get more and more outside of the sector. Well, they're using CompuPower, right?
8:26Wait, is that built into Walmart? It looks like NVIDIA. Pull up a five-year chart of that. I mean, whatever enthusiasm is about the kind of productivity gains or whatever they're going to get, it's in the stock right here. It's trading at 35 times. The point isn't about Walmart. It's about every other company like Walmart. We haven't heard about it yet. We're using Walmart. I mean, no offense, guys. I mean, like, it might be a rounding error. I mean, like, you could say it's coming up a low base. Let's think about the banking sector then. I mean, that's a huge sector with huge spend. Right, insurance.
8:52But this is going to take years to really get those sorts of returns on that sort of thing. I mean, think about when you're, like, upgrading your CTO and you're upgrading this enterprise software and you move, like, the transition into cloud-based things and a subscription sort of things. It took much longer than people expected. Well, from that June high to where we were, again, talking about intraday lows on that August 5th day when it was a combination of Bank of Japan. I don't know what was going on. Carry trade, weak data. But NVIDIA had a 36 % pullback from peak to trough. And that was not even one people were talking about.
9:23So your point is right, Dan. I mean, the volatility inherent in the stock is outrageous. But if you think about how quickly it recovered from that in the middle of a period where maybe that low was also on the concerns around black wealth production, fair enough. But the data points here, to me, are enough to say the next couple of years. And, again, if I was seeing a competitive landscape that was different, that would be another story. All right. Let's get to the banks here. Goldman Sachs and Morgan Stanley closing on new highs. This is both companies get set to report tomorrow. Bank of America and Citi are also on deck in the morning.
9:57So what are we expecting here, Karen? Well, the J.P. Morgan really started us off well, right? So I think we're expecting, well, Citi Bank, which is my sort of next largest position in the banks, I expect a good fee service. I think that card charge-offs will remain. I mean, J.P. Morgan seemed firmly in the 3.4 camp. I would think they'll be somewhere around there. And I think, you know, markets and banking activity was a positive there. So Citibank, though, has come a long way in the last three or four weeks. But I still think there is room to go there. It's undervalued. I know you always cite Guy priced a tangible book well lower than everything else.
10:37They do seem a little slow being able to get out of the under this decree or that decree, but eventually that will happen. So I like Citibank. You know, Goldman Sachs is interesting. Historically, we've seen, I'd say, and I don't know this, maybe Kensho knows if he still works for the firm, but 75, 80 percent of the time, you'll see Goldman sell off after earnings. And the levels that we're trading up to and the fact that, you know, this has been resistance a couple times leads me to believe, you know, maybe we're sort of at the upper end of the short term range. So I love we've liked Goldman Sachs for a long time.
11:08But the way the stock has traded into earnings to me is a little it's not all that encouraging for continued upside. And again, if you think about some of the cycles that Goldman's been on over the last couple of years, which, by the way, it was a three hundred dollar stock back in that same two year ago moment. Some of this was also unloading unprofitable or even loss-leading consumer banking dynamics, but also an environment where if anyone was able to navigate through and make money in some of their trading businesses and really in some of their specialty businesses, I think it's probably Goldman.
11:37I agree with you. At some point, this is not the multiple in the banking space that looks interesting. It's Money Center and it's regional banks. It's not Goldman. All right. Joining us now on what the technicals are saying about NVIDIA and what's next for the financials is LPL Financial's Adam Turnquist. Adam, great to have you with us. We've got a bunch of stocks at new highs today. So what's your forecast for Nvidia? Right now, when you look at Nvidia, it's been a pretty impressive breakup. Finally broke out of this consolidation range, we'll call it, cleared 130. And if you measure that move, you apply it to the breakout level.
12:10The technicals here are telling you maybe 170, 175. Of course, we don't cover the stock, but that's the technical objective-based price move. And we're finally starting to see some relative strength in the name. Hasn't had a new high since June, but it's rallied 40 percent off the August lows. That's certainly showing some great momentum coming into Q4 and maybe enough to turn the weakness in the semiconductors over and create an inflection point in relative strength there. Which bank chart looks the best to you? I think we've got to talk a little bit about Morgan Stanley because this one's been really interesting.
12:46It's been in this consolidation phase for, call it, three years, finally breaking out through resistance at 109. And it looks like this rally has more room to go. It says the longer consolidation phase, the more meaningful the breakout. So technically, we view this as a significant breakout, finally clearing that key resistance level. I think when you look at earnings coming up, we heard from J.P. Morgan, Wells Fargo, asset management revenues in those fees look pretty good. not to mention investment banking, trading and sales also looking pretty good. So some potential catalysts to drive this rally higher.
13:22And then on a relative basis, we're also seeing an inflection point when you look at Morgan Stanley versus the S &P 500, reversing a downtrend and starting to show some relative strength over the broader market. All right. So we mentioned it's a two-year birthday of the bull market. Are we going to be sitting here next year celebrating the third birthday or is it going to be over? I think we will be here. I don't know if we're going to talk about 27 percent annualized returns for the S &P 500. That's what we had during the first two years. Year three tends to be a little bit more challenging, but the good news, it's still positive.
13:56Depends on how far you look back, but average year three returns right around five percent. And the other good news is bull markets tend to be durable. They last on average at least since 1950, about 60 months. So five years suggesting this bull market has a little more room to run here. Adam, how about the relationship between either some of these sectors and the overall market? So semis typically have been the leader for this market and they've resumed that leadership. How about banks, though? You know, the cyclicality of the banking sector, the goodwill from, I mean, the investor community.
14:28In other words, people are reasonably fired up, especially in a more benign credit environment where growth isn't falling apart. How about our banks' leadership here? Can they be or are they part of that barbell? Because banks are leading on several different metrics. And when we started to see semiconductors give up that leadership status earlier in the summer, we asked ourselves, OK, who's going to pick up the slack? And I think financials have done a pretty good job of doing that. When you look at how many financial stocks are outperforming the S &P 500, over half. That's the highest across all 11 S &P sectors.
15:00They also have some of the best momentum with the most stocks clearing their important July high resistance levels. Even though valuations aren't as cheap as they used to be, though, I still think there's some relative value and performance here for the financial sector. Adam, thanks for joining us. Appreciate it. Adam Turnkiss of LPL. Morgan Stanley with the best chart. You agree, Guy? Well, let's take a look at that chart because you'll see the levels he's talking about now. This goes back to February of 22, that prior high. But look at the double bottoms. And I actually remember the group talking about that in October when the stock traded down to 74 or so of last year.
15:36It was the same low we saw, I think, in June of 2022. So that held up extraordinarily well. Now, of course, the problem is we're up against that prior resistance level. So yeah, it looks great. But keep in mind, you know, typically past resistance will be future resistance and we're right up against it now. Yeah, I'll just say this. And back to your question. And again, you know, I might have been a little glib with Guy about the Walmart thing. There are lots of industries where it's going to help out a lot. And to Guy's point, the company did spend a lot of time talking about e-commerce improvements.
16:04They talked about greater productivity, personalization, customer service. Okay. These are all things, to your point, Karen, are going to work within financial institutions. They're going to work in, but my only point about that is that these companies have been investing in machine learning and all this sort of stuff around data for a long time. So now it gives them the opportunity to talk about generative AI and using that to do all this stuff. I just think it's going to take longer than a lot of folks expect. Look at the correlation between Morgan Stanley and the overall market. This is an asset management firm now.
16:32It's not necessarily a banking firm, and that's where they put their business. Look at the move in the markets. That's AUM increase year over year. That's great for them. Coming up, Google going nuclear. The tech giant inking a new deal to power its data centers as the demand for energy grows. The details on that one next. But first, brewing up some changes at Starbucks by Brian Nichol is tamping down on discounts as he looks to turn the coffee chain around. And venture investor Bradley Tusk joins us in just a few minutes to lay out his take on crypto's comeback, AI regulation, and much more. Don't go anywhere.
17:00Much more Fast Money in tune.
17:05This is Fast Money with Melissa Lee, right here on CNBC.
17:17Welcome back to Fast Money, a pair of fast food movers in the fast food trade. McDonald's hitting a fresh record high today in its fifth straight winning session. Meantime, Starbucks shares sliding as the company gets ready to ditch discounts under new CEO Brian Nichol. Let's get to Kate Rogers. He's got all the details. Hey, Kate. Hey, Melissa. Starbucks is stepping away from discounts under its new CEO, Brian Nichol, who took the helm in September. That's according to a report in the Wall Street Journal. Now, in August, Starbucks started to phase out its$5 bundle offers of coffee and croissants, which were uncharacteristic for the coffee chain.
17:48They were introduced as a flurry. Remember, value deals hit the market, including$5 offers from McDonald's and Burger King as chains are competing for the low-income consumer. This phase-out did occur before Nickel's tenure officially started in September. Now, in addition, the Wall Street Journal reports the company offered extra loyalty points on Tuesdays and deals on Saturdays in a move away from a previous buy-one-get-one offer. Starbucks declined to comment on the report. In setting the agenda for his tenure at the coffee giant, Nichols said he wants to, quote, get back to Starbucks in a company-wide letter we previously reported on, doing things like executing well, slimming down the menu, and making sure that, quote, baristas have the tools and time to craft great drinks every time delivered personally to each customer.
18:30A premium experience is what the coffee company has, of course, been known for, and it seems that they're heading back in that direction with pricing and the overall experience. Melissa, back over to you. All right, Kate, thank you. Kate Rogers. Tim Seymour, what do you make of this approach? I wouldn't run too far away from promotional. I think pricing issues, I think they're a big deal for the company. And although we've gotten into this world where we're no longer as concerned about not only, forget the low end, because that's probably not Starbucks' customer. But I think you have a dynamic here.
18:59It's not like they're that hard at work at promotional for that long. This was September. They were doing these bundles. I think they actually, one of the things I heard was that they were pulling them back because of operational challenges in pulling off these bundles. So I just think Starbucks has to be very careful. There's a dynamic here where I think they are losing people. You add in the in-store operational dynamics are probably the biggest issue. That seems to be what he was talking about. And if, again, bundles were creating operational issues on top of operational issues, I would understand that.
19:26But I think on the price side, I think people are paying attention and they don't like it. I definitely agree with that. If I were a shareholder, which I am not, I would give him some time, though. Right. Let him do his thing. He's been there, you know, a minute. See what he's got to say, you know, see how it works out. But if this happened under the prior administration, this same news probably wouldn't have been unchanged, I think. Yep. Bank of America had an interesting note looking at some of the data amongst loyalty customers and non-loyalty customers. And they said that this data indicate that some of these occasional customers, they're just not going back to Starbucks.
20:03They're leaving specialty coffee altogether. Maybe they're brewing at home. Maybe they've given up coffee. Who knows why? But they're not going back to Starbucks. Which is why I don't think it's a quick fix. And the stock from 73 to 95 has been unbelievable. Yet it's still in like a three and a half year downtrend from its prior all-time high. And listen, at 25 times next year's numbers, it's not historically expensive. However, it might now be historically expensive given some of the obstacles. Get ready, Tim. They report on around Halloween. Boom. And it might be a scary one there, Mel. Good job.
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20:36By the way, speaking of scary, how's that almond latte going for you? Have you pulled back on your consumption of those? By the way, speaking of boo. There's nothing wrong with that. That's my drink at Starbucks if I ever go. Speaking of boo, Guy is not much of a BOGO guy, right? A what? He doesn't know what that means. I really don't know. So they're doing away with the BOGO. And you're a big customer. You actually are. Yeah, you are. I find it interesting. He's very easy for guests. So, Nicol, who just got here, and we were just saying this before the break. Like, I've never seen Starbucks advertise on TV.
21:06And over the course of this weekend, I saw them advertising. It wasn't fancy advertising. I don't think there was any people in there. It was like a cup of coffee and a green thing and their little mermaid thing. But I wonder, I just wonder. They showed the evolution of the coffee bean all the way through the cycle. Did they? I don't know. I thought it was compelling. My only point is I wonder if there's going to be a marketing shift, too, as they kind of reorient some of the products now. There's a lot more Fast Money to come. Here's what's coming up next. The tech trade is going nuclear as Google inks a new deal to power its data centers.
21:36How AI's energy consumption is changing up the whole space. Next. Plus, still looking for that swoosh? Nike under new leadership. But will the changes at the top be enough to send shares to new heights? You're watching Fast Money, live from the NASDAQ market site in Times Square. We're back right after this.
22:04Welcome back to Fast Money. Google inking a deal to buy power from small nuclear reactor developer Kairos Power as the company looks to meet growing data center energy demand. Meantime, Oklo, a fellow micro-reactor startup backed by OpenAI, Sam Altman, surging almost 10 % on the back of the deal. For more, let's get to Dia Drabosa. Dibo. Hey, Mel. So we know that all three hyperscalers, they are increasingly looking for ways to feed their growing appetite for energy to power AI. Nuclear power is proving a popular route. This deal between Google and Cairo, so it's the first of its kind. It focuses on the development of multiple small modular reactors, or SMRs, for 500 megawatts of energy.
22:43I've been characterizing that as roughly enough to power 400 ,000 homes. Another way to characterize it, one AI data center campus, really giving you an idea of how much energy is needed for the AI boom. Now, Google didn't provide any financial details, but this is part of what it is calling its clean energy portfolio. And it's a longer term project. The first SMR expected online by 2030 and additional deployments through 2035. On a media call, Google's senior director for energy and climate said that nuclear can play a key role in helping meet the company's energy demand cleanly in a way that is more around the clock.
23:19Another way he said Google is meeting increased energy needs is that they're looking for opportunities on the demand side, like using AI to shift compute loads to different times of the day to align with power grids and what they need. Now, Kairos is a private company, but Melissa, you mentioned this. Check out shares of Oklo moving higher in sympathy. This is a California-based advanced nuclear developer that is building its first SMR by 2027, so that would be ahead of this deal that Google has with Kairos and could maybe open it up to some opportunities if this is, in fact, a viable way of getting nuclear power online at a much smaller scale.
23:56Because it's backed by OpenAI's Sam Altman, is there any thought that they would, I don't know, make available the power to only certain players? It's possible. You're talking about Oklo, the public company. I'm not aware of them signing any deals with the major hyperscalers or open AI. But the idea is that nuclear power and just the energy needs for AI is so insatiable. It's going to rise at such a rapid rate. And these things are hard to get online. Everyone's just scrambling to find solutions. This idea of doing small nuclear reactors, that can maybe streamline the regulatory process versus a large traditional nuclear reactor.
24:36So it may prove a popular option and maybe for OpenAI since it's already got that connection. Right. Deidre, thank you. Deidre Bosa in San Francisco for us. Dan? It kind of screams of bottlenecks here if you think about it. So access to GPUs, you've got to build the data centers, access to energy. It just seems like these lead times are going to be sort of long. And when I think about Google, obviously, we know the FTC situation here. You know, this is the only mega cap, you know, I guess mag seven, if you want to call it, that trades below a market multiple. It seems like there's no shortage of headwinds that a lot of folks are kind of pricing into the story.
25:09And I say to myself, OK, so maybe this degradation they've had in margins over the last few years from 68 percent down to 62 percent really speaks to the sort of build that this company is going to need to do. And then the other issue is like all these competitors who are working open AI, perplexity, they are trying to kind of take a shot at their hold, I guess, on the digital ad market, throw TikTok in there, too. So, again, lots of headwinds here. Trade's cheap, though. I know you love it, Karen, but it probably is not a bad do right here if you can discount some of these things that are kind of coming for them.
25:40Not surprisingly, I'll take the nuclear side of this trade. And this is the first time it's ever happened. I mean, commercial construction of these small modular reactors, this is a big, big deal. Google get out there and say it's a carbon free footprint. We're thinking of interesting ways to to complement what's going on with wind and solar. It's a case where I mean, look, the the symbolism behind Microsoft cutting that deal and restarting the one undamaged reactor from Three Mile Island, which was, again, what produced some fantastic music in the late 70s. I mean, I just you have to understand what's going on in nuclear right now.
26:13And it's only really early stage. How about the energy side of the of the that's right. Right, right. For you. Oh, for me. Well, I mean, in the XLE is very little of, you know, not this. So I think it's so much broader than just data centers, right? If it really can become viable, if they actually do allow, I mean, at the first few to get approved and built, that will be the hardest. And then if they really work, I mean, that's extraordinary and very deflationary. Yeah. Real quick. I mean, this is a name we started talking about in the summer. But look at what VST has done over the last nine months, a stock that we never talked about on this show.
26:50And quite frankly, there was no reason to because for many years it basically flatlined. Now look at the stock. I mentioned it today because BNP Paribas upgraded it and put a$231 price target on the back of that. And the valuation at current price is extraordinary. That price is somewhat ridiculous. So these AI adjacent trades vis-a-vis energy, people are just sort of buying first, asking questions later. Keep an eye on this. Coming up, crypto, its proxies and Trump media stock all with big moves higher today. Are these moves pricing at a likely outcome on Election Day? We'll discuss that. And a new Nike CEO lacing up for the job today.
27:26But will new leadership give shares a reason to run higher? That trade when Fast Money returns. Missed a moment of fast? Catch us anytime on the go. Follow the Fast Money podcast. We're back. Right after this.
27:48Welcome back to Fast Money Stocks, setting fresh records to start the week. The Dow in the S &P 500 closing at new highs, and the Nasdaq jumping about nine-tenths of a percent. NVIDIA also up another two-and-a-half percent, notching a new record close. Shares of Caterpillar lower today. Analysts at Morgan Stanley downgrading the stock to an underweight, lowering the price target from$349 to$332. The firm citing mounting pressures from its construction industry segment. And checkout shares of Trump media surging nearly 20 percent today, now up more than 86 percent this month. Turning now to Bitcoin, a big move today, popping more than 5 percent, soaring above the 65 ,000 level Ether.
28:24Also moving higher in a crypto adjacent name Coinbase, climbing double digits as well. A host of crypto adjacent names getting a boost too. And with the election less than 30 days away, our next guest says either presidential candidate could provide a favorable outcome for crypto. Tusk Ventures CEO Bradley Tusk joins us here on SetNow. The firm's notable investments include FanDuel, Circle, Coinbase, and Roe. Bradley, great to see you. Thanks for coming by. Yeah, thanks for having me. So it's a win-win situation for crypto investors. Why is that? In fairness, crypto investors, it's been a winter for a while from a regulatory standpoint.
28:58Gary Gensler has been the single worst regulator in the history of crypto imaginable. And so the good news is, and this was basically good news once Biden dropped out of the race, whoever Trump or Harris pick is going to be better than Gensler. And in a way, because the crypto community has done a pretty good job on the politics, not only is Trump actively seeking their support, but Harris is as well. And so we know that we'll get someone better than Gensler and hopefully we'll start getting favorable policies. So let's talk about the favorable policies. What are like the one or two that are the most problematic that you hope to get?
29:29Well, I mean, the most important thing would be who actually regulates crypto itself. So there's been this sort of turf war in Washington between the CFTC and the SEC over that. I think everyone on the crypto side of it really prefers the CFTC and we're regulated as a commodity and not a security. But ultimately, to me, the thing that Gensler has done that I have found almost offensive is the unwillingness to tell the crypto industry what is and isn't legal. You know, it's one thing to say, OK, this is not OK. This is OK. And we can fight about whether or not, you know, we agree. But to just say, like, do what you're going to do and maybe I'll put you in jail.
30:02Maybe I won't. Like, that's un-American, right? And so, you know, whether it's margin lending or anything else, I really think more than any one specific policy, it's just, A, being treated with some basic respect and, B, just having information and predictability. Bradley, talk to us a little bit. I mean, given your history with Uber going way back, and we know that they had plans for autonomy and the like, and we've spent a lot of time talking about Elon Musk's plan for autonomy. They had this event last week. Are there any similarities about how Uber approached it? We know that they got out.
30:31I mean, like, are you going to take the over on when people think these fleets are going to be massively deployed? So this election also, I think, could matter a lot. So what's interesting is for the last eight years, the U.S. Department of Transportation has blocked any regulations and interstate autonomous vehicles and trucking because Trump saw himself as a Teamsters guy and then Biden saw himself as a Teamsters guy. But as you might have noticed, a few weeks ago the Teamsters said, we're not endorsing, which works well for them if Trump wins. But if Harris wins, I think that blockade is going to get lifted really quickly and all of a sudden those regulations are going to finally move through and that's going to mean autonomous trucking, autonomous driving, and I think that's the unlock the whole industry needs.
31:10Let's talk about you as an author. Flying Cars is a book. Is that fiction now, but is that going to be nonfiction in our lifetime? Yeah. I mean, look, there's, you know, over$8 billion invested in eVTOL, which is a technical name for flying car startups. You're seeing one's already doing cargo and things like that happening. The FAA has made pretty good progress in certification. The real where the rubber meets the road is going to be where do they take off and land in cities itself. Right. So we're sitting here overlooking Times Square. And yeah, sure. I mean, a flying car could get a lot of people here pretty efficiently.
31:43But where exactly you'd put a vertiport in the middle of Times Square, I don't know. So there is a world of political fights ahead. But the tech is, you know, I wrote a novel, as you kind of were referencing last year about flying cars. When I started writing it in 2020, it was like this is something years away and I'll do something futuristic. And by the time the book came out, it was like actually becoming a reality. Brad, first of all, go Mets. Let's go Mets. Big Mets fans. Good day today. Coinbase. Yes. So if we're in 2.0, maybe 3.0, why does Coinbase still work? If they were the on-ramp in 1.0, are they 2.0 or 3.0?
32:16I mean, I think so. I mean, to be clear, we were investors in Coinbase, but, you know, I tend to exit once the lockup is over and accompany IPOs. I don't have any position in Coinbase itself. But, look, I think that Brian Armstrong is a really fantastic CEO, and I think that he is constantly thinking ahead. And he also is a guy that, you know, there's not a lot of people who seem to have courage of convictions to say, I believe this. I'm going to stick by it. And if it's popular, great. If it's unpopular, great. And he's been willing to do that. And so I think he deserves a lot of credit. And, you know, while we're not public market investors, I really understand why people would want to back them.
32:47Obviously, we like to talk about your portfolio companies, Bradley, but what's in your portfolio of stocks? What's your number one holding? So, you know what? I actually totally it's all done by my financial advisors. I am focused on specifically the 53 companies in my venture portfolio and trying to make those all billion dollar companies. You don't get the itch to say buy in video or sell whatever. Here's the thing. When I invest in an early stage startup, look, we get it wrong all the time anyway. But at the very least, we're working with a lot of information. We're involved from the beginning.
33:21Either myself or my partner, Jordan, are on the board typically. And we're heavily involved in both the regulatory efforts for our companies and everything else. And I at least feel like I have some chance at impacting the outcome. That may be a fiction that I just tell myself. but I think that and my LPs think that. And when it comes to public equities, I don't feel like I can really move the needle much one way or the other. And so, you know, for me, you know, I found that I do better at early stage venture. Bradley, thanks so much for coming by. Yeah, thank you for having me. I'd like to speak with you.
33:51Coming up, big shoes to fill. New Nike CEO Elliot Hill taking the helm today, but can he lead a swoosh in the retailer's stock? We'll debate that. Plus, Flutter, SoFi, and HIMSS shares all hired today. The analyst calls and headlines have had those names in the green when Fast Money returns.
34:14Welcome back to Fast Money. New Nike CEO Elliot Hill clocking in for his first day on the job today, kicking off a turnaround effort aimed at getting the shoe giant back to the top of its game. The stock is down nearly 25 % this year and nearly 50 % in the last three years as the company's shift in retail strategy has failed to pay off. Obviously, it's his first day. There's a lot to do, Tim. But what would you like to be number one on his list? I think connection to the customer. I think this is one of the issues that I know it's we laud Nike for their DTC business and what that's meant to them and their leadership and certainly their margin profile and their ability to actually be in control.
34:51I think it's been an issue. I think it's one of the things that they're talking about. There's no question Elliott Hill is bringing the marketing prowess. People, I think the innovation story is one that's less important. Nike has always been, I know there's been innovation there, but it's always been about the brand. And that's been built through marketing. I think like Brian Nichol, give him a lot of time, right? Okay, it's day one. But I do think it's, I don't know, you know, the stories of morale being much higher, that's helpful. I think the DTC obviously has been a problem. It worked really well during the pandemic.
35:24They were set up great. But I think, you know, we saw what happened to Foot Locker on the other side of that, taking away the wholesale and going DTC. So I'm long. I think it's not cheap. There's some, you know, optimism built in. But I do think some optimism is warranted. Yeah, a lot more complicated than the situation with Starbucks. If you think about it, they've got to get the menu right. And there's some issues, obviously, you know, geographically. But, you know, this thing, if you think about all these different moving parts, is Loud good? Are we Loud their DTC? Like applaud. Yes. Law. Law.
35:57Law. Okay. Law to tour it. But it just seems like very complicated. The different channels, you know, we talked about. What? I don't know. Surprised that you didn't know that. I don't know. But it's a lot more complicated than Starbucks. Wouldn't you guys all agree? I don't know, actually. Yeah. I mean, there's similar, some similarities in that. I think they're more in control than Starbucks is. I mean, I think this is really about what they choose to do with this brand and this connection. I think they're going to retake it. But it's not just this brand. They're the largest athletic brand in the world.
36:24It's multiple brands. By far. Like, no one's close. What's the deal with the competition? The competition's been eating your lunch now for the last couple of years. Are you going to become Nike once again? And sort of, to Tim's point, show everybody that you're still top of the you-know-what pile. I'll say this quickly. You know, when we traded down to 73-ish. Why is it the you-know-what pile? Because I'm not allowed to say the word on cable television. But I've never heard that expression. You've heard it, Tim. The word that goes before pile. Yes. Anyway, can you finish your thought? Double bottom in the stock.
36:52We traded down to 2020 lows if you go back and look. So it actually technically looks pretty good. Expensive. It's always expensive. And, you know, maybe they can start to figure it out on the competition side. Why not just say applaud? No, but, you know. Because I'm trying to use a better word. I am a bit of a wordsmith. It's kind of fancy. So, I mean, look. You just feel bad that you didn't know it. We can define these for you if you need. We don't need to know everything. More you know. Coming up, a few fast movers catching our traders' attention. how they're handling the Johnson, Flutter, SoFi and HIMSS.
37:23That's next. More Fast Money in two.
37:33Welcome back to Fast Money. We've got some fast movers in the green today. Let's start off with Flutter Entertainment. Shares of the FanDuel parent regaining some of its momentum on a bullish upgrade from Wells Fargo Securities. Shares had fallen Friday on news that the U.K. is considering a higher tax on gambling. Wells Fargo saying to buy the dip, upgrading the stock to overweight, upping the price target to$294. Analysts saying Friday's sell-off is close to a worst-case scenario for U.K. taxes, but Flutter's management and track record make the stock appealing. Guy, I think you were mentioning this one.
38:03Yeah, and that's something Danny Moses has talked about, and I think valuation-wise, this one you can wrap your head around. But if you don't want to go that route, I think DraftKings had a huge sell-off, and it's starting to bounce again. I'm looking in the report. Sorry about that, Mel. The report on November 1st. So DraftKings in the earnings over the next couple of weeks, to me, can get some momentum back on the upside. I just have to say DraftKings was one of my stock picks with Breonna Stewart. The whole thing was just to be able to say, Breonna Stewart, you killed it yesterday. Great job.
38:30There you go. That was it. Yeah. Sneaky. Yeah. Take a look at shares of SoFi. That stock's jumping more than 11 percent on news of a$2 billion agreement with Fortress Investment Group for SoFi to grow its loan platform business, Dan. Yeah. I mean, this is a big part of their growth plan here. So to partner with someone like Fortress to give them that kind of backing, that confidence to do it, I think it makes a lot of sense. This stock has been kind of stuck in the mud. It's gotten back now towards 52-week highs. It's still well off these multi-year highs. So, again, it seems like a really great catalyst.
38:59And the FDA is reviewing its decision to remove Eli Lilly's weight loss drug from its shortage list, allowing compounding pharmacies to sell knockoff versions of the GLP-1 while the agency conducts its review. That news sending shares of HIMSS and HERS Health higher by nearly 10 percent today. The telehealth provider offers a compounded version of Novo Nordis weight loss drug, not Lily's. But still, there's this sort of uncertainty right around the whole space that the FDA can just basically dictate their futures. Look, I saw that headline, and you know a lot more about this stuff than I'll remember or something like that, whatever that expression is.
39:34But to me, that they're able to get out there and actually be making their own version of this and the FDA. We think about the FDA process for so many other drugs and that this is something that just seems to be a little willy nilly. Eli Lilly, by the way, has said that all dosages of its drug, terzepatide, are available right now. So it is not in shortage. So the company is weighing in. I don't know who you believe. The company says it's not in shortage. Why do you need the compounders? Why do you why? Why would you believe him's or hers? So. All right. Be sure to check out my full CNBC investigation.
40:07Ozempic Underworld, the black market of obesity drugs. You can scan the QR code on the screen if we have that, or go to CNBC.com backslash Ozempic Underworld. Dan, I know you're just kidding. You guys know what you're doing? I'm doing it right now. I thought you watched. You told me you watched it. Big shot? I watched it. I love it. Up next, final drinks. Watch it three times.
40:32If the New York Mets were a stock, 2024 was quite a season, a lot of volatility. Let's graph this. Let's go to the charts. We're going games over 500 against a relative strength indicator, a measure of however bought or however sold. We went into the season. Fundamentals were solid. Mets open 0-5, hit a low point, one of the worst starts in team history. They kind of meandered throughout the season, but hit a low point. Relief pitcher, Jorge Lopez, out of frustration, throws his glove into the stands. Team, 11 games under 500. Sentiment, all-time low. Francisco Lindor calls a team meeting, an inflection point, a time to be a buyer.
41:07Welcome back to Fast Money. That was our very own Tim Seymour charting the 2024 Mets season on SNY Sports Night this weekend. That's the network that covers the Mets. Fun stuff. We love the Mets. Some of us. And we love SNY. That's fun stuff to do. It's been a volatile season, so it's easy to talk about it as if it was a stock because that's what we do all day long. Markets and sports have a lot of crossover. As we're sitting here now, by the way, and it hurts me, pains me to say this. But the Mets are up now 6-1 as we head into the sixth inning, looking to come back to Shea, tied at one for the middle three-game set.
41:44We've got three innings to play. Let's play this thing out, and we'll take these one game at a time. That's how we're doing it here. But the thought of a Yankee-Met potential World Series is terrifying to me. Because as an arrogant Yankee fan, and I am an arrogant Yankee fan, would put me in a no-win situation, Melissa Lee. And we can talk about that on tomorrow's show. Sure, I look forward to it. Time for the final trade. Let's go around the horn. Tim. Yeah, a lot of power in that Mets lineup. A lot of power in Enbridge. Again, a midstream play that I think is underrated in terms of their ability to deliver on margin and cash flow.
42:16Karen. Yes, I find myself agreeing with Dan on the Google valuation below a market multiple. We all know there's some headwinds there, some legal overhang. Mainly, I think it's keeping it low, but I'm long. I like it. Dan. Yeah, while you're waiting for a Nike turnaround, you could probably play Lulu to the upside. Bye. Our stage director, Nancy's son, Evan, who never misses the show. Happy birthday, six years old today. Huge Fast Money fan, E.T. Go to McDonald's for your birthday tonight. Stock's doing well. Thanks for watching Fast Money. See you back here tomorrow at 5. Mad Money with Jim Cramer starts right now.
42:53All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their 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 notching a record close, as the broader indices hit new records of their own. How the AI darling can keep climbing, and if stocks can continue their rally as earnings season gets underway. Plus
Venture investor Bradley Tusk weighs in on tech, crypto, AI regulation, and more. The spaces he’s seeing the most opportunity in, and how markets will fare into year’s end.
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