Nvidia’s Post Earnings Blues… And JPMorgan CEO Jamie Dimon’s Bond Market Warning 5/30/25

0:03Live from the Nasdaq market site in the heart of New York City's Times Square. This is Fast Here's what's on tap tonight. Out of steam, shares of NVIDIA nearly giving back all their post-earnings gains. Why couldn't the chip giant turn things around with the rest of the market? We'll debate that. And May flowers. The S &P and NASDAQ looking to their best months since November 2023. But will the summer months be just as sunny? And how will next week's jobs report factor in? We'll get some answers. Plus, Ulta shares get a glow up after earnings. Netflix score two big bullish calls from Wall Street and a literal buzzkill.

0:34why booze stocks have been under pressure and how to trade the names. I'm Melissa Lee. Coming to you live from Studio B at the NASDAQ. On the desk tonight, Tim Seymour, Karen Feynman, Courtney Garcia, and Steve Grasso. We start off with the latest developments on the U.S.-China trade tensions. China stocks falling amid reports that the Trump administration is planning wider sanctions on the country's technology sector. Megan Cassell is at the White House with the very latest on this. Megan. Hey, Melissa, some back and forth between the U.S. and China today. Some harsh words on both sides. But that headline you mentioned coming from Bloomberg about midday reporting that the administration is looking at expanding restrictions on China with new regulations that would capture the subsidiaries of companies that already face sanctions.

1:15So the idea here, they say this is a draft rule that's currently being considered. And the idea is if you take a company like Huawei that's already subject to U.S. sanctions, if Huawei becomes the majority owner in a subsidiary company, that subsidiary would also be subject to the same sanctions. It's meant to stop this sort of workaround that companies have been using to try to avoid some of these restrictions. So that put some pressure on shares, especially because it came after sort of this back and forth, starting with the president this morning saying that China had violated aspects of the trade truce that was struck in Geneva just a few weeks ago.

1:48China then firing back and saying that actually it was the U.S. that was the one that was breaking the deal here. So some tensions and some questions when I was at the White House earlier about whether this might lead to further action from the administration ratcheting up some of their moves towards China. But when the president was asked about China in the Oval Office mid-afternoon, he sort of downplayed things. He said, yes, that China did violate a big part of the agreement. But he went on to say that he's sure that he will speak to Chinese President Xi Jinping and that, quote, hopefully we will work that out.

2:20So, Melissa, no call scheduled between the two leaders. That could be the next step. But for now, the president's still seeming optimistic that they can work on some sort of deal. Megan, were there any specifics on how exactly China was violating that agreement made in Switzerland? Did this have to do with critical minerals, which U.S. Trade Representative Greer made reference to this morning? That's exactly right. When Greer was on Squawk Box, he talked about those critical minerals. And the idea was that in this agreement in Geneva, China was meant to soften its export controls to allow the flow of critical minerals to the U.S.

2:53But remember, there was no timeline attached to that aspect of it. The Wall Street Journal had some good reporting just in the last couple of hours that that piece of the agreement was really hard fought in Geneva, that it came along just at the end and that it was crucial to the two sides both agreeing to lower their tariffs. But with no timeline attached, the U.S. now feels that China has been slow walking that and not doing enough. So that is at the center of this here. I don't think it's the only tension. We also have these fights over semiconductor export controls, of course, and student visas, among other things.

3:24So a lot of tensions, but the critical minerals really do seem to be at the heart of it. All right. Megan, thank you. Megan Casella. And this all comes on today when we saw a sharp reversal in shares of NVIDIA, the chip giant dropping almost 3 percent, nearly erasing all its post-earnings gains. The stock unable to bounce off session lows, like most of the so-called MAG7 stocks. It is now up just half a percent this year, still more than 11 percent off the record high hit in January. So what does this tell you about the world's biggest chip stock that didn't participate in the rebound, especially as we do seem to have trade tensions ratcheting higher?

3:56Well, it participated when I thought the market was reacting to the fundamentals of the release. I think the market got tired today. I mean, again, this was the best. I think I had it the best May since 2000, up 6 percent. It wasn't a sell and may go away. It's a place where I think NVIDIA has largely rocketed back to where it belongs. It gave a little bit back here. But what we heard from the company, I think, reiterates the dynamic that Blackwell, second half of the year, the production that we needed, supply chains eased up. And we heard no sign of a delay in demand. And I guess, you know, I think about the week that was also when we heard from a couple retailers gap today.

4:32We heard it from Best Buy. I mean, there are impacts already in the retail world. The consumer has proven resilient. We've also heard that. I this felt like a week if I had to characterize it as anything. I think rates ground lower, vol ground lower. We're getting through earnings season. And there's always a new headline every day on trade that I think the market started to become more in a year or two. So I think Nvidia, a lot of it was I mean, look at how low it got in the low 90s. Right. So for Nvidia to move more than 50 percent is an extraordinary move into earnings. So we've seen how hard it is to go into big earnings.

5:07And no matter what you put up, sometimes it is enough. It was enough for one day. I think that rising China tensions, you know, with so much focus on Jensen's talking about how important China is to their business and to the AI sort of us leading the AI technology around the world. So this, I don't know, I think it was a little bit ahead of itself. I don't look at it as a structural problem there. And the whole market has had a huge run. Yeah, and I agree. I wouldn't say it's a structural problem. And I think realistically, they did so well with earnings in spite of the fact that they have all these headlines with China.

5:43And then today you get some increased rhetoric again. There might still be some issues with China. And I think yesterday there was some optimism that, OK, maybe these tariffs weren't legal or they weren't going to go through. There was a legal pushback. But now you're seeing that again. So I think some of that's putting pressure on NVIDIA after this really good earnings release. But I don't think it's anything I'd be concerned about just with some of those headlines. I think your peak NVIDIA bullishness, you would be hard pressed to find anything more bullish that's coming down the pike for NVIDIA.

6:11To Karen's point, you had that run from 90 all the way back up to 142. That's a lot locked and loaded for what's coming down the pike. Think about all the competition, AMD, Google, things that you don't, the hyperscalers are actually the competition because Meta is coming up with their own chip. Google is coming up with their own chip. Amazon, their own chip. So I don't see anything tremendously bullish going forward. The stock is sort of range bound right now, 90, 145. You don't think that there's going to be another deal signed with, you know, Saudi Arabia or some party in the Middle East, sovereign AI, for instance, or some sort of, you know, being an exemption in the chip export restrictions?

6:52I mean, all those things could be massively bullish. Massively. And I think that's why it ran to 140 and change. I think that was all factored in. I think that was the pop off of the$90 level. And if we're treating this like a trading show, not an investing show, I think you have to sell your NVIDIA at this level and wait till it round trips, wait till it gets back down to 100 or so. I'm not sure what took it back down to the 90s is going to happen again. I mean, really, we're at the worst of trade rhetoric. I think sentiment on NVIDIA is hardly bullish here. I think it's been kind of a prove-it story.

7:27I understand it's come back and I understand what they delivered yesterday was reassurance. And that should give a lot of confidence. I mean, there was no sign of weakness. And yes, gen sanity does seem to be alive and well. And yes, there are alternative export markets. And there is this sovereign AI market. And I think it's very important because nowhere have I heard of a fall off in demand. And then I would just take it back to a valuation at a time when we're questioning the valuation of the S &P. This is not a place where I mean, you know, I don't think so. Not on the next couple of years forward.

7:57We all know the growth isn't going to be there. So, you know, I hear you, Steve. I mean, it's hard to see a stock that moves from 90 to 140 hasn't had a big run. But I think the sentiment and I think the positioning of the company is important. I think they still could have very good growth. I mean, we'd always talk about, you know, the cloud service providers. Then we talk about Sovereign. But when you look at Dell, they talk about cloud service providers are 50 percent of their business on prem and companies. Right. We don't talk about that is 40. and Sovereign's 10. So that 40 is growing a lot.

8:29And we usually just think about how much are the big three or four, whoever it is, CoreWeave, Microsoft, Meta, Google, and Amazon, how much they're spending. But there's a whole other giant section that's growing really fast. But just think about the four top clients for NVIDIA, account for 40 % of their revenues. And those are the clients that I hear what you're saying, there's replacement, whether it's going to be a sovereign angle to be replacing. But you still have four clients that I don't think are going to be buying as much or as much at this level of cost. So let me throw the trading aspect back at you.

9:12You said, OK, if this is a trading show, you got to take profits. I get that. But at the same time, what you're talking about is something that happens not next quarter, not the quarter after, maybe not even the quarter after or the quarter after. I mean, in terms of replacing NVIDIA or a sizable amount of NVIDIA GPUs with in-house GPUs, that's something to happen over time. And I agree with that. I can't argue with that at all. But what does the market do? It's a forward pricing mechanism. The market usually probably pulls forward six to nine months. So plenty of times you look on a chart and then you get to the actual event.

9:46You think, oh, that's why it sold off 30%. It's a forward-looking mechanism. Well, I think your point on AMD is a good one, which is also the A in band, by the way, or bland, depending on how good I feel about Lyft that day. I mean, I just I think there's a case here to be made for AMD picking up the pace and what we've heard in terms of their ability to deliver a chip that also people were questioning about. I think in a world where, if anything, deep seek has made the playing field more level for other players and also shown that it doesn't have to be Blackwell all the time. All right. Meantime, another potential headwind for big tech.

10:21Germany considering a 10 percent digital services tax for large online platforms. Meta and Google among the names that could be most heavily impacted. For more, let's bring in Fast Money Friend and Deepwater Asset Management managing partner, Gene Munster. Gene, always good to see you. Hello. So how big of an impact is this? As I understand it, other countries already have a digital services tax and Germany is sort of joining in on the party at this point. Correct Melissa, it's about 2 to 5 % for a dozen or so countries. So Germany has not have one. So they're a little bit late to the game. But the news here is that the size of it is a step function bigger.

10:59It's a 10 % digital tax. It's also on revenue. And that's important because typically you pay taxes on earnings, but in this case, it is an impact to revenue. So think of this effectively as the impact. If it was like a tax rate, it would be about double that number, talking about like a 20 % number. And so that's one piece that kind of sticks out. A second is this rift, this continued friction between US tech and Europe. And we saw it with GDRP, the Digital Management Act. And now we're seeing it with this digital service tax. And I think what is ultimately at play here is kind of the sense that some of these countries feel like an injustice.

11:45And in the case of many of the countries, the Europeans especially, they don't get the benefit of a lot of the taxes because most of those funnel through Ireland. As you know, it's just an awesome tax shelter for big tech, and they're typically paying like a 12 % tax rate. And so the news here is that just the size of what Germany is talking about, and it kind of has some sounds, rhymes like what's going on with tariffs too, is these big kind of step function numbers. And it makes me wonder, is this just kind of all part of a trade negotiation? Hey, Gene, it's Karen. That was sort of my question, which is, was that sort of a, you know, Liberation Day kind of all right throw it out there 10 % of revenue but really we'd settle for five what we're actually a percent of earnings what would be a number that would be easily absorbable for a meta and Amazon or Google rather so keep in mind they're painted today in many countries kind of that two to five percent and so I think that a number the twos go up to fives and the five stays at fives I think probably is something that investors largely would look past The reason why the stocks didn't do as much today, didn't really react to the news is because I mentioned those other shots that EU has taken at big tech and they have made changes to the business.

13:11I mean, these taxes have gone up for them. They have made changes to the business. GDRP impacts how Google can sell ads, how Facebook can track, but they've just keep finding ways to continue to grow the business. And I think that to answer your question, how much would be absorbed from an investor perspective? I think they could probably take it up to 5%. And my guess is it is going to go up. I think that there's enough meat here and precedents that's already in place that you're probably going to see some adjustment higher. But my sense is investors will largely look the other way. Gene, when you look at the percent of revenue that comes from Germany for an alphabet, it's under 3%.

13:52And for a meta, it's just right at 3%. is a lot of this us just digging through, and I get it, the numbers, the absolute numbers are big. Those numbers are$10 billion. But when we really look at it, this doesn't change your thesis on these companies, right? It doesn't change the thesis. There is a piece to this. You're right on those percentage of revenue. There is a piece that the kind of governing body around these types of taxes isn't just a European, it doesn't just have European influence, it's global. And so there is this risk that effectively they ratchet it up for just across the board.

14:31And if you want to take it to the most extreme level, you look at these three companies, two thirds of their revenue comes from outside of the US. And you could build a case where if it goes from two to a 5%, you get a 3 % revenue hit, if all that makes sense. And so I agree, it doesn't change the fundamental thesis of any of these companies. But that's why there is this is worth attention, because it does have an effect of potentially impacting many companies beyond Germany and Europe. So when we say that Germany is the one that sort of laid to the party in terms of any sort of digital services tax, is the real I mean, it's surprising almost that the EU doesn't band together and say we will all or event maybe this is going to happen at some point, we will all raise it to 10 % because that will give the maximum leverage when it comes to an EU trade negotiation as opposed to Germany saying 10%.

15:24Absolutely. I'm surprised that the fact that Germany kind of went at this alone, I would think that if this was part of more of an orchestrated tariff negotiation, Europe would have maybe done something that was a little bit more organized. And so that does surprise me, but it's still on the table. And I think that, you know, they're probably, you know, they're going to float this out. They're going to see what the administration, the White House says about it. Germany is going to float it. They have floated it. And now they're going to see what the reaction is. And Germans, the European allies are going to, I'm sure, fast follow.

15:57Gene, to what extent are the Googles and the Metas of the world just going to be negotiating on their own? And in some sense, I kind of see this is where it's going. I mean, the revenue streams of these companies, they're like many sovereigns. And if you think about the influence they have in some countries, more important than others. So I'm tending to believe this is kind of no news because I think these companies are important. But I do think that ultimately the leverage lies in the sovereign. Just curious. But again, one on one bilateral. This is kind of the fallout from trade rancor everywhere.

16:28I think sometimes the U.S. government can get cut out of the middle. I think what we see over the last year, last six months, really since the election, it's a different answer today. I think that just given how tech has been positioning around the White House, kind of the influence and the effort that you've seen from their leadership, there is this sense that the companies are negotiating along with the U.S. government. And if you're going to rewind back to six months ago, a year ago, I'd have absolutely agreed with you. Each of these companies for themselves and they have to defend and debate their position on their own merits.

17:04But my sense is that there just seems to be bigger at play. Look no further than Jensen's comments last night. I mean, the White House is having a big impact on its business, and he's spending a lot of time there to try to make sure that they're well aligned. Gene, always great to get your take. Thanks so much. Thank you. Gene Munster, Deepwater Asset Management. Courtney, does this change your thesis on these stocks? You know, it doesn't change my thesis, but when you look at a lot of the MAG-70 or big tech companies, is there are a lot of headwinds and the regulatory concerns have been one of them.

17:36And I think this is something where you've already seen a lot of regulation happening, both in the US, but in Europe. And now you're seeing things like these taxes that are going on top of it. And I don't think those are gonna end in the near future. So you're looking at like some higher valuations, you're looking at some tariff exposure. This is just another one of those headwinds that I think is a big reason why you wanna stay diversified. So I absolutely wanna own these companies. You just don't wanna be overexposed. And we find so many people are much more exposed than they have any idea. And we just really try to point that out.

18:02Yeah. It does seem that for years, years and years, the EU has been going after big tech in so many different ways. And this is just another step. And GDPR was going to be disastrous. Not so much of an impact in the end. In the end. In the end. It was painful for a while. For a while. Yeah. Now now we're through it. Well through it. Yeah. Yeah. They do. They have just they throw out. They know they can get a billion dollars for anything. Right. Right. without even trying there. So I do think, though, for more for Google than meta, there is a very large or two very large issues out there that are well bigger than this would be, right?

18:41It's the antitrust, both antitrusts. That's going to be the most important thing to happen to these stocks in a while. Yeah. Yeah, I guess I just think about these companies in a place where really one of the other big themes of May was broadening of the market. I, you know, we don't even need to go out there and say it was peak. It's peak mag seven because, you know, I think on some level these kinds of skirmishes and dynamics around regulatory and change in some of the world tech order. I think it's obvious the market is broadening. This is actually good news for investors. And I would also just say that the negotiation stance that this administration has had with China and even Russia.

19:17I think there's other parts of the world that are saying, you know, China's kind of gotten what they wanted so far. Russia's definitely gotten what they wanted so far. And we might as well as well. I think this is healthy. They used to trade like a monolith. And now you see Microsoft up 9 percent, Meta up 11 percent. Google, to Karen's point, has a host of issues that they're facing. And that's why the stock is down 9 percent with an NVIDIA flat. So I think there's enough room to pick and choose which mega cap tech that you want. I think it's much more healthy for the markets. All right. Coming up, no need to conceal.

19:46We are highlighting Alta's big jump after earnings in the profit primer. Oh, boy. Giving the stock a solid foundation. We got the defense next. Oh, come on. Never ending. And on Friday, come on. And a radioactive trade for your portfolio. Nuclear stocks exploding this month thanks to the chain reaction from Trump's nuclear renaissance order. The names powering the trade and whether the gains are sustainable. Don't go anywhere. Fast Money is back in two. This is Fast Money with Melissa Lee right here on CNBC.

20:24Welcome back to Fast Money. No blemishes to cover up in Alta's latest quarter. That's a good one. Shares jumping nearly 12 % as opposed to the other ones, which are marginal. Shares jumping nearly 12 % on the back of yesterday's earnings report. The beauty retailer topping top and bottom line estimates, raising its annual profit forecast. Alta saying lower inventory losses and new launches, especially of celebrity-owned brands, help drive demand at its stores. It was a very strong quarter. They're saying consumer spending really picked up in May. Yeah. Post all the tariff uncertainty. Traffic was great.

20:58I mean, this is Keisha still been the CEO. She's been there, I don't know, 15 years. Maybe this is her second CEO. This is a second great earnings. I mean, so many good things happen. Comps were great. The margins were good. When you have that top line growth, the margins are good. And then you leverage, you know, your SG &A, you get great operating margins. That's happening. They they took share in mass. They took share in prestige. I'm surprised they had the confidence to put out. You don't need to. Right. You don't need to forecast in this environment. Everybody sort of gets a pass. And so they must feel awfully good.

21:32All of that was great. My only concern now is valuation. Right. This is now a high teens, multiple. It hasn't been here in a while. Not quite sure what to do. But I mean, kudos to them. They did a fantastic job. I mean, analysts are saying that the raised guidance was actually cautious because of what the CFO said. They said, oh, it's a pretty dynamic environment in terms of consumer spending, what's going on with tariffs. So we thought it'd be safer to take a cautious approach to guidance, which leads one to believe that the raised guidance may be a conservative raise. They have to feel very comfortable with that.

22:04Super confident, yeah. Yeah, and I think it's great to see they're actually taking share from their obvious competitors, like a Sephora. But even as Amazon or Walmart starts to get more into beauty, the fact that they're really able to continue that. When you're ordering everything on Amazon and Walmart, the fact they're still going to Ulta is, I think, a really strong sign. And the fact that consumer has still been picking up, and you actually just saw this with the consumer sentiment numbers, is people are getting a lot less pessimistic about the economy. I don't know if they're optimistic yet, but definitely not as bad.

22:31But you are seeing that savings rates are going up. So people are still cautious on their spending, but they are still spending at Ulta. And I think that's actually a really positive sign. They have zero international exposure, right? So I think that probably goes into a little bit of no headwinds for them of the current environment that we're in for the rest of the market. And if you go back to October 2023, stock was at 375, gapped up to 470-ish in January of 2024. Then it was a solid base. And then it ran another 100 points higher. So I think you're good here. Yeah. Yeah, I mean, Courtney's right.

23:04I mean, I'm getting my beauty at Walmart these days. So, I mean, it shows. Wow. I did set myself up for that one. You totally did. I was waiting for somebody to come in. It was intended to be. But part of what was interesting about this is the new brand launches and where they're incubating new brands. I mean, they are looking to stay on top. They are looking to stay in the lead. They are looking to actually have the margin associated with house brands. And I think that that's part of what works for the multiple. Given the move in the stock today, the multiple is actually north of 20 now. So it's not as bad.

23:35No, a little higher. Oh, higher. Yesterday was 18 and change. Oh, I didn't realize that. But the stock moved up so much. A little uglier. Yes. Yeah, yeah. There's a lot more Fast Money to come. Here's what's coming up next. The chain reaction pushing the nuclear trade to new heights. More on the radioactive run and whether the gains in these names are sustainable. Plus, Jamie Dimon ringing some alarm bells. The cracks he sees in the bond market and the impact it could have on equities, the economy, and your money. You're watching Fast Money, live from the NASDAQ market site in Times Square. We're back right after this.