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Episode Notes
Nvidia's Post Earnings Slide, The Trade on Big Banks (2/27/25)
Podcast Overview
- Title: CNBC's "Fast Money"
- Host: Melissa Lee
- Description: The podcast features a roundtable of top traders discussing daily actionable news relevant for investors, airing weeknights at 5 p.m. ET on CNBC.
Episode Summary In this special live episode from Times Square, the Fast Money team discusses the significant market impact following Nvidia's disappointing earnings report. The Nasdaq experiences a sharp decline, and the discussion shifts to investor sentiment and trading strategies in light of market volatility.
Key Highlights
Nvidia's Earnings Impact
- Nvidia's Stock Decline: Nvidia shares plummeted over 8% post-earnings, losing more than $270 billion in market capitalization.
- Earnings Report Analysis:
- Despite beating revenue and profit expectations, Nvidia's weak margin guidance led to market skepticism.
- The discussion centered around if this report marked a turning point for AI stocks and broader tech market sentiment.
Trader Perspectives
- Guy Adami:
- Suggested that the earnings report didn't "break the back" of the market but indicated short-term challenges.
- Mentioned past patterns where similar earnings reports led to declines of 25% to 40%.
- Dan Nathan:
- Offered a different view, arguing that while margins are concerning, the fundamentals remain strong and may lead to recoveries.
- Karen Feinerman:
- Emphasized the importance of examining Nvidia's future potential despite current challenges.
Broader Market Sentiment
- Retail Investor Insights:
- Charles Schwab's head of trading services joined to discuss current retail investor sentiment, noting a rise in bearish views but also bullish trends among younger investors.
- Trends in derivatives trading and investor engagement were highlighted, suggesting resilience in trading activity despite market downturns.
Other Stock Highlights
- Starbucks: Shares increased on operational improvements and menu streamlining under new CEO Brian Niccol.
- Visa: Stock reached an all-time high, indicating strength in consumer spending amidst inflationary pressures.
- Lyft: Shares saw a minor uplift despite not having substantial news, indicating potential market interest.
Audience Interaction
- The live audience participated with questions directed at various traders, touching on sectors like banking (J.P. Morgan vs. Goldman Sachs), portfolio management, and specific stocks such as Pfizer and Ares Capital.
Final Thoughts
- Trader Insights:
- Traders provided a mix of bullish and cautious viewpoints on market conditions, emphasizing the importance of long-term investment strategies and careful market observation.
- Conclusion: The episode concluded with acknowledgments to the audience and a reminder of the show's continued engagement with investor sentiment and market analysis.
Key Takeaways
- Nvidia's Earnings: Highlighted the volatility in AI stocks and raised questions about margins and future growth.
- Retail Sentiment: Mixed feelings among investors, with some sectors showing signs of positivity.
- Market Strategies: Emphasis on long-term investment strategies amidst current volatility and uncertainty.
Disclaimer All opinions expressed in this podcast are those of the participants and do not reflect the views of CNBC or its affiliates. The information is based on reliable sources but should not be taken as investment advice. ```
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Transcript
Automatic transcript. May contain errors.0:02Live from the Nantuck Market Site in the heart of New York City's Times Square. It is a very special night here on Fast Money. We've got company, 100-plus diehard fans from three countries. Over 30 states are here, folks all the way from Alaska, Hawaii, even Ireland, and they're part of our audience for this very special Fast Money Live event. Guy Dami is coming to set to take your questions, so get ready. But first, here's what's on tap tonight. The fallout from NVIDIA, the semi-stock's 8-plus percent drop, dragging down the broader market, sending the Nasdaq within a whisker of its Election Day.
0:36close. So what does last night's big earnings report say about the state of the AI trade and the future for big tech? And with the S &P now back negative for the year, we're taking the pulse of the retail trader. Charles Schwab's head of trading services will join us here on set with his view on investor sentiment and what those folks are doing with their money right now. Plus, Starbucks shares perk up under Brian Nichols stewardship. Visa charges to a new record and Lyft gets a little lift, a little too late for Tim's blysep though. Oh boy. Welcome everybody. I'm Melissa Lee here in Studio B.
1:05We've got a super-sized desk here for this extra special show. Steve Grasso, Tim Seymour, Karen Feinerman, Dan Nathan, and Guy Adamian. What a night we've got on tap here, right? Let's give the audience a round of applause. We can't hear the audience. Make some noise back there. There's a delay. Watch how loud it's about to get. It is amazing. It is amazing. We're so glad that everybody is here to share this special day. We start off with a late-day sell-off that sent the NASDAQ down nearly 3 % today. The tech-heavy index posting its lowest close since Election Day and now just half a percent away from erasing all of its post-election gains for the first time.
1:41The big drag, NVIDIA, down 8.5 percent for its biggest loss since the deep-seek scare a month ago. The AI darling shedding more than$270 billion in market cap just today is now over 20 percent off its record high from early this year. The move coming after the company's hotly anticipated earnings report last night. Weak margin guidance, overshadowing top and bottom line beats. So was this the report that broke the back of the market? Guy, what do you think? I don't know if it broke the back, but in the short term it clearly did. And you go back, we talked about this in January, that quarter they reported you had the engulfing pattern the next day.
2:13We said technically that looks like two times we saw last year, and both times resulted in anywhere from a 25 % to a 40 % decline. And we're in the midst of one now. The quarter was fine. It's not an indictment of the quarter. The numbers are staggering, but it's the magnitudes of the beats that are getting smaller. And one of my concerns was margin deceleration. And you saw it. Now, people will explain it away and say, well, reaccelerate today. The market shot first and asked questions later. Yeah, and they told you that margins were going to decelerate. So to me, it wasn't a big surprise. I actually just make this one point is looking at the post market, looking at the pre-market and taking your cues off of that is not really a great example.
2:48The stock opened up today. You know, for me, it was that there was not an upward earnings revision for the first time, I want to say, in eight quarters. There was nothing wrong with the quarter or the guidance or the commentary. It's just there was so much enthusiasm in this one stock as a pure play on this secular shift that the stock has been telling you for nine months that it's going to take a time. It's going to take a time out and it's digesting a little bit. So to me, I think the price action today made some sense. I would have expected it to be down 5 percent right after that conference call because there was no there there.
3:19What were we talking about? The test that yesterday you take a look at. Horshack checks. Arnold Horshack. Welcome back, Connor. Not really. But that's what this earnings report was, because it happened in the context of a market that wanted to see the holes in the AI story, that had a lot of doubts, that were worried about the uncertainties involved with tariffs and chip exports and things like that. You know, it was the blue dress, gold dress kind of thing. Right. So I, like Dan, had my own view that actually is different than Dan's, which isn't surprising. I thought the call was actually pretty good.
3:51I think that the margin story, I absolutely believe we're talking about Blackwell, which is this is the first quarter that they really started to ramp up$11 billion. And I think that they've talked about how difficult it was, how complex it was. And so that's expensive. And so that means margins aren't where they're going to be. I bought I believe the story of 71, let's call it, which was the disappointment in the margin story, which weighed on the stock. I believe that could go up a few hundred basis points. So to me, nothing was, I thought the call was good. And, you know, last night when I looked at it last, it was sort of up a little, flattish.
4:29Nothing really happened. So I don't think that the story unwound today. I think some other things happened as well. Maybe there were those who were really hoping for something big and had options and they just had whatever. Sell, that could be. But I think it was also the uncertainty about the China tariff situation. So that weighed on it as well. So I don't know. I don't want to get too distracted by what I think is really not a monumental event. Close to the lows of the session of very heavy volume, 160 percent average daily volume. It was the devil with the blue dress. And it's hard not to be distracted.
5:02And it's hard also to see where the semiconductors as a group close through that intraday low on deep seek. Two thirty two on the SMH is an area that I think everyone was kind of watching. And they actually traded through to the bottom. And if you look at semis and I say this a lot, which is where have you been getting market leadership? You've been getting semis leadership over Q's or Nasdaq. You've been getting leadership over the S &P from those two. And you now have semiconductors that after today's minus 6 percent are down about 5 percent going all the way back to March of 2024. I don't think there was anything wrong.
5:34I don't think NVIDIA could not have done anything differently with that number. And I think they massaged a lot of the information flow around global demand. And yes, as everyone has pointed out here, the margin story, which ticks down, is expected to go higher in the second half of the year. I think this is about tariffs. I think this is about macro data we got this morning. We got terrible housing numbers. We got we got PCE embedded in the GDP report, which was also not a great number. So ultimately, I think some of this is macro market intelligence coming into this. This is one of the most bearish moments that the markets have had in months.
6:05And today it played out. I don't think it has anything to do with tariffs. Is it a small aspect? Like, yes, I think the major headwind is that you have on the revenues over 40 percent is from four clients. Three of those four clients are making their own chips. If they pull away from this business. And by the way, all the other clients don't need the sophisticated chip that Blackwell provides for them. So you have an AMD. So you have a Gaudi chip from Intel. For me, it's about why don't you see where the stock can go? Probably 113 is where people are going to take a shot. That's the February 3rd low.
6:41But I think this thing dips below$100, and I think it's a commoditized business. You're talking about the number of people working on their own chips. You got a list together? So Steve just made a couple. So it's all the usual suspects, and you're going to kind of just knock them down one by one. But some of the kind of third-party folks who kind of rate these things versus the others, I mean, for inference, this is very different than the chips that are used for the training of the models. And so once you've trained up the models, then you can start using a lower-cost chip to do the inference, for doing all the tasks and that sort of thing.
7:11So the CFO spent some time talking about it. They got questions about this. And they see a huge opportunity there, right? They built some great models on these high-end GPUs. But the one issue that I have here about the margin, and this will come back to Karen a little bit, is like, so Blackwell initially in the fall, it was going to be, there were some bugs, there were some delays, and now they got it going. It's 30 % of that data center number that we saw last night. Well, there's reports out that Rubin, the next generation, is going to be six months earlier. So at the end of this year, well, that's a very complicated architecture, too.
7:40And they're going to have to spend a lot of money to get that up and running. So when I hear something about, well, the gross margin are going to pick up in the back half of the year, I don't like, like, back-end stories. You know what I'm saying? So to me, I think it makes sense to be a little skeptical. I'll try it here, Tim. Sometimes they're great stories. Dan does not like back-end stories. I'm saying. You know what I mean? I mean, not every back-end story. Back-half loaded is what I meant. Same thing. I'll say this real quick. You know, if you look at the SMH, which is not the best constructed ETF of all time, but it's one we look at, that made its all-time high of July of last year.
8:13And now we're breaking down the levels that we last saw in the fall of last year. That's problematic because much of this rally has been predicated on semis. And then Microsoft, which we all agree is one of the most important companies in the world. Look at how poorly that's traded since over that same time frame. So below the surface, damage is being done. All right. We've got an earnings alert on Dell. shares initially higher, but now negative in the after hours. After a mixed fourth quarter report, the conference call kicking off in less than half an hour. CNBC's Christina Parts Neblis got the numbers.
8:40Christina. Well, the conference call is actually underwrite. They started out about 30 minutes ago, but Dell's AI server business is equipped with NVIDIA's powerful chips and business in that section is booming. That's why its infrastructure solutions group, ISG, is the fastest growing segment. Although Q4 sales did come in below estimates, Dell's chief operating officer says deals booked with XAI, that's Elon Musk's AI model, and others put Dell's server backlog at$9 billion. Good news. These servers, though, include NVIDIA's chips. And management pointing out on the call just now, margins are actually lower with Blackwell than the previous iteration of Hopper chips.
9:14So that's, you know, weighing on gross margins for that section. Dell is also still highly exposed to traditional computers and servers. That's about 50 % of their business. management saying on the earnings call that they're still waiting for this PC refresh, especially transferring towards AI PCs, and that the consumer still continues to be challenged. You got a mixed report, too, just in regards to their guidance. But shares really turning once this call went underway to talk about the challenge consumer and margins for certain categories. Back over to you, Melissa. All right, Christina, thank you.
9:47Christina Parts Nevelis. Karen, you own this one. I do. I like Dell. I didn't love this quarter. I didn't get a chance to, I didn't hear the call, obviously, but I will listen to it later. But, you know, a little light on a couple of things. The PC refresh has been slower than we thought. Even, you know, the sexier part, the ISG, a little slower than thought. The guidance was very good in terms of EPS. This doesn't make this an expensive stock. They're talking about 930. So it's, you know, 12, not even. So I think there should be some support there. But I really want to hear the call and hear what, you know, where do they think we are in the AI boom.
10:26Right. Let's get more on NVIDIA's report and the state of the AI trade. Stiefel's Ruben Roy joins us now. Ruben, great to have you with us here on set. What did you make of the quarter? You know, within the context of all the moving parts going into the quarter, I really don't think it could have gone much better. I think Jensen and company, you know, laid out the vision, laid out the plan for the rest of the year. And I think, you know, things really went well. You had technical issues for Blackwell. You had the Deep Seek event. You had tariffs and all kinds of things. And then, you know, the overarching theme of how long is this CapEx cycle going to happen?
11:02You know, how big can it get? And we went through December quarter earnings and every hyperscaler raised their CapEx pretty much. Right. Google went to 75 billion dollars for the year from consensus expectations in the low 60s. So I think it went really well. Maybe a couple of things we could nitpick on, margins and otherwise. But overall, I think it was a great call. So why do you think the markets are so skeptical? I mean, I imagine that today was a very busy day for you. You spent all day talking to investors and clients, et cetera, about this slide into the close. Yeah. How skeptical are people of the AI story at this point?
11:36Because obviously NVIDIA didn't say anything. Jensen went full court press. You know, he did the conference call. Then he did a 20-minute interview on CNBC. and the stock still slid into the close today. Yeah, I think I heard the term, you know, shoot first, ask questions later. And I think there's a lot of jitters in the marketplace. I mean, kind of what's next? We've got this event. Probably, you know, there is a little bit of a de-risking, which is great. But then what? Right. So in our view, we've got a catalyst coming up in a few weeks time. NVIDIA is going to have their big tech conference, GTC, which I think is going to be really interesting in terms of product roadmaps, technology and otherwise.
12:08But, you know, until then, what are we what are we playing for? I guess, short term is sort of what's what's I think in the market today. Well, Ruben, maybe we're just playing for a valuation argument that at some point says this is really attractive. I mean, you know, relative to peers. And I would just say also help us understand within your coverage, especially in the semiconductor space. I mean, where would you rather be given at least and the concerns around A.I. are certainly not places that I think there's really almost anyone else that can even be in this game. So talk about valuation and talk about relative value to the peer group.
12:37I mean, it was cheap this morning when we were pitching it to the investors. Even better. Got better. We liked it this morning. We love it now. Down in the low 20s on next year's earnings. Right. And numbers didn't move much. Right. But, you know, you have a ramp coming. We want to play for the blackball ramp. It has it just started. It's going better than we thought. But second half, bigger ramp potentially. So a stock that's trading in the low 20s on forward earnings with, you know, margins. People are kind of complaining about 71 percent gross margins. I've been covering semiconductors for 25 years.
13:07That's pretty good. And as you guys know, NVIDIA is not a chip company. It's a system, software, and solutions company. And I think margins are going to go back up into the mid-70s as Blackwell continues to ramp throughout the year. And you've got other things, networking coming back, software coming back, et cetera. So I think the stock's cheap. It's the best way to play AI compute. But, yes, I think AI investment, it's a broader investment cycle. There's networking companies out there. There's a lot of other companies that are, I think, part of this, you know, boats rising with all tides that NVIDIA really is driving.
13:38So we're still in kind of full bore AI investment cycle. So, Ruben, thanks for being here, first of all. I thought he spent a lot of time on the call trying to talk about inference as actually needing much more compute than we had originally thought. And so how did you buy that? And how do you think that translates into the story? Yeah, I do buy that. I am, you know, and it's not just Jensen talking about it. We talk about we talk to supply chain folks. We talk to other users of various methods of AI compute. But I think something that gets lost is, oh, you need a lot of compute for training, and then we can do inference on our iPhones.
14:14I don't think it's that simple. I think the definition of inference across workloads is very wide. And, you know, there are inference use cases that require massive amounts of compute. And the other thing that's happening, I think DeepSeek is showing this, is that the world's changing very quickly, right? When you get to post-training models and we get to, you know, kind of distillation of other models and trying to figure out reasoning and otherwise, there's a lot of compute intensity. So that's what's going on. I think the world really hasn't figured it out yet. So when we talk about custom chips and custom solutions, I think NVIDIA's kind of approach of a GPU, which by nature is quite flexible and programmable and workload independent.
14:52I think there's a lot of merit to that as we figure out where the workloads are going. I still think we're in the very early innings of an overall AI investment cycle. And inference is, in our opinion, absolutely going to be a long tail investment cycle. Ruben, thanks for coming by. Thank you. Thanks for having me. of Stiefel. Steve, you have been out of NVIDIA for a while. Is it tempting? It's not tempting, only because after that DeepSeek headline, I know that people are still going to spend money. Those four clients are going to still spend the money. But they're also going to say, if I could spend fractions of the price, we better be working on better chips ourselves.
15:28So it's not, as Ruben said, it's not a chip company as a solo, but it's benefited from being a chip AI company. And I think there's plenty of other companies you can go to now. We've all liked NVIDIA. Some of us have liked it since the teens. I'm not saying we hate it. We don't need hate mail. I think it's time to let it breathe. So if I had to say 90, 150, I think 90 first. Remember, this is, I'd say, NVIDIA is a stock that's overshot every single cycle in each direction. Remember, in November of 21 to 22, it went down 65 percent. Nobody wanted to own it. Coming up, we're just getting started in this special edition of Fast Money Live.
16:08Our diehard fans have questions on stocks, trading, techniques, and much more. Hello, fans. We're going to get them some answers next. But first, sipping on Starbucks, shares touching a three-year high as the coffee chain gets ready to make some cuts to their menu. what the changes could mean for the stock when Fast Money returns.
16:38Welcome back to Fast Money. Starbucks bringing up some gains today. Shares rising more than 1 % and trading at levels not seen since January 2022. The gains coming ahead of next Tuesday's big menu changes. Starbucks planning to cut about one-third of its items. Drinks on the chopping block include the espresso frappuccino. Oh, Guy, you going to be okay? I'm fine, Tim. I'm fine. I'm fine. Lemonade. That's projection, Tim. And white hot chocolate. So let's dish on what the changes mean for this. You should have seen the list of the drinks. It is insane. Chai creme frappuccino, caramel ribbon crunch creme frappuccino.
17:13I mean, too much. Thank goodness they're paring it down. You know, we joke because I know Guy really does like all those fancy drinks. I'm pretty much just a straight coffee guy. But getting back to what are the drivers for Starbucks here? Again, you have a case with the new CEO and Brian Nichols, superstar. You've got a dynamic here, marketing guy. But really, it's been the operational dynamic. Streamlining this menu, I think, is part of it. The margin story is something that I think is still in question. But this stock's got a lot of good news price into it. I'm long. I'm happy. And the cherry chai drink, I think, is something that I won't miss.
17:46shy drink. I don't know. You know what's interesting about this? And, you know, I think they have the gap up here on the chart when they had that CEO change. You know, this is something when Steve Jobs came back to Apple in 1997, he took a look at all the SKUs that they had and he got rid of like 85 % of them or something like that. It really kind of set the stage to focus on the things that kind of made the company what it is. And I think that's kind of what this new CEO wants to do. That being said, the stock's come a long way in a short period of time and we got to see the rubber hit the road.
18:14Tim makes fun of me. You know, you understand the word projection because all the things that Tim likes, he's saying that I like. I get how that works. With that said, you know, if our crack staff and EC can put up a chart, you know, we've talked about this. Three-year downtrend was broken about a month, month and a half ago, and it sets up for that prior all-time high, which was, I think, in the summer or so of 2021. Tim knows better than I, but 120. But I think at that point, you've got to be taking some chips off the table. All right, we're going to take a quick break here, but Guy has got somewhere to be.
18:44Yeah, yeah. Get going, Guy. I've got to get my fanny packs. He's going to check in with our fans to get some of their questions for the traders. Also ahead, we'll go inside the mind of the retail trader. The head of Charles Schwab Trading Services will join us for a look into what they are seeing from users and where investors are putting their money to work. That and much more on our special edition of Fast Money, back in two.
19:25Welcome back to Fast Money. We've got Guy on the ground with our fans' most burning questions. Guy, what do you have? I mean, it's a little crazy here, Mel. People are excited, as they should be. We got questions, so I'm going to go to Dave. Dave, stand up and your question. Thanks, Guy. We're really happy to be here, and I hope I don't get in trouble with Melissa. Would you rather? Would you rather J.P. Morgan or Goldman Sachs? Wow, J.P. Morgan or Goldman Sachs. I'm going to answer that. I'm going to say Goldman Sachs because I work there and I love the people, but I guarantee Karen Feynman has a different answer.
20:00Karen, give it to me. Yes, you're right. I have a different answer. I would say J.P. Morgan. And I like that the business model is a little more recurring than Goldman Sachs, which, you know, is a trading desk and it's great and all of that when it's good. But we traded him a lower multiple. So J.P. Morgan and, of course, Jamie Dimon. Yeah, I mean, it's remarkable. The love affair with Jamie Dimon is and he's watching right now. Shout out to Jamie Dimon. I love you, Jamie. We're here with Shiraz from Toronto. Shiraz, your question. You know, I've been an old fan of fast money for many, many years.
20:33and Guy, you are our favorite. Listen, I'll Venmo you that money, but thank you. My question's on Meta. You know, I've owned Meta for many years now, and it's up a significant amount, a couple of hundred percent, and holds a big chunk of the portfolio. And now for the last couple of days ago, it had a 20-day streak, and you guys on this set say, you know, it's the best MAGA stock, and people say you should let your winners run. And but the problem I have is it keeps marching higher and higher each time. And what should I do? You went to the Peter Jennings class of question asking. You know, the questions are longer than the answers.
21:14This is great for Steve Grosso. This is all about portfolio management. Steve, what does he do? So when you got into the trade, you have to ask yourself, how much am I looking to make off of this trade? So you want to give yourself a profit. But you started off saying it's become a considerable percentage of your portfolio. What was it when you established the position? Because you should, in theory, bring it back down to that same percentage. But you want to give yourself a profit. So if you were looking to make 20%, take yourself 40 % out of it and leave the rest and let the ride with the house money.
21:47I'm with Ken Guthrie from Cleveland, Tennessee. A shout-out to Tennessee is in there. That's amazing. Your question. So, Vol, you guys commute with me every day from my hour ride from work from 5 to 6 o 'clock. So it's great to be with you. But my question is quantum computing technologies. What do you think the future holds for companies that are involved in? Well, as you've come to realize, I am not the smartest person on the show. I'm not the sharpest knife in the draw. But you know who is Dan Nathan. Dan, quantum computing. Yeah, great question. And, you know, we're always looking for new technologies that are going to drive some existing stories, but also some upstarts here.
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22:25You know, Microsoft and Alphabet, Google, have had some big announcements in the space, some research that they've been doing. And I think they got some early gains of that. But, again, I think it's too far away. You've got to be really careful about some of those small cap names that are saying that they're quantum stocks. Because until we figure out what that actually means and how it's going to be commercialized, it's probably a little too far in the offing right now. All right. I'm here with Mary. And she asked me a question before. And she said to me, is Tim Seymour as handsome in person as he is on TV?
22:54And the answer is clearly yes. But you have another question. First of all, you are my Taylor Swift.
23:07You guys are our celebrities. Really, you are our celebrities. Well, you're sweet to say. I appreciate you. Thank you. Yes. Even so much so, when my final time comes, they're playing the fast money music. It's not coming too soon, but please. No, it's not. But I've got a question. If somebody's got dry powder, should we buy? Should we sell? Or should we hide out in maybe treasuries? What do we do if we've got dry powder? Where do we go? Well, I'm going to give that to Karen Feinerman, the dry powder queen. Karen. Oh, thank you. I don't know what to make of that. You know, I'm always long, so I always want to be invested.
23:49And it's really hard to time the market. I never try to do it because I know I'll never get it right. But one thing I do really believe in is dollar cost averaging. You can just slowly deploy it. You don't need to make a decision, an emotional decision every week or month, however you choose to do it. You just deploy it over that amount of time. Ultimately, that works out. Tim? Alex here from the great state of Michigan. Love Michigan, right? I mean, give a round of applause for Michigan. By the way, sleeper this year, the Detroit Tigers in the World Series. What's your question? Hey, guy. I have a stock I'm very in love with.
24:26I play it for the dividend. It pays an 8.33 % dividend. And I reinvest the money I get from the dividend over and over again, compounding. What's your take on a stock called ARCC Aries Capital? You might as well ask me what the winning lottery numbers are tonight because you're going to get a better shot. I mean, that one's out of my ballywick. But maybe somebody on the desk, Mel, throw it up to the group. Maybe somebody knows a little bit about it. Tim is raising his hand. Tim, what do you think of Aries? Well, I know Aries. And ultimately, again, we're talking about a finance-focused company that has been delivering a pretty steady dividend yield.
25:06One thing we often say about stocks is I don't necessarily like to own a stock just for a dividend, even though there have been names like an energy transfer or even an AT &T has been resurgent. But it's not been necessary about the dividend. Now, in the case of Aries, in the case of some of these finance companies that are actually focused on investments in, I would call the middle market companies, it's been an incredible run for credit. And at some point, it's going to be an issue. Right now, I actually think these kinds of returns are ones I love compounding. It's like the magic in this world that actually exists.
25:36All right. We're going to get to more questions a little bit later on in the show. In the meantime, we're going to take a break. Coming up, the bears coming out of hibernation on Wall Street. Retail trader pessimism nearing record highs, but one firm is seeing some signs of hope. The latest read on investor sentiment next. Don't go anywhere. More Fast Money in two. Missed a moment of fast? Catch us anytime on the go. Follow the Fast Money podcast. We're back right after this.
26:09Welcome back to Fast Money. Today's sell-off intensifying into the close after President Trump confirmed tariffs on Canada and Mexico would proceed as planned. The Dow dropping nearly 200 points. It had been up 450 points at highs. The S &P down 1.6 percent. The Nasdaq leading to the losses down nearly 3 percent as NVIDIA plunged more than 8 percent on the back of its results. Well, individual investors are getting more pessimistic about the market, according to AAII's latest investment sentiment survey. The share of respondents with bearish views rising to 60.6 percent. It is only the sixth time going back to 1987 where that number has crossed the 60 percent threshold.
26:46Purpose spoke investment group for more. Charles Schwab's head of trading services. James Costulius joins us here on set. And you're actually seeing something a little bit different. It sounds like there's some optimism out there. Certainly. Well, thanks so much for having me, Melissa. I would say, yes, a little bit different. But the recent survey we did was a quarterly sentiment survey. And as I was just telling Steve, wow, can things change quickly within these markets? So certainly a little bit more bullish probably coming into the start of the year than we'll see now. But a couple interesting trends, I think, that are still still offer some pretty good perspectives.
27:21One would be more bullishness in younger investors. So we saw a pretty big spike up to six out of 10 younger investors turning bullish towards the market, which is certainly interesting. So relative to sectors, I think we see a bit of bullishness in finance, which I think is sort of holding through what we're seeing even over the course of the last couple of days and a couple of weeks. And certainly some bearishness within health care. James, over the last few years, we've kind of some sentiment, positive sentiment has been around products, right? Options, crypto, that sort of thing. What are you seeing in those products?
27:54Because we know that some of your competitors are seeing a lot of growth there. Yeah, we continue to see great growth in derivatives, both options and futures has been really, really strong. I think over the course of the last couple of quarters, definitely a rise in equity trading as well. What we tend to see at Schwab is resilience within the derivative traders. So they're going to be there regardless of what they're seeing in the market and what we've seen with the bull rise lately. Certainly a little bit more of a lean towards equities. James, when you look at crypto with obviously you're trading them all through ETFs now at Schwab.
28:26Is the younger population more bullish? That would that would seem logical than than the older, older demographic. And last one, just to piggyback it with, are these do they validate when you look back in hindsight? Do the things if they're negative health care, is that is that proven out six months out or is it a contrary indicator? Yeah, it's a great question, Steve. So we also do an addition to the quarterly sentiment survey. We do a Schwab trading activity index. So we the survey is sentiment based. The Schwab Trading Activity Index is actually behavioral based. So we look at actually what we see trading and we do that monthly.
29:04And we've created an index out of that, what we call the stacks. Oftentimes, they are very highly correlated. Where it gets really interesting is where they're not correlated. And sometimes probably one or two quarters a year, we will see some derivation between what they said in the survey and what they're actually doing, which tends to lead to some interesting insights. James, how about a case where after a run we've had in the volatility even of the last couple of weeks and the bearishness you're talking about, are people taking their money and putting them into higher yielding, call it money markets, in places that really are more about an asset allocation that, frankly, we hadn't really seen out of that investor until rates were useful?
29:42Yeah. So certainly with the rise in rates, we saw that, right, being in this business for quite a while. We hadn't talked about rates since probably, you know, 506, 507, and then rates became all the rage. We are seeing a lot of engagement, a lot of trading engagement, as was asked before, relative to certainly derivatives, but equities as well. We're up, from a trading perspective, a little less than 10 percent year over year. We have not seen a slowdown in the start of this year. So I don't think at this point people are on the sidelines. I think they are still remaining really quite active.
30:13James, thanks so much for joining us. It's always great to get a picture of the retail investor. My pleasure. Thanks so much for having us. Of Charles Schwab. Guy, what do you... What's the matter? Are you drinking out of a Yankees cup? Yeah, you know, I feel really bad because the Yankees seem to really have lost the back page of the New York Post. You're not getting enough attention. So as a Mets fan, I just thought it would be nice on a big show of ours to drink out of a Yankee cup to make you feel better. No, I appreciate that. You know, the Mets fans always have been sort of the younger children here in the New York metropolitan area.
30:43And I understand why you would want to do something that in a live television show. But the reality is it's still a Yankee town, Melissa. Obviously, we hit a nerve, I think. I mean, that's just, you know, this is what's going on with Mets and Yankee fans. I don't know where you guys are going. We're totally off the rails. Well, yeah, sorry. That's never happened before, has it? Sorry. Up next, guys, going to be on the move again. Guys heading back to our beloved fans to get more of their questions. Plus, Super Bowl champion entrepreneur Endomikin Su will join us next to talk about how he is tackling his latest investments.
31:15The special Fast Money Live is back into.
31:30Welcome back to Fast Money. Guy is back in the fray. Couldn't keep him away for long. More audience questions. That's a raucous crowd here. Now, Tim won't understand that because at Shea Stadium, they go, they dress as empty seats. This is more Yankee Stadium crowd. But I'm here with Sheila. Sheila, what's your question? I just want to say I'm a CNBC devotee. that's on from coffee to cocktails in my house. And my question is, what do you do with Pfizer? That is directed to Tim Seymour. Tim's Pfizer. Tim, help Sheila out. Sheila, first of all, appreciate the devotee and appreciate running all the way, maybe even through cocktails.
32:07And we're going to have some tonight. I think Pfizer's a story where it's obviously gone from being the vaccine story coming out of COVID. They spent$30 billion on diversification. And in fact, I thought it was a very smart move. The CGN acquisition last year, about two years ago, was a big one. That's all about oncology. I think the integration is actually going quite well. I think the story around Pfizer is it's not cheap, but it's a company with a lot of, I think, upside to its pipeline portfolio. And I think there's zero investor interest in this stock right now. So I would stay long. David is with us.
32:37David, welcome to Fast Money. Thank you, Guy. It's an honor to be on the show. I've been watching this show my entire life. This is pretty much a milestone for me, really. I cannot thank you enough for doing this. You're a gentleman. Your question is... So with the markets weak and the recent correction, there's no bidding in the TLT. There's no flight to safety. Do you think the TLT or the GLD is the way to go to protect yourself? I'm going to throw that at Steve Grasso. TLT in the form of bond. I'm going to pass to Karen. Let's pass it over to Karen. Yeah, I haven't traded TLT since I was seven.
33:11Well, I'll take the TLT part. I'll pass the gold back to you, Guy. So I am actually short the TLT. I do think that we are in for some inflation. So I actually think, you know, 10 to 20 year bonds is not where you want to be. But lately, that's been the wrong call the last couple of weeks. Karen is so difficult on herself. She's give Karen Feynman a round of applause. She's a genius.
33:38Tom is here from, get this, people, Alaska. Tom is here from Alaska. A round of applause for Tom from Alaska.
33:49What's your question, Tom? My question has to do with the protection of the portfolio or individual stocks. Is there a recommended way that traders recommend to protect on the downside? There used to be a show called Options Action. Risk less, make more, all this beep. I didn't say the word. Dan Nathan, help him out here. Yeah. Thanks for coming all the way from Alaska. You know, listen, there's two ways to think about this. It's not too different than what Steve said before. A, you can kind of move your feet and risk manage an individual position. As it relates to a portfolio, I like to use index ETF, something like a SPY ETF.
34:25And I'll often use put spreads to do that. But I want to really track my portfolio to the proper ETF that's going to give me the best protection. If you think that you have a tech-heavy portfolio, then you might want to use the QQQ. The top 10 names there make up 50 % of the weight. So I like the idea of put spreads. I don't do them too often. It can be a huge drag on your portfolio. You want to be tactical about hedging with options. The great state of Minnesota is represented. A round of applause from Minnesota. Brian. Guy. Longtime fan. And for 18 years, this has been on my bucket list to be on the show.
35:00You're on now, sir. Thanks for having me. Cross it off. Hey, I'm a retired school counselor, high school counselor, and my dream job was always to be on the desk of Fast Money. What is your dream job if you weren't on the desk of Fast Money on CNBC? Great question. I'd either be Melissa Lee's, like, protege and sort of her helper, or I'd play tight end for the New York Giants. The problem is I'm not athletic enough and I'm too slow. So those days are over. But that was my dream job for a long time. Thank you. So thank you for that. And we have one more question. Hello, Raghu. Hi, guys. this is the best show on the network.
35:39I agree. Best show on the network. Who agrees with that? Now, I will get in trouble for doing that, but I think you've come to realize I don't really care. What's your question? So first thing, thanks, Melissa, for keeping this wild Mr. Swift on check. So my question is, would you rather Halliburton or Schlumberger? Would you rather? Suzy, we get in trouble for that, but I will self-would you rather. Tim, I'm going to go with Halliburton, two of the biggest components of the OIH. My sense is you might go in a little different direction here, Tim. Yeah, Raghu, first of all, welcome. Go Gators. I would absolutely say Schlumberger.
36:14I think the offshore drilling margins are increasing. This is a company that's probably getting back to, I think, late 2018-ish in terms of profitability. Schlumberger, and I think it's cheap here. I'm walking backwards. I'm walking backwards. But I'm tossing to Melissa Lee. All right. Thanks, everybody. Yeah. Get your little you-know-what back here on the desk. Our next guest has had a few dream jobs himself from winning Super Bowl 55 as a Tampa Bay Buccaneer and being on the Sky Sports broadcast team in London for this year's big game to rubbing shoulders of the legendary Warren Buffett and building out an impressive investment portfolio of his own.
36:49Five time NFL pro bowler and entrepreneur. And Dominic and Sue joins us now. Big Sue, great to have you back on Fast Money. Welcome. Thank you. It's always a pleasure to be on. Good to see you, Melissa. And I think we can take care of our guy and get him into a giant's uniform if we want to. All right. Right on. We'll send him out on the field then. How are you feeling about the investment? I mean, I know you're a long-term investor. You've got a lot of investments across crypto, real estate, restaurants, VC. How are you feeling about this environment today as opposed to, say, six months ago? This environment is very interesting.
37:24Honestly, as I'm looking at all my different portfolio positions, but then also just the companies I'm working on, it's important for me to just ultimately look at what my risk is. And I'm seeing a lot of risks, especially in crypto, as well as in the stock market and then just in tech. And everything's for sale right now. You look at even Bitcoin, it's 50 percent off or 20 percent off. And that means all the other crypto pieces are going to be 50 percent off from that standpoint. So as I look at it, it's staying cash heavy, finding different opportunities and being consistent. And as Warren has always said, you've got to always have that long-term vision.
38:01So focus on what your craft is and your thesis is and stick with it, and you'll be perfectly fine at the end. And, Dominic, I was in London in January. I saw the playoffs. I saw you calling the games. Tom Brady, your ex-teammate's got nothing on you, man. You were great. Can you give us a sense? I know you're very diversified here. You know, you've told us once before about when you started investing and how did you think about that and timeframes and the like? Yeah, for me, when I look at investing, I'll give you probably the best example. Most recently, I've had to take over some companies, more so in the hospitality space.
38:34And I connected with a guy named Greg Majewski, who is a rock star in creating his own brands, but had a lot of success with Jimmy John. Jimmy John's, excuse me, taking them from 30 stores to 300 stores. and his brand and Craveworthy have shown some great opportunities of, one, how to be an amazing operator. And that's something I learned very, very quickly. I am not an operator. I'm a forward thinker. How we can help make great experiences and do some fun stuff in and around that. But when it comes to operations, you want to have those experts that are along your side. And we spent months together before working on deals.
39:09And I'm excited with some things that we have coming up in the future. You sounded pretty cautious about the stock market in Dominican. And I'm just curious, what will make you get more bullish? Is it a bigger pullback? Is it something that changes in the macro environment? There's a lot of uncertainty out there, certainly, among individuals about the tariff situation, the economy. I'm just curious, what has you on the sidelines? To be honest with you, it's policy. When we look at our government right now, once we can have policy and guidelines of where things are going to be sitting, and as you mentioned tariffs, all that work has to be settled and have understanding of where we actually sit.
39:46And I think at that particular point in time, I would move forward and say, hey, I want to make some decisions. But at the same time, you can't be afraid. And there's no perfect time in entering the market. You want to be able to potentially get into the market at certain levels, buying now, buying later, looking at different things from that standpoint. But I think it's important always to look at it from a standpoint of what is my long-term vision? What's my long-term focus? And Dominic, great to speak with you. Thank you so much. And we're going to be sending Guy your way to get suited up. I will work out.
40:20Big suit. Beef up. Thank you. All right. Let's get a check on some of today's movers, starting with Supermicro. That stock more than erasing all the gains since filing its long-delayed financial results Tuesday night, just before the NASDAQ's deadline. This is a very interesting story because now it's on the other side of this, down 15 percent. Yeah. And we said this, I think, on the show last night. I mean, there's so many other stocks to trade. When you have these sorts of investigations, the fact that they passed this one hurdle about not getting delisted doesn't make a whole lot of sense. And then when you think about Dell's results tonight, if you don't want to buy Dell, if that thing's trading down off those results, you definitely don't want to buy this one.
40:53All right, let's move on to Visa here. Among the Dow's top performers, adding more than 1 % today. The stock stock touching a new all-time high and is now up almost 13 % so far this year. So what does Visa's strength tell us about the U.S. consumer, about the consumer at large? In the last earnings report, they're citing really strong cross-border volumes guy? Well, I mean, I think it speaks to how they're spending, and I think it speaks to what they're spending for. We've said it for a while. I don't think it's an indictment or basically a, I don't know, a plus for the consumer. I think what it says is they're fighting inflation with credit, and that's a problem.
41:26Now, Visa wins to this, MasterCard wins to this, but some of these other companies, like maybe like a Capital One or American Express, potentially, if credit starts to deteriorate, are going to lose to this. So Visa, I mean, it's been an extraordinary stock, Visa and MasterCard, for years and years. I think they got a couple of tailwinds. So we talk about cross-border. That's so much more profitable business for them. The euro being down so much, that makes that a great destination for U.S. shoppers. And we know Japan also. So it's an extraordinary business. I sold my MasterCard way too early, never got back in, and still regret it all the time.
42:01All right. And let's take a look at Lyft shares lifting off today, up as much as 9%. On seemingly no news, it did close off those highs, but still up a percent and a half or so. Rival Uber meantime in the red today. So remember, famously, Tim added Lyft to his bicep trade, making it bicep last year. Lyft could be added to band this year to be bland. One of the rewards for playing the acronym game the right way on this show, folks, by the way. Really? Like adding something in the middle? I'm not going to say anything, Karen. But sometimes if things are going your way, you might want to throw something in there.
42:37So, yeah, band could be bland. Remember, the blicep last year didn't go so well. But, look, Lyft, it's about normalization of their core model. This is possibly a takeout play. I like it. I want to play the name. I want to play Uber, the flip side of it. It has much more levers to pull. Lyft is sort of a direct play. And, obviously, Uber has been outperforming Lyft by a large margin this year. I can't believe this show is almost over. This special edition has been a lot of fun. So we should do it again. Stay tuned for a big announcement coming next week. Up next, a special edition of Final Trades.
43:11Up next.
43:19Welcome back to Fast Money. Before we get to Final Trades, Guy and Tim couldn't wait to meet the fans, including one who flew all the way from Hawaii. It's unbelievable. Thank you for coming. I mean, this is unbelievable. Well, first, I think we say aloha. Aloha. Mahalo, Anui. How am I doing? Very poorly. These came from Honolulu, Hawaii. We flew all over from Honolulu. Just to meet you. Just to meet you. And your name is? Aulani Munson. Well, we can't thank you enough. And again, mahalo, Anui. We respect and we appreciate all your judgment. Now, come in for the hug, sister. Don't crush the lay.
44:03I mean, that's unbelievable. Thank you. Thank you so much. That's really sweet. And again, coming all the way from Hawaii and you brought those with you. So thank you. Thank you. Thank you. A little hula dance. How are we doing? How are we doing? Just got to move it. Got to move it, guys. Got to move it. Got to move it. Got to move it. Throw it back to Melissa Lee. Melissa, back to you. I hope you didn't throw anything out. It is time, can you believe, for the final trade of this very special edition of Fast Money Live. So let's go around that horn. Steve Grasso. I'm going to play that quantum computing, but I'm going to play it, as Dan said, through a sophisticated way and a multilateral way with IBM.
44:46Karen Feinerman. Okay, I know I'm going to get a little pushback of this for my final trade, which is the E in carb, the OIH, obviously. Big oil field services, OIH, E in carb. E is an energy. E is an energy-related oil field services, yes. Makes perfect sense. Perfect sense. Yeah, I'm going to go with Tim's L in the blicep of last year. Lift, I think the path towards autonomy, there's going to be a takeout candidate here, that would be the lift. Tim and Guy back there with our fans. This smells amazing. My final trade is a shout out to the most passionate, loyal, and smartest fans on any TV show, let alone financial TV.
45:26Thank you, Fast Money fans. Shout out to Mary Duffy and her team and our entire floor staff. They've done an amazing job. Casey Sullivan's here. Thanks, everybody, for joining us. Let her see. We'll get you done, everybody. Ditto that. Thank you all for watching a very special edition of Fast Money Live. Mad Money starts right now.
45:53All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC, NBC Universal, 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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