Nvidia’s Record $4 Trillion Market Cap… And Time For An Apple Turnover? 7/9/25

0:02Live from the Nasdaq market side in the heart of New York City's Times Square. This is Fast money. Here's what's on tap tonight. A tech-led rally. The Nasdaq jumping again today. And Nvidia briefly becoming the first stock to hit the$4 trillion mark. Will the rally keep rolling for the red-hot sector? We'll debate that. And industrial gains. Caterpillar shares jumping on a big bullish call. Can the stock lead its sector to even higher highs? Plus, Adblocker, the headline that had advertising firm WPP sinking today. We had to Sun Valley with VC Reid Hoffman to get his thoughts on the AI race. And is it time for a new CEO at Apple.

0:36One top analyst lays out his case for why the iPhone maker may want to shake things up now. I'm Melissa Lee, coming to you live from Studio B at the NASDAQ. On the desk tonight, Tim Seymour, Karen Feinerman, Courtney Garcia, and Steve Grasso. And we start off with that major milestone for NVIDIA, the semi-giant rising as much as two and three quarters of a percent today, becoming the first company in history to hit a$4 trillion market cap. Though it finished off its highs. It did set a record closing value of$3.97 trillion, topping the previous best hit by Apple back in December. The chipmaker's big breakout, pushing both the Nasdaq composite and the broader chip trade to all-time highs, with Broadcom and KLA also hitting records.

1:15And the gains didn't stop there. Meta, Microsoft, Alphabet leading the Mag7 thanks to bullish calls, highlighting AI and earnings tailwinds. Bitcoin, by the way, hitting its own record late in the session crossing 112 ,000 for the first time. So what do all these moves tell us about where we are in the markets right now? Tim? It tells us that the market is not only responding to momentum, but following the leadership of mega cap tech stocks, who obviously from a mathematical perspective, pull the indices up. But I thought today was interesting because I think we have a lot of breadth out there, too.

1:46I mean, if you look at what's going on, small caps are up over 1%. So they actually outperformed today. If you look at cost industrials, which have been performing all year. All we do seem to do is talk about banks. We have earnings coming up now next week, and I think we're getting upon an earnings season. The fascinating part about this is Q1 earnings was really almost a pass. It was a pass on uncertainty. Now, we still may have a lot of that uncertainty. Maybe this is a market that right now is inclined to do that. But I like markets here. I like them in the absence of what has been some rockiness.

2:15We've got a VIX sub-15, which could change very quickly depending on Washington. But in the absence of kind of status quo right now, markets want to go higher. Big sub-16. Sub-16. What did I say? Yeah. Oh, I thought it was 15. My bad. I might have. And that, you know, it might be tomorrow then. It's low. And it came down. It is low. And I think this to me is starting to get a little bit frothy again, right? I mean, so the$4 trillion thing, that's kind of a, you know, we love brown numbers and any kind of time we could use any of the graphics with sort of the Roger Bannister of of you're a sports trivia person, the$4 trillion mark probably will be broken again.

2:57There it is. So that's all nice. I do think that, you know, the market sort of got another charge when the Fed had a little bit of opening of that maybe there are some rate cuts there. And I'm sort of coming around to that, that they should be cutting. And I think that is what's driving a lot of this. And if we are going to see the Fed cutting rates this year, which a lot of people are expecting, at this point. And you're seeing growth is actually continuing to be strong. A lot of people thought growth was going to fall off a cliff. It's not. You're starting to see inflation coming down. That's a really good thing for the markets.

3:28And it's a really good setup here for the second half of the year. And there's still a lot of cash on the sidelines, right? And if you're going to see the shorter term rates come down, a lot of that money can make its way back in. And that's where you're seeing a lot of these retail investors are rushing into these riskier areas of the markets. They're going into your Bitcoins. They're going into things like your NVIDIAs, these things that maybe are getting expensive, maybe frothy to your point. But I don't know if the like the FOMO trade is done there yet. But, you know, what you should be doing is broadening out to Tim's point.

3:57But I don't know if these trades are actually over at this point. You know, the obvious is risk on. And the not so obvious is that this was the biggest canary in the coal mine for tariffs and trade. So did they ring the bell for the all clear months ago, weeks ago? It looks like they did. I mean, look at the one that's in the target zone. 12.5 % of sales from China. Four and a half billion right down. And the stock off to the races. I still wouldn't buy it. Here's the problem. Customer concentration. And all of those customers are looking for other ways to develop their own chips. That didn't hurt NVIDIA to go from 90 up to where it is now.

4:40But I cannot buy it now. Now, frothy, Karen said, I think the point if Karen, I shouldn't say that you're you're a value girl. So you have a different opinion of frothy. I just think that what makes Nvidia a winner in the space is going to be chipped away at. OK, when? I mean, that's fair, except for I don't think anybody's even close. And I feel like that's what we've learned over the last few weeks, which is is that the valuation is not expensive relative to the growth that we have. and even the foreseeable. I understand that we've had these massive quarterly, almost impossibilities in terms of a bar being set higher.

5:18But, you know, all we heard out of AMD is the 350 and the 400 chips, which aren't even on, you know, they're not even in the stratosphere. So if anything, you're getting excited about where they sit in terms of data center and some of the broader, you know, platform parts. But I hear you on that. But to me... You've got to finish your story. Well, I was just going to say that the rally in NVIDIA has come with a lot of pessimism around it that's been reinforced by, remember, they were last to the party in terms of earnings. We have had a, and I talk about this sovereign AI tour that they went on with the administration.

5:52And I think, again, sovereigns are behind the private sector. They've got a lot to do there. Yeah. So also, this is a stock that went from 152 down to 86 January to April. So this is not one that hasn't had hiccups along the way. So this is not a story that has only been lower left, upper right. I think you're due for another one of those pullbacks. OK. I mean, I would even argue that those hiccups are the reason why this rally can go higher. That despite the deep seek scare, you know, despite all this, what did we learn from Microsoft recently from that report out of the information? That it is stepping back.

6:28Pulling back away. Right, exactly. Away from making its own ship. That it may be harder than thought to do that. And also some of these specialized chips can actually coexist with the NVIDIA chips. It's not necessarily a replacement for them. It's for their specialized needs. So let me just add. So I'm always long, right? And I'm not inclined to sell things like this, but I am inclined to hedge. With the VIX here, I'm inclined to buy some protection or in a name like NVIDIA, where I do feel like it's getting a little frothy, but I still want to be there, sell some upside calls because we talk about it all the time.

6:59If demand is still there, then I think that that is the single most important underpinning of the story. And I think demand absolutely is still there. It's going to peak. The stock is going to peak well before demand is. But I don't know when that is. Yeah. I mean, I think that part of the conversation that we're having now is this sort of conversation that we've had every night where we've seen record highs. And that is, what do you pay for the performance that you're seeing in financials, in Walmart, in NVIDIA, in the names that are actually delivering, that are executing, that are relatively defensive compared to some of the other areas of the market?

7:37But what are you willing to, because we're reaching areas where, you know, it can be, the argument can be made that all of these sectors that I mentioned are expensive at this point. Yeah, and I think you have to look at where growth is going forward, because I think if the economy isn't going to be strong moving forward, if we're going to see growth slow down, then these valuations can't be justified. But if we are going to continue to see growth hold in there, I think a certain amount can. And I don't think the entire market is expensive. Like, specifically, the MAG-7 is where it's becoming expensive.

8:06It's becoming frothy, to your point. But there are plenty of other areas, whether you're looking at the other 493, whether you're looking at foreign investments, and you like to talk about your MIGA trade all the time. Yes, I do. Even small caps like relative to history are really not as expensive as they should be. So I think there's plenty of areas to look here. And I don't want to get out of the MAG-7 as expensive as they are. You still want to be there. You just want to be over-concentrated. I just think that we do the show every night, and it all depends on your trading horizon. And so here we are talking about today's market.

8:38We're talking about the dynamics that we have around us. And I'm not here to tell you that I think the economy in the fourth quarter necessarily is going to be gangbusters that the market is cheap. I'm telling you that the dynamics we have around semiconductors, the breadth in the market, and the fact that I think we've seen reassertion of strength in the top of the leaderboard, both by NVIDIA and Microsoft, which are the two most important companies in the world as far as I can tell. And the fact that matters maybe Apple, which we're going to have a nice chat about Apple, but I think Apple has been interesting on top of a market where the broader part of that market, So the breadth that we want to see and financials are very important.

9:13So, again, put it in the context of, sure, there's all kinds of bad things out there. There's going to be a bunch of people talking about this Citibank extreme greed and fear and all these different measures of euphoria. But I think as I look to the market that we have today in the month of July, which is a great seasonal time to own equities, I'm not too worried about it today. All right. Here's another sector hitting record highs. Industrials among the leaders today. Caterpillar are up 2 percent, hitting its highest level since January. Mellius Research upgrading the stock to a buy, writing that AI-driven power demand could be a game changer for the company.

9:46Rob Wertheimer, the analyst behind the call, joins us here on set. His updated price target,$500, is a street high, according to FactSet. Rob, great to see you. Good to see you. So this is actually a tech-adjacent name, an AI-adjacent name, and that's why you like Cat. There's a change in the world coming. I mean, the AI wave is just hard to grasp. and that really the demand just being pushed through in power and grid is stunning, and it's creating new opportunities that didn't exist before. I think most people think of CAT and they think of big machines that dig earth. Old economy. Yeah, exactly.

10:18But we're talking about turbines. We're talking about things that power the energy trade. Yeah, so CAT has always had a huge engine business, but they go into big industrial things. They go into mining trucks and to frack suites and to tugboats and ferries and just massive amounts of power, but not on the grid. They've also done backup power in the past, and still do, but in more niche applications. And what's changing now is the grid is under strain. So, you know, there's pockets where you don't have power. There's just the AI demand is massive. And so people are putting in their own power plants at data centers.

10:46And so the whole world has changed and that's creating a new opportunity. So a name like this, I think of historically very cyclical, right? It's now trading in a market-ish, multiple may a tad under, right? And it used to be that they would, you know, that multiple would change dramatically. is that phenomenon gone or how do you think about that? You're 100 % right. And there's a couple of things that have changed. I mean, Cat has become a better and better managed company with more and more aftermarket. So they've tried to steady out some of that cyclicality. You also just haven't seen a mining upcycle in 15 years.

11:18And so I don't think that we've had a bubble in Cat in a long, long time. So one answer to your question is we're at a position where you worry a little bit less about things falling apart and a little bit more about the upside and missing it. Rob, how about the rest of the mining cycle? And I guess I know we're here talking about Caterpillar, but are there peers of the Kubotas of the world? I mean, where else could you be excited? Is this a lateral trade as well? And copper has hit all-time highs. So if you're mining almost anything in the industrial metals or in the precious metals world, it seems like they've got spot prices that say go out and just mine as much as you can.

11:51100 % they do. The miners have been disciplined in CapEx nonetheless. I think you saw 15 years ago a bunch of mining management teams turned over and was like, hey, we're not going to spend the capex the way that we used to. So we haven't seen that kick off on the equipment side yet. You know, Komatsu is your other major player and Cummins provides engines to the industry. So there are ancillary plays, but that cycle hasn't kicked off yet. Again, some of the same engines go into data centers, and so that's where you have the explosive demand. I know that it's early, but when you think about a 50 % tariff on copper, for instance, there's a general push to have everything made in the United States, dug up in the United States.

12:28And so do you think about that as spurring new mine development, or is it just way too early? Because we haven't had a new mine, a copper mine, in the U.S. for more than a decade or so. And to your point, developing a new mine will take you 10, 15, 20 years. I mean, there's environmental stuff that maybe we have a little bit more of in the U.S. than other places. but anywhere in the world it's going to take you 10 or 15 years. I do think there's been a change in the world, you know, in reshoring, in supply chains, you know, partly spurred by President Trump's actions this term, but also the first term.

12:57And so you're seeing more investment in the U.S. Mining is a slow one, though. So when you look at that to that point, so roughly half is international, roughly half is, it's probably a little more weighted towards North America. So that makes you more bullish to everything that the others have said about Trump building up, building America, mine in America, everything being pulled back to America. Is any part of this government dependent on dollars? Because obviously that's been a very big stick point where we've seen a lot of companies pull a lot of revenue from the governments. Not so much directly.

13:33I mean, look, I do think that the change over the last eight to 10 years, including President Trump and President Biden, was to direct more investment with different policies. to the North American market. So some of that might drive construction, the infrastructure bill and things like that. But in a general sense, the soaring markets are driven by the tech giants. You know, I have lots of cash and a need to invest it. While I've got you here on an adjacent question, United Rental, which is in my acronym in some way or another, I think you're the street high, are you not? We usually are, yeah.

14:03Yes, okay. So what's your feeling? I mean, it's adjacent to CAT. Yeah, so it's been one of our favorite stories over the last seven or eight years. In my job, you often do all the work and find out you agree with everybody else. This is one where we disagreed. We thought it was a phenomenal growth story that was underappreciated. And they continue to churn out. So construction equipment, other equipment, rental in the U.S., growth industry, growth leader, essentially like a Walmart of decades ago, just expanding and creating new opportunities. It's fantastic, I think. Rob, thanks for coming by.

14:33Great to see you. Rob Wertheimer of Milius. What do you think, Kat? Actually, I like this name a lot, And I think you bring up a lot of really good points here. This is a company that is very cyclical, which, again, if the economy is going to improve, is something that you want to bet on. But they've also really worked on making it less cyclical. So they get a lot more service revenue. They've really been working towards that and are actually very on track to meet their goal, which means even if it's, you know, the economy doesn't hold up as well as you hope, they're actually going to be a little less cyclical than they have historically.

15:01But I absolutely think this is a name that you want to be in right now. When I look at CAT relative to itself, which is one way to do this, It's trading about 20 percent expensive to its five year P.E., forward P.E. It is trading about the same to its to its 10 year, which given the opportunities that Rob talked about, given where we are with the electric grid, given where we are in terms of the market overall, that's not expensive. Where dear, which is sometimes also thrown in the same boat, at least if you're looking at comps, is somewhere around 40 times. So a chart back to the financial crisis shows that the cat's done, you know, who needs Bitcoin when you can have cat that's done 1500 percent in that time.

15:39I mean, it's an incredible 15 to 20 year chart as it is that doesn't look that expensive to me here. All right. Let's get to a news alert now. President Trump sending more letters detailing new terror rates, including a levy on Brazil. CNBC's Megan Cassell has got the details. Megan. Hey, Mel, that Brazil letter came out just about 30 minutes ago, and it's different from all the others we've seen this week. This is the steepest tariff we've seen so far at 50 percent. And it's the first country to receive a letter that was not previously set to face a so-called reciprocal tariff. The U.S. runs a rare trade surplus with Brazil, so there is no trade deficit to fix here.

16:15In the letter, President Trump says the tariff is in part due to Brazil's treatment of former President Bolsonaro. He calls that a witch hunt and due to what Trump calls insidious attacks on free elections and on the free speech rights of Americans. Trump also says that in addition to the 50 percent tariff, he's instructing his U.S. trade representative to launch a Section 301 investigation into Brazil. That's something that will look into unfair trade practices, specifically this time over digital trade. And that could lead to further tariffs down the road as well. So we are in new territory here.

16:48here. These are tariffs against a country that the U.S. runs a surplus with over political reasons, not economic ones. Brazil is in the U.S.'s top 20 trading partners, but it's not huge. About 1.3 percent of all U.S. imports come from Brazil. Separately, the president did earlier send seven other countries tariff letters all to countries we do very little trade with, all matching the same format as before. So you can see them here, the Philippines, Iraq, Sri Lanka, all of them facing tariff rates between 20 and 30 percent because of their trade deficits, unless they strike a deal by August 1st.

17:21Melissa. All right, Megan, thank you. Megan Casella. Immediately, we saw a reaction in the EWZ, the ETF for Brazil, as well as the Real, which declined a quick 2 percent. Got to go to the ambassador for the trade on this one. And everything else other than these headlines tells you you want to own Brazil. And it's been the right trade this year, which is up almost 30 percent. And the dynamics not only around the commodities that we've just hit on, including copper and iron ore and whatnot, but I think some of the consumption trends that have been just fine, weaker U.S. rates, weaker U.S. dollar, you're buying Brazil typically.

17:55The fact that politics and really messaging that we had not heard anything about ever before around Brazil have kind of crept into this is, you know, it's just hard to really understand what's driving policy here. So to the extent that if you want to be along the Brazil trade, I do think you don't have to, you know, you don't have to necessarily blow off these headlines. I, you know, whether these headlines are ones that are really deep rooted or whether there's somebody that has a bone to pick, the philosophical differences here are not ones I think we've heard a lot about. And and I would be cautious.

18:30Is this a concern for market participants in general that the reasons for the tariffs have changed. And so it becomes a lot less predictable in terms of how tariffs are imposed, when they're imposed and why they're imposed. If they can just be done because you don't like how somebody is being treated in another country, that's hard to handicap. Hard to handicap, but we're not breaking new ground, right? I mean, we don't trade with Iran. We don't trade with North Korea. No, but I mean, Brazil is just as an example of a, you know, I don't like what you're doing, So I'm going to put a 25 percent tariff on you or 30 percent.

19:03And Brazil is not North Korea or Iran. I mean, you know, this is a country that that largely I think we've had very solid trade relations with. And at times it's been a really important. And also the timing, though, the commodities pricing goes into it, too. Right. Surplus. If the commodities price goes down and equipment prices go up, we're going to have an imbalance or they're going to have an imbalance with us. So a lot of this is the product mix. I think some of this is absolutely a gathering in Rio de Janeiro over the weekend of these BRIC countries that aren't just the BRIC countries. It's all the other countries that didn't just call out tariffs.

19:39They call out unilateral dynamics in terms of military action. And it took place in Rio de Janeiro. And Brazil was very outspoken over the weekend. He did not like that. Coming up, wheels up for Boeing. The stock hitting 52-week highs now up more than 75 percent from April lows. The next move for that name next. And deal-making over breakfasts. The news that had shares of cereal giant Kellogg soaring after hours do not go anywhere. Fast money's back in two.

20:14We've got a news alert on a potential deal in the cereal aisle. Pippa Stevens has got the details. Pippa. Hey, Melissa, check out shares of WK Kellogg. because they are surging almost 50 % on a report that Ferrero is nearing a deal to buy the company for about$3 billion. That's according to the Wall Street Journal. The privately held Italian maker of Ferrero Rocher chocolates and Nutella could finalize the deal as soon as this week, the journal said, citing people familiar with the matter. Now, W.K. Kellogg is the maker of Froot Loops, Frosted Flakes and Rice Krispies and became a standalone company in 2023 after Kellogg spun out the cereal maker.

20:47Once again, those shares up some 50 % here. Melissa? All right, Pippa. Thank you. Pippa Stevens. Cereal is hot again. Yeah, apparently, at least in the M &A space, Karen. Well, just remember when this company was spun off, Kellogg's and Kenview. Yeah. And they both traded disastrously. Absolutely. Disastrously. Neither of them now will be independent. Right. Remember, Kelanova to Hershey. and that's it. It's hard to believe. That was like an American brand from, I don't know, more than 100 years, I'm guessing. Fruit Loops, is that Toucan, Sam? I'm trying to guess. Yeah, Toucan, Sam. I mean, that's a big loss for us.

21:26I mean, I really, I think we need to, I just wonder when you see this kind of a move and the premium and where the stock was trading, I mean, you know, where's the multiple here? And it's surprising. My guess is I'm not spending a lot of time looking at the strategic interest in the cereal sector, but this is surprising on valuation because this stock wasn't cheap yesterday. All right. Meantime, Boeing flying to 52-week highs, popping more than 5 percent at its peak. The jump comes a day after the company announced its best monthly delivery numbers since December 2023. Investors also awaiting a preliminary report on the deadly Air India crash, which killed 260 people in June.

22:02that expected to be released in the coming days. But it's like that stock drop on the back of that crash never happened, Court. Yeah, and there's like preliminary reports that are saying that that was not a design issue. And I think that's part of the reason that Boeing is trading better today. But this is a preliminary report. I think you do need to wait for the actual report to come out here. Because this is something we've seen with Boeing where we are hopeful that they're getting over this hump and then they're not getting over the hump because some other news is coming out. So they have really made a lot of strides here over the last several months.