Oracle’s Slide Continues… And Market Volatility Ticks Higher 12/17/25

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0:51The key to being rich is knowing what counts. Let's find your rich together. Edward Jones, member SIPC. Live from the NASDAQ Market Sight right here in the heart of New York City's Times Square. This is Fast Money. Here's what's on tap tonight. Six-month lows for Oracle, the latest hit to the software giant. And what it may all say about the macro AI trade. Micron on the move. Shares of Micron, it beat earnings. It beat revenue estimates. But what's the stock doing? We'll let you know and get all the details in the quarter and how to play Micron now. Plus, hi-ho silver away. The commodity setting yet another price record.

1:35Warner Brothers choosing its buyer, but will a deal with Netflix actually get done? And Medline's market debut, the biggest IPO of the year, getting off to a strong start. What is next for the stock and maybe what it means for the IPO market next year? Hi, everybody. Hi, I'm Brian Sullivan in for Melissa Lee again tonight, coming to you live from Studio B right here at the NASDAQ and on your desk. We've got Tim Seymour. We've got Karen Feynman. We got Dan Nathan. and you will get a healthy dose of Guy Adama. Welcome, everybody. All right, let's start off with more signs of some growing investor concern over AI spending.

2:14Because Oracle today falling again. Stock fell about 5%. But Oracle now at its lowest level since June and has been cut nearly in half since its September highs. Today's hit came on a report in the Financial Times that a major investment firm called Blue Owl will not back Oracle's proposed$10 billion data center in Michigan. Blue Owl, by the way, a public company trading under the ticker Owl. It was also down today. There you go. No Tootsie Roll included. Oracle hitting back at the report, calling it inaccurate. But that did not help the stock rebound. And while the stock falls, Oracle's debt risk is rising.

2:56The spread on its five-year credit default swaps. Anybody remember those in the subprime crisis? Of course. There you go. You don't need a graduation cap on an owl to know that. Those spreads keep going up. That spread has now more than quadrupled this year, which in plain English means the market's perceived risk on Oracle debt is rising. To be clear, that risk is still low overall, but it is going up. Some of that hitting the macro AI trade. Alphabet, NVIDIA, Broadcom, Palantir, all lower today. Even some of the AI infrastructure players pulling back. GE Vernova, down double digits. Oklo, Vistra, among the big laggards as well.

3:41So, Guy Adam. Yes, sir. Welcome, by the way, Brian. Hi, by the way. How are you? I'm well. Merry Christmas, almost. Well, no, it's not early. Nine days. Eight. Eight. Eight. Is it two worlds? It's eight. No, it's not. I mean, let's do the Hanukkah thing. You're right on time. if you're doing that. Happy Hanukkah. Thank you. You too, Karen. Happy Hanukkah. Did I miss any? Here we go. All right. What is all this telling us? I was talking to Guy Adobio. I understand. Well. Thanks for watching, everybody. Matt Money starts right now. What is all this telling us about the AI trade? One of the terms we've used is the sanctity of CapEx.

4:19And I think for a long time, people felt like the CapEx spend was somehow etched in stone as it came down from the mountaintop on one of the slabs of Fred Flintstone, like granite. It's not etched in stone, and I think we're learning that now. And I think the whole, most of the market, in my opinion, is sort of built on this capex spend. And if it's vulnerable, and if you start questioning the financing around it, then you have problems. I'll say this. NVIDIA, to me, is sort of ground zero. 167 was the low in September. We closed around 171 today. That's a bit of a line in the sand. But you get through there and people are going to start talking about the reversals and moving averages being crossed.

4:59So NVIDIA is the one you have to watch in this entire thing, Brian. All right. Tim Seymour, NVIDIA down. Yeah, listen, again, down two and a half, three percent. It's not some huge haircut. I do worry that we don't we wouldn't want to make too much of this. But Oracle is Oracle its own thing or is it symbolic of something else? Blue Owl may not love Oracle, but Blue Horseshoe does love Anacosteal, just to be clear. Really? Anyway, so, you know, I. Yeah, really. That was great. The Fast Money Wall Street trailer, by the way, Guy. It's unbelievable. It's a must watch. You can find it out there on the Internet.

5:33You know, Oracle to me. On whatever holiday you may celebrate. Yes. Well, Oracle is being pushed well below the valuation. It started here, which is what's fascinating. And ultimately, they could make a decision to not be as CapEx heavy, to not necessarily chase the order flow from companies that may or may not be worth a half a trillion dollars or not. So what I think is more interesting on a day like today, this is Mr. Glass half full, is that the other 493 were flat, effectively. That's not fair. But the equal weighted S &P is effectively flat. And those that benefit from AI may actually be having a pretty good run here.

6:10So the market is a bit over its skis, I think, in some of these trades. And I think there's a lot of momentum that still could could come out here. But if you're looking to own Oracle, you know, unless they are going to spend like a drunken sailor, I think this is a valuation that you're getting any of the A.I. optionality for free. Given their spending, just be careful. You don't want to insult drunken sailors. Look, I mean, this is all going to be debt spent. Sometimes they buy some good stuff. Debt-fueled spending. And we're looking at a stock, Dan Nathan, that arguably has had an unbelievable run, but yet we showed the credit default swaps.

6:52There's attention being paid to Oracle. What do you make of it? I mean, it really hasn't had an unbelievable run relative to the other names you'd associate with this trade. I mean, it kind of joined the party last year. It was a distant fourth place in this cloud business. And to your point earlier, I mean, they can spend however they want, but they don't have the money to spend. So they have to raise the debt. That's why a blue owl is so important to this build out for them. Right. And if you think about the hyperscalers, you know, they were already building these clouds and they were ready to build for, you know, this A.I.

7:21sort of trade. And they had many of them, their own models. And if you're not, you're Amazon, you're investing in Anthropic, you're investing supposedly in open A.I. right now. You're putting those models on your cloud service so you can sell that compute and folks, you know, their customers can use it. You know, the problem is, Brian, you just said this, you remember CDS, right? Credit default swap. Well, the last time we saw, you know, this is like, OK, first inning sort of stuff. You want to go back to the financial crisis. But the last time we really focused on that, you know, you would have thought a lot of these arrangements, a lot of these contracts between these financial institutions, you would think that there was some sort of sanctity, as Guy likes to say, about those sorts of deals they had with each other.

7:58They were until they weren't. Right. And so when you think about some of this stuff, there can be some dominoes. And the other thing is, if the market is saying that Oracle is not going to be able to fulfill these contracts, you know, from OpenAI and others, well, you would think neoclouds like CoreWeave would be trading much better, right? Because they're the ones. I mean, that's rough. And so do you understand my point? I mean, like, if they're the ones who are going to do excess sort of capacity when it comes to it. Thanks, Tim. Thanks, Tim. I was on a roll there. But I mean, there's. Wait a minute.

8:27You think CoreWeave would be trading better? Well, I'm just saying because let's just assume that this company. Now, listen, they are heavily indebted and they lose money. My only point is if you believe that there's all this demand for compute, then you would think that companies like CoreWeave would be able to do it if Oracle is not able to do it. Right. CoreWeave has contracts with Microsoft. They have Microsoft 70 percent. There's so many bombs just waiting to kind of go off if this thing slows down. So to me. It's a big if. Well, listen, the other thing we've been saying on this desk. If you see Oracle below 150 and you see that CDS above 200 bps, the government's probably going to come in and take a stake and probably try to stop that.

9:05Why do they have to come in and take a stake? They haven't spent the money yet. Because Larry Ellison is so far up. You know, I mean, like this is like a deal. You're acting like the company needs a bailout. They don't need a bailout. They haven't spent the money yet. But it's also the psychology. Tim, if you're thinking about this as like kind of this bipolar sort of trade between China and us, this deal, Stargate, these other things, it's kind of important. I mean, if you think about it, right? So if we're going to misallocate all of this capital, ultimately, these things will get bailed out.

9:32They're going to have to. So you would ask, is Oracle the center? Open AI is the center, but we don't really know. We don't really know. Right. So we don't really know what's going on there. But I think I have no doubt that we're still early in AI. But that doesn't ever mean that the stocks will trade at exactly in tandem with whatever the AI demand is. So as the credit default swaps go up, the price of doing these deals goes up. The deals are then less attractive if you have to spend more on financing. So that, you would think, would dampen demand as well as all the things I know you like to bring up.

10:08Where's the power coming from? Where's the approval from whatever local authority there might be that could put the brakes on this? One sort of tangent trade from that, I wonder, Meta, which has traded poorly on this giant spend, if they were to bring it in a little because either things can't be built or the price of what they thought the projects were is changing, that would actually, I think, be a positive for Meta. A few things. You nailed it. You nailed it. I think this is a stock show. OpenAI is a private company. So we can't really talk about it. But OpenAI is kind of the center of, like, to your point, Karen, right?

10:45It's kind of all of this. They're handing out gigawatts of power here and there. And a lot of people in the energy business I talked to were like, where are they getting all this power? Because they don't make power themselves. They're making deals. If there was something to come out about open AI, then what? What happens? Something negative? Yeah, just some sort of headline. Cut back on spending or they're not going to fund this deal. Code red? I mean, it seems like there's a lot of negative sort of spinning around there now. Code orange. Was it code orange, maybe? What was code orange? Burnt Sienna.

11:17I don't know. I mean, we were sort of thinking that. How vital is OpenAI to all of these stocks we talk about all the time? It is. I mean, when you think about Oracle, which, okay, that's the public. Is that the public center of this? I think CoreWeave is also somewhat of a proxy there. By the way, I covered Core. I'm no longer short CoreWeave. Nice trade. I just feel like it was a good trade. You covered it. Yes. But I'm long down, long NVIDIA. I'm long, you know, I got a lot of, I'm long a lot of Google. But you made a fortune on CoreWeave because the stock was 183 a few months ago, down 65.

11:43It was in the 130s, and now it's 65. Now I covered a little higher than here. Anyway, so if Oracle is the center, then what propelled them, we all know, was that giant backlog growth, right? That extraordinary future sales of, you know, 500%. RPOs, baby. Yes. Not run-pass option. Not run-pass option, but purchase option. Remaining performance obligation. Yeah. So if that goes down, I don't I mean, it's reflecting. I think the stock is reflecting that it's in the price. Isn't the point here, the point that you're making and you said was a great point. And it's related to what Dan said, which in which I said, I don't think so, is if they all just pull back a little bit on the on the spend.

12:32It doesn't mean demand's not there. It doesn't mean Oracle's going out of business. It doesn't mean that NVIDIA is not still, you know, maybe they're not at 76 percent gross margin. But the point is that demand right now is outstripping any normal type of rational ROI decision. And the conversation we had even before Oracle got this far down the road on this desk was that they were trading high margin software recurring inventory for very low margin business that they then came out and said, not as low margin, but we're going to be the lowest of the bunch. And I just think that it doesn't have to go down like that.

13:06And ultimately, it gets back to a company that now is trading as if open AI didn't exist. I'm not even long Oracle, folks. So it's not as if I feel like I need to defend a long position. I'm just saying that I think it's— You're saying it won't need a bailout. Well, I'm saying what Karen said. We've already seen it with Meta. When they tap the brakes, the market responds. Forget bailout. It really is about sentiment. And I don't believe that this stock is the center of the universe. I think it's obviously open AI. It's NVIDIA. It's about, you know, the big hyperscalers. We haven't seen any problems other than the fact that Microsoft and Meta don't trade particularly well.

13:38NVIDIA doesn't either. And, again, stocks are allowed to not trade well at certain periods, right? I just don't think Oracle in the grand scheme of things is that important to the ecosystem. What I think is important is from a sentiment standpoint. So when you're seeing the CDS blowout, if you're seeing the stock crater, you know, that's why I believe at some point you're going to get some sort of headlines that's putting some sort of floor in this thing. Because go back to January when Stargate was announced. Larry Ellison was in the White House. Sam Altman was in the White House. Moss' son was in the White House.

14:05They haven't funded this thing. And Elon Musk said within an hour of that meeting, he said they don't have the money. I mean, Elon's pretty prescient when you think about it. So, again, to me, it's about sentiment. It's also about, you know, the way we're competing with China. And if we have these sorts of blowups, it doesn't make us feel or shouldn't make the world feel a whole heck of a lot better. And by the way, the rest of the world is using open source models. And they're spending far less than we are. And we're spending hundreds, if not trillions by the end of the decade on this. And that might be the biggest misallocation of resources the world has ever seen.

14:37It's a great discussion, obviously, one that brings passion. We're going to continue it, kind of expand it right now because demand for AI infrastructure keeps growing. But a bit of a red flag is being raised on financing some of these data centers. Diana Olick here now with the property play on data centers. Dana, you just heard all that discussion and we talked so much about all the investors getting in. But there are also now some that are either getting out or sitting out. Yeah, I mean, look, Brian, you know, I am all about the buildings. That's all I focus on. And I'm hearing that commercial real estate investors are increasingly concerned about hyperscalers who are turning to private equity rather than just funding the buildings themselves.

15:19They're entering into these lease agreements, which could end up being risky if the technology changes. What does that mean? It means if it becomes more efficient and it no longer acquires these huge buildings, these huge spaces. I actually sat down with billionaire developer Fernando de Leon, who he predicts, he predicts hyperscalers will be trying to get out of their leases earlier than expected. it. I look at a data center that's$10 billion, right? First of all, there haven't been any exits above, you know,$4 or$5 billion. You haven't seen comp, so that worries me quite a bit. Then I see large technology companies, the largest companies on the planet with$4 trillion market cap saying, I don't want to own this asset.

16:02I don't want to have this on my balance sheet. So I ask why? Why doesn't the largest company in the world want to own its own asset? That is very, very important to them, right? This is the AI business is everything for them today for the large hyperscalers. And so they're saying, no, you build it, you finance it. So his concern is that when big private equity is left holding the bag because of all this risk, it's not their money, it's the investors and the funds. And guess what? That's your money. That's a lot of that in pension funds of everybody in the country. Brian? Yeah, it is. And there's also, Diana, I know you cover this on the property side.

16:39There's also been this huge pushback from just towns. They're worried about electricity rates. They're worried about water. Today, Chandler, Arizona. You don't want it in your backyard. You don't want your electric bills going up. They're getting pushback all over the country. I mean, I'm right by Virginia, where it's data center central. But you're seeing pushback in regions all over the country, small towns. So the politics of this, if you look at some of the forecasts for the commercial real estate market in 2026, a lot of it on the data center sign is concerned about politics, local politics pushing back on these data centers.

17:12Yeah. Chandler, Arizona today, five nothing to vote or yesterday voting down a new debt. They got a lot of water issues in Arizona. I get it. But still, the public pushback, maybe the great variable we're not talking enough about. Diana, look, thank you very much. All right. Switching gears a bit. I mean, it's related. We've got an earnings alert on Microsoft. Microsoft. That's what I get. Mike Ron. You read the teleprompter too quickly, and that's what happens. Reading the teleprompter. By the way, in Brian's defense, I mean, the guy barely reads the teleprompter. He does it all by himself. I actually try to ignore the teleprompter.

17:46He actually tries to make it up. No, you're right. Make it up as I go along. It's a compliment. Jim Seymour, you're my favorite Fast Money star. Christina Portsett-Evilus, what's happening with Mike Ron? Not Microsoft. Micron memory chip maker. Well, the guidance is getting attention. For the February quarter, they're guiding to earnings of$8.42 per share versus what the street was anticipating at$4.49. That's nearly double what analysts expected. The driver is memory chip pricing. Higher average selling prices are boosting profitability as supply stays very tight. The CEO is saying on the call that despite significant effort, the company can't meet customer demand in 2026.

18:25The bottleneck, one of them, is clean room space. These specialized facilities needed to make these chips. Lead time for building out that capacity are getting longer, which means tight supply persists beyond 2026. On high bandwidth memory used in AI, Micron now sees that market hitting$100 billion by 2028, which you're reading in your email right now. Tim, up from$35 billion this year. That$100 billion number is arriving two years earlier than previously planned. The flip side, though, is higher memory prices mean higher costs for anyone building data centers or AI infrastructure. That pricing pressure could feed into broader inflation concerns for tech spending.

19:04And one last thing, as it was coming to set, he also said that he is increasing CapEx specifically for construction, too. So you saw a little uptick in the stock. That's the news that we kind of talked about at the top of the show, right, Tim? This is the news we need to hear. We want to hear that the spending on whatever it is for continues to grow. And so this CEO is not only saying that, he is also he spoke to how AI is helping productivity within his firm and how many employees are using, which I thought was a very bold statement because most CEOs don't add a 30 percent productivity increase because of AI.

19:39So he's saying a lot of positive things and it's quite a strong reaction in the stock, too. Well, and speaking of construction, I mean, he's on the tape here. He's talking about how construction of the New York fab is going to begin in 26 and it's going to be operational by 2030. I mean, at least in terms of what people want to begin to model out what it means. But in the short run, what he's saying is that the spot market continues to be so strong that the contract pricing now at the next several quarters is reflecting the current spot market, which is amazing. So, again, Micron is that much more insulated from even the first part of the conversation because their business, at least right here now, is based upon reality.

20:13and reality in terms of memory and the things that we all know are at one point were very commoditized. There's about three companies in the world that do this really, really well, and they're one of the three. And as much as I have not been a fan of Micron, I'm not talking about this like I've been gangbusters on it. At times, I have felt that we were over our skis and that at some level there wasn't that big of a moat. I'm not sure I'm chasing this move, but I think this is an important conversation relative to the one we started the show with because this is real, this isn't magic, and this is business that's accountable now.

20:44Historically highly cyclical. I mean, this quarter suggests maybe they're not anymore. Now, again, I was a skeptic as well going in, but you just look at a couple things. I mean, their operating margins were 47 % this quarter. This quarter last year was 27.5%. Free cash flow was almost$4 billion. The street was looking for about$370 million. It's an extraordinary quarter, and the guide was good, too. I'll say this, this quarter and the guide should get us through the prior all-time high, which was 265. To Tim's point, if it doesn't, it's telling you something in terms of the chase. I got a question.

21:20I probably can't answer. Okay, well, I'll throw it out there. Okay. So you might know. So as you talk about cyclical businesses, so when there's a dearth of supply, you get a bulging orders, right? And so there's this sort of, is it a fake sort of double ordering or, you know, that phenomenon? You know, we saw with channel stuffing? Well, not channel stuffing. Just if you need a certain amount, you probably double order. Right. You'll order X and hope you get half of X. What we saw with during COVID, especially with the automakers. We saw with everything. Everything. Well, then, isn't that what they say, the bring forward demand in many companies?

21:58Pull forward? Yeah, pull forward. They denied that. And he didn't say anything on the call thus far about that. I feel like we actually haven't heard that question asked in quite some time. I think two things. One, about the pricing, I wonder if it's the peak now. That's, I think, why we're not seeing an even bigger reaction in the stock price. And then you just brought up the New York Clay facility. That's been delayed like crazy to Diana's report right before us, which plays right into that. You have all these companies making promises. Micron's New York Clay location is a perfect example how things are not going as planned.

22:32Well said. A good look at Micron stocks up 8 % right now. Big, big move for MU. Christina, thank you very much. All right. On deck. The latest on the Warner Brothers brawl and why the company's chairman says the choice. It should be easy. Plus a silver surge. How high can silver go? Ho, ho, ho. We're back after this. The world of business is constantly evolving, and Comcast Business keeps you totally in step with secure, AI-backed networking in more than 100 countries. They're powering over 90 % of the Fortune 500 and millions of small businesses. That's a lot of muscle. And behind it all, thousands of experts answering your call at 2 a.m.

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