Qualcomm’s New Chip… And Opportunities Abroad 10/27/25

0:02Live from the Nasdaq market site in the heart of New York City's Times Square on a record breaking day with the S &P500 closed above 6800 for the first time ever this is fast money and here is what's on tap on the S & as the company gets in on the AI game, and the rest of the chip space is coming along with it. So can the rally keep going, and how will this week's earnings change the game? And trading the globe. It's not just U.S. markets hitting records. How the desk is playing the big moves higher in stocks from Japan to Argentina and beyond. Plus, Lulu hits the gridiron for its latest partnership.

0:39A big earnings week kicks into gear tomorrow morning, and the state of the retail trader, Schwab's head of trading services, joins with his latest read on investor sentiment. I'm Mike Santoli in for Melissa Lee today. Coming to you live from Studio B at the NASDAQ on the desk tonight, Tim Seymour, Karen Feynman, Dan Nathan, and Guy Adami. Good to see you all. Good to have you. Good to have you. Always fun. But we start with the semi-surg, sending stocks to new highs. The SMH ripping to a record on three major headlines from stocks that are not named NVIDIA. First up, Qualcomm soaring more than 11 percent to lead the S &P 500 after unveiling new AI accelerator chips that compete directly with NVIDIA and AMD.

1:23The news marks the company's first shift away from a focus on wireless connectivity. AMD also with some news of its own, inking a billion dollar deal with the Department of Energy to develop two AI powered supercomputer that will be used in fields ranging from nuclear power to drug discovery. And even Intel catching a bid after Barclays upped its price target from$25 to$35. Last week, Intel posted its first profit in seven quarters. The chip move, helping major indexes all hit records as well. The Nasdaq up nearly 2%. So just how far can the chip rip carry this rally? Guy, market's saying there's enough to go around for everybody.

2:04It's great to have you, obviously, number one. Number two, I had been trying to unsuccessfully, I think collectively we have, trying to make a bullish case for Qualcomm, just on valuation alone. And this is a stock, I know you know this, made its all-time high in May of 2024. It's been trading horribly ever since. Now, it has held an uptrend line that's been in place for the last six years, if you want to go back and look. However, this might be exactly what the company needs in order to get the valuation I think it deserves. You just put a market multiple on this stock, and it should be trading new all-time highs.

2:36What does that mean for the broader tech? I don't know if it's going to be a rotation out of some of the higher flyer names into Qualcomm, but I think this Qualcomm news, despite there's no real, I don't know, meat around it, makes a lot of sense in terms of revaluing the stock. And Karen, it's kind of like the market has this muscle memory. There was the AMD story was, you know what, they're kind of out in the cold on it on AI. And then the bull case was that they can just slice off a little piece, just shave a little bit of the demand that NVIDIA is enjoying. then we have leverage to the upside and the stock did, in fact, go vertical.

3:09So, I mean, can we apply that here? To Qualcomm? Well, Qualcomm, I got to push back a little bit, Guy, on the market multiple part. The market multiple is pretty high. There is still, remember when 70s used to be somewhat cyclical? Yeah, of course. Yeah. So, I mean, this is good. Maybe it is the thing to get them off the mat, though. But I'm a little concerned at how high these things are trading going into earnings, right? I'd much rather have the bar be lower. So we've got, I think, AMD coming up November 4th, NVIDIA November 19th. I'd much rather be off of a lower base. And I think what happens is if the first one comes out great, they'll all trade up.

3:47And then the bar is that much higher for whoever comes out next. I'm a little bit concerned. I'm long, but I have put some collars on. And just to put some numbers on, I mean, before the move today, Qualcomm was at like 14 times forward. Yeah. S &P is at 22. to, you know, you could go up from there in terms of what the Nasdaq is trading. Yeah. The Qualcomm thing is not about valuation. It's about sentiment. It's about, you know, investors finding other places to express this view. But I think it's really important to kind of drill down a little bit. So if they gain 200 billion dollars in market, excuse me, 20 billion dollars in market cap just today on this announcement, they are basically getting an order for 200 or 200 megawatts.

4:23OK, 200 megawatts is point three percent. OK, it's like literally three percent of a gigawatt. OK, and so when you think about this, like, AMD got a four and a half gigawatt order and is going to a Saudi company. You know, I mean, this is like nonsensical in a way. It's great if they have a product that real customers want to buy. I don't think this kind of suggests that by any means. But listen, get after it. Like, you know, everybody should get in on the game. It does speak to there's going to be pricing pressure. How do you compete with an NVIDIA? You underprice them. That's what AMD is doing.

4:55So the more competition that comes in is probably the harder it is for NVIDIA if you look out a year or so. Yeah, I was going to say, I agree with that, especially at the point that this is not a cloud provider that they partner with. I mean, do we I think I'm sure any buyer, any investor, anyone that's backing this type of capacity is someone that's certainly done their homework and has a view here. But are they getting this from any of the other legacy folks in the space? No. Are they a player that will hold them to a kind of a standard that we would expect some of the other partners are holding AMD to, for example?

5:28Absolutely not. So I think it just gets back to where semiconductors continue to be kind of this driving point for the market. And we all know markets have gone bananas since Liberation Day. And this has been one of the greatest six month periods of all time. But but during this period, so a time when the market's gone through the moon, the the the socks or the SMH, whatever you're tracking for the semiconductors, have outperformed the S &P by 50 percent. Not not five, not 10, not 20, but by 50 percent in the last six months, when over the last three years in total, they've outperformed the S &P by about 120 percent, which is also very impressive and where you've wanted to be.

6:03But it does tell you just how powerful this is. And I don't think we're late on it. I really don't. And I think investors feel that way, too. I mean, you can almost sort of read the market's mind in a sense. You talk about a 20 billion dollar gain in market cap from Qualcomm. I mean, how adorable is that when Biddy is at four and a half trillion? Right. And it's a two billion dollar order, essentially. They didn't kind of map this out. So you're getting a multiple. Just do the math of that on revenue that they have not received yet. And that is the story about Oracle. That has been the story about AMD.

6:36And so the fact that the market is willing to value these revenues that have not actually been taken on yet is and there's execution risk to like this is a company that's deploying this first thing. We remember Hopper. There were bugs in it. There were delays. Blackwell, there were bugs in it. There were delays. So, you know, at the end of the day, these companies have to execute Oracle on the cloud side. Oh, my goodness. They were like a distant five cloud player. And now they're going to deploy gigawatt after gigawatt of this technology. and globally, it just seems like, you know, the markets are just chasing right here or investors are chasing.

7:08It doesn't make a lot of sense to me. And we're going to hear in the next few days from most of the companies doing all the buying, right, from the actual hyperscaler group. So I don't know, what does the market need or want to hear out of that in terms of volume of CapEx? Is it just steady as she goes? Are we going to penalize these companies for upping the ante at all? I think upping the ante, the market rallies on upping of the ante. I think steady as she goes. So it's the old saying in football, if you throw a forward pass, three things can happen, two of them are bad. In this case, three things can happen, two of them are good.

7:36The bad, I think, would be we're cutting back on CapEx, but I don't see that happening. I mean, you were talking about the ball. I'm still trying to figure out the football. No, well, three things can happen. Let's go through this. Drop the ball. Incomplete, interception, both bad or you catch the ball, which is good. You never heard that before? Maybe we should follow sports a little bit. But, I mean, an incomplete pass isn't the end of the world. I mean, you get three more tries. What about a way about an error? You've used a try, and you haven't made any. All right. Thank you, Karen. All right.

8:05All right. Anyway, okay, so meta coming up. This is my largest position. I am concerned to be the stock hit almost 800. I feel like all of that down to here at 750 is concern over the spend, not the underlying business. And so I think the very best thing they can say is, wow, we're really seeing return on that spend, which they haven't said. to date. Well, it's concerned over the spend maybe in dollars, but also the way that they seem to be kind of repositioning and scrambling, right? They dismantle one AI unit and they kind of shift their emphasis to something else. And I mean, this is the interesting part of it, because obviously the stock's up so much, you know, up to that point.

8:45But like, are there going to be net losers? At some point, when does the market try to decide who's got a head start that can't be matched? And how much you have to spend before you decide. Yeah, what are the table stakes, right? or something like that. But in a world where we've had such extraordinary catbacks and, you know, everyone crunches new addressable market dynamics, and nobody is expecting there to be discernible impact, at least to top line, let alone bottom line, for a lot of these players until as we get to 28 through 32. So what are we going to do about this? Are we going to, you know, I mean, because I don't know that anyone's going to get their uncertainty in some of these questions answered.

9:20We're not going to get them answered in this earnings period. And I think it gets back to, again, look at the names that are outperforming. It's the names that have underperformed to a certain point or the names that have satisfied some fear about existential threats like Google. Well, Microsoft and Meta, though, have not confirmed any of the new highs in the S &P 500 over the last two, three months since their earnings. And I think that's worth noting because you go back to that spend, right? So is it going to be great if Microsoft says we're lowering the spend? I'm not so sure. It might say something about the uptake of the products, and they're not backing out co-pilot numbers, but that's all going to be mashed in together.

9:55And we're not likely to see that. Now, obviously, you can look at Azure, you can look at AWS, you can look at Google Cloud. There's numbers of ways to kind of, you know, figure out what these companies are doing and how they think about their products. Meta, actually, to me, all that stuff that you sent, going out and spending hundreds of millions of dollars for talent and not really having Lama rate particularly large their model, I don't think that's great for them right now. And maybe they've squeezed out a lot of that productivity that they've gotten from gains of their own use of AI. Yeah, I mean, the market probably would just love that, actually, if they just said we're going to be a free rider on this.

10:26And it's just going to basically be better and ads and more lucrative for the core business for Meta. Let's get more on all this on Qualcomm's jump. The AI rally will bring in Gene Munster. He's managing partner at Deepwater Asset Management. So you've you've heard the discussion here, Gene. So how should we be thinking about it all? Mike, we need to read between the lines and beyond this Qualcomm news in 26 or 27 when they actually come out with the product, what they're telling us is that they see a big opportunity here. And I think it goes beyond them just looking at the headlines. I suspect that they're also talking to potential customers for them to make this level of an investment.

11:03And so kind of the thread throughout our conversation today has been related to what's the sustainability? What's next year ultimately look like on these CapEx numbers? because that's going to be one of the key takeaways from Wednesday and Thursday. And so, Mike, I just see the fact that I'm going to put Qualcomm in a group that is respectable in terms of how they think about the future. They've had some difficulties around the relationship with Apple. But the fact that they want to get into a crowded business, I think, speaks to how much supply constraint we have around different pieces and inference.

11:37So I want to put one final point on it here, Mike, is that the key numbers for this week is related to what Amazon and Google say about their CapEx growth. So Microsoft's at 22 percent for next year for calendar 26. Meta's at 42 percent. This is the street expectations. But Amazon and Google are at 8 and 13 percent respectfully. Those numbers need to come up for AI to continue to trade well. So they need to come up for AI as a category to continue to trade well. What about what it would do for Amazon and Alphabet, respectively? Well, I think that this is still what we saw with Qualcomm today. There is no substance behind this.

12:18This is a press release that has unlocked$20 billion in market cap. And I think the reason why that's important is that the commentary about how optimistic and the kind of investment that Amazon and Google are making into CapEx, I think is going to be some sort of a barometer in terms of how investors generally think about their outlook. So I think that a positive, an increase in CapEx will be viewed positive. Just throw a little bit of a zinger at the end here, too, is that Google, Liz Reed, who is running Google Search, was out two weeks ago making positive comments about their search business.

12:56And so I think when it comes to Google in particular, that's a really high bar going into this earnings report. Gene, you heard Karen talk about the cyclicality of the space, so maybe it doesn't deserve a market multiple. Yet, people are paying through the nose for a lot of the space. And Mike pointed out Qualcomm trading at maybe 15 times next year's numbers. I mean, what do they have to say next year? Maybe not to get them to a market multiple, but, you know, 20 times next year's numbers puts the stock at about$250 or so. So I want to be respectful to them and them wanting to get into some big business.

13:29But keep in mind, this is really hard to do what they're talking about here. AMD talked about this two years ago. They're exiting version two of their chips, their GPUs, and they really haven't had much progress. The growth and the uptick in analysts' expectations is based on version three that's coming out, generation three. So when I think about Qualcomm as a stock and I think about all these different levers, my general sense is it's cheap, but it's cheap for a reason, and I'd rather invest in other places. And then in terms of the other big ones we're hearing from this week, Gene, is there one that you would emphasize over the others?

14:03I point out, as much as these companies have not really set a wrong step in the last three years since ChatGPT came out, every one of them besides Microsoft's had at least a 30 percent drawdown at some point. And Microsoft had like a 25 percent drawdown. So they wax and wane in terms of investor favor. And undoubtedly, and I think the big picture takeaway, I agree with Karen's assessment going into it, is that investors are generally bullish, which is a negative sign going into this week. So I'm expecting a sell-off. But the underlying fundamental takeaway is going to be that we're still early in AI.

14:37It's kind of hard to, in some ways, to even say those words because we've made so much progress. But I do believe we're still early. I think that's going to be one of the big takeaways. Keep a special eye on Apple. I think this is going to be the best performer of the mag seven going into the end of the year. The iPhone bar is low for December and they've got the AI wildcard next March. And I think hope springs eternal. It does. Yeah, you're starting to see a lot more folks warm to the story there. Gene, thank you very much. Thank you. Karen, you agree with Gina Green with you? No, not at all.

15:10No, I'm interested in what he said about Google search because that is at the moment the weak part of the Google story. The Google story seems to really be on track, I think. I mean, they had a lot of good news. Obviously, we had that remedy issue, which was huge, and that really got the stock going. But now the Google, but now the cloud business, this chip thing, the deal, the chip deal that they signed, there's a lot of momentum here. It's still not a crazy price. So I like Google a lot. Yeah. I also like to point out that the trillion dollars or so in Tesla's market cap, that seems to be attributable to Robotex.

15:44Right. What does Waymo get? And same with YouTube. I mean, Netflix or YouTube? Yeah, it's a little... There's a changing narrative really quickly, though. There was a lot of folks who were saying there's this existential risk with Google and the 10 links and all that sort of stuff. Now you're starting to read about that some of the traffic, the quality of the traffic that's coming from these AI searches, the chatbot search, is much higher. It's much better. They're getting better results from that sort of thing. And I think that's something that really does help Google because they weren't able to make that case probably pretty decently earlier this year.

16:17definitely not last year. As you see them talk more about overlays, and that is the kind of response that you're getting that's contextual. And then also AI mode. I think these are things that, you know, that is a huge tailwind. And then the other thing, Anthropic, you know, their tensor processing unit, the TPUs, they're getting big orders for this. So there is a lot of stuff that's working there that was not part of the theme, I think, late last year. All right. Well, we'll get to more news on another one of these names. Amazon set to announce sweeping cuts to its corporate staff starting tomorrow, CNBC has confirmed.

16:49Reuters early reporting as many as 30 ,000 employees could be let go. That number would represent almost 10 % of Amazon's corporate payroll. It would be the company's largest workforce reduction to date. Tim, it's starting to become really more than an accumulation of anecdote here, a lot of these kind of efficiency moves. Well, and therefore, I don't think we're ready to make a call on the macro, what this means for the job market, that clearly is one that the Fed is most focused on, right? Not inflation. I think for Amazon, this is what you want to hear as a shareholder. And for a stock that has underperformed, and again, we're trying to talk about the strengths of all these folks.

17:25AWS needs to put up, too, on this quarter. And I think this is part of the story. We always know that that's where the valuation lies. I'm not ready to say that, yes, these efficiency calls are ultimately great for the margin profile of these companies. This is what we want to hear. May not be great for the macro, but I don't think we're, this isn't going to chip away at the macro story to me. Yeah, I mean, it's a question. You know, I wonder because everyone's already now okay with soft labor market data, whether we explain it away in terms of structural stuff or not. They're okay with it because the Fed has made the decision that that's what they're going to focus on and they want the rate cuts.

17:59That's fine. But it gets back to be careful what you wish for because if the labor market deteriorates in a way that it should or that I think it will, I don't think that's particularly bullish for corporate profits and then subsequently the economy as a whole. So I guess right now people are saying this is the perfect scenario. But at a certain point, an unemployment rate north of four and a half percent is going to be problematic. Yeah, the soft patch is fine as long as that's all it is, I guess, is the answer. Coming up, Lulu's Hail Mary, how the beaten down retailer is teaming up with the NFL and whether the deal can clinch a comeback.

18:33But first, Fortress Investment co-CEO Drew McKnight joins us next. what he sees next for the regional banks and the state of the private credit markets. The details when Fast Money returns.

18:46Welcome back to Fast Money. Huntington Bankshare is announcing today it would buy a smaller regional Cadence Bank for$7.4 billion. Our next guest says there's even more dealmaking coming in the financial space. For more on that and to get the pulse on private credit, let's bring in Fortress Investment Group's co-CEO, Drew McKnight. Drew, it's good to have you here. I mean, I guess we've had the makings of a little bit of a roll-up action in regional banks for a while, starting to see the signs of it. Should we actually be celebrating it? I mean, you're seeing some of the buyers trade down a little bit.

19:19Is that just routine, or is it more deep concern about what this is coming from? Thanks for having me. Look, I think most transactions, the buyers are actually trading quite well, both on a short-term and also on a medium-term basis. M &A over the year over year is up almost 25%. And generally, the deals have been well-received. I think you're referencing the Huntington Bank deal with Cadence, which was announced today. This one, to us, is pretty clear. It's a movement to Texas. Huntington Bank closed on a transaction with Veritex a couple weeks ago, which was a relatively small transaction. And then this deal today is a much larger transaction.

19:59looks like you guys are pulling up a transaction was just announced today, actually one that we're involved in, where First Sun, which is a Dallas headquartered bank, is merging with First Foundation. First Foundation has one office in Dallas, but is predominantly in southwestern California. So it really gives a very nice footprint across the southwest, and one that we're very excited with as we move forward. So, yeah, I mean, obviously, if it's geographic synergies and obviously you've got regulation that's going to encourage more activity, the market's probably going to be able to live with it.

20:35I wonder what you make of what at least seems to have been holding back the broader regional bank group. You had a couple of kind of credit hiccups. The market wanted to seize on it for, you know, a few days anyway. And then things have calmed down from there. So are you seeing things bubble up in private credit or elsewhere that you think make those concerns justified? We haven't. I think the market reacted quite strongly two weeks ago with two credits, Tricolor and First Brands. Those were two credits, neither of which are in the private credit space. But those were very, very specific issues in credit issues.

21:13We are not seeing that flow through the broader credit portfolio, and we're not seeing it in our portfolio, and we're largely not seeing it in regional bank portfolios by and large. Drew, it's Tim. Thanks for joining us. You quoted that you think private credit is too overmarked and that you're looking for your spots. Talk about that. Where are you sizing up and where do you think things really are a little too frothy? Yeah, look, I think private credit's really been I don't know that it's been overmarked. I think private credit's issues have really been around a lack of deal flow. I think private equity may have some marked issues.

21:50And part of the lack of deal flow is private equity is marked at levels where they can't transact. And I think if you read any bit of industry rhetoric, there's a lot of dry powder on both the private equity side and the private credit side. So that would argue, why aren't there more transactions happening? And I think the real reason is that the existing marks in private equity are below where they can transact and even below where private equity funds will put new money to work. And that's really what I think is holding back deal flow in the private credit and private equity space. Drew, it's Karen Feinerman.

22:25Thanks for being on. What do you think about the banks trying to sort of take back some of the private credit loans that have, you know, that this industry has really been able to feast on? Look, I think it's competition's good. I think you saw the regulatory environment previously hold back both bank M &A and hold back banks' balance sheets. I think allowing banks to compete in this space is good for the economy. I think it's good for the markets. And so I don't think it's a bad thing. I think the real issue and the reason private credit has grown like it has is you've seen both regional banks and investment banks balance sheet constrained and having to shrink their balance sheets.